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You can view full text of the latest Auditor's Report for the company.

BSE: 532755ISIN: INE669C01036INDUSTRY: IT Consulting & Software

BSE   ` 686.80   Open: 669.40   Today's Range 660.00
689.90
+19.70 (+ 2.87 %) Prev Close: 667.10 52 Week Range 410.60
729.00
Year End :2017-03 

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Tech Mahindra Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017 and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (“Ind AS”) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following note to the standalone Ind AS financial statements:

Note 34 in respect of certain matters relating to erstwhile Satyam Computer Services Limited (erstwhile Satyam), amalgamated with the Company with effect from April 1, 2011 which are discussed below:

Certain non-compliances and breaches of various laws and regulations by the erstwhile Satyam under the former Management (prior to Government nominated Board) identified by the various agencies have been responded to/appropriately addressed in earlier years and no further communication has been received by the Company on these matters and with the passage of time, the Company does not expect any further proceedings in this regard.

The Company’s management on the basis of current legal status and external legal opinion, as more fully described in note 34 to the standalone Ind AS financial statements, has concluded that (i) claims made by 37 companies in the City Civil Court for alleged advances amounting to Rs.12,304 Million made by these companies to erstwhile Satyam, and presented separately under ‘Suspense account (net)’ and (ii) the claims to these advances filed by Enforcement Directorate under the Prevention of Money Laundering Act in the High Court of Andhra Pradesh will not sustain on ultimate resolution by the respective Courts as explained in the note.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, based on our audit, we report, to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and 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 financial position in its standalone Ind AS financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

iv. The Company did not have any holdings or dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016 - Refer note 58 to the standalone Ind AS financial statements.

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 the Order.

ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT RE: TECH MAHINDRA LIMITED

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The major portions of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed/ Possession Certificate/ Lease agreement/ Encumbrance Certificate provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date, except the following:

(Rs. in Million)

Particulars of the land and building

Gross Block as at the Balance Sheet date

Net Block as at the Balance Sheet date

Remarks

Freehold land located at Bahadurpally, Survey No. 62/1A, Qutubullapur Mandal, Bahadurpally Village, District - Ranga Reddy, Hyderabad - 500043 admeasuring 581,711 square metres

167.98

167.98

As per the information given to us, after payment of the stamp duty to Registrar of state of Andhra Pradesh the split of state of Andhra Pradesh into State of Andhra Pradesh and state of Telangana occurred due to which jurisdiction of Registration office has also changed therefore the final demand is not crystallized and Andhra Pradesh High Court order is not adjudicated.

Freehold land located at Infocity SEZ, Tower - I & II Plot No. 22 to 34, Hi-Tech City, Layout, Madhapur, Hyderabad -500081 admeasuring 79,804 square metres

141.65

141.65

Freehold land located at Survey No. 44 P, Near Bullaiah College, New Resapuvanipalem Village, Visakhapatnam - 530003 admeasuring 29,844 square metres

79.83

79.83

Leasehold land located at Plot No. S - 1, Maitree Vihar Road, Chandrasekharpur, Bhubaneswar -751023, admeasuring 55,600 square metres

4.86

4.17

As per the information given to us upon issues of letter to the company from General Administration Department of Government of Odisha the Company has to pay Transfer fee based on the value of the property to General Administration Department of Government of Odisha. On such payment the property will be registered in the revenue records.

Leasehold Land located at Survey no.

470.27

439.05

As per the information given to

1(P), 3(P), 8(P), 40(P), 7l(P), 109, 152(P),

us, the Company is awaiting for

MIHAN SEZ Area, Nagpur - 441108,

adjudication certificate. Mutation

admeasuring 518,241 square metres

proceeding will be initiated after the adjudications certificate is received from the authority.

In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) In our opinion and according to the information and explanations given to us, having regard to the nature of the Company’s business / activities during the year, clause (ii) of paragraph 3 of the Order is not applicable to the company.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly the provisions of Clause (iii) of paragraph 3 of the Order are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits. Therefore, the provisions of the clause (v) of paragraph 3 of the Order is not applicable to the Company.

(vi) Having regard to the nature of the Company’s business / activities, the maintenance of cost records has not been specified by the Central Government under section 148(1) of the Act. Accordingly reporting under clause (vi) of paragraph 3 of the Order is not applicable.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, duty of Custom, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2017, for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Value Added Tax, Provident Fund and Cess which have not been deposited as on March 31, 2017 on account of disputes are given below:

(Rs. in Million)

Name of Statute

Nature of Dues

Forum where Dispute is pending

Period to which the amount relates

Amount Unpaid

Amount paid Under protest

The Income-tax Act,1961

Income-tax

Supreme Court

Financial Year 2004-05

39.55

-

The Income-tax Act,1961

Income-tax

High Court

Financial Year 2005-06

2.83

-

The Income-tax Act,1961

Income-tax

High Court

Financial Years 2002-03 to 2007-08

5,967.31#

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2003-04

151.69

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2004-05

150.46

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2005-06

1.57

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2006-07

6.03

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2007-08

16.63

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2007-08

29.09

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2008-09

0.93

-

The Income-tax Act,1961

Income-tax

Income-tax Appellate Tribunal

Financial Year 2010-11

553.34

-

The Income-tax Act,1961

Income-tax

Assessing Officer*

Financial Year 2007-08

1.43

-

The Income-tax Act,1961

Income-tax

Income Tax Appellate Tribunal

Financial Year 2009-10

659.80

-

The Income-tax Act,1961

Income-tax

Income Tax Appellate Tribunal

Financial Year 2007-08

18.12

-

The Income-tax Act,1961

Income-tax

Assessing Officer*

Financial Year 2010-11

58.88

-

The Income-tax Act,1961

Income-tax

Commissioner of Income-tax (Appeals)

Financial Year 2011-12

19.41

-

The Income-tax Act,1961

Income-tax

Commissioner of Income-tax (Appeals)

Financial Years 2005-06 and 2010-11

42.38

-

The Income-tax Act,1961

Income-tax

Commissioner of Income Tax (Appeals)

Financial Year 2011-12

108.57

-

The Income-tax Act,1961

Income-tax

Commissioner of Income-tax (Appeals)

Financial Year 2001-02

8.11#

-

The Income-tax Act,1961

Income-tax

Income Tax Appellate Tribunal

Financial Year 2008-09

56.09

-

The Income-tax Act,1961

Income-tax

Assessing Officer*

Financial Year 2009-10

25.58

-

The Income-tax Act,1961

Income-tax

Income Tax Appellate Tribunal

Financial Year 2009-10

58.73

-

The Income-tax Act,1961

Income-tax

Commissioner of Income Tax (Appeals)

Financial Year 2013-14

32.65

-

The Income-tax Act,1961

Income-tax

Commissioner of Income Tax (Appeals)

Financial Year 2014-15

10.58

-

Finance Act, 1994

Service Tax

Commissioner of Central Excise

Financial Years 2003-04 to 2006-07

12.86

-

Finance Act, 1994

Service Tax

Supreme Court

Financial Years 2008-09 to 2013-14

11,857.56

-

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Years 2004-05 to 2007-08

86.60

6.60

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Years 2004-05 to 2008-09

118.77

10.00

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Years 2005-06 to 2007-08

46.43

41.51

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Years 2007-08 to 2010-11

169.50

3.00

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Years 2007-08 to 2010-11

96.07

96.00

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2008-09

11.73

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Years 2012-13 to 2014-15

3,195.60

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2008-09 to 2011-12

36.30

1.26

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2006-07 to 2010-11

375.50

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2009-10 to 2012-13

221.66

5.21

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2007-08 to 2013-14

81.12

3.63

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2011-12 to 2012-13

8.25

2.69

Finance Act, 1994

Service Tax

Customs Excise & Service Tax Appellate Tribunal

Financial Year 2005-06 to 2009-10

17.58

Andhra Pradesh VAT Act, 2005

Value Added Tax

Commercial Tax Officer*

Financial Year 2007-08

14.16

11.96

Andhra Pradesh VAT Act, 2005/ Central Sales Tax Act, 1956

Value Added Tax/ Sales Tax

High Court

Financial Years 2008-09 to 2010-11

148.27

82.71

Maharashtra Value Added Tax Act, 2002

Value Added Tax

Joint Commissioner of Sales Tax (Appeal)

Financial Year 2008-09

4.19

0.40

Central Sales Tax Act, 1956

Central Sales Tax (Gujarat)

Deputy Commissioner of Commercial Tax (Appeal)

Financial Years 2006-07 to 2008-09

5.60

6.80

Central Sales Tax Act, 1956

Central Sales Tax (Tamil Nadu)

Deputy Commissioner of Commercial Tax (Appeal)

Financial year 2015-16

1.78

0.59

Andhra Pradesh Value Added Tax Act, 2005

Value Added Tax

Sales Tax Appellate Tribunal

Financial Years 2007-08 and 200910 to 2010-11

0.54

0.54

The Karnataka Stamp Act 1957

Stamp Duty

High Court

Financial Year 2006-07

1.08

-

The Customs Act, 1962

Custom Duty

Customs Excise & Service Tax Appellate Tribunal

Financial Year 1996-97

1.19

1.19

The Employees Provident Fund and Miscellaneous Provisions Act, 1952

Provident

Fund

The Employees Provident Fund Appellate Tribunal

March 2013 to April 2014

2,448.31

@

Revenue & Taxation Code, USA

Pennsylvania state Income-tax

Commonwealth of Pennsylvania Department of Revenue

Calendar Years 1988 - 2005

4.82

Decree of the President of the Republic of Italy

Tax on purchase of shares

Regional Court of Emilia Romagna, Italy

Financial Year 2008-09

7.32

Chad Tax Administration

Withholding Tax/ Value Added Tax/ Corporation Tax

Deputy General Manager of Tax Authorities

Calendar year 2012 and 2014 to 2015

17.77

3.19

Internal Revenue Act 2000 and Income Tax Act 2015

Income Tax / Withholding Tax

Commissioner General

April 2013 to March 2015

52.03

111.43

Value Added Tax Act, 2013

Value Added Tax

Commissioner General

April 2013 to March 2015

5.98

2.90

Tax Code

Income Tax

Commissioner General

January 2011 to December 2013

18.84

5.73

Tax Code

Value Added Tax

Commissioner General

January 2013 to March 2016

13.28

-

# The above excludes the Income-tax Draft Notices of Demand amounting to Rs. 7,952 Million and Rs. 9,637 Million for financial years 2001-02 and 2006-07 respectively, issued by the Additional Commissioner of Income-tax under Section 143(3) read with Section 147 of the Income-tax Act, 1961, against which the Company has filed its objections with the Dispute Resolution Panel, which is pending disposal.

* The Company is not aware whether the Department has filed an appeal against the same.

@ The Company has given bank guarantee of Rs. 500 Million to The Employees Provident Fund Appellate Tribunal.

(viii) The Company has not taken any loans or borrowings from banks and government or has not issued any debentures. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and the term loans have been applied by the Company during the year for the purposes for which they were raised.

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

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals 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 paragraph 3 of the Order is not applicable.

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

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its subsidiaries or associate companies or persons connected with them and hence provisions of section 192 of the Act are not applicable.

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

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Hemant M. Joshi

Place: Mumbai, India Partner

Date: May 26, 2017 (Membership No. 38019)