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Tech Mahindra Ltd.

Dec 06 BSE 1552.05 ( -40.85 -2.56%)
Volume163758
Prev. Close 1592.90
Open Price 1608.00
Today's Low / High
1547.20 1619.00
B. Price (Qty.)0.00 (0)
O. Price (Qty.) 0.00 (0)
52 Wk Low / High 890.10
1637.00
Dec 06 NSE 1551.75( -41.55 -2.61%)
Volume2911781
Prev. Close 1593.30
Open Price 1606.00
Today's Low / High
1546.85 1619.55
B. Price (Qty.)0.00 (0)
O. Price (Qty.) 0.00 (0)
52 Wk Low / High
890.00 1638.25

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

ISIN No INE669C01036 Market Cap. ( in Cr. ) 150561.12 P/BV 6.04 Book Value ( ) 256.77
BSE Code 532755 52 Week High/Low ( ) 1638/890 FV/ML 5/1 P/E(X) 34.00
NSE Code TECHMEQ Book Closure 05/11/2021 EPS ( ) 45.64 Div Yield (%) 2.90
Year End :2021-03 

issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial statements.

emphasis of matter

We draw attention to note 39(B) of the standalone financial statements, which describes in detail, certain matters relating to erstwhile Satyam Computer Services Limited ("erstwhile Satyam”), amalgamated with the Company with effect from 1 April 2011. The Company’s management on the basis of current legal status and external legal opinion, has concluded that claims made by 37 companies in the City Civil Court, for alleged advances amounting to ' 12,304 million, to erstwhile Satyam and presented separately under ‘Suspense account (net)’ will not sustain on ultimate resolution by the Court as explained in the aforesaid note.

Our opinion is not modified in respect of this matter.

key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion

To the Members of Tech Mahindra Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANcIAL StatementsOpINION

We have audited the standalone financial statements of Tech Mahindra Limited ("the Company”), which comprise the standalone balance sheet as at 31 March 2021, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 31 March 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OpINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities 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

description of key audit matter

Key audit matter

How our audit addressed the key audit matter

Revenue recognition on fixed price development contracts

The Company engages in fixed price development contracts, including contracts with multiple performance obligations. Revenue recognition in such contracts involves judgments relating to identification of distinct performance obligations, determination of transaction price for such performance obligations and the appropriateness of the basis used to measure revenue recognised over a period.

Our audit procedures included:

• Obtained an understanding of the systems, processes and controls for evaluation of fixed price development contracts to identify distinct performance obligations and recognition of revenue. • Evaluated the design and operating effectiveness of internal controls including IT controls relating to recording of the contract value, determining the transaction price, allocation of consideration to performance obligations,

Key audit matter

How our audit addressed the key audit matter

In case of fixed price development contracts where performance obligations are satisfied over a period of time, revenue is recognised using the percentage of completion method based on management’s estimate of contract efforts.

The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

Revenue contracts involve recognition of contract assets as per the contractual terms which is significant as at the balance sheet date.

(Refer note 2.3 (i), 2.9 and 48 to the standalone financial statements).

measurement of efforts incurred and process around estimation of efforts required to complete the performance obligations and the most appropriate method to recognise revenue.

• On a selected sample of contracts, we tested that the revenue recognised is in accordance with the revenue recognition accounting standard. We

- evaluated the identification of performance obligations;

- considered the terms of the contracts to determine the transaction price, including adjustments for any sums payable to the customer;

- determined if the Company’s evaluation of the method used for recognition of revenue is appropriate;

- tested the Company’s calculation of efforts incurred, estimation of contract efforts including estimation of onerous obligation, through a retrospective review of efforts incurred with estimated efforts;

- assessed appropriateness of contract assets on balance sheet date by evaluating underlying documentation.

• Reviewed and evaluated aged contract assets to assess possible delays in achieving milestones, which may require a change in estimated efforts to complete the remaining performance obligations.

• Performed analytical procedures over revenue and receivables.

Evaluation of tax positions and litigations

Our audit procedures included:

The Company operates in multiple global jurisdictions

• Obtained an understanding of the key tax matters,

which require it to estimate its income tax liabilities according to the tax laws of the respective tax jurisdiction. Further, there are matters of interpretation in terms of application of tax laws and rules to determine current tax provisions and deferred taxes.

including management’s assessment of uncertain tax positions and possible outcomes. We also considered legal opinions and consultations made by the Company for key uncertain tax positions.

• Involved our tax experts to test the current tax

The Company’s tax positions are challenged by the

provisions, inspect key correspondence and

tax authorities on a range of tax matters including

considered legal precedence and other tax rulings

corporate tax and transfer pricing. The Company has

in evaluating the management’s assessment of

uncertain tax positions including erstwhile Satyam tax litigations.

uncertain tax positions.

Key audit matter

How our audit addressed the key audit matter

This requires the management to make significant judgements to determine the possible outcome of uncertain tax positions, which consequently have an impact on related accounting and disclosures in the financial statements.

• Evaluated the key assumptions in estimating current tax provisions and deferred taxes.

• Assessed and tested the presentation and disclosures relating to taxes.

Further, the Company operates in SEZ units which are eligible for exemption under the Income Tax Act, 1961. This requires management to make certain estimates to determine the quantum of exemption.

Refer note 2.3 (ii), 2.13 and 52 to the standalone financial statements.

investment impairment

The Company has investments in subsidiaries and associates. These investments are accounted for at cost, less impairment. If triggers for impairment exist on the balance sheet date, the recoverable amounts of the above investments are estimated in order to determine the extent of the impairment loss, if any.

Determination of triggers for impairment in value of these investments and recoverable amount, involves significant estimates and judgements, including the cash flow projections and sensitivity analysis of the key assumptions.

Refer note 2.3 (iv), 2.8 (iii), 2.11 and 37 to the standalone financial statements.

Our audit procedures included:

• Evaluation of impairment risk and assessing whether triggers exist for any investments based on consideration of external and internal factors affecting the value and performance of the investments.

• Obtained management assessment of recoverable amount for investments where impairment risk is identified.

• Where management has used an independent valuer, evaluated the independent valuer’s competence, capabilities and objectivity, and assessing the valuation methodology used by the independent valuer to estimate the fair value of investments.

Evaluated the reasonableness of the cash flow projections and assessed the underlying key assumptions in management’s valuation models used to determine recoverable amount considering external data, including assumptions of projected profits, revenue growth rates, terminal growth rates, discount rates.

Assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance.

Engaged independent valuation specialists to assist in the evaluation of assumptions and methodologies used by the Company in assessment of recoverable value of certain investments, as appropriate.

Assessed the appropriateness of the related disclosures in the financial statements.

OTHER INFORMATION

The Company’s management and Board of Directors are responsible for the Other Information. The Other Information comprises the information included in the Company’s annual report, but does not include the financial statements and our auditors’ report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

MANAGEMENT’S AND BOARD OF DIRECTORS’ RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified 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 of 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 accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible

for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls with reference to

financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation

precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors’ Report) Order, 2016 ("the Order”) issued by the Central Government in terms of section 143 (11) of the Act, we give in the ‘Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(A) As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

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

e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B”.

(B) 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, 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 as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 32 to the standalone 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-Refer Note 25 to the standalone financial statements; and

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

(C) With respect to the matter to be included in the Auditors’ Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm’s Registration No: 101248W/W-100022

Jamil Khatri

Partner

Place: Mumbai Membership No. 102527

Date: 26 April 2021 UDIN: 21102527AAAAAL7747