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– 2020 21 ANNUAL REPORT

Mindteck 2020–21 Annual Report Letter to Shareholders

Consolidated Financial Highlights	1
Letter to Shareholders	2
Board of Directors	7
Leadership Team	8
Board’s Report	9
– Annexures	19
Corporate Governance Report	33
Management Discussion and Analysis	49
CEO and CFO Certifcation	57
Standalone Financial Statements	58
Consolidated Financial Statements	110
Notice of the Annual General Meeting	164
Form for Registering E-mail ID	171
ECS Mandate Form	172

Mindteck 2020–21 Annual Report Letter to Shareholders

Consolidated Financial Highlights

(Rs. in million)

	2020–21	2019–20	2018–19	2017–18	2016–17
Revenue from Operations	2,867	2,761	2,994	2,968	3,417
EBITDA	242	62	73	33	136
Proft Before Tax
and Exceptional	161	(31)	44	(1)	115
Items
Proft After Tax (PAT)	109	(648)	27	(56)	93
Earnings Per Share (Basic EPS)	4.31	(25.71)	1.09	(2.26)	3.74

Mindteck 2020–21 Annual Report Letter to Shareholders

Letter to Shareholders

Dear Shareholders,

We are pleased to present the financial statements for the fiscal year ended March 31, 2021.

Consolidated Revenue for the year 2020-21 stood at Rs. 286.72 crores, as against Rs. 276.13 crores for the previous year ended March 31, 2020. The Company reported a Consolidated Net Profit for the year 2020-21 of Rs. 10.86 crores as compared to a loss of Rs. 64.80 crores for the previous year ended March 31, 2020. Last year’s loss included an exceptional non-cash item amounting to Rs. 59.42 crores on account of impairment of goodwill on consolidation of the US and Singapore subsidiaries.

The Company’s Standalone Revenue for the year 2020-21 was Rs. 103.98 crores, as against Rs. 92.31 crores for the previous year ended March 31, 2020. Standalone Net Profit for the year 2020-21 stood at Rs. 8.53 crores as compared to a loss of Rs. 59.24 crores for the previous year ended March 31, 2020. Last year’s loss included an exceptional non-cash item amounting to Rs. 56.66 crores on account of impairment of investment in the US and Singapore subsidiaries as mentioned above.

Expression of Gratitude

When your Company embarked on a new fiscal year last April, it was becoming apparent that the year would be like no other. The coronavirus pandemic was sweeping the globe and presenting difficulties for humankind. How lives were lived dramatically changed! Furthermore, as a matter of course, an abundance of uncertainties prompted companies of all sizes to pivot to survive or stabilise until it became clear that recovery was attainable.

In 2020-21, your Company clearly faced pandemic-related challenges and was also challenged again by ongoing industry disruption, competition, and talent scarcity. It is particularly heartening to report, however, that our shared commitment to ensure business continuity and care during the pandemic fuelled more connectedness, harmony, knowledge-sharing and entrepreneurialism within the global organisation, while improving operating profitability.

Stronger today, we are profoundly grateful for the valuable contributions of all those without whose support the year would have been much more challenging.

Our Employees , who once again collectively exceeded expectations with their ‘can-do’ spirit, considerate and caring nature, patience, perseverance, and dedication to their work, our clients and the Company under tremendous pressure. Additionally, a special word of appreciation to the IT team and a cadre of support staff who provided continuous critical remote support for new joiners and employees;
Our Clients , who trusted us and believed in our ability to consistently execute on the expected deliverables with positive outcomes, despite the challenges posed by the pandemic;
Our Shareholders , who expressed warm concerns for the well-being of our employees, and whose confidence and advocacy endures.

Mindteck 2020–21 Annual Report Letter to Shareholders

Resolute and Proactive

While navigating through the year’s volatile situation, we remained resolute in our pursuit of a future of predictable, profitable and sustainable growth. To this end, we focused on proactive measures specifically related to:

Driving Performance

Additional steps in our quest to build a performance culture were taken with the Company-wide establishment of measurable goals for individuals and teams, as well as focused leadership development coaching.

Competencies in new technologies and new service offerings to spur growth:

Development of an IoT Framework – providing a variety of industries faster solution deployment, with near ready-made components that can be seamlessly deployed as a complete solution or integrated with existing systems for the Consumer Internet of Things (CloT), Industrial Internet of Things (IIoT), and the Internet of Medical Things (IoMT).
Enhancement of Digital Engineering capabilities, including in AI/ML and cloud native application development.
Introduction of a Cybersecurity Practice.
Establishment of a dedicated IT Infrastructure services team focused on providing services such as Remote Infrastructure Support, including data centre, network, security, desktop and ITIL compliance management.
Sharpened our focus on sales to improve lead qualification and closures, enhance sales coverage, and drive revenue from specific services.

Delivery Excellence

The team continues to adhere to the business continuity measures instituted early last April. We are pleased to have received accolades for our performance during this time as well.
Invested in the curation of a series of Learning and Development sessions to sharpen the business and technological acumen of multiple teams with an eye toward improving competencies and the capacity to anticipate clients’ future needs.
Increased the frequency of client connects, and refined associated protocols and processes.
Implemented more robust project management practices and efficiencies in the estimation process.
Improved the quality and speed of hiring.

Refined processes to increase collaboration among teams.

Quality Assurance

During 2021, the team transformed quality management system processes in order to enhance modularity and scalability, as well as organisational capabilities in process management, project management and engineering. This is in line with our dedication to continuous improvement, enabling us to consistently deliver quality products and services to our clients on time and within budget.

4 Mindteck 2020–21 Annual Report Letter to Shareholders

Other highlights include: the strengthened ability to delivery critical safety applications in the medical device domain; successful completion of the ISO 27001:2013 surveillance audit, and being appraised at CMMI DEV Version 1.3 Maturity Level 5. The quality journey will continue in the coming year with a focus on CMMI DEV Version 2.0 adoption, as well as the exploration and adoption of the latest information security/threat intelligence solutions to help protect clients’ information assets from cyberattacks.

Notable Highlights

As a testament to the increased recognition of our valued niche knowledge, we are pleased to report that your Company added a total of 29 logos to its roster across several industries during the year.

In the IMEA region, we started an engagement with the Indian subsidiary of a patient-centric medical technology company by securing a dialysis equipment system testing project. We also won a two-year IT infrastructure management and maintenance contract with a premier public sector manufacturing company in the Middle East. Other highlights for the region include:

Software testing project with a new logo – the Indian subsidiary of a data storage start-up.

Collaboration with the Middle East and US teams of a multinational conglomerate specialising in efficiency, controls, and automation, for:

An integration testing project for a FIFA stadium.

Full stack development for a waste management company.

Two projects with a company focused on connected technologies for the hardware design and development of:
A first-of-its-kind product to be used as a smartphone attachment for composition analysis and authentication of liquids, and objects such as gemstones and paintings.
A smart connected device which integrates personal voice assistants and control of smart home devices.

Test automation project for an existing data storage company’s new product line.

Secured business with telecommunications companies in Bahrain and Saudi Arabia, and a leading Japanese provider of industrial automation and test and measurement solutions in Qatar.

In the United States, we secured a high-value, full development project from a US-based semiconductor equipment manufacturing client which focuses on delivering next-generation solutions. This win follows the successful execution and delivery of a three-month system study phase for the same project which initiated the new client relationship during the fourth quarter of 2019-20. The scope of the project encompasses the design and development of a common cluster tool controller software framework for their new and existing products, as well as the development of control application for three of their existing tools. Additional business highlights include:

Multiple digital transformation projects with a new medical device client that specialises in oncologyrelated solutions. The projects are being conducted with both onsite and offshore teams across the US, Canada, Europe and India. Two teams are enhancing the application integration workflows on radiation oncology software, as well as a mobile workflow management tool used for patient care by healthcare professionals.

Mindteck 2020–21 Annual Report Letter to Shareholders

Hardware reengineering project with another new medical device and equipment client which designs medical solutions and systems that help prevent the transmission of infection. The project encompasses electronic and firmware design, as well as the modernisation of a user interface of a medical system.
Added two system integrators as new clients, and won additional business on a data center and cloud transformation project across North America with an existing digital technology integrator client.
IoT application development project for an existing workforce management solutions client. It entails the enhancement of an intelligent and touchless time clock product to be used by companies wishing to have employees return to the workplace without the risk of infections.

Signed multiple product engineering contracts with an existing audio video client, including:

Customisation of a conference system with the addition of various lighting options due to pandemic-related work-from-home measures.
Creation of a universal interface for multiple device integration on the web.
Development of a mobile application that controls keypads, switches, dimmers, sensors, plugs and receptacles.
Won a project in big data analytics with Einstein Analytics skills for a world-renowned analytical instruments client.

Deepened relationships with all existing clients in the region.

In the APAC region, we secured business from several new clients, including multiple insurance providers, a manufacturer of mobile and telecom devices, and an HR information technology support services company. We also expanded our relationships with existing clients such as a Japanese life sciences company, a utilities company and a global industrial manufacturing conglomerate.

Key new client highlights

A new data storage company engagement involving an agile-based software development project for the client’s entry offering in the public cloud storage domain. It is massively scalable object storage that will be available on leading cloud platforms.
A new semiconductor manufacturing company engagement comprising the remote execution of a crucial proof-of-concept project for their Industry 4.0 initiative roll-out. This required the integration of the client’s critical legacy semiconductor automation system to their newly-installed factory system gateway.
A new consumer electronics company engagement encompassing the design of a mobile app interface for an edutainment system, as well as product development and support services.

Key existing client highlights

Three new projects with a high-tech photonics client. Amidst stiff competition, we were fortunate to win a project involving the development of a Computer-Integrated Manufacturing (CIM) app on Azure Cloud which will be used by the client’s production staff across two plant locations in Malaysia, one location in China and another one in Germany. The other two projects involve cloud consulting, as well as software development and testing.
Two new feature and functionality enhancement projects for the Transportation and Information Security divisions of another hi-tech client.

Mindteck 2020–21 Annual Report Letter to Shareholders

In the European region, we won a project encompassing the design and development of new control systems software for next-generation process modules for metal deposition technology. The new client is a company that provides advanced wafer processing technologies and solutions for the semiconductor and microelectronics industry. Other business highlights include:

Collaborating on the first-ever advanced mass spectroscopy solutions development project with the UK subsidiary of a US-based analytical instrument client.
Secured a SOUP anomaly database project with a new medical device client that specialises in oncologyrelated solutions.
Won new business with the world’s largest brewery and received extensions with an existing semiconductor client in Belgium.
Strengthened global relationship with a longstanding MedTech client.
With a multinational B2B IT services company, we secured:
A new project to support large, professional sporting venues in Germany.
Project extensions from their German and Romanian centres of excellence.

Marking Another Milestone

As we close a memorable year with optimism and gratitude lingering in our hearts and minds, we would like to take this special opportunity to mark the start of our 30[th] year by acknowledging all the individuals, companies, institutions, and governments who contributed to our longevity and success. We recognise the importance of your unwavering confidence, support and commitment and wholeheartedly value our relationships with you.

Thank you for your role in our journey.

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Yusuf Lanewala
Chairman
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Anand Balakrishnan Managing Director and CEO

Mindteck 2020–21 Annual Report

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Mindteck 2020–21 Annual Report

Legal and Company Secretary

Shivarama Adiga S. Vice President

Registered Office

Mindteck (India) Limited

AMR Tech Park, Block-1, 3rd Floor #664, 23/24 Hosur Main Road, Bommanahalli Bengaluru - 560068 Tel: 91 80 4154 8000 Fax: 91 80 4112 5813

Auditors

Registrar and Share Transfer Agent

Universal Capital Securities Private Limited C 101, 247 Park LBS Road, Vikhroli West Mumbai – 400083, India Tel: 022-28207203-05 Fax: 022-28207207

Bankers

Axis Bank Limited

HDFC Bank Limited YES Bank Limited Citibank, N.A. Standard Chartered Bank Limited

S.R. Batliboi & Associates LLP

Leadership Team

Anand Balakrishnan

Managing Director and Chief Executive Officer

Meenaz Dhanani President - Mindteck, Inc. Director IT Talent - US Region

Arup Banerjee Senior Vice President Global Delivery and Practices

Pradeep K

General Manager Human Resources

Jacob Pillay Senior Vice President Sales (US and Europe)

Karen Stark

Senior Vice President Marketing and Communications

Harish Nair

Senior Vice President Sales (APAC and IMEA)

Ramachandra Magadi Chief Financial Officer

Practice Team

Ratnakar Gandhe IoT and Automotive

Surjit Lahiri Storage, Semiconductor, Cloud and Testing

Manju Reddy Electronic Design

Mindteck 2020–21 Annual Report Board’s Report

Board’s Report

To the Members,

The Directors hereby present the Thirtieth Annual Report of your Company along with the Audited Financial Statements for the Financial Year ended March 31, 2021. The Consolidated performance of the Company and its Subsidiaries has been referred to wherever required.

1. FINANCIAL RESULTS

(in Rs. Million)

Particulars	Standalone Year ended March 31, 2021 Year ended March 31, 2020 1,039.8 923.1 28.3 18.4 708.1 662.4 23.3 21.8 125.6 165.9 211.1 91.4 13.0 18.7 58.4 61.5 - 599.3 139.7 (588.1) 54.4 4.3 85.3 (592.4) 256.2 256.2 3.33 (23.12)	Consolidated
		Year ended March 31, 2021 Year ended March 31, 2020
Revenue from operations		2,867.2 2,761.3
Other income		45.5 17.5
Employee benefts expense		1,947.8 1,992.4
Cost of technical sub-contractors		491.1 417.1
Other expenses		232.1 306.9
Proft before fnance cost, depreciation, taxes, amortisation		241.7 62.4
Finance cost		16.5 22.6
Depreciation and Amortisation expense		63.9 70.4
Exceptional Item		- 610.1
Proft Before Tax		161.3 (640.7)
Tax expense		52.7 7.3
Proft After Tax		108.6 (648.0)
Paid-upEquityShare Capital		252.1 252.1
Basic Earnings Per Share (EPS)		4.31 (25.71)

2. COMPANY AFFAIRS

Standalone

On a Standalone basis, your Company recorded revenue of Rs. 1,039.8 million, as against Rs. 923.1 million in the previous financial year. Mindteck’s profit after tax stood at Rs. 85.3 million, as against a loss of Rs. 592.4 million in the previous financial year. At an operating margin level, Mindteck recorded EBITDA (including other income and excluding exceptional items) of Rs. 211.1 million (20.3%) during this financial year as against Rs. 91.4 million (9.9%) last year.

Consolidated

During the financial year under review, your Company recorded Consolidated revenue of Rs. 2,867.2 million as against Rs. 2,761.3 million in the previous financial year. Of the Consolidated revenue that was recorded, 54.6% is attributed to the US and the balance pertains to the rest of the world.

Mindteck’s Consolidated profit after tax for the financial year stood at a profit of Rs. 108.6 million, as against loss of Rs. 648.0 million in the corresponding previous financial year.

At an operating margin level, Mindteck recorded EBITDA (including other income and excluding exceptional items) of Rs. 241.7 million (8.4%) during this financial year as against Rs. 62.4 million (2.3%) last year.

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

3. DIVIDEND

The Board has not recommended any dividend for the year ended March 31, 2021.

4. BUSINESS FOCUS AND HIGHLIGHTS

Mindteck provides a unique blend of engineering value and technology know-how to a top-tier clientele of Fortune 1000 companies, start-ups, leading universities, and government entities around the globe. Since its establishment in 1991, the Company’s niche knowledge and expertise has led to engagements with industry leaders, including the top 5 Data Storage companies, top 3 Medical Device companies, top 6 Semiconductor companies, and top 7 Analytical Instrument companies.

The Company’s legacy expertise in embedded systems, enterprise applications, testing and professional services complements expanded competencies in digital engineering. Appraised at CMMI Level 5, the highest form of third-party validation, the Company stands out among industry peers for process capability and maturity.

Mindteck has a strong track record of supporting clients with knowledge that matters to maximise their R&D and technology investments, gain competitive advantage, and become futureready. The Company delivers on a variety of requirements, such as designing new products and reengineering older ones; fulfilling compliance requirements; conceptualising and developing test frameworks; automating and modernising systems; developing control and monitoring software; cloud migration and enablement of applications; data visualisation and analytics; wireless communications, and sourcing, deploying and retaining top-notch IT talent.

10 Mindteck 2020–21 Annual Report Board’s Report

The Company’s ‘best-shore delivery model’ provides clients with a mix of onsite, offshore, near-shore, offshore-onsite and other hybrid options across geographies for faster and more efficient service delivery.

focused efforts in remote patient monitoring, telemedicine, IoTbased smart asset tracking, smart and connected devices, smart grid and smart street lighting.

Data Services

Current partner and alliances include: Intel Partner Alliance, Microsoft® Gold Application Development Partner, NetApp, SNIA, CMMI Institute, and the IoT Global Network. The Company is also one of the Founding Members of The Atlas of Economic Complexity, a data visualisation tool for research developed by the Growth Lab at Harvard University’s Center for International Development.

Over the last three years, Mindteck has consistently improved its rank in the third-party rating considered the industry standard for benchmarking service providers across capabilities. In 2020-21, the Company improved its ratings across all ER&D services, moved into an Emerging and Expansive Player in Digital Services, and became an Established and Niche Player for IoT Services.

Product Engineering

Mindteck’s end-to-end product engineering service offerings encompass core competencies in embedded design; application development, support and maintenance; product lifecycle management; system integration; reengineering, sustenance and optimisation; product conceptualisations, feasibility studies and prototyping. Domain-specific trained engineers work seamlessly as extended engineering teams to help clients maximise their potential for new product development and continually enhance or modernise existing products.

Notable projects for 2020-21 include:

Collaboration with a longstanding client to create product engineering solutions for the debut of a new AV room product for a global leader in advanced workplace technology. The product provides integrators with high-value plug and play capabilities for expanding classrooms and smaller meeting space businesses.
System validation of new equipment for a medical technology company.
Development of medical equipment in the area of probe disinfection with solutions in hardware, software and cybersecurity.
Gateway-related projects for home automation, as well as mobile verifier accessories for a leading audio electronics company.
Product development and testing for a multinational electronics company.

Digital Engineering

Mindteck’s digital engineering portfolio is comprised of selected solutions, services, and technologies which complement our product engineering portfolio and help clients compete, innovate and propel forward along the digital continuum: data services, cloud, mobility, IoT-based solutions, and cybersecurity.

According to recent industry reports, Engineering R&D spend stayed resilient and grew during 2020, despite COVID-19. Apart from the spend towards traditional ER&D services, digital engineering spend is accelerating across industries and is expected to represent 47% of the total ER&D spending by 2023. Mindteck’s growing strength in this area is evidenced by our

Mindteck’s data services capabilities now leverage the data ecosystem to support clients’ need to move, process and use data for competitive advantage, as well as for operational, compliance and decision-making requirements. The portfolio includes services and solutions for enterprise data management, AI and ML, advanced analytics, analytical dashboards, dedicated data analytics R&D labs, as well as strategic consulting to help guide clients to data maturity.

Internet of Things (IoT)

During 2020-21, Mindteck enhanced its IoT solutions portfolio with the development of an IoT Framework comprised of:

Edge devices for monitoring and control
Low-Power Wide-Area Network (LPWAN) for sensor and actuator connectivity
Solution deployment on the cloud and on-premises
Web and mobile applications
Addition of computer vision with AI and ML capabilities, as well as data analytics

Various components of this Framework have been optimised to provide key solutions for IoT applications, as follows:

Solutions for the manufacturing industry with process, quality and productivity improvement in compliance with Industry 4.0 requirements – including Machine-to-Machine (M2M) communication providing connectivity between sensors, machines and operators for better production yield and efficiency.
Smart solution for energy saving and conservation for utilities – including lighting controllers, smart metering, solar plant management, and software applications for Network Operations Centres (NOCs).
Video surveillance and image processing for object detection and classification to provide security and automated inspection solutions – with AI/ML capabilities.
Asset tracking solutions with Radio Frequency Identification (RFID) and Bluetooth Low Energy (BLE) for the healthcare and manufacturing industries.

Cloud

Mindteck’s cloud discipline covers an array of cloud-based IT services that deliver sustainable software solutions to optimise clients’ investments, together with applications to help ensure reduced IT infrastructure costs and increased flexibility. The Company’s cloud infrastructure expertise includes offerings that span across multiple cloud environments, such as private, public and hybrid, and cloud inter-op solutions, such as multi-cloud storage. Key focus areas include:

Serverless Solutions: Serverless is the next evolution from monolithic application architecture after service-oriented architecture and micro-services architectures. As per experts, it is among the top five fastest-growing PaaS cloud services. This year, Mindteck supported a client in the development of a true serverless application.

Mindteck 2020–21 Annual Report Board’s Report

DevOps: Developing scalable and secured Continuous Integration/ Continuous Delivery (CI/CD) pipelines to improve software delivery requires a DevOps or site reliability engineering approach. Mindteck, as a solid DevOps partner, has a proven track record of building pipelines that help clients improve and enhance product quality.

Hybrid Cloud Appliances: Custom stacks that extends a client’s local data centre to seamlessly connect with the public cloud for on-demand dynamic provisioning of the IT infrastructure resourced by leveraging existing investments made by the user. This provides resource optimisation for better TCO and improved ROI.

Interoperable Cloud Storage: SNIA/CDMI standards-compliant solution that helps in building the right cloud storage strategy for business solutions needing high storage requirements without compromising on security, standards and performance requirements. It also addresses low-cost storage needs.

Business Data Analytics: Mindteck has built a solution hosted on Amazon EC2 that leverages cloud infrastructure to provide the best analytical solutions in terms of dashboard, custom reports, and data mining capabilities.

Mobility

The unusual turn of events in 2020 increased the use of digital services more than ever before. Mobile devices have become more personal than the personal computer as businesses and organisations are seeking mobile applications to woo users and maintain a competitive edge.

E-commerce companies have shifted their focus to mobile applications to reach out to mass markets, and the surge of smart appliances and machines are slowly paving way for more and more technical users to use their mobile phones to configure, monitor and control various smart installations. With these two sectors expanding rapidly, social media and the entertainment and gaming industries have been influencing the user experience of all mobile applications being developed.

Over the past few years Mindteck has adapted to this demand by building a dedicated team for mobility development and testing which has been adding the power of mobile applications for existing industry verticals. Apps developed include those for:

Smart Energy
Medical Patient Monitoring

Cloud Migration: Services to move applications/infrastructure and data to the cloud platform, such as Amazon Web Services (AWS), and Microsoft Azure.

Application Development and Deployment: At platform, such as Azure and AWS as IaaS.

IoT Device Monitoring and Management
Industrial Workforce Applications
Automated Meter Reading Tools
Smart Parking

Security and Compliance: Security and compliance for the healthcare domain.

Cloud Testing Competencies:

Application: Testing on the whole cloud for system function validation, integration, regression testing, end-to-end business workflows, browser compatibility, as well as performance and scalability evaluation.
Network: Testing different network bandwidths, protocols and successful transfer of data through network, cloud and network connectivity, latency and packet loss.
Infrastructure: Testing for disaster recovery, backups and failure, availability, secure connection, and storage policies.
Performance and Scalability: Testing multiple user actions and disruptions due to scaling; load and stress conditions with increased traffic; multi-tenancy; scalability under different conditions.
Security: Testing for authorisation and authentication, data encryption, integrity, accessibility, security settings for firewall, VPN, among others.
Migration: Data migration and live upgrade testing.

Highlights for 2020-21 are as follows:

Developed a centralised Fault Documentation and Catalogue System to unify the inspection process with Serverless Architecture.
Developed a Connected Clock for biometric registration data using the Azure IoT Hub. It is a multi-tenant application with device provisioning and real-time data monitoring.
Deepened relationships with existing storage clients by supporting them in the areas of hyper-converged infrastructure, multi-cloud storage, test automation and DevOps implementation.
Asset Tracking
Library and Knowledge Management Systems
Insurance Field Agent
Vehicle Infotainment

The mobile applications developed by Mindteck span across standard consumer mobile phones to specialised Android-based touchscreen, hand-held devices and industrial tablets.

The Company is proficient in the development of these applications on various popular platforms for both Native Android, Native iOS, Hybrid, and even in a few cases, combinations of Native and Hybrid technologies. Data security measures are taken into account, and qualifying third-party security audits are conducted when required.

The Mindteck mobility team has implemented advanced programming such as device communication across multiple protocols, integration with third party libraries, maps, payment gateways, back-end API integration, dynamic reporting, and data security under the hood. At the same time, the team designs intuitive UI/UX to give end users the seamless people-centric experience they have grown accustomed to with their mobile phones.

Cybersecurity

Mindteck continuously strives to update and expand its capabilities to help clients compete, innovate and propel forward along the digital continuum. During the year at hand, the Company focused some efforts toward the global cybersecurity services segment which, according to a report by Grand View Research, Inc., is expected to reach USD 192.70 billion by 2028, registering a CAGR of 10.2% over the 2021-2028 forecast period.

12 Mindteck 2020–21 Annual Report Board’s Report

Specifically, the Company began offering services such as Vulnerability Assessment, Penetration Testing, Threat Modelling and Threat Analytics. It completed a Threat Modelling and Threat Analytics of a connected medical device in an ambulance for a leading US medical device manufacturer. Additional projects related to our existing industry verticals are in progress.

Testing

Mindteck’s hallmark end-to-end testing discipline encompasses manual black box testing, white box testing, test automation, security/penetration tests, regression testing, performance testing, prototype testing, unit testing, multilingual and business/ user acceptance testing. Over the years, the Company has supported most clients with one or a multitude of test services specifically for web, mobile, embedded device and other applications; networks; hardware and firmware; databases; web services; cloud; connectivity; interoperability. Mindteck’s niche knowledge for domain-specific testing, such as for data storage, is also a core strength.

Highlights for the year 2020-21 include:

The win of a new data storage logo, for whom we are in involved in the development and testing of a petabyte-scale cloud storage solution.
End-to-end manual and automation testing for a Building Management System catering to next-generation smart stadiums and integration components.
Functional validation of an application for automated positive pressure solid phase extraction

IT Infrastructure Services

The pace of growth in cloud and a variety of emerging technologies, combined with increased demand throughout the pandemic, helped prompt the Company to establish a dedicated IT Infrastructure team focused on the following portfolio of services:

Vulnerability Assessment and Penetration Testing (VA/PT)

VA/PT helps to protect against network and application breaches by providing visibility of security weaknesses and the guidance to address them. It is increasingly important for enterprises that want to achieve compliance with standards, including the GDPR, ISO 27001 and PCI DSS.

Vulnerability Assessment – carried out through vulnerability scans, is designed to help identify, classify and address security risks. This exercise does not include exploiting the vulnerabilities observed during the scanning process.

Penetration Testing – a multi-layered security assessment that uses a combination of machine and human-led techniques to identify and exploit vulnerabilities in the infrastructure, systems and applications.

Service areas include:

Network VA/PT – involving a rigorous testing of the network to obtain information of backdoor entries into a network. It establishes the possibility of penetrating the network to obtain access to the internal IT infrastructure, application software and data.
Infrastructure VA – involves the scanning of the IT infrastructure to ensure that IT assets are configured as per business and security requirements, and that the internal environment is safe and secure.
Application Software VA/PT – vulnerabilities within web-based application software (internet and mobile) are easily exploited to obtain sensitive data or compromise customer information. Automated and manual tests are carried out to identify such vulnerabilities and ensure the robustness of the application.

Change in Nature of Business

There were no changes in the Nature of Business of the Company during the year.

5. QUALITY

Remote Infrastructure Support

Remote Infrastructure Management (RIM) – including the management of computer hardware and software, such as workstations, servers, network devices, storage devices, and IT security devices. Sub-services include:

Data Centre Management: Monitoring and management of servers, database, middle tier application, messaging and storage
Network Management: Monitoring and management of routers, switches, VOIP devices and network links
Security Management: Monitoring and management of firewall, IPS, IDS, VPN, PKI, etc.
Desktop Management: Remote maintenance of desktop/ laptops, file and print servers, printer and scanners

ITIL-Compliance, Processes, SLA

Proactive monitoring and incident management
Problem change and configuration management
Asset management and patch management
Availability management
Process consulting, audits and reviews
24/7 support

During 2020-21, Mindteck continued to transform its quality management system processes in order to enhance modularity and scalability. Using Lean Principles, ETVX and SWIMLANES, the Company successfully completed the enhancement of organisational capabilities in process management, project management and engineering to continue consistently delivering quality products and services to clients in time and within budget.

The transformed processes comport to the latest industry standards and frameworks and have been validated through ISO audits for ISO 27001:2015 and ISO 13485:2016 which were completed successfully in February 2021. The highlight of the year was being appraised at CMMI DEV Version 1.3, Maturity Level 5, which again reflects our confidence in the transformed Quality Management System’s ability in enabling projects to achieve the highest levels of customer satisfaction.

In addition, several guidelines were released to strengthen the Company’s ability to deliver critical safety applications in the medical device domain. With respect to information security, the Company also successfully completed the ISO 27001:2013 surveillance audit.

In 2021-22, the quality journey will continue with a focus on CMMI DEV Version 2.0 adoption, as well as exploration and

Mindteck 2020–21 Annual Report Board’s Report

adoption of the latest information security solutions to protect clients’ information assets based on threat intelligence.

In 2021-22, the quality journey will continue with a focus on CMMI DEV Version 2.0 adoption, as well as exploration and adoption of the latest information security solutions to protect clients’ information assets based on threat intelligence.

by any investor at Mindteck’s registered office. The soft copy of accounts is available on the Investors section of the Company’s website (www.mindteck.com) . The Holding, as well as Subsidiary Companies, regularly file the applicable data to various regulators and government authorities, as and when required.

None of the Subsidiaries, Joint Ventures or Associate Companies ceased during the year.

6. INFRASTRUCTURE

Mindteck has local offices in the US, Canada, UK, Germany, Singapore, Malaysia, Bahrain and India. In addition to space for workstations, conference rooms, meeting rooms, and a world-class communications system, the Company’s infrastructure includes two development centres equipped with R&D laboratories (Bengaluru and Kolkata, India).

At the start of the pandemic in 2020-21, the Company made the requisite adjustments in its IT infrastructure to ensure productive and safe in-office and remote workplace environments for both essential and other employees, while contending with peaks in the spread of the virus. Specifically, access to conferencing platforms was expanded, and critical support for new joinees and existing employees was provided continuously on a rotational basis by the IT team, security officers, an electrical team and courier services. Additionally, the Company initiated plans for investment in hybrid workforce management capabilities such as productivity, security and asset management tools.

7. SUBSIDIARIES

On March 31, 2021, Mindteck had seven wholly owned subsidiaries: Mindteck, Inc. (US), Mindteck Middle East Limited WLL (Bahrain), Mindteck Software Malaysia SDN. BHD. (Malaysia), Mindteck Singapore Pte. Ltd. (Singapore), Mindteck (UK) Limited (UK), Chendle Holdings Limited (British Virgin Islands), and Hitech Parking Solutions Private Limited (India). Mindteck (UK) Limited has one subsidiary: Mindteck Germany GmbH (Germany), and Mindteck, Inc. has one subsidiary: Mindteck Canada, Inc. (Canada). Mindteck Solutions Philippines, Inc. and Hitech Parking Solutions Private Limited are under strike-off process.

8. RELATED PARTY TRANSACTIONS

All Related Party Transactions entered during the financial year were on an arm’s length basis and in the ordinary course of business. There were no material Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel, or other designated persons and their relatives except with its wholly owned subsidiaries. The particulars of such contracts or arrangements with related party are attached as Annexure-2 .

During the financial year, your Company had obtained urgent nonmaterial legal services from CounsePro Compliance at which a Partner is a relative of an Independent Director of the Company.

9. LITIGATION

No material litigation was outstanding as on March 31, 2021 except one recovery suit filed in the year 2013 in connection with advance payment made for the office premises, which was not occupied by the Company.

10. CHANGES TO SHARE CAPITAL

The Company has not issued any Equity Shares during the FY 202021. Hence, there was no change in the Share Capital compared to previous financial year. The issued, subscribed and paid up Equity Share Capital was Rs. 25,62,18,980 as on March 31, 2021.

11. FIXED DEPOSITS

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Consolidated Financials have been audited and form part of this Annual Report. The financials of the subsidiaries have also been audited by the respective Auditors. The Consolidated Financials have been prepared and audited in strict compliance with the applicable Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All information, including (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation and (j) proposed dividend as directed by the Ministry of Corporate Affairs, has been disclosed in the Consolidated Financial Statement. Financial Highlights with the Indian rupee equivalent of the figures given in the foreign currency, along with exchange rate as on closing day of the financial year, and the statement pursuant to Section 129 (3) of the Companies Act, 2013 in Form AOC-1, forms part of this Board’s Report as Annexure-1 .

Further, the Company undertakes that the annual accounts of the Subsidiary Companies and the related detailed information will be made available to any investor seeking such information at any point of time. The annual accounts of the Subsidiary Companies and related information will also be kept for inspection

Loans, Guarantees or Investments covered under Section 186 of the Companies Act, 2013, forms part of the notes to the Financial Statements provided in the Annual Report.

13. TRANSFER TO RESERVES

During the financial year, the Company did not transfer any amount to its reserves.

14. DIRECTORS

As per Section 152 of the Companies Act, 2013, Mr. Meenaz Dhanani retires by rotation as a Director in the ensuing Annual General Meeting, and being eligible, offers himself for reappointment. A brief resume of Mr. Meenaz Dhanani is included in the Annexure to the Notice of the Annual General Meeting. Mr. Guhan Subramaniam, an Independent Director of the Company, was appointed for five (5) years effective from May 20, 2016 and his term ended on May 19, 2021. The Board of Directors have re-appointed Mr. Guhan Subramaniam, who fulfils the requisite criteria of an Independent Director for a second term of five (5) years effective from May 20, 2021 as recommended by the Nomination and Remuneration Committee subject to the approval of the Members of the Company, in the ensuing Annual General Meeting.

14 Mindteck 2020–21 Annual Report Board’s Report

Declarations by Independent Directors

All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Regulation 16(1)(b) and 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Sub-Section 6 and 7 of Section 149 of the Companies Act, 2013.

& Associates LLP, Chartered Accountants (Firm Registration No. 101049W/E300004), Bengaluru for a period of five (5) years, who shall hold the office up to the conclusion of the 31st Annual General Meeting. During the year, the Statutory Auditor confirmed its eligibility and independence criteria to hold office.

Secretarial Auditor

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has carried out an annual performance evaluation of the Board, Individual Directors, as well as Committees and Chairperson.

CS S Kannan, a Practicing Company Secretary, was appointed to conduct the Secretarial Audit of the Company for the FY 2020-21, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for the FY 2020-21 forms part of this Board’s Report as Annexure-4 .

Cost Auditor

Board Diversity

The Company places great emphasis on the principle of diversity, including gender diversity. Diversity throughout the organisation makes great business sense. The Company maintains that appointments to the Board should be based on merit, as well as complement and expand the skills, knowledge and experience of the Board as a whole.

The maintenance of cost records as specified by the Central Government under Sub-section (1) of Section 148 of the Companies Act, 2013, is not applicable to the Company, and accordingly such accounts and records are not maintained.

The Board noted the reports provided by the Statutory Auditor and Secretarial Auditor, and confirmed that there are no qualifications, reservations or adverse remarks.

Policy on Directors’ Appointment and Remuneration

Mindteck has an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management. As on date, the Board consists of eight Directors, one of whom is Managing Director and CEO; two are Non-Executive; and five are Independent Directors, including one-woman Director. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on Directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters as provided under Sub-section (3) of Section 178 of the Companies Act, 2013, is adopted by the Board, and uploaded on the Company’s website (www.mindteck.com) . We affirm that the remuneration paid to the Directors is as per the requirements of the Companies Act, 2013.

Number of Meetings of the Board

The Board met four times during the Financial Year, the details of which are given in the Corporate Governance report that forms part of this Annual Report. The intervening gap between two meetings was within the limit prescribed by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Vigil Mechanism/Whistleblower Policy

The Company has established a Whistleblower Policy for Directors, Employees and other Stakeholders to report their genuine concern, and the said policy is attached as Annexure-3 .

Constitution of Internal Complaints Committee

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

15. AUDITORS

Statutory Auditor

At the 26th Annual General Meeting held on August 11, 2017, Members of the Company appointed Statutory Auditor, S.R. Batliboi

16. ANNUAL RETURN

In accordance with Section 92(3) and 134(3)(a) of the Companies Act, 2013, the annual return in the prescribed format is displayed on the website of the Company ( Weblink: https://www.mindteck. com/annual-return ).

17. SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the Regulators, the Courts, or Tribunals impacting the going concern status and the Company’s operation in the future. The details of Tax Matters are disclosed in the Standalone Financial Statements.

18. INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of the reliable financial disclosures.

19. INDEPENDENT DIRECTORS FAMILIARISATION PROGRAMME

Mindteck has an established familiarisation programme for its Independent Directors. The business heads, Managing Director and CEO, Delivery Head, Chief Financial Officer and the Company Secretary make presentations on business models, nature of industry and its dynamism, the roles, responsibilities and liabilities of Independent Directors. Further, updates on business, statutory law and industry are made available to Independent Directors especially to the Audit Committee members on an ongoing basis by internal teams, and Statutory and Internal Auditors on a quarterly basis.

20. PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure-5 to the Board’s report.

15 Mindteck 2020–21 Annual Report

Board’s Report

The list of employees who were employed throughout the financial year and in receipt of remuneration of Rs.102 lakhs or more, or employed for part of the year and in receipt of Rs. 8.50 lakhs or more per month, and the List of Top 10 employees under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

Top 10 employees of the Company based upon the remuneration drawn during the FY 2020-21

										Any such employee
										is a relative of any
									Percentage	Director or
									of Equity Shares	Manager of the
									held by the	Company
		Remuneration							employee	and if so,
Employee Name	Designation	Received (in Rs.)	Nature of Employment	Qualifcation	Experience (in years)	Date of Commencement of Employment	Age	Last Employment	in the Company	name of such Director or Manager
Anand Balakrishnan	Managing Director and CEO	1,26,88,960	Contractual	CA and CPA	28	30-Jan-19	48	Wipro GE Healthcare Private Limited	0.03%	NO
Ramachandra M S	Chief Financial Offcer	60,68,355	Employee	CA and DipIFR	15	01-Jul-19	41	Spera Management Group	NIL	NO
	Senior Vice President
Arup Banerjee	- Global Delivery and	52,56,721	Employee	B E and M.Tech	33	08-Jul-11	55	Wipro Ltd	0.04%	NO
	Practices
Surjit Lahiri	Vice President - Technology	52,26,816	Employee	B. Tech	30	29-Mar-05	51	Novellus India Pvt Ltd	0.03%	NO
Shivarama Adiga S.	Vice President - Legal and Company Secretary	49,17,838	Employee	C.S, M.Com and LLB	44	18-Mar-13	62	Diligent Media Corporation Limited	0.03%	NO
Ayushman Ghosh	General Manager - Delivery	34,98,128	Employee	M.Sc.	29	01-Jul-99	51	PCL, Mindware	0.01%	NO
Saibal Dey	General Manager - Delivery	33,32,007	Employee	B.Sc. (Physics)	28	12-May-03	50	Cygnus Software Services	0.01%	NO
Karnendu Raja Pattanaik	General Manager - Delivery	32,39,246	Employee	B.E.	21	04-Jan-12	44	Wipro Ltd	0.02%	NO
Selvaganapathi Kasi	Principal Architect	31,01,467	Employee	MCA	21	19-Nov-08	44	Satyam Computer Services Ltd	0.00%	NO
Santosh Kalli Nandiyath	Senior Manager - Finance	29,71,055	Employee	CA	12	05-Nov-19	38	Altisource Business Solutions Pvt Ltd	0.00%	NO

16 Mindteck 2020–21 Annual Report Board’s Report

List of employees who were employed throughout the financial year and in receipt of remuneration of Rs.102 lakhs or more, or employed for part of the year and in receipt of Rs. 8.50 lakhs or more per month

										Any such
										employee is a
										relative of any
									Percentage	Director or
									of Equity	Manager of the
									shares held	Company
									by the	and if so,
		Remuneration Received	Nature of	Qualifcation	Experience	Date of Commencement of		Last	employee in the	name of such Director or
Employee Name	Designation	(in Rs.)	Employment		(in years)	Employment	Age	Employment	Company	Manager
Anand Balakrishnan	Managing Director and CEO	1,26,88,960	Contractual	CA and CPA	28	30-Jan-19	48	Wipro GE Healthcare Private Limited	0.03%	NO

21. COMMITTEES OF THE BOARD

Currently, the Board has four Committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, and Stakeholders Relationship Committee.

A detailed note on the Board and its Committees is provided under the Corporate Governance report in this Annual Report. The composition of the Committees and compliances, as per the applicable provisions of the Act and Rules, are as follows:

Name of the Committee	Composition of the Committee	Highlights of duties, responsibilities and activities
Audit Committee	Mr. Jagdish Malkani – Chairperson	▪The Committee oversees the Company’s fnancial reporting process and
	Mr. Satish Menon – Member	disclosures of its fnancial information to ensure accuracy and reliability.
	Mr. Guhan Subramaniam – Member	▪The Company has adopted the Whistleblower Policy for Directors,
	Mr. Meenaz Dhanani – Member	Employees and other Stakeholders to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company’s Code
		of Business Conduct and Ethics. The Whistleblower Policy is attached as
		*Annexure-3*to the Board’s Report.
		▪In accordance with the Companies Act, 2013 and SEBI (Listing
		Obligations and Disclosure Requirements) Regulations, 2015, the
		Company has formulated policies on related party transactions and
		material subsidiaries. The policies, including the Whistleblower Policy, are
		available on the Company’s website.
Nomination and	Ms. Prochie Mukherji – Chairperson	▪The Committee oversees and administers executive compensation,
Remuneration Committee	Mr. Yusuf Lanewala – Member Mr. Meenaz Dhanani – Member	operating under a written charter adopted by the Board of Directors. ▪The Committee has designed and continuously reviews the compensation
	Mr. Subhash Bhushan Dhar – Member	program for the Managing Director and senior executives to align both short and long-term compensation with business objectives, and to link
		compensation with the achievement of measurable performance goals.
		▪The Committee structures compensation to ensure that it is competitive
		in the global markets in which it operates in order to attract and retain the
		best talent. The Committee intends to have a combination of stock options
		and performance-based stocks to align senior employee compensation.
		▪The Nomination and Remuneration Committee has framed the
		Nomination and Remuneration policy. A copy of the policy is uploaded
		on the Company’s website_(Weblink: https://www.mindteck.com/assets/_
		investor_pdf/Nomination_Remuneration_Policy.pdf).
Corporate Social	Mr. Yusuf Lanewala – Chairperson	▪The Board has laid out the Company’s policy on Corporate Social
Responsibility Committee	Ms. Prochie Mukherji – Member Mr. Subhash Bhushan Dhar – Member	Responsibility (CSR), and the CSR activities of the Company are carried out as per the instructions of the Committee. ▪The Company allocates 2% of its average net profts of three years
		immediately preceding the fnancial year for CSR activities to various
		benefciaries.
		▪The Company was not required to spend any amount for the FY
		2020-21 as the Company incurred a loss in the immediate previous year.
		The Annual Report on CSR Activities is attached as per the prescribed
		format inAnnexure -6to the Board’s Report.
		▪The contents of the CSR policy are available on the Company’s website
		(Weblink: https://www.mindteck.com/assets/investor_pdf/CSR_Policy.pdf)

Mindteck 2020–21 Annual Report Board’s Report

Name of the Committee	Composition of the Committee	Highlights of duties, responsibilities and activities
Stakeholders	Mr. Meenaz Dhanani – Chairperson	▪The Committee reviews and ensures redressal of investor grievances.
Relationship Committee	Mr. Yusuf Lanewala – Member Mr. Subhash Bhushan Dhar – Member	▪The Committee notes all the grievances of the investors and takes suitable action accordingly.
	Ms. Prochie Mukherji – Member

22. RISK MANAGEMENT

The Company has a robust Enterprise Risk Management (ERM) framework to identify and evaluate business risk opportunities. This framework seeks to create transparency, minimise adverse impact on business objectives, and enhance the Company’s competitive advantage. The business risk policy defines the risk management approach across the enterprise at various levels, including documentation and reporting. The model has different modes that help in identifying risk trends, exposure and potential impact analysis at a Company level and also separately for different business segments. The Company has identified various risks and also has mitigation plans for each risk identified.

23. CORPORATE GOVERNANCE REPORT

Mindteck recognises good Corporate Governance and is committed to sound corporate practices based on conscience, openness, fairness, professionalism and accountability, for the benefit of its stakeholders and for long-term success. Mindteck adheres to the standards set by SEBI for Corporate Governance practices as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and a report on Corporate Governance pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. A Compliance Certificate on Corporate Governance forms part of this report as Annexure-7 .

24. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis is part of this Annual Report.

25. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief, and according to the information and explanations obtained by the Company, the Directors made the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. that such accounting policy as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently. Judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

26. CSR INITIATIVES

We Care is Mindteck’s brand experience framework which encompasses honouring the Company’s commitments and making a lasting difference internally throughout the organisation, as well as externally to clients, partners and communities. The cornerstones of the framework are Knowledge, Opportunity, Advocacy, Inclusion, Goodwill and Respect.

Care is rooted in the ways the Company engages and enables, and fundamental to building and nurturing relationships, championing others, as well as stewarding community causes. We Care Ambassadors represent the Company’s brand and, in concert with others in the Company, work to ensure a positive experience. This includes, but is not limited to, fostering a caring culture and business approach.

Mindteck’s Corporate Social Responsibility (CSR) commitment is part of We Care. We believe that through our successes around the globe, we should give back in kind and deed. We do what we can to create shared value and steward our resources to create hopeful tomorrows for others.

Core pillars of Mindteck’s CSR endeavours are Global Education and Local Targeted Giving. We believe in the empowerment of knowledge and how it helps to bring positive change and stability to society as a whole; we also know that giving to local organisations that embrace the interests and values of the communities we serve, builds stronger communities and makes business sense.

During FY 2020-21, there was no amount spent on CSR activity as it was not applicable for the Company.

27. MINDTECK EMPLOYEES STOCK OPTION SCHEMES

Mindteck believes in the policy of enabling Mindteckers to participate in the ownership of the Company and share in its wealth creation as they are responsible for the Management growth and success of the Company. The Company has four Employees Stock Option Schemes: Mindteck Employees Stock Option Scheme 2005, Mindteck Employees Stock Option Scheme 2008, Mindteck Employees Stock Option Scheme 2014, and Mindteck Employees Stock Option Scheme 2020.

a. Mindteck Employees Stock Option Scheme 2005 No options were granted under this Scheme and there has been no variation in the terms of ESOP Scheme during the year.

b. Mindteck Employees Stock Option Scheme 2008

No options were granted under this Scheme and there has been no variation in the terms of ESOP Scheme during the year.

18 Mindteck 2020–21 Annual Report Board’s Report

c. Mindteck Employees Stock Option Scheme 2014

No options were granted under this Scheme and there has been no variation in the terms of ESOP Scheme during the year.

d. Mindteck Employees Stock Option Scheme 2020 During the year, the Company introduced a new Scheme through Postal Ballot dated December 11, 2020. The Scheme has 4,16,000 shares which shall be administered and transferred through the Mindteck Employees Welfare Trust (MEWT). No options were granted under this Scheme and there has been no variation in the terms of ESOP Scheme during the year.

The details of the Employees Stock Option Schemes, as required under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014, are displayed on the website of the Company. (Weblink: https://www.mindteck.com/assets/investor_pdf/ Disclosures-pursuant-to-SEBI-Regulations-2014.pdf)

28. MINDTECK EMPLOYEES WELFARE TRUST

The Mindteck Employees Welfare Trust was set up in the year 2000 to implement the Company’s Share Incentive Scheme. During the year, the Company implemented a new Scheme named as Mindteck Employees Stock Option Scheme 2020 in lieu of Company’s earlier Share Incentive Scheme. The Scheme has 4,16,000 shares which shall be administered and transferred through Mindteck Employees Welfare Trust (MEWT). As on March 31, 2021, the said Trust holds 4,16,000 shares of the Company and has not transferred any shares to the employees of the Company under the said scheme.

30. ACKNOWLEDGEMENTS

The Directors place on record their appreciation of co-operation and continued support extended by customers, shareholders, investors, partners, vendors, bankers, the Government, and statutory authorities for the Company’s growth. We thank employees at all levels across the Group for their valuable contribution in our progress, especially during the pandemic, and look forward to their continued support.

==> picture [81 x 55] intentionally omitted <==

for and on behalf of the Board of Directors

==> picture [78 x 21] intentionally omitted <==

Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Yusuf Lanewala Chairman (DIN: 01770426)

Bengaluru, India May 28, 2021

29. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE AND OUTGO

Particulars that are required to be disclosed under Sub-Section (3)(m) of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are set out in Annexure-8 included in this Report.

19 Mindteck 2020–21 Annual Report Board’s Report

Annexure-1

STATEMENT CONTAINING THE SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE COMPANIES (AOC 1)

{Pursuant to first proviso to Sub-section (3) of Section 129 of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules 2014}

(Amount in Rs.)

										(Amount in Rs.)
		Mindteck
		Software	Mindteck	Mindteck				Mindteck		Hitech Parking
Name of the	Mindteck	Malaysia	Middle East	Singapore	Mindteck (UK)		Chendle	Solutions	Mindteck	Solutions Private
Subsidiary	Germany GmbH	SDN. BHD.	Ltd. WLL.	Pte. Ltd.	Limited	Mindteck, Inc.	Holdings Ltd.	Philippines, Inc.*	Canada, Inc.	Limited*
Sl. No.	1	2	3	5	6	7	8	9	10	11
Reporting Period	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21	01-04-20 to 31-03-21
Reporting Currency	EUR	MYR	BHD	SGD	GBP	USD	USD	PHP	CAD	INR
Exchange Rate	85.858	17.687	195.726	54.409	100.855	73.153	73.153	-	58.173	-
Share Capital	21,46,450	44,21,750	97,86,295	7,13,02,995	9,76,68,789	60,08,41,653	3,65,76,500	-	1,24,55,945	-
Reserves & Surplus	(5,72,09,847)	7,19,22,647	(23,04,673)	2,11,50,628	(8,23,18,154)	(23,35,81,187)	-	-	59,66,048	-
Total Assets	3,04,25,757	9,53,21,027	3,86,72,503	13,34,15,003	9,75,05,807	72,02,13,450	3,65,76,500	-	3,76,31,008	-
Total Liabilities	8,54,89,154	1,89,76,630	3,11,90,880	4,09,61,380	8,21,55,172	35,29,52,984	-	-	1,92,09,015	-
Investments	-	-	-	-	-	1,22,64,320	3,65,76,500	-	-	-
Turnover	10,11,55,783	14,26,01,629	10,71,32,184	25,78,84,537	25,16,80,501	1,59,46,81,946	-	-	9,93,32,890	-
Proft before taxation	(38,06,713)	62,69,178	1,15,94,279	(2,01,27,068)	(35,49,920)	(12,26,234)	-	-	47,77,888	-
Provision for taxation	-	18,60,422	-	11,06,721	-	26,63,858	-	-	12,66,180	-
Proft after taxation	(38,06,713)	44,08,756	1,15,94,279	(2,12,33,789)	(35,49,920)	(38,90,092)	-	-	35,11,708	-
Proposed Dividend	-	-	-	-	-	-	-	-	-	-
% of Shareholding	100	100	100	100	100	100	100	99.99	100	99.99

Mindteck Solutions Philippines, Inc. and Hitech Parking Solutions Private Limited are under strike-off process.

for and on behalf of the Board of Directors

==> picture [76 x 20] intentionally omitted <==

Yusuf Lanewala Chairman (DIN: 01770426)

==> picture [61 x 40] intentionally omitted <==

Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Bengaluru, India May 28, 2021

20 Mindteck 2020–21 Annual Report Board’s Report

Annexure-2

PARTICULARS OF CONTRACTS/ARRANGEMENTS/TRANSACTIONS MADE WITH RELATED PARTIES (AOC 2)

{Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014}

This Form pertains to the disclosure of particulars of contracts/arrangements entered into by the Company with the related parties referred to in Subsection (1) of Section 188 of the Companies Act, 2013, including certain arm’s length transactions under third proviso thereto.

Details of contracts or arrangements or transactions not at an arm’s length basis

There were no contracts or arrangements, or transactions entered in to during the year ended March 31, 2021, which were not at arm’s length basis.

Details of material contracts or arrangements or transactions at an arm’s length basis

The details of material contracts or arrangements or transactions at arm’s length basis for the year ended March 31, 2021 are as follows:

(Amount in Rs.)

						(Amount in Rs.)
				Salient terms of
				the contracts or
			Duration of the	arrangements	Date(s) of	Amount
		Nature of contracts/	contracts/	or transactions	approval by	paid as
Name(s) of the	Nature of	arrangements/	arrangements/	including the value,	the Board,	advances,
related party	relationship	transactions	transactions	if any*	if any	if any
(a)	(b)	(c)	(d)	(e)	(f)	(g)
Mindteck, Inc., US	Subsidiary	Buy & Sale of service/ Cross charge transactions	01-04-2008 - ongoing	51,19,96,490	NA	55,46,199
Mindteck Software Malaysia SDN. BHD, Malaysia	Subsidiary	Sale of service/Cross charge transactions	01-04-2009 - ongoing	1,04,33,397	NA	30,623
Mindteck Middle East Limited WLL, Kingdom of Bahrain	Subsidiary	Sale of service/Cross charge transactions	01-04-2009 - ongoing	39,59,274	NA	20,10,445
Mindteck (UK) Limited, United Kingdom	Subsidiary	Sale of service/Cross charge transactions	01-04-2008 - ongoing	15,82,42,922	NA	7,23,477
Mindteck Singapore Pte. Limited,	Subsidiary	Buy & Sale of service/
Singapore		Cross charge	01-04-2009 - ongoing	4,58,08,391	NA	24,62,953
		transactions
Chendle Holdings Ltd, BVI	Subsidiary	NIL	NIL	NA	NA	NA
Hitech Parking Solutions Private Limited**	Subsidiary	NIL	NIL	NA	NA	NA
Mindteck Germany GmbH, Germany	Step-Subsidiary	Sale of service/Cross charge transactions	01-04-2008 - ongoing	61,79,462	NA	43,78,052
Mindteck Solutions Philippines, Inc., Philippines**	Step-Subsidiary	NIL	NIL	NA	NA	NA
Mindteck Canada, Inc., Canada	Step-Subsidiary	NIL	NIL	NA	NA	NA

Based on TP Agreements.

** Mindteck Solutions Philippines, Inc. and Hitech Parking Solutions Private Limited are under strike-off process.

for and on behalf of the Board of Directors

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Yusuf Lanewala Chairman (DIN: 01770426) Bengaluru, India May 28, 2021

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Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Mindteck 2020–21 Annual Report Board’s Report

Annexure-3

WHISTLEBLOWER POLICY/VIGIL MECHANISM

As part of our Corporate Governance practices, the Company has adopted the Whistleblower policy that covers our Directors, former or current employees, vendors, consultants and any other person(s) who is affiliated with the Company.

The policy is provided herewith pursuant to Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy is also available on our website.

1. INTRODUCTION

Mindteck (India) Limited (hereinafter referred to as (“the Company”) is committed to the highest standards of transparency, professionalism, legal compliance, honesty, integrity, ethical behavior, corporate governance and accountability in conducting its business. The Company is committed to developing a culture where it is safe for all persons to raise concerns, grievances on various matters pertaining to any malpractice, fraud, violation of code of conduct, abuse of power or authority by any official and misconduct.

Misappropriation of funds
Non-compliance to the law of the land or violation of law
Concealing legal mandatory disclosures
Breach of fiduciary responsibilities
Infringement of Company Code of Conduct
Breach of integrity and ethics policy
Infringement of Insider Trading Code of the Company
Financial irregularities

An important aspect of transparency and accountability is a mechanism to enable all persons to voice their Protected Disclosures in a responsible and effective manner. It is a fundamental term of every contract of employment with the Company that an employee will faithfully serve his or her employer and not disclose confidential information about the employer’s business and affairs. Nevertheless, where a or any person discovers information which he/she believes to be a serious malpractice, impropriety, abuse or wrongdoing within the organisation, especially at the higher levels, then he/she should be able to disclose or report this information internally without fear of reprisal.

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 provides for a mandatory requirement for all listed companies to establish a mechanism called ‘Whistleblower Policy’ for Stakeholders to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy.

Accordingly, this Whistleblower Policy (“the Policy”) has been formulated with a view to provide a mechanism for all persons of the Company to approach various Committees of the Company.

In addition to the Listing agreement, section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014 mandates all listed company to constitute a vigil mechanism.

2. DEFINITIONS

The definitions of some of the key terms used in this Policy are given below. Capitalised terms not defined herein shall have the meaning assigned to them under the Code:

a. “Audit Committee” - means the Audit Committee constituted by the Board of Directors of the Company in accordance with Section 177 of the Companies Act, 2013 and read with Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
b. “Alleged Wrongful Conduct” - means and includes, but not limited to:
Non-compliance of Corporate Governance
Non-compliance of Related Party Transactions
Infringement and misuse of Intellectual Property
Leak of Unpublished Price Sensitive Information in any manner
c. “Code” - means Company Code of Conduct.
d. “Company” - means “Mindteck (India) Limited”.
e. “Employee” - means every employee of the Company (whether working in India or abroad), permanent or temporary including the contracted employee and Directors of the Company whether in the employment of the Company or not.
f. “Person” - means former or current employees, vendors, consultants and any other person(s) who is affiliated with the Company.
g. “Protected Disclosure” - means any communication made in good faith that discloses or demonstrates information that may evidence unethical or improper activity.
h. “Subject” - means a person against or in relation to whom a Protected Disclosure has been made or evidence gathered during the course of an investigation.
i. “Whistleblower” - means any person making a Protected Disclosure under this Policy.

3. SCOPE OF THE POLICY

a. This policy covers all persons of Mindteck (India) Limited and its subsidiaries.
b. The Policy covers any ‘Alleged Wrongful Conduct’ and other malpractices which have taken place involving, but not limited to:
Any unlawful act, whether criminal or not.
Breach of any Policy or Manual or Code of conduct adopted by the Company.
Abuse (e.g. through physical, psychological or financial abuse, exploitation or neglect).
Fraud and corruption (e.g. to solicit or receive any gift/ reward as a bribe).
Any instance of failure to comply with legal or statutory obligation either on behalf of the Company or in any personal capacity in the course of discharging duties of the Company.
Any kind of financial malpractice.

22 Mindteck 2020–21 Annual Report Board’s Report

Abuse of power (e.g. bullying/harassment).
Negligence causing substantial and specific danger to public health and safety
Wastage/misappropriation of Company funds/assets
Leak of Unpublished Price Sensitive Information in any manner
Any other unethical or improper conduct.
c. All persons of the Company are eligible to make Protected Disclosures under the Policy. The Protected Disclosures may be in relation to matters concerning the Company or any other subsidiaries.
d. This policy has been introduced by the Company to enable persons to raise their Protected Disclosures about any ‘Alleged Wrongful Conduct’, malpractice, impropriety, abuse or wrongdoing at any stage and in the right way, without fear of victimisation, subsequent discrimination or disadvantage. However, persons shall not to use this mechanism to question financial or business decisions taken by the Company Management or to reopen issues, which have already been addressed pursuant to disciplinary or other procedures of the Company.
e. The Whistleblower’s role is that of a reporting party with reliable information. They are not required or expected to act as investigators or finders of facts, nor would they determine the appropriate corrective or remedial action that may be warranted in a given case.
f. Whistleblowers should not act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Committee Heads.

4. EFFECTIVE DATE OF POLICY

This revised policy is effective from May 28, 2019.

5. COMPANY GUARANTEES UNDER THE POLICY

Protection

a. The Company as a matter of policy condemns any kind of discrimination, harassment, victimisation or any other unfair employment practice being adopted against Whistleblowers. Complete protection shall be given to Whistleblowers against any unfair practice like retaliation, threat or intimidation of termination/suspension of service, disciplinary action, transfer, demotion, refusal of promotion, including any direct or indirect use of authority to obstruct the Whistleblower’s right to continue to perform his/her duties/functions including making further Protected Disclosure.
b. The Company will take steps to minimise difficulties, which the Whistleblower may experience as a result of making the Protected Disclosure. Whistleblowers who acted in good faith, raise genuine Protected Disclosures under this policy will not be at risk of losing their jobs or be subjected to any kind of harassment or pressure from the Management .

Protected Disclosures are not published

The Company will take appropriate action to protect the identity of Whistleblowers who raise Protected Disclosures in good faith, unless forced by circumstances to reveal, in which case the Whistleblowers will be taken into confidence and his/her interests adequately protected.

Any other person assisting in the said investigation shall also be protected to the same extent as the Whistleblower.

Disqualifications

a. While it will be ensured that genuine Whistleblowers are accorded complete protection from any kind of unfair treatment as herein set out, any abuse of this protection will warrant disciplinary action.
b. Protection under this Policy would not mean protection from disciplinary action arising out of false or bogus allegations made by a Whistleblower knowing it to be false or bogus or with a mala fide intention.

Whistleblowers, who make three or more Protected Disclosures, which have been subsequently found to be mala fide, frivolous, baseless, malicious, or reported otherwise than in good faith, will be disqualified from reporting further Protected Disclosures under this Policy. In respect of such Whistleblowers, the Company/Audit Committee would reserve its right to take/recommend appropriate disciplinary action.

6. PROCEDURE FOR DISCLOSURE, ENQUIRY AND DISCIPLINARY ACTION

How to disclose Protected Disclosures?
a. A person intending to make any Protected Disclosure is required to disclose all relevant information at the earliest from the day on which he/she knew of the Protected Disclosure.
b. Protected Disclosures should preferably be reported in writing, so as to ensure a clear understanding of the issues raised and should either be typed or written in a legible handwriting in English or in the regional language of the place of employment of the Whistleblower.
c. The Protected Disclosure, if forwarded under a covering letter which shall bear the identity of the Whistleblower. The Chairperson of the Audit Committee shall detach the covering letter and discuss the Protected Disclosure with Members of the Committee.
d. The Whistleblower must disclose his/her identity in the covering letter forwarding such Protected Disclosure. Anonymous disclosures will not be entertained by the Audit Committee as it would not be possible to interview the Whistleblowers.
e. Protected Disclosures should be factual and not speculative or in the nature of a conclusion and should contain as much specific information as possible to allow for proper assessment of the nature and extent of the concern and the urgency of a preliminary investigative procedure.

To whom should Protected Disclosures be disclosed?

The Protected Disclosure should be disclosed through e-mail or fax, letter or any other method to the Chairperson of Audit Committee as below:

Chairperson of Audit Committee

Mindteck (India) Limited A.M.R. Tech Park, Block-1, 3rd Floor #664, 23/24, Hosur Main Road, Bommanahalli Bengaluru - 560068

Email: [email protected]

Mindteck 2020–21 Annual Report Board’s Report

Investigation Process

a. All Protected Disclosures reported under this Policy will be thoroughly investigated by the Chairperson of the Audit Committee of the Company, who will investigate/oversee the investigations under the authorisation of the Audit Committee. If any member of the Audit Committee has a conflict of interest in any given case, then he/she should recuse himself/herself and the other members of the Audit Committee should deal with the matter on hand.
b. The Chairperson of the Audit Committee may at his/her discretion, consider involving any Investigators for the purpose of investigation
c. The decision to conduct an investigation taken by the Chairperson of the Audit Committee is by itself not an accusation and is to be treated as a neutral fact-finding process. The outcome of the investigation may not support the conclusion of the Whistleblower that an improper or unethical act was committed.
d. The identity of a Subject will be kept confidential to the extent possible given the legitimate needs of law and the investigation.
e. Subject will normally be informed of the allegations at the outset of a formal investigation and have opportunities for providing their inputs during the investigation.
f. Subject shall co-operate with the Chairperson of the Audit Committee or any of the Investigators during investigation to the extent that such co-operation will not compromise selfincrimination protections available under the applicable laws.
g. Subject has a right to consult with a person or persons of their choice, other than the Investigators and/or members of the Audit Committee and/or the Whistleblower. Subject shall be free at any time to engage counsel at their own cost to represent them in the investigation proceedings.
h. Subject shall not interfere with the investigation.
i. Evidence shall not be withheld, destroyed or tampered with, and witnesses shall not be influenced, coached, threatened or intimidated by the Subject.
j. Unless there are compelling reasons not to do so, Subject will be given the opportunity to respond to material findings contained in an investigation report. No allegation of wrongdoing against a Subject shall be considered as maintainable unless there is good evidence in support of the allegation.
k. Subject has a right to be informed of the outcome of the investigation. If allegations are not sustained, the Subject should be consulted as to whether public disclosure of the investigation results would be in the best interest of the Subject and the Company.

Appropriate appeal procedure may be formulated by the Board, ensuring principles of natural justice and the Subject shall have right of remedies under the law.

Untrue Allegations

If any person makes allegations in good faith, which is not confirmed by subsequent investigation, no action will be taken against the Whistleblower. In making disclosures, employees should exercise due care to ensure the accuracy of the information.

Maintaining confidentiality of the Protected Disclosure

The Whistleblower as well as any of the persons to whom the Protected Disclosure has been disclosed or any of the persons who will be investigating or deciding on the investigation as well as the members of the Audit Committee shall not make public the Protected Disclosure disclosed except with the prior written permission of the Audit Committee. However, this restriction shall not be applicable if any Whistleblower is called upon to disclose this issue by any judicial process and in accordance with the laws of land.

7. COMPLAINTS OF RETALIATION AS A RESULT OF DISCLOSURE

a. If any Whistleblower believes that he/she has been retaliated against in the form of any adverse action for disclosing a Protected Disclosure under this policy, he/she may file a written complaint to the Audit Committee seeking redress.
b. For the purposes of this policy, an adverse action shall include a disciplinary suspension, a decision not to promote, a decision not to grant a salary increase, a termination, demotion, rejection during probation, a performance evaluation in which the employee’s performance is generally evaluated as unsatisfactory, a forced resignation or an unfavorable change in the general terms and conditions of employment.

Amendment

The Company reserves the right to amend or modify this Policy in whole or in part, at any time without assigning any reason. However, no such amendment or modification will be binding on the persons unless the same is notified on the website of the Company.

for and on behalf of the Board of Directors

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==> picture [75 x 20] intentionally omitted <==

Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Yusuf Lanewala Chairman (DIN: 01770426)

Bengaluru, India May 28, 2021

l. The investigation shall be completed normally within 45 days of the receipt of the Protected Disclosure.

Appeal against the decision of the Audit Committee

If either the Whistleblower or the Subject is not satisfied with the decision of the Audit Committee, then either of the Parties could prefer an appeal against this decision before the Company’s Board and the decision of the Board in the matter will be final and binding on all the parties in relation to the terms of employment.

24 Mindteck 2020–21 Annual Report Board’s Report

Annexure-4

FORM NO. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH, 31, 2021

{Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014}

To, The Members, Mindteck (India) Limited A M R Tech Park, Block 1 3[rd ] Floor, No. 664, 23/24 Hosur Main Road Bommanahalli BANGALORE – 560068

I have conducted the secretarial audit of the compliance of applicable statutory provisions and adherence to good corporate practices by Mindteck (India) Limited (herein after referred to as “Company”) for the period from 1st April 2020 to 31st March 2021. Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.

It is pertinent to note here that in view of the Covid-19 situation and prevailing lockdown, it was not possible for the undersigned to visit the office of Mindteck (India) Limited for physical verification of the documents, records, registers, minutes and such other related testimonials. In most of the cases, the Company officials had made arrangements to provide scanned copies of the desired documents and records. Hence, the Secretarial Audit could be conducted only based on the scanned documents provided and on the oral/verbal and electronic exchange of information by the officials of the Company. We were also largely dependent on the documents filed online with the Stock Exchanges with which the shares of the company are listed and also the filings made with the Ministry of Corporate Affairs and the Registrar of Companies, Karnataka.

Based on my verification of the documents provided by the company as stated above and also the information provided by the Company and its officers during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31st March 2021 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the scanned documents and other records provided by the Company for the financial year ended on 31st March 2021 according to the provisions of:

The Companies Act, 2013, (the Act) and the Rules made there under;
The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made there under;
The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act) as amended up to the date of audit:
a. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993; regarding the Companies Act and dealing with client;
b. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
c. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
d. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
e. Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
f. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
g. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
h. The Securities and Exchange Board of India (Issue of Capital and Disclosures Requirements) Regulations, 2018; and
i. The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018;
The Company has identified the following laws as applicable to them:
(i) Employees Provident Fund and Miscellaneous Provisions Act, 1952
(ii) Employees State Insurance Act, 1948
(iii) Environment Protection Act, 1986 and other applicable environmental laws
(iv) Indian Contract Act, 1872
(v) Income Tax Act, 1961 and other related laws
(vi) Payment of Bonus Act, 1965
(vii) Payment of Gratuity Act, 1972 and such other applicable labour laws.
(viii) The Information Technology Act, 2000
(ix) The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
(x) The Central Goods and Service Tax Act, 2017, IGST and relevant State GST Acts.

I have relied on the representation made by the Company and its Officers for systems and mechanism formed by the Company for compliances under other applicable Acts, Laws, Rules and Regulations to the Company. I have also examined compliance with the applicable clauses of the following:

a. Secretarial Standards issued by The Institute of Company Secretaries of India to the extent applicable as on the date of my audit.

The Company has listed its securities with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) and the shares of the Company are traded at both the Stock Exchanges.

Mindteck 2020–21 Annual Report 25 Board’s Report

During the period under the review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that:

(i) The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors.
(ii) Adequate notice is given to all Directors to schedule the Board and other Committee meetings. Agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
(iii) Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.
(iv) There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
(v) During the audit period, the Company has no major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013, having major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc.

Members approved both the above resolutions with requisite majority.

(vii) During the audit period, there were no Public / Rights issue of shares / debentures / sweat equity by the Company.
(viii) During the period under review, the Company has NOT allotted any equity shares through various ESOP Schemes to its employees and Directors.
(ix) During the audit period, there were no instances of:
a) Redemption/Buy-back of securities
b) Merger/amalgamation/reconstruction etc.,
c) Foreign technical collaborations.

This report has to be read with our letter of even date which is annexed as Annexure-A and forms an integral part of this report.

For S KANNAN AND ASSOCIATES

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S Kannan Company Secretary FCS No. 6261/C P No.: 13016 Firm No. S2017KR473100 UDIN No. F006261C000388016

Place: Bangalore Date: 28[th] May 2021

(vi) During the period under review, the Company has sought approval of the members through Postal Ballot (e-voting), pursuant to Section 110 of the Companies Act, 2013 read with Rule 20 and 22 of Companies (Management and Administration) Rules, 2014, for.
i. Mindteck Employees Stock Option Scheme 2020; and
ii. Grant of stock options under Mindteck Employees Stock Option Scheme 2020 to the employees of subsidiary company (ies) of the Company.

26 Mindteck 2020–21 Annual Report Board’s Report

Annexure-A

To, The Members, Mindteck (India) Limited A M R Tech Park, Block 1 3[rd] Floor, No. 664, 23/24 Hosur Main Road Bommanahalli BANGALORE – 560068.

e. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.
f. We further report that, based on the information provided by the Company its officers, authorised representatives during the conduct of the audit, in our opinion adequate systems and process and control mechanism exist in the Company to monitor compliance with applicable general laws like Labour laws & Environment laws and Data protection policy.

Our report of even date is to be read along with this letter.

a. Maintenance of Secretarial record is the responsibility of the Management of the Company. Our responsibility is to express as opinion on these secretarial records based on our audit.
g. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

For S KANNAN AND ASSOCIATES

b. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
c. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
d. The compliance of the provisions of Corporate and other applicable laws, Rules, Regulations, standards is the responsibility of Management. Our examination was limited to the verification of procedures on test basis.

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S Kannan Company Secretary FCS No. 6261/C P No.: 13016 Firm No. S2017KR473100 UDIN No. F006261C000388016

Place: Bangalore Date: 28[th] May 2021

Mindteck 2020–21 Annual Report Board’s Report

Annexure-5

DETAILS OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year
(ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year

(iii) The percentage increase in the median remuneration of employees in the financial year

(iv) The number of permanent employees on the rolls of Company

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

(vi) Affirmation that the remuneration is as per the remuneration policy of the Company

	Name of the Director Yusuf Lanewala	Ratio to the Median 1.36
	Anand Balakrishnan	20.92
	Meenaz Dhanani	NIL
	Guhan Subramaniam	1.36
	Jagdish Malkani	1.36
	Prochie Mukherji	1.36
	Satish Menon	1.36
	Subhash Bhushan Dhar	1.36
	Name of the Director & KMP Yusuf Lanewala	% increase 14.29%
	Anand Balakrishnan	NIL
	Meenaz Dhanani	NIL
	Guhan Subramaniam	14.29%
	Jagdish Malkani	14.29%
	Prochie Mukherji	60.00%
	Satish Menon	14.29%
	Subhash Bhushan Dhar	14.29%
	Ramachandra M S, CFO	NIL
	Shivarama Adiga S., CS	5.00%

27.32%

The total number of Mindteck permanent employees as on March 31, 2021 was 672.

Average percentage increase was 3.31% for all the employees and for managerial personnel in the FY 2020-21.

Remuneration increase is based on merit performance of individual employees and market benchmark data.

Yes – the remuneration is as per the Nomination and Remuneration policy of the Company.

for and on behalf of the Board of Directors

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Yusuf Lanewala Chairman (DIN: 01770426)

==> picture [71 x 45] intentionally omitted <==

Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Bengaluru, India May 28, 2021

28 Mindteck 2020–21 Annual Report Board’s Report

Annexure-6

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

{Pursuant to Section 135 of the Companies Act, 2013, and Companies (Corporate Social Responsibility Policy) Rules 2014}

Brief outline on CSR Policy of the Company: Company laid down its focus on the following CSR activities in line with the statute governing CSR, and for the benefit of the public:
Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, differently abled and livelihood enhancement projects.
Eradicating hunger, poverty and malnutrition, promoting health care, including preventive health care and sanitation including contribution to the Swachh Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water.
Any other CSR activities as per the Companies Act, 2013 and approved by the Board from time to time.
Composition of CSR Committee:

Sl.	Name of Director	Nature of	Number of meetings of CSR	Number of meetings of CSR
No.		Directorship	Committee held during the year	Committee attended during the year
1	Yusuf Lanewala,	Chairman	NIL	NIL
	Chairperson of the Committee
2	Prochie Mukherji	Independent	NIL	NIL
		Director
3	Subhash Bhushan Dhar	Independent	NIL	NIL
		Director

The Composition of CSR committee, CSR Policy and CSR projects approved by the Board are disclosed on the website of the Company: There was no CSR expenditure during the FY 2020-21. The CSR policy and CSR Composition is mentioned in the website of Company. ( Weblink: https:// www.mindteck.com/assets/investor_pdf/CSR_Policy.pdf )
The details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014: NOT APPLICABLE
Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any: NOT APPLICABLE

2014 and amo	unt required for set off fo	r the fnancial year, if any:NOT APPLICABLE
Sl. No.	Financial Year	Amount available for set-off from preceding fnancial years (in Rs)	Amount required to year, if any (in Rs)	be set-off for the fnancial
NIL	NIL	NIL		NIL

Average net profit of the Company as per section 135(5): NOT APPLICABLE
(a) Two percent of average net profit of the Company as per section 135(5): NOT APPLICABLE
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: NOT APPLICABLE
(c) Amount required to be set off for the financial year, if any: NOT APPLICABLE
(d) Total CSR obligation for the financial year (7a+7b-7c): NOT APPLICABLE
(a) CSR amount spent or unspent for the financial year: NOT APPLICABLE

(a) CSR amount spent	or unspent for the fnancial year:NOT APPLICABLE
Total Amount Spent for the Financial Year (in Rs.)	Amount Unspent (in Rs.)
	Total Amount transferred to Unspent CSR Account as per section 135(6) Amount transferred to any fund specifed under Schedule VII as per second proviso to section 135(5)
	Amount Date of transfer Name of the Fund Amount Date of transfer
NIL	NIL NIL NIL NIL NIL

Mindteck 2020–21 Annual Report Board’s Report

(b) Details of CSR amount spent against ongoing projects for the financial year: NOT APPLICABLE

Sl. No.	Name of the Project	Item from the list of activities in Schedule VII to the Act	Local area (Yes/ No)	Location of the project	Location of the project	Project duration.	Amount allocated for the project (in Rs.)	Amount spent in the current fnancial year (in Rs.)	Amount transferred to Unspent CSR Account for the project as per Section 135(6) (in Rs.)	Mode of Implem- entation - Direct (Yes/ No)	Mode of Implementation - Through Implementing Agency	Mode of Implementation - Through Implementing Agency
				State	District						Name	CSR Registration number
NIL	NIL	NIL	NIL	NIL		NIL	NIL	NIL	NIL	NIL	NIL	NIL

Sl. No.	Name of the Project	Item from the list of activities in Schedule VII to the Act	Local area (Yes/No)	Location of the project	Location of the project	Amount spent in the current fnancial year (in Rs.)	Mode of Implem- entation - Direct (Yes/No)	Mode of Implementation - Through Implementing Agency	Mode of Implementation - Through Implementing Agency
				State	District			Name	CSR Registration number
NIL	NIL	NIL	NIL	NIL		NIL	NIL	NIL	NIL

(d) Amount spent in Administrative Overheads: NOT APPLICABLE

(e) Amount spent on Impact Assessment, if applicable: NOT APPLICABLE
(f) Total amount spent for the Financial Year (8b+8c+8d+8e): NOT APPLICABLE
(g) Excess amount for set off, if any: NOT APPLICABLE

Excess amo	unt for set off, if any:NOT APPLICABLE
Sl. No.	Particulars	Amount (in Rs.)
(i)	Two percent of average net proft of the Company as per section 135(5)	NOT APPLICABLE
(ii)	Total amount spent for the Financial Year	NOT APPLICABLE
(iii)	Excess amount spent for the fnancial year [(ii)-(i)]	NOT APPLICABLE
(iv)	Surplus arising out of the CSR projects or programmes or activities of the previous fnancial years, if any	NOT APPLICABLE
(v)	Amount available for set off in succeeding fnancial years [(iii)-(iv)]	NOT APPLICABLE

30 Mindteck 2020–21 Annual Report Board’s Report

(a) Details of Unspent CSR amount for the preceding three financial years: NIL

Details of Unspe	nt CSR amount for the	preceding three fnanc	ial years:NIL
Sl. No.	Preceding Financial Year	Amount transferred to Unspent CSR Account under section 135 (6) (in Rs.)	Amount spent in the reporting Financial Year (in Rs.)	Amount transferred to any fund specifed under Schedule VII as per section 135(6), if any			Amount remaining to be spent in succeeding fnancial years. (in Rs.)
				Name of the Fund	Amount (in Rs)	Date of transfer
NIL	NIL	NIL	NIL	NIL	NIL	NIL	NIL

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): NOT APPLICABLE

Details of CSR	amount spe	nt in the fn	ancial year for on	going proje	cts of the preced	ing fnancial year(s)	:NOT APPLICABLE
Sl. No.	Project ID.	Name of the Project	Financial Year in which the project was commenced	Project duration.	Total amount allocated for the project (in Rs.)	Amount spent on the project in the reporting Financial Year (in Rs)	Cumulative amount spent at the end of reporting Financial Year (in Rs.)	Status of the project - Completed/ Ongoing
NIL	NIL	NIL	NIL	NIL	NIL	NIL	NIL	NIL

In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year (asset-wise details): NOT APPLICABLE
Specify the reason(s), if the Company has failed to spend two percent of the average net profit as per section 135(5): NOT APPLICABLE

for and on behalf of the Board of Directors

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Yusuf Lanewala Chairperson of the CSR Committee (DIN: 01770426)

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Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Bengaluru, India May 28, 2021

Mindteck 2020–21 Annual Report Board’s Report

Annexure-7

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

To, The Members, Mindteck (India) Limited A M R Tech Park, Block 1 3rd Floor, No. 664, 23/24 Hosur Main Road Bommanahalli BANGALORE – 560068

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

Corporate Identity No: L30007KA1991PLC039702 Nominal Capital: Rs. 33,00,00,000.00

I, S Kannan, Company Secretary, have examined all the relevant records of Mindteck (India) Limited for the purpose of certifying compliance of the conditions of the Corporate Governance under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the period from 1st April 2020 to 31st March 2021.

Further, I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of certification. The compliance of conditions of corporate governance is the responsibility of the Management. My examination was limited to the procedure and implementation process adopted by the Company for ensuring the compliance of the conditions of the corporate governance.

This certificate is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. In my opinion and to the best of my information and according to the explanations and information furnished to me, I certify that the Company has complied with all the mandatory conditions of Corporate Governance as applicable under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

For S KANNAN AND ASSOCIATES

==> picture [71 x 38] intentionally omitted <==

Place: Bangalore Date: 28[th] May, 2021

S KANNAN Company Secretary FCS No. 6261/C P No.: 13016 Firm No.: S2017KR473100 UDIN No.: F006261C000444765

32 Mindteck 2020–21 Annual Report Board’s Report

Annexure-8

DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTFLOW

1. CONSERVATION OF ENERGY

As previously mentioned, the Company has been conscious of its carbon footprint and has been working to effectively reduce the same in every manner possible. Various initiatives have been taken by the Company to ensure that consumption of energy is at minimal levels in our operations.

Mindteck has been vigilant in its power saving initiatives and has been effectively working to reduce its power conservation across all premises. The steps taken are as follows:

Conservation of Energy:

(i) Mindteck has deployed an LED-based smart lighting system at the Bengaluru location which is helping in curtailing lighting energy consumption.
(ii) Mindteck has deployed bio-urinal mats for reduction in water and energy consumption in the toilets.
(iii) Steps taken by the Company for utilising alternate source of energy:
Monitors are turned off by employees before leaving for the day. Desktops and laptops hibernate when not in use for more than ten minutes.
Only 50% of the lifts are kept operational in the various office premises of Mindteck during holidays and weekends.
The staff ensures that lights are switched off when employees are not in the office.
The office premises is planned to allow effective use of sunlight and thus reduce the need of switching on the lights during the day.
TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT

Technology Absorption :

(i) The efforts made towards technology absorption:
Mindteck has developed technologies on its own in the areas of IoT and Smart Cities and has not absorbed any technologies from external sources.
(ii) The benefits derived like product improvement, cost reduction, product development or import substitution:
Development of homegrown technologies in IoT and Smart City space has helped in reducing the solution costs, delivery timelines and helped in import substitution.
(iii) In the case of imported technology (imported during the last three years reckoned from the beginning of the financial year) – Not Applicable

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

(i) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services, and export plans.

Through off-shore leverage, Mindteck is seeking to increase exports and develop new markets through subsidiaries.

(ii) Total Foreign Exchange used and earned:

	Particulars Earnings	Year ended March 31, 2021 69,94,03,252	Amount in Rs. Year ended March 31, 2020 60,42,15,279
	Expenditure	11,930,513	2,17,75,849

Air conditioners are switched off in the evenings and during the weekends.
Air conditioner runtime has also been minimised by altering the exhaust system.
Within the premises, diesel generator sets are used only in case of extreme necessity, and these are well maintained to increase efficiency, resulting in less wastage of fuel.
The water pipes have been resized to reduce water consumption.

Waste Management:

Mindteck ensures the least possible level of waste accumulation through effective disposal and recycling of the Company’s waste. The steps taken:

The Company operates on a ‘paper-free office’ policy and storage is encouraged in digital format, rather than on paper.

for and on behalf of the Board of Directors

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==> picture [75 x 20] intentionally omitted <==

Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Yusuf Lanewala Chairman (DIN: 01770426)

Bengaluru, India May 28, 2021

All paper waste and shredded paper is sent to a recycling agent, including all cartons, boxes, and packing materials.
Separate dustbins are used to segregate bio-degradable and non-biodegradable waste to effectively process this disposal mechanism.
Food waste is processed by organic manure manufacturers.
STP is set up in the premises to ensure the usage of treated water for common area cleaning and gardening.
All e-waste is disposed and recycled through e-waste recycling agencies.

Mindteck 2020–21 Annual Report 33 Corporate Governance Report

Corporate Governance Report

The Corporate Governance framework for Mindteck (India) Limited (‘Mindteck’ or ‘the Company’) is a reflection of its culture, policies, relationship with its stakeholders and commitment to values. Accordingly, Mindteck always seeks to ensure that its performance is driven by integrity in order to retain the trust of its stakeholders.

The Securities and Exchange Board of India (SEBI) implemented SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [hereinafter referred as SEBI (LODR)], as amended from time to time, to implement comprehensive Corporate Governance norms for listed companies. These norms provide stringent disclosures for the protection of investor rights, including equitable treatment for minority and foreign shareholders. SEBI (LODR) is aligned with the provisions of the Companies Act, 2013, as amended from time to time, and is aimed to encourage companies to adopt best Corporate Governance practices.

Accordingly, the Company complies with Corporate Governance as per SEBI (LODR) and a report containing the details of the Corporate Governance and processes at Mindteck is as under:

(viii) Maintenance of high standards of safety and health.
(ix) Adherence to good governance practices in spirit and not just in letter.

2. THE GOVERNANCE STRUCTURE AT MINDTECK

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----- Start of picture text -----

Board
Board of Delegation of Authority Committees
Directors and
Reporting day-to-day affairs Management
Accountablity
Appointment of
Board Members
Managing
day-to-day affairs
Good Governance
----- End of picture text -----

1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

The Company’s philosophy on Corporate Governance envisages attainment of the highest levels of transparency, accountability and equity in all facets of its operations and in all its transactions with its stakeholders, including its employees, customers, shareholders, suppliers, partners, supporting agencies, Government, and society at large.

The Management aims to achieve its objective of increasing stakeholders’ value while consistently observing the norms laid down in the Code of Corporate Governance. The Management has institutionalised Corporate Governance at all levels within the Company in order to ensure transparency, good practices, accountability and a systems-driven style of functioning.

The overall responsibility for guiding Corporate Governance within the Company rests with the Board of Directors (‘the Board’), which has put in place appropriate policies, guidelines and processes. The day-to-day implementation and monitoring of these policies, guidelines and processes rest with the Management of the Company and are in consonance with the requirements of the Companies Act, 2013, as amended from time to time, and applicable SEBI Regulations, including SEBI (LODR). Keeping in view the Company’s size, complexity, global operations and corporate traditions, Mindteck has adopted the following main principles and philosophies:

(i) Constitution of the Board of the Company and Committees of Directors of appropriate composition, size and expertise.
(ii) Complete transparency in the operations of the Company.
(iii) Maintaining prescribed levels of disclosure and complete openness in communication.
(iv) Independent verification and safeguarding integrity of the Company’s financial reporting.
(v) A sound system of risk management and internal control.

The governance mechanism adopted at Mindteck:

(i) The Board is appointed by the shareholders and is vested with the responsibility of conducting the affairs of the Company with the objective of maximising returns to all stakeholders.
(ii) The Board is responsible for the overall vision, strategy and good Corporate Governance. The Board and Committees ensure accountability and transparency in the affairs of the Company, to the Stakeholders, by directing and controlling the management activities.
(iii) The Managing Director and CEO, along with Senior Management, are responsible for setting up business targets and day-to-day management of the Company in line with the objectives and principles set by the Board.

A. GOVERNANCE BY THE BOARD OF DIRECTORS Composition:

The Board is at the core of the Corporate Governance practice and oversees how the Management serves and protects the long-term interests of all stakeholders of the Company. The Company’s Board has an optimum combination of Executive, Non-Executive and Independent Directors, including a woman Director, with considerable experience in their respective fields to maintain the independence of the Board and to separate the functions of the Board from the Management of the Company. There is a clear demarcation in the roles and responsibilities of the Chairman, Managing Director and CEO, and the Board. The Board of Directors of the Company have the requisite core skills, expertise and competencies, as identified by them, for the nature of business and industry for its effective functioning, with expertise in Information Technology, Finance, Sales & Marketing, Legal, Corporate Governance, Management, Human Resources, as well as knowledge of global market conditions.

(vi) Timely and balanced disclosure of all material information concerning the Company to its stakeholders.
(vii) A system to ensure compliance with applicable laws in countries where the Company operates.

34 Mindteck 2020–21 Annual Report Corporate Governance Report

Table 01: Specific Core Skills, Expertise and Competencies of the Board of Directors:

		Sales and			Corporate		Human	Global
Name of the Director	Technology	Marketing	Finance	Legal	Governance	Management	Resources	Business
Mr. Yusuf Lanewala	Yes	Yes	Yes	-	Yes	Yes	Yes	Yes
Mr. Anand Balakrishnan	-	Yes	Yes	-	Yes	Yes	-	-
Mr. Meenaz Dhanani	-	Yes	Yes	-	Yes	Yes	-	Yes
Mr. Jagdish Dayal Malkani	-	-	Yes	-	Yes	Yes	-	-
Ms. Prochie Sanat Mukherji	-	-	-	Yes	Yes	Yes	Yes	-
Mr. Guhan Subramaniam	-	Yes	Yes	-	Yes	Yes	Yes	-
Mr. Satish Menon	-	-	-	Yes	Yes	Yes	-	-
Mr. Subhash Bhushan Dhar	Yes	Yes	-	-	Yes	Yes	Yes	Yes

As at March 31, 2021, the Company had eight Directors, of which five Directors were Independent, as defined in the Companies Act, 2013 and SEBI (LODR). The Chairman of the Company, a Non-Executive Director, conducts all the Board Meetings and Shareholders’ Meetings. The Managing Director and CEO, manages the day-to-day affairs of the Company. The Board periodically evaluates the need for change in its composition and size. None of the Directors of the Company are related inter se.

None of the Directors of the Company held directorships for more than the statutory limit, or were Members of more than ten Committees or Chairperson of more than five Committees across all companies in which they are Directors, as prescribed under the Companies Act, 2013 and SEBI (LODR). Further, none of the Directors of the Company held directorships in any other listed companies.

Table 02: Directorship, Designation, Shareholding and Committee Membership of the Board of Directors:

Name of the Director Designation and Category Age Equity Shareholding (as on March 31, 2021)	No. of Directorship No. of Committees***
	Public Private Chairperson Member
Mr. Yusuf Lanewala Non-Executive Chairman 67 29,705 shares	- 1*** - -
Mr. Anand Balakrishnan Managing Director and Chief Executive Offcer 48 7,350 shares	- 1*** - -
Mr. Meenaz Dhanani Non-Executive Director 64 NIL	- - - -
Mr. Jagdish Dayal Malkani Independent Director 65 NIL	- 4*** - -
Ms. Prochie Sanat Mukherji Independent Director 72 NIL	- - - -
Mr. Guhan Subramaniam Independent Director 67 NIL	- 1 - -
Mr. Satish Menon Independent Director 63 NIL	- - - -
Mr. Subhash Bhushan Dhar Independent Director 55 NIL	- 2 - -

Excluding Directorship in Mindteck (India) Limited and Foreign Companies. ** Only membership in Audit Committee and Stakeholders Relationship Committee is taken into consideration, excluding Mindteck (India) Limited. *** Mr. Yusuf Lanewala, Mr. Anand Balakrishnan and Mr. Jagdish Dayal Malkani are the Directors of Hitech Parking Solutions Private Limited, which is under strike off process.

Broad Definition of Independent Directors:

The Company has defined the independence as stipulated under the Companies Act, 2013 and SEBI (LODR). Accordingly, an Independent Director means a person who is not an officer or employee of the Company or its subsidiaries, or any other individual having a material pecuniary relationship or transactions with the Company which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director. At the time of their appointment, all Independent Directors furnished to the Company a declaration that they qualify the test of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR), and annually certify their independence. The process of selection of Independent Directors is rigorous, transparent, objective and is aligned with the needs of the Company. None of the Independent Directors have any pecuniary relationship or transactions with the Company except the receipt of sitting fees, nor served on the Board of the Company for more than ten years. In the opinion of the Board, all Independent Directors are

independent of the Management and fulfill the conditions specified in SEBI (LODR).

Pursuant to Regulation 25(3) of SEBI (LODR), the Independent Directors of the Company met once in FY 2020-21: February 11, 2021.

Independent Directors Familiarisation Programme:

Mindteck has a well-established familiarisation programme for its Independent Directors. The Managing Director and CEO, Business Heads, Delivery Head, Chief Financial Officer and the Company Secretary make presentations on business models, nature of industry and its dynamism, and the roles, responsibilities and liabilities of Independent Directors. Further, business, statutory law and industry updates are made available to Independent Directors, especially to the Audit Committee Members, on an ongoing basis by internal teams, and by Statutory and Internal Auditors on a quarterly basis. (Weblink: https://www.mindteck. com/assets/investor_pdf/ID_Familiarisation_Programme.pdf)

Mindteck 2020–21 Annual Report 35 Corporate Governance Report

Board Meetings:

The Board meets once in a quarter and additionally as and when required. The calendar of the Board meetings is decided in consultation with the Board, and the schedule of meetings is communicated to all Directors in advance to enable them to plan their effective participation during the Board meetings. The items in the Agenda are backed by comprehensive background information to enable the Board to take appropriate decisions. In addition to the information required under Schedule II Part A of SEBI (LODR), the Board is also kept informed of major

events/items and the approvals of the Board are taken wherever necessary.

The Board met four times in FY 2020-21: May 27, 2020, August 13, 2020, November 12, 2020 and February 11, 2021.

Sitting Fees:

During FY 2020-21, the Company paid a sitting fee of Rs. 1,00,000 each to its Non-Executive Directors, including Independent Directors, for attending meetings of the Board, Audit Committee and Nomination & Remuneration Committee.

Table 03: Directors’ Attendance and Sitting Fee Paid Details:

	No. of Board Meetings	No. of Board Meetings
	during	FY 2020-21
Name of the Director	Held	Attended
Mr. Yusuf Lanewala	4	4
Mr. Anand Balakrishnan	4	4
Mr. Meenaz Dhanani	4	4
Mr. Jagdish Dayal Malkani	4	4
Ms. Prochie Sanat Mukherji	4	4
Mr. Guhan Subramaniam	4	4
Mr. Satish Menon	4	4
Mr. Subhash Bhushan Dhar	4	4

	Whether attended	Sitting fees for Board
	last AGM held	and Committee
	on August 14, 2020	Meetings (in Rs.)
	Yes	8,00,000
	Yes	NIL
	Yes	NIL
	Yes	8,00,000
	Yes	8,00,000
	Yes	8,00,000
	Yes	8,00,000
	No	8,00,000

Non-Executive/Independent Directors’ Remuneration:

The remuneration paid to Non-Executive/Independent Directors is fixed by the Board of Directors and is within the limits prescribed under the Companies Act, 2013. The remuneration paid to NonExecutive/Independent Directors of the Company, as sitting fees, are noted above in Table 03 for FY 2020-21. The Company did not pay any other remuneration to Non-Executive/Independent Directors during the FY 2020-21, except sitting fees. None of the Non-Executive Directors including Independent Directors have any pecuniary relationship or transactions with the Company except the receipt of sitting fees. The Company also reimburses out-of-pocket expenses incurred by the Directors for attending the meetings.

Mr. Meenaz Dhanani, a Non-Executive Director of the Company, was not paid any remuneration by the Company but a remuneration of USD 191,268 per annum was paid till September 30, 2020, which was revised to USD 197,006 per annum w.e.f. October 01, 2020 by the Company’s wholly-owned subsidiary, Mindteck, Inc., US.

None of the Non-Executive/Independent Directors held shares or any convertible instruments in the Company, except Mr. Yusuf Lanewala, Non-Executive Chairman, who held 29,705 equity shares as on March 31, 2021. Mr. Yusuf Lanewala holds 1,00,000 stock options issued at Rs. 90.75 per share on August 10, 2016, and Mr. Meenaz Dhanani, Non-Executive Director, holds 1,00,000 stock options issued at Rs. 90.75 per share on August 10, 2016. Both grants of stock options are not issued at discount and shall vest one-third on the completion of every year from the date of grant. The said stock options can be exercisable for a maximum period of 60 months from the date of vesting.

The criteria for making payments to Non-Executive/Independent Directors is as per the Nomination and Remuneration Policy adopted by the Company which is displayed on the website of the Company. (Weblink: https://www.mindteck.com/assets/investor pdf/Nomination_Remuneration_Policy.pdf)_

Remuneration to Managing Director and CEO:

The criteria for making payment to the Managing Director and CEO is as per the Nomination and Remuneration Policy adopted by the Company which is displayed on the website of the Company. (Weblink: https://www.mindteck.com/assets/investor_pdf/ Nomination_Remuneration_Policy.pdf)

The Company has executed a formal service contract with Mr. Anand Balakrishnan, Managing Director and CEO, with a notice period of 90 days.

The detailed remuneration of Mr. Anand Balakrishnan, Managing Director and CEO, is as under:

Gross Salary: Fixed Salary: Rs. 1,25,00,000/- p.a.

Variable Salary: Rs. 25,00,000/- p.a. (based on the Company’s performance)

Mr. Anand Balakrishnan was granted 100,000 stock options at Rs. 34.70 on February 26, 2019 under the Mindteck Employees Stock Option Scheme 2014 and it was not issued at discount. The grant of stock options shall vest one-third on the completion of every year from the date of grant. The said stock options can be exercisable for a maximum period of 60 months from the date of vesting.

Proceedings of Board Meetings:

The agenda items for the Board meetings are decided in advance in consultation with the heads of various functions, the Chairman, and the Managing Director and CEO. Every Board Member can suggest additional items for inclusion in the agenda. Functional heads, who can provide additional insights into the items discussed in the Board Meetings, are also invited for the discussion. A report on the action items is placed before the Board at its succeeding meeting.

Information and Updates to the Board of Directors:

The following information and updates were made available to the Board of Directors:

Annual operating plans, budgets, and any updates.
Capital budgets and any updates.

36 Mindteck 2020–21 Annual Report Corporate Governance Report

Quarterly results of the Company and its operating divisions or business segments.
Minutes of meetings of the Audit Committee and other Committees of the Board of Directors.
Information on recruitment and remuneration of senior officers just below the level of Board of Directors, including the appointment or removal of the Chief Financial Officer and the Company Secretary.
Show cause, demand, prosecution notices and penalty notices that are materially important.
Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.
Any material default in financial obligations to and by the Company, or substantial non-payment for goods/services sold by the Company.
Any issue involving possible public or product liability claims of substantial nature, including any judgment or order which may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that may have negative implications on the Company.
Details of any joint venture or collaboration agreement.
Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.
Significant labour problems and their proposed solutions. Any significant development on Human Resources/Industrial Relations matters, such as signing of wage agreements, implementation of Voluntary Retirement Scheme, etc.
Sale of investments, subsidiaries and assets which are material in nature and not in the normal course of business.
Quarterly details of foreign exchange exposures and the steps taken by Management to limit the risks of adverse exchange rate movement, if material.
Non-compliance of any regulatory, statutory or listing requirements and shareholders service, such as non-payment of dividend, delay in share transfer, etc.

All the information to be provided to the Board as per Part A of Schedule II of SEBI (LODR) has been made available to the Board. The Company’s Board reviews and takes on record the statutory compliance reports submitted by the Company’s Management on a quarterly basis. In case of business exigencies, resolutions of the Board are passed by circulation. In addition to the above, the Company has complied with all Corporate Governance requirements specified in Regulation 17 to 27 and Regulation 46(2)(b) to (i) of SEBI (LODR).

Recording Minutes of Proceedings at Board and Committee Meetings:

The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. Draft minutes are circulated to all the Members of the Board/Committees for their comments. The minutes are entered in the Minutes book and signed as per Secretarial Standard-1.

Post-meeting Follow-up Mechanism:

The important decisions taken at the Board/Committee meetings are communicated promptly to the concerned departments/

divisions and Stock Exchanges wherever and whenever necessary to comply with SEBI (LODR). An Action Taken Report on the decisions/minutes of the previous meeting(s) is placed at the following meeting of the Board/Committee for noting and taking on record. Thus, effective post-meeting follow-up, review and reporting of the decisions taken at the Board/Committee meetings is ensured.

B. GOVERNANCE BY COMMITTEES OF THE BOARD OF DIRECTORS

The Company has the following Committees of the Board of Directors:

(I) Audit Committee
(II) Nomination and Remuneration Committee
(III) Stakeholders Relationship Committee
(IV) Corporate Social Responsibility Committee

(I) Audit Committee

The Company’s Board has constituted an Audit Committee pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR).

(a) Composition and Meetings of the Committee:

Meeting: The Audit Committee Meeting was conducted four times during the year on May 27, 2020, August 13, 2020, November 12, 2020 and February 11, 2021. The approved minutes of the meetings were placed before the Board at the succeeding Board Meeting for information.

Table 04: Composition and Attendance Details of Audit Committee Meetings held during the year:

Members	No. of Meetings
	Held Attended
Mr. Jagdish Dayal Malkani, Chairperson	4 4
Mr. Guhan Subramaniam	4 4
Mr. Satish Menon	4 4
Mr. Meenaz Dhanani	4 4

Mr. Shivarama Adiga S., Company Secretary, acted as Secretary for all of the Audit Committee meetings held in FY 2020-21.

(b) Powers:

Powers of the Audit Committee include:

(i) To investigate any activity within its terms of reference.
(ii) To seek information from any employee.
(iii) To obtain outside legal or other professional advice, if considered necessary.
(iv) To secure attendance of outsiders with relevant expertise, if considered necessary.

(c) Roles and Responsibilities:

(i) To oversee the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
(ii) To recommend appointment, remuneration and terms of appointment of auditors of the Company.

Mindteck 2020–21 Annual Report 37 Corporate Governance Report

(iii) To approve payment to the Statutory Auditor for any other services rendered by them.
(iv) To review, with the Management, the annual financial statements and the auditor’s report thereon before submission to the Board for approval, with particular reference to:
matters required to be included in the Director’s Responsibility Statement and the Board’s Report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
changes, if any, in accounting policies and practices and reasons for the same;
major accounting entries involving estimates based on the exercise of judgment by Management;
significant adjustments made in the financial statements arising out of audit findings;
compliance with listing and other legal requirements relating to financial statements;
disclosure of any Related Party Transactions;
modified opinion(s) in the draft audit report.
(v) To review, with the Management, the quarterly financial statements before submission to the Board for approval.
(vi) To review, with the Management, the statement of uses/ application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document/prospectus/notice, and the report submitted by the monitoring agency that monitors the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.
(vii) To review and monitor the auditor’s independence, performance and effectiveness of the audit process.
(viii) To approve or subsequently modify transactions of the Company with related partiess.
(ix) To scrutinise inter-corporate loans and investments.
(x) To carry out valuation of undertakings or assets of the Company, whenever it is necessary.
(xi) To evaluate internal financial controls and risk management systems.
(xii) To review with the Management, performance of Statutory and Internal Auditors, and adequacy of internal control systems.
(xiii) To review the adequacy of the internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
(xiv) To discuss with the Internal Auditor, any significant findings and follow up thereon.
(xv) To review the findings of any internal investigations by the Internal Auditor into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature, and report the matter to the Board.
(xvi) To discuss with the Statutory Auditor before the audit commences, the nature and scope of audit, as well as post-audit discussion to ascertain any area of concern.
(xvii) To look into the reasons for substantial defaults in the payment to depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.
(xviii) To review the functioning of the whistleblower mechanism.
(xix) To approve the appointment of the Chief Financial Officer after assessing the qualifications, experience and background, etc., of the candidate.
(xx) To carry out any other function as is mentioned in the terms of reference of the Audit Committee.
(xxi) To review the utilisation of loans and/or advances from/ investment by the holding company in the subsidiary exceeding Rs. 100 crore or 10% of the asset size of the subsidiary, whichever is lower, including existing loans/ advances/investments.
(xxii) To consider and comment on the rationale, costbenefits and impact of schemes involving a merger, demerger, amalgamation, etc. on the Company and its shareholders.
(xxiii) The Audit Committee mandatorily reviews the following information:
Management Discussion and Analysis of financial condition, and results of operations;
Statement of significant Related Party Transactions (as defined by the Audit Committee), submitted by Management;
Management letters/letters of internal control weaknesses issued by the Statutory Auditor;
Internal Audit reports relating to internal control weaknesses;
The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to review by the Audit Committee;
Statement of deviations:
a. Quarterly statement of deviation(s), including report of monitoring agency, if applicable, submitted to Stock Exchange(s) in terms of Regulation 32(1) of SEBI (LODR).
b. Annual statement of funds utilised for purposes other than those stated in the offer document/ prospectus/notice, in terms of Regulation 32(7) of SEBI (LODR).

38 Mindteck 2020–21 Annual Report Corporate Governance Report

(II) Nomination and Remuneration Committee

(a) Composition and Meetings of the Committee:

Meeting: The Nomination and Remuneration Committee held four meetings during the year: May 27, 2020, August 13, 2020, November 12, 2020 and February 11, 2021.

Table 05: Composition and Attendance Details of Nomination and Remuneration Committee Meetings held during the year:

Table 05: Composition and Nomination and Remuneration during the year:	Attendance Details of Committee Meetings held
Members	No. of Meetings
	Held Attended
Ms. Prochie Sanat Mukherji, Chairperson	4 4
Mr. Subhash Bhushan Dhar	4 4
Mr. Yusuf Lanewala	4 4
Mr. Meenaz Dhanani	4 4

(b) Roles and Responsibilities:

The terms of reference of the Nomination and Remuneration Committee include the following:

(i) To decide on all matters relating to the Company’s stock option/share purchase schemes including the grant of options/shares to the Directors and employees of the Company and/or its subsidiaries.
(ii) To determine and make suitable recommendations to the Board in all matters relating to qualification, appointment, evaluation and remuneration of the Independent Directors, Executive Directors, Non-Executive Directors and Key Managerial Personnel of the Company under the Companies Act, 2013 and SEBI (LODR).
(iii) To establish and administer employee compensation and benefit plans.
(iv) To decide and make suitable recommendations to the Board on any other matter that the Board may entrust to the Committee with or as may be required by any statutes/regulations/guidelines, etc.
(v) To formulate the criteria for evaluation of performance of Independent Directors and the Board of Directors.
(vi) To devise a policy on diversity of the Board of Directors.
(vii) To identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria that is laid down, and recommend to the Board of Directors their appointment and removal.
(viii) To decide whether to extend or continue the term of appointment of the Independent Directors, on the basis of the report of performance evaluation of Independent Directors.
(ix) To recommend to the Board, all remuneration in whatever form, payable to Senior Management.
(c) The Nomination and Remuneration policy is displayed on the Company’s website.
(Weblink: https://www.mindteck.com/assets/investor_pdf/ Nomination_Remuneration_Policy.pdf)

(d) Performance Evaluation Criteria for the Board of Directors

The Board, along with the Nomination and Remuneration Committee, laid down the evaluation criteria for the Board,

including evaluation of the performance of the Board as a whole, Individual Directors (including Independent Directors and Chairperson), and various Committees of the Board, in line with the Companies Act, 2013, and the Guidance Note on Board Evaluation issued by SEBI. The Members of the Board evaluate the performance of all Board Members through peer evaluation. Further, each and every Board member evaluates the effectiveness of the Board dynamics and relationships, the Company’s performance strategy, and effectiveness of the Board and its Committees. Questionnaires were devised to gather information from the Board of Directors and sent to the relevant Directors for evaluation and submission. The responses were collected and summarised, which helped to provide effective feedback to all Individual Directors, Chairperson and Committees of the Board, as well as the Board as a whole.

Independent Directors are evaluated with some key performance indicators, such as:

Ability to adopt international best practices to address risk and challenges.
Ability to monitor Corporate Governance practices.
Commitment to fulfill the obligations and responsibilities.
Active participation in the boardroom discussion and long-term strategic planning.

(III) Stakeholders Relationship Committee

( a) Composition and Meetings of the Committee:

Meeting: During the year, the Stakeholders Relationship Committee met once on February 11, 2021.

Table 06: Composition and Attendance Details of Stakeholders Relationship Committee Meetings held during the year:

during the year:
Members	No. of Meetings
	Held Attended
Mr. Meenaz Dhanani, Chairperson	1 1
Mr. Subhash Bhushan Dhar	1 1
Mr. Yusuf Lanewala	1 1
Ms. Prochie Sanat Mukherji	1 1

Mr. Shivarama Adiga S., VP, Legal and Company Secretary, acts as the Chief Compliance Officer.

(b) Roles and Responsibilities:

The roles of the Committee include the following:

(i) To resolve the grievances of the Shareholders of the Company, including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/ duplicate certificates, general meetings, etc.
(ii) To review measures taken for effective exercise of voting rights by shareholders.
(iii) To review the adherence of service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent.
(iv) To review various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensure timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company.

Mindteck 2020–21 Annual Report 39 Corporate Governance Report

Table 07: Report of Investor Complaints Received and Resolved during the year ended March 31, 2021:

	No. of Cases Outstanding	No. of Cases Added	No. of Cases Resolved	No. of Cases Outstanding
	as on April 01, 2020	during the year	during the year	as on March 31, 2021
No. of
Investor	NIL	NIL	NIL	NIL
Issues
No. of Legal Cases	NIL	NIL	NIL	NIL

There were no cases which were not resolved to the satisfaction of the shareholders.

(IV) Corporate Social Responsibility Committee

(a) Composition and Meetings of the Committee:

Meeting: During the year, the Committee did not meet as the Company was not required to spend any Corporate Social Responsibility fund and also there was no ongoing project.

Table 08: Composition of Corporate Social Responsibility Committee:

Members

Mr. Yusuf Lanewala, Chairperson Ms. Prochie Sanat Mukherji Mr. Subhash Bhushan Dhar

(v) To institute a transparent monitoring mechanism for implementation of CSR projects/programs/activities.
(vi) To monitor the implementation of CSR activities on a quarterly basis.
(vii) To approve such projects/programs/activities as approved by the Central Government

C. GOVERNANCE BY MANAGEMENT

Related Party Transactions:

During FY 2020-21, there were no materially significant Related Party Transactions entered into by the Company with the Directors or the Management or their relatives that may have a potential conflict with the interest of the Company at large. The details of the transactions with subsidiaries on an arm’s length basis are separately shown in the Annexure-2 to the Board’s Report and Note 41 of the Notes to Accounts of the Standalone Financial Statements as at March 31, 2021. The Company’s Related Party Transactions Policy is displayed on its website. (Weblink: https://www.mindteck.com/assets/investor_pdf/RPT Policy.pdf)_

Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchanges or Securities and Exchange Board of India (‘SEBI’) or any statutory authority, on any matter related to capital markets, during the last three years:

No penalties have been imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority on any matter related to capital market during the last three years.

(b) CSR Objectives:

The Company focuses on the following CSR activities for the benefit of the public, in line with Schedule VII of the Companies Act, 2013:

(i) Promoting education, including special education and employment-enhancing vocation skills especially among children, women, elderly and the differentlyabled and livelihood enhancement projects.
(ii) Promoting gender equality, empowering women, supporting the set-up of homes and hostels for women and orphans, as well as old age homes, day care centres and facilities for senior citizens, and measures for reducing inequalities faced by socially and economically backward groups.
(iii) Any other CSR activities in line with Schedule VII of the Companies Act, 2013 and approved by the Board from time to time.

(c) Terms of Reference of the Corporate Social Responsibility Committee:

(i) To formulate and recommend to the Board, a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013.
(ii) To recommend the CSR budget from time to time for the approval of the Board.
(iii) To recommend the amount of expenditure to be incurred on the CSR activities, out of the budgeted amount.

Certificate on Corporate Governance:

As required under Schedule V (E) of SEBI (LODR), the Certificate is obtained from a Practicing Company Secretary and is also annexed to the Board’s Report as Annexure-7.

Certificate on Qualification of Directors:

As required under Point 10(i) of Schedule V(C) of SEBI (LODR), a Certificate is obtained from a Practicing Company Secretary that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such Authority, and is annexed to this Corporate Governance Report.

CEO and CFO Certificate:

The Certificate signed by the Managing Director and CEO, and Chief Financial Officer, as per SEBI (LODR) in the prescribed format, also forms part of this Annual Report.

Code of Business Conduct and Ethics:

In compliance with the Companies Act, 2013 and SEBI (LODR), the Company has adopted a Code of Business Conduct and Ethics for all employees and Directors of the Company, and its subsidiaries. All Members of the Board and Senior Management personnel have affirmed compliance with the Company’s Code of Business Conduct and Ethics. A copy of the said Code of Business Conduct and Ethics is available on the Company’s website. (Weblink: https://www.mindteck.com/assets/investor_pdf/ Mindteck-Code-of-Business-Conduct-and-Ethics-v3.pdf)

(iv) To monitor the Corporate Social Responsibility Policy of the Company from time to time.

40 Mindteck 2020–21 Annual Report Corporate Governance Report

Compliance with Laws:

The Company believes in commitment to values and compliance of laws which are the hallmarks of good Corporate Governance. Legal Compliance Management in the Company transcends to compliances as a yardstick to measure and manage business risks to maximise shareholder value. The Board periodically reviews the status of compliance and the Company continuously aims to be compliant of all applicable laws at all times.

Management Discussion and Analysis:

A Management Discussion and Analysis Report is included in the Annual Report.

Subsidiaries:

The Company has no Indian-listed subsidiary. Hitech Parking Solutions Private Limited was an unlisted wholly-owned Indian subsidiary of the Company, for which a strike-off application has been filed with the MCA for approval. The statement pertaining to all Subsidiaries of the Company forms part of the Board’s Report as Annexure-1.

Material Subsidiaries:

The Company has formulated a Policy on Material Subsidiaries and has established the necessary mechanism under Regulation 16(1)(c) of SEBI (LODR). For the purpose of this Regulation, a subsidiary shall be considered as material if its income or net worth exceeds ten percent of the consolidated income or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year. The Company’s Policy on Material Subsidiaries is displayed on its website. (Weblink: https://www.mindteck.com/assets/investor_pdf/ Material_Subsidiaries_Policy(1).pdf)

Compliance with mandatory and non-mandatory

requirements of SEBI (LODR):

The Company has disclosed all the mandatory requirements under SEBI (LODR) and the status of adoption of non-mandatory requirements is as under:

The Company has moved towards a regime of financial statements with an Unmodified Audit Report.
Internal Auditor directly reports to the Audit Committee.
Separate posts of Chairperson and CEO.
The Company shares the Financial Results on a quarterly basis to all the shareholders immediately after the Board Meeting, by email.

Policies and Best Practices:

The Company has formulated various policies and procedures in accordance with the requirements of the Companies Act, 2013, SEBI (LODR) and other applicable SEBI Regulations to maintain transparency, professionalism and accountability in the organisation.

Code of Practices and Procedures for Fair Disclosure:

Pursuant to Regulation 8 of Chapter IV of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a Code for timely, appropriate and adequate disclosure of unpublished price sensitive information.

Code of Conduct for Prohibition of Insider Trading:

Pursuant to Regulation 9 of Chapter IV of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated the “Mindteck Code of Conduct to Regulate, Monitor and Report Trading by Insiders” from using unpublished price sensitive information to their advantage. The Company Secretary is the Compliance Officer for the purpose of this Code of Conduct and maintains a record of the Designated Persons including the maintenance of a structured digital database. No Insider of the Company has violated this Code and no unpublished price sensitive information has been communicated or used by them.

Whistleblower Policy:

The Company has adopted a Whistleblower Policy and has established the necessary vigil mechanism in line with the Companies Act, 2013 and SEBI (LODR), for any person to report concerns, alleged wrongful conduct, including unethical behavior, financial irregularities, misuse or leak of unpublished price sensitive information, sexual harassment, infringement and misuse of Intellectual Property. It also provides protection against victimisation of any person who avails this mechanism, and also allows them direct access to the Chairman of the Audit Committee. No employees have been denied access to the Chairman of the Audit Committee. The Whistleblower Policy is displayed on the website of the Company. (Weblink: https:// www.mindteck.com/assets/investor_pdf/Whistle_Blower_Policy. pdf)

Policy for Determining Material Information:

The Company has adopted a Policy for Determining Material Information as per SEBI (LODR). This Policy applies with respect to the disclosure of Material Events/ Information occurring/arising within the Company and its subsidiaries. This Policy for Determining Material Information is displayed on the website of the Company. (Weblink: https://www.mindteck.com/assets/investor_pdf/Policyfor-Determining-Material-Information.pdf)

Document Retention and Archival Policy:

The Company has adopted a Document Retention and Archival Policy as per SEBI (LODR). This Policy deals with the retention and archival of all important corporate records of the Company. All employees are mandated to fully comply with this Policy. The Document Retention and Archival Policy is displayed on the website of the Company. (Weblink: https://www.mindteck.com/ assets/investor_pdf/Document-Retention-and-Archival-Policy. pdf)

Mindteck 2020–21 Annual Report Corporate Governance Report

Statutory Auditor’s Fees:

The total fees paid by the Company to the Statutory Auditor and all its entities in the network firms/entities of the Statutory Auditor, for all the services provided to the Company and its subsidiaries, on a consolidated basis is as under:

Table 09: Details of Total Fees Paid to the Statutory Auditor and its Network Firms/Entities during FY 2020-21:

			Amount in Rs.
Description	Basic	Out-of-pocket Expenses	Total
Payment to S.R. Batliboi & Associates LLP
Audit Fees	32,00,000	1,92,901	33,92,901
Tax Audit	1,00,000	2,706	1,02,706
Annual Performance Report and Other Certifcations	5,15,000	4,752	5,19,752
US GAAP Audit	7,00,000	24,958	7,24,958
Total	45,15,000	2,25,317	47,40,317

Internal Auditor:

The Audit Committee of the Company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit. Accordingly, the Internal Auditor shall act upon and produce the audit report for each Quarter before the Audit Committee.

For queries relating to financial statements:

Mr. Ramachandra M S

Chief Financial Officer Tel: 91 80 4154 8000, Ext. 8169 Email: [email protected]

For queries relating to shares/dividend/compliance:

Mr. Shivarama Adiga S.

Sexual Harassment Complaints:

The disclosure in relation to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is as under:

Table 10: Report of Sexual Harassment Complaints Received and Disposed of during year ended March 31, 2021:

	No. of	No. of	No. of
	Complaints	Cases	Cases	Pending
	Outstanding	Received	Resolved	as on
	as on April	during the	during the	March 31,
	01, 2020	year	year	2021
No. of	NIL	NIL	NIL	NIL
Complaints

Software Development Centres

Bengaluru, India:

A.M.R. Tech Park, Block-1, 3rd Floor #664, 23/24, Hosur Main Road Bommanahalli, Bengaluru – 560068, India

Kolkata, India:

9-C, 9th Floor, Tower 2 Millennium City Technology Park Plot 62, Block-DN, Sector V Salt Lake, Kolkata – 700091, India

Investor Contacts

Registered Office Address for correspondence: Mindteck (India) Limited

A.M.R. Tech Park, Block-1, 3rd Floor #664, 23/24, Hosur Main Road Bommanahalli, Bengaluru – 560068, India Tel: 91 80 4154 8000 Fax: 91 80 4112 5813

For additional information on the Company, please visit www.mindteck.com

Vice President, Legal and Company Secretary Tel: 91 80 4154 8000, Ext. 8013 Email: [email protected]

Address of Registrar and Transfer Agent: Universal Capital Securities Private Limited

C 101, 247 Park, LBS Road Vikhroli West, Mumbai – 400083 Contact: Mr. Santosh Gamare Tel: 91 22 2820 7203-05 Fax: 022-2820 7207 Email: [email protected]

Addresses of Regulatory Authority/Stock Exchanges: Securities and Exchange Board of India (SEBI)

Plot No. C4-A, G Block, Bandra Kurla Complex Bandra (East), Mumbai – 400051, India Tel: 91 22 2644 9000/4045 9000 Email: [email protected]

Registrar of Companies, Karnataka

‘E’ Wing, 2[nd] Floor Kendriya Sadana, Koramangala Bengaluru – 560034, India Tel: 91 80 2563 3105/2553 7449 Email: [email protected]

BSE Limited

Phiroze Jeejeebhoy Towers Dalal Street, Mumbai – 400001, India Phone: 91 22 2272 1233/4, 91 22 6654 5695 Email: [email protected]

National Stock Exchange of India Limited

Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E) Mumbai – 400051, India Tel: 91 22 2659 8100/022 2659 8114 Email: [email protected]; [email protected]

42 Mindteck 2020–21 Annual Report Corporate Governance Report

Depository for Equity Shares – India: National Securities Depository Limited

Trade World, A Wing, 4th and 5th Floors Kamala Mills Compound, Senapati Bapat Marg Lower Parel, Mumbai – 400013, India Tel: 91 22 2499 4200 Email: [email protected]

Central Depository Services (India) Limited

A-Wing, 25th Floor, Marathon Futurex Mafatlal Mills Compound, N.M. Joshi Marg Lower Parel, Mumbai – 400013, India Tel: 91 22 2305 8640/8624 Email: [email protected]

D. INFORMATION FOR SHAREHOLDERS Corporate Profile:

Mindteck (India) Limited was incorporated in Mumbai in 1991 as Hinditron Informatics Limited under the Companies Act, 1956. The name was changed to Mindteck (India) Limited in September, 1999. Later on, in the year 2006, the Registered Office of the Company was shifted from Mumbai to Bengaluru. The Company’s CIN is L30007KA1991PLC039702.

Forthcoming Annual General Meeting (AGM):

The AGM for FY 2020-21 is scheduled for Friday, August 13, 2021 at 12:00 Noon through Video Conferencing (VC)/Other Audio-Visual Means (OAVM).

Table 11: Location and Time of last three AGMs held:

Date of AGM	Time of AGM	Location
September 28, 2018	12:00 Noon	Hotel Paraag, #3, Rajbhavan Road, Bengaluru – 560001
August 14, 2019	12:00 Noon	Hotel Paraag, #3, Rajbhavan Road, Bengaluru – 560001
August 14, 2020	3:00 PM	Held through Video Conference

Table 12: List of Special Resolutions passed by the Company at Annual General Meetings during the last three years:

September 28, 2018	▪No Special Resolutions were passed.
August 14, 2019	▪Re-appointment of Mr. Jagdish Dayal Malkani as an Independent Director of the Company.
	▪Appointment and Payment of Remuneration to Mr. Anand Balakrishnan as Managing Director
August 14, 2020	and Chief Executive Offcer of the Company.

Re-Appointment of Ms. Prochie Sanat Mukherji as an Independent Director.

Postal Ballot:

During FY 2020-21, the Company conducted a Postal Ballot through e-voting for which the details are as under:

Date of Postal Ballot Notice: December 11, 2020.
Voting Period: December 18, 2020 at 9:00 A.M. to January 17, 2021 at 5:00 P.M.
Date of Approval: January 17, 2021.
Date of Declaration of Result: January 18, 2021.
E-voting Facility: The e-voting facility was provided through CDSL platform.

Resolution	Type of Resolution	No. of Votes Polled	No. of Votes in Favour	% of Votes in Favour	No. of Votes Against	% of Votes Against
To approve Mindteck
Employee Stock Option	Special	1,72,83,067	1,72,82,037	99.994	1,030	0.006
Scheme
To approve grant of stock
options under Mindteck
Employee Stock Option
Scheme 2020 to the	Special	1,72,83,067	1,72,82,037	99.994	1,030	0.006
employees of subsidiary
company(ies) of the
Company

Mr. Gopalakrishnaraj H H, a Practicing Company Secretary (FCS No. 5654, CP No. 4152), was appointed as the Scrutiniser to scrutinise the e-voting process in a fair and transparent manner. Both agendas were approved in the postal ballot as Special Resolutions

Financial Year:

April 01, 2020 to March 31, 2021

Book Closure dates for the forthcoming AGM:

July 31, 2021 to August 13, 2021 (both days inclusive)

Listing and Payment of Annual Fees:

2021; Scrip code is “517344” and the Symbol is “MINDTECK”, respectively.

The annual listing fee for FY 2021-22 has been paid by the Company to BSE and NSE. The annual custodial fee for FY 2021-22 has been paid by the Company to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

The Company’s equity shares are listed on BSE Limited (‘BSE’) and National Stock Exchange of India Limited (‘NSE’) as at March 31,

Mindteck 2020–21 Annual Report Corporate Governance Report

Dividend:

The Board has not recommended dividend for FY 2020-21.

Share Transfer System:

In terms of Regulation 40(1) of SEBI (LODR), as amended from time to time, transfer of securities shall not be processed unless the shares are held in dematerialised mode with effect from April 01, 2019. However, transmission or transposition of securities are allowed for shares held in physical mode. Further, SEBI has stipulated March 31, 2021 as the cut-off date for re-lodgement of transfer deeds and the shares that are re-lodged for transfer shall be issued only in dematerialised mode. Members holding shares in physical mode are requested to consider converting their shares into dematerialised mode. Transfers of dematerialised shares are effected through the depositories without any involvement of the Company.

Dematerialisation of shares and liquidity:

The Company’s shares are compulsorily traded in dematerialised mode and are available for trading on both the depositories in India viz. NSDL and CDSL. Equity Shares of the Company representing 99.38% of the Company’s equity share capital are dematerialised as on March 31, 2021. The Company continues to facilitate requests for dematerialisation of shares on a regular basis and the request can be routed through the respective investors’ Depository Participant (DP) to the Company’s RTA, Universal Capital Securities Private Limited for further action. Under the Depository system, the International Securities Identification Number (ISIN) allotted to Mindteck shares is INE110B01017.

Secretarial Audit:

As per the requirements of Regulation 76 of SEBI (Depositories and Participants) Regulations, 2018, the Company has appointed Mr. Rajnikant N. Shah, a Practicing Company Secretary, to undertake the reconciliation of the share capital of the Company for its submission to the BSE and NSE. The audit reconciles the total admitted capital with NSDL and CDSL with the total issued and listed capital of the Company on a quarterly basis. The audit has confirmed that the total issued/paid-up capital has been in agreement with the aggregate total number of shares in physical mode and the total number of dematerialised shares held with NSDL and CDSL.

During the year, Mr. S. Kannan, a Practicing Company Secretary, was appointed to conduct the Secretarial Audit of the Company for FY 2020-21, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for FY 2020-21 is attached to the Board’s Report as Annexure-4.

The Board noted the reports provided by the Secretarial Auditors and confirmed that there is no qualification, reservation, adverse remark or disclaimer.

Commodity price risk or foreign exchange risk and hedging activities:

There was no commodity price risk during FY 2020-21. The Company’s transactions involve foreign currency and, to that extent, attracts foreign exchange risk due to changes in the forex rate, if any. The Board has taken a conscious decision not to have a formal hedging strategy for the foreign exchange exposures of the Company.

Shareholding Pattern as on March 31, 2021:

The Shareholding pattern as on March 31, 2021 is available on the Company’s website (www.mindteck.com) and also made available on the websites of BSE Limited (www.bseindia.com) and National Stock Exchange of India Limited (www.nseindia.com).

Table 13: Distribution of Shareholding as on March 31, 2021:

Range Number of Shares 1 – 500 501 – 1,000 1,001 – 2,000 2,001 – 3,000 3,001 – 4,000 4,001 – 5,000 5,001–10,000 10,001 & above Total	As on March 31, 2021 Shareholders Shares Number % to Total Number % to Total 8,746 86.94 9,12,069 3.56 633 6.29 5,18,415 2.02 290 2.88 4,46,540 1.74 115 1.14 2,92,506 1.14 49 0.49 1,75,793 0.69 55 0.55 2,57,912 1.01 85 0.85 6,32,408 2.47 87 0.86 2,23,86,255 87.37 10,060 100.00 2,56,21,898 100.00	As on March 31, 2020
		Shareholders Shares
		Number % to Total Number % to Total
		9,664 88.09 9,55,744 3.73
		635 5.79 5,20,279 2.03
		267 2.43 3,99,022 1.56
		106 0.97 2,69,196 1.05
		51 0.46 1,81,196 0.71
		59 0.54 2,73,063 1.06
		108 0.98 7,89,576 3.08
		81 0.74 2,22,33,822 86.78
		10,971 100.00 25,621,898 100.00

Unclaimed Dividend:

Sections 124 and 125 of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred as ‘IEPF Rules’), mandates companies to transfer dividend that has been unclaimed for a period of seven years from the Unpaid Dividend Account to the Investor Education and Protection

Fund (IEPF). Further, the IEPF Rules mandate the transfer of corresponding shares with respect to the dividend which has not been paid or claimed for seven consecutive years or more to the IEPF. Accordingly, the dividend for the years mentioned as under, if remains unclaimed within a period of seven years, and corresponding shares will be transferred to the IEPF as per the due dates noted below.

44 Mindteck 2020–21 Annual Report Corporate Governance Report

Table 14: Details of Unclaimed Dividend:

					Amount
			Date of	Due Date for	Unclaimed
Dividend Year	Type of Dividend	Dividend Rate	Declaration	transfer to IEPF	in Rs.(1)
2013-14	Final Dividend	10%	14-08-2014	18-10-2021	113,342.00
2014-15	Final Dividend	10%	11-08-2015	15-10-2022	146,567.19
2015-16	Final Dividend	10%	11-08-2016	15-10-2023	165,763.97
2016-17	Final Dividend	10%	11-08-2017	15-10-2024	170,367.29
2017-18	Final Dividend	10%	28-09-2018	02-12-2025	217,364.56
2018-19	Final Dividend	10%	14-08-2019	18-10-2026	232,094.34

(1) Amount unclaimed as at March 31, 2021

Shareholders may write to Universal Capital Securities Private Limited before the due dates to claim their unclaimed dividend. Any shareholder whose unclaimed dividend and corresponding shares are transferred to the IEPF, including all benefits accruing on such shares, if any, can claim back from the IEPF by following the procedure prescribed in the IEPF Rules. Shareholders are cautioned that once unclaimed dividend is transferred to the IEPF account, no claim shall lie in respect thereof with the Company.

The statement of the entire unclaimed dividend amount as on March 31, 2020 has been published on the website of the Company as per Form IEPF-2.

In accordance with the above provisions, the following shares were transferred to the IEPF Authority in respect of which dividend amount was unpaid/claimed for seven consecutive years during FY 2020-21:

Dividend Year	No. of Shareholders	No. of Shares
2000-01	225	6,525
2001-02	78	2,516
2004-05	300	14,930
2005-06	270	9,455
2006-07	185	7,185
2007-08	184	8,112
Total	1,242	48,723

Communication to the Shareholders:

(i) Quarterly Results:

(ii) News Releases and Presentations:

Official news releases, detailed presentations made to media, analysts, etc., if any, are displayed on the Company’s website (www.mindteck.com) .

(iii) Website:

The Company’s website www.mindteck.com contains a separate dedicated Investors section where all shareholder information is available, along with the Annual Reports of the Company.

(iv) Annual Report:

The Annual Report of the Company, containing the annual audited financial statements (both standalone and consolidated), along with the Auditor’s Report thereon, the Board’s Report, Management Discussion & Analysis Report, and other important information, is being circulated to all the shareholders whose email IDs are registered with the Company. The soft copy of the Annual Report is made available on the website of the Company.

Members holding shares in dematerialised mode are requested to update their email IDs with their respective Depository Participant (DP). Changes intimated to the DP will be automatically reflected in the Company’s records that will help the Company and its RTA to provide efficient and better services to the Members. Members holding shares in physical mode are requested to update their email IDs to the RTA, Universal Capital Securities Private Limited at C 101, 247 Park, LBS Road, Vikhroli West, Mumbai – 400083, Tel: 022-2820 7203-05, Fax: 022-2820 7207, Email: [email protected] .

The Company published its quarterly and year-end financial results in the Business Standard (English) and Hosadigantha (Bengaluru Edition - Kannada) newspapers during FY 2020-21. The results have also been submitted to the BSE and NSE where the Company’s equity shares are listed, and published on the Company’s website (www.mindteck.com) .

Mindteck 2020–21 Annual Report Corporate Governance Report

(v) Market Price Data:

Table 15: High/Low of BSE Sensex and Company’s Share Price on BSE Limited, month-wise for FY 2020-21:

Month April 2020 May 2020 June 2020 July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 February 2021 March 2021	Sensex High Low 33,887.25 27,500.79 32,845.48 29,968.45 35,706.55 32,348.10 38,617.03 34,927.20 40,010.17 36,911.23 39,359.51 36,495.98 41,048.05 38,410.20 44,825.37 39,334.92 47,896.97 44,118.10 50,184.01 46,160.46 52,516.76 46,433.65 51,821.84 48,236.35	Share Price (Rs.) High Low 21.30 13.21 24.80 17.00 28.85 19.65 29.65 22.20 43.90 22.20 36.75 28.00 34.25 28.00 37.80 26.25 55.70 35.05 61.35 42.00 49.15 40.10 49.90 41.00	Trade
			No. of Shares Traded Value in Rs.
			31,718 5,44,709
			58,202 12,35,525
			1,06,186 26,18,066
			55,449 13,65,437
			1,01,780 33,36,393
			51,914 17,11,861
			36,381 11,15,926
			54,049 17,85,788
			1,37,156 60,51,132
			1,66,591 85,98,119
			78,569 35,71,779
			1,05,797 47,96,507

Table 16: High/Low of Nifty and Company’s Share Price on NSE, month-wise for FY 2020-21:

Month April 2020 May 2020 June 2020 July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 February 2021 March 2021	Nifty High Low 9889.05 8055.80 9598.85 8806.75 10553.15 9544.35 11341.40 10299.60 11794.25 10882.25 11618.10 10790.20 12025.45 11347.05 13145.85 11557.40 14024.85 12962.80 14753.55 13596.75 15431.75 13661.75 15336.30 14264.40	Share Price (Rs.) High Low 21.90 13.30 24.90 16.65 28.85 19.05 29.75 22.00 44.50 22.35 36.00 27.70 34.70 27.20 37.65 26.30 56.20 35.00 61.95 41.15 49.20 41.00 49.75 41.25	Trade
			No. of Shares Traded Value in Rs.
			1,80,075 31,82,145.05
			2,98,702 65,73,630.55
			4,92,223 1,16,20,413.20
			3,64,609 89,33,037.70
			8,34,091 2,77,08,171.45
			1,89,464 62,02,854.25
			1,11,893 35,08,936.40
			2,75,133 92,55,844.95
			5,82,824 2,56,91,223.50
			6,75,274 3,52,48,040.55
			2,75,506 1,23,75,119.75
			3,05,797 1,37,75,115.75

Table 17: Company’s Quoted Share Price in Comparison to broad-based BSE Index and BSE IT Index:

	Closing Share Price on the
Month	month’s last trading day (Rs.)	BSE Index	BSE IT Index
April 2020	18.73	33,717.62	14,235.04
May 2020	21.75	32,424.10	14,067.30
June 2020	28.70	34,915.80	14,886.92
July 2020	22.95	37,606.89	18,251.06
August 2020	34.15	38,628.29	18,055.38
September 2020	30.15	38,067.93	19,979.89
October 2020	28.85	39,614.07	21,058.79
November 2020	36.90	44,149.72	21,635.41
December 2020	55.70	47,751.33	24,248.26
January 2021	43.65	46,285.77	24,820.69
February 2021	46.40	49,099.99	24,423.97
March 2021	41.35	49,509.15	26,543.24

46 Mindteck 2020–21 Annual Report Corporate Governance Report

Table 18: Company’s Quoted Share Price in Comparison to broad-based NSE Index and NSE IT Index:

	Closing Share Price on the
Month	month’s last trading day (Rs.)	NSE Index	NSE IT Index
April 2020	18.50	9859.90	14108.35
May 2020	21.80	9580.30	14010.50
June 2020	28.80	10302.10	14754.30
July 2020	22.70	11073.45	18071.85
August 2020	34.20	11387.50	17928.85
September 2020	30.00	11247.55	19951.30
October 2020	28.05	11642.40	20916.85
November 2020	36.60	12968.95	21764.90
December 2020	56.20	13981.75	24251.35
January 2021	43.70	13634.60	24645.75
February 2021	46.60	14529.15	24301.45
March 2021	41.70	14690.70	25855.00

(vi) Performance of Mindteck Shares in Comparison to BSE Index:

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(Source data: www.bseindia.com)
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Mindteck 2020–21 Annual Report Corporate Governance Report

(vii) Performance of Mindteck shares in comparison to NSE Index:

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Performance of Mindteck shares in comparison to NSE Index:
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(Source data: www.nseindia.com)

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Business Conduct and Ethics for its Senior Management including the Managing Director and Non-Executive Directors/Independent Directors. I confirm that the Company has received from its Senior Management Team, and the Members of the Board, a declaration of compliance with the Code of Business Conduct and Ethics as applicable to them in respect of the FY ended on March 31, 2021.

for and on behalf of the Board of Directors

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Anand Balakrishnan Managing Director and CEO (DIN: 05311032)

Bengaluru, India May 28, 2021

48 Mindteck 2020–21 Annual Report Corporate Governance Report

Annexure

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To, The Members of Mindteck (India) Limited A M R Tech Park, Block 1 3rd Floor, No. 664, 23/24 Hosur Main Road Bommanahalli BANGALORE – 560068

I, S Kannan, Consultant Company Secretary, have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Mindteck (India) Limited having CIN L30007KA1991PLC039702 and having registered office at A M R Tech Park, Block 1, 3rd Floor, No.664, 23/24, Hosur Main Road, Bommanahalli, Bangalore – 560 068 (hereinafter referred to as ‘the Company’), produced before me by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In my opinion and to the best of my information and according to the verifications (including Directors Identification Number (DIN) status at the MCA portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company and its officers, I, hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ended 31st March, 2021 have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sl. No.	Name of Director	DIN No.	Date of appointment
1	Satish Menon Kumar	00114149	14/05/2018
2	Subramaniam Guhan	00131687	20/05/2016
3	Jagdish Dayal Malkani	00326173	08/08/2013
4	Yusuf Lanewala	01770426	13/02/2013
5	Subhash Bhushan Dhar	03603891	29/05/2018
6	Anand Balakrishnan	05311032	01/03/2020
7	Meenaz Dhanani	06705048	04/10/2013
8	Prochie Sanat Mukherji	07158863	11/08/2015

Ensuring the eligibility for appointment/continuity of every Director on the Board is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these, based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For S KANNAN AND ASSOCIATES

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Place: Bangalore Date: 28[th] May, 2021

S KANNAN Company Secretary FCS No. 6261/C P No.: 13016 Firm No. S2017KR473100 UDIN No. F006261C000418442

Mindteck 2020–21 Annual Report 49 Management Discussion and Analysis

Management Discussion and Analysis

In addition to historical information, this Annual Report contains certain forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause the difference include, but are not limited to, those discussed in the Management Discussion and Analysis of financial performance and elsewhere in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis as of the date hereof.

MACROECONOMIC OUTLOOK

According to the World Bank’s Global Economic Prospects Report released in June 2021, the global economy is set to expand by 5.6 percent in 2021 – its greatest post-recession pace in 80 years. That said, recovery is anticipated to be uneven and largely reflects sharp rebounds in some major economies. In several Emerging Market and Developing Economies (EMDEs), hindrances to vaccination continue to be a burden on activity. The report states that by 2022, last year’s per capita income losses will not be fully unwound in about two-thirds of EMDEs. As far as global outlook is concerned, it remains subject to significant downside risks, including the possibilities of more COVID-19 waves and financial stress amid high EMDE debt levels.

The growth rate of the US is expected to reach 6.8 percent in 2021, reflecting a large-scale fiscal support and relaxation of pandemic restrictions. In other advanced economies, growth is strengthening, but to a lesser extent. Among EMDEs, China is anticipated to rebound to 8.5 percent in 2021, indicating the release of curbed demand.

At a modest 4.7 percent in 2022, the growth rate recovery in many EMDEs is being directly challenged by a resurgence of COVID-19 cases and lagging vaccination progress, as well as the withdrawal of policy support in a few instances. Gains in this group of economies are not sufficient to recover losses experienced during the recession induced by the pandemic. Further, according to the report, output in 2022 is expected to be 4.1 percent below pre-pandemic projections. While major drivers of growth had been expected to lose momentum even before the COVID-19 crisis, the trend is likely to be amplified due to the damaging effects of the pandemic.

In the South Asian region, growth is projected to become a strongerthan-expected 6.8 percent in 2021, partly reflecting momentum from the end of 2020. India accounts for most of the improvement since strong activity in the services sector more than compensated for the prolonged economic effects of the pandemic. However, the recovery will not reach the pre-pandemic projections for 2022. In fact, the GDP is expected to be 9 percent lower.

In October 2020, the International Monetary Fund (IMF) had projected the GDP for the Middle East and North Africa region (MENA) to grow by 3.2 percent in 2021, but in April 2021 this figure was revised to 4 percent as countries began recovering from the pandemic. The outlook is expected to vary significantly across countries depending on factors such as vaccine rollouts, as well as exposure to tourism and policies, according to the IMF’s latest regional economic report.

As of May 2021, the GDP growth forecast in Singapore for 2021 was 4-6 percent, although the government warned of a larger-than-usual degree of uncertainty caused by the pandemic, as well as new domestic curbs against it. Malaysia’s GDP projection was lowered to 4.5 percent in 2021 amid a dramatic resurgence of the COVID-19 beginning in mid-April

As far as the EU is concerned, the economy is forecast to grow by 4.2 percent in 2021 and further strengthen to around 4.4 percent in 2022.

INDUSTRY OUTLOOK

According to Gartner’s 2021 Tech Trends e-book, distributed cloud, which provides public cloud options to different physical locations, is expected to be a major trend. In the distributed cloud model, the public cloud company maintains, operates and evolves services, but physically executes at the point of need. This further means that latency issues and privacy regulations (which require data to remain at a specific geography) can be effectively resolved and managed. This allows customers to get all benefits of the public cloud and also avoid the expensive and complicated private cloud. Some distributed cloud styles include: on-prem public, IoT edge, metro-area community, 5G mobile edge and global network edge.

The cybersecurity mesh – a distributed architectural approach to scalable, flexible as well as reliable cybersecurity control – has gained popularity during the pandemic. It enables any person to securely access and use any digital asset, irrespective of the asset’s location, while providing the necessary level of security. Additionally, it enables a security model that retains the agility so very crucial in business operations considering the current conditions. At the same time, cybersecurity mesh offers security to companies without any hindrances. The rise of distributed digital assets and users is a major growth driver of the cybersecurity mesh trend.

Prior to the pandemic, companies around the world were primarily focusing on efficiency – this meant that when the disruption hit, many business processes were burdensome and not stable enough to adapt to the circumstances. To achieve resilient delivery during the rebuilding process, Gartner suggests that leaders need to consider designing an architecture – one that is composable, modular and adaptable – enabling better access to information, and augmentation of this information with new insights.

Hyperautomation is very crucial, especially with digital operational excellence already in demand, along with COVID-19 pushing companies to allow more remote, digital-first options. By implementing hyperautomation, companies can achieve both digital operational excellence as well as operational resiliency. However, digitising documents and IT process workflows alone is not sufficient – companies also need to automate tasks, processes and orchestrate automation across functional areas.

Some challenges associated with AI-based projects include lack of maintainability, scalability and governance. A robust AI engineering strategy is necessary for the facilitation of performance, scalability, interpretability and reliability of AI models while delivering the full value of AI investments. In the absence of AI engineering, most companies will fail to move AI projects beyond POCs and prototypes to full-scale production. According to Gartner, companies need to apply DevOps principles across the data pipeline for DataOps and the machine learning model pipeline for MLOps so as to reap the benefits of AI engineering.

The increasing prevalence of 5G technology, which will bring faster broadband speeds and more reliable mobile networks, continues to be yet another trend of the year. Forbes states that the 5G proliferation will also result in enhancements of smart city, smart vehicle, smart

50 Mindteck 2020–21 Annual Report Management Discussion and Analysis

manufacturing, and numerous other IoT-based technologies. Transformation across many industries is anticipated to take place as a result of the 5G technology penetration.

As far as business intelligence technologies are concerned, SaaS was adopted by multiple organisations in 2020. A report by Analytics Insight suggests that this is further expected to grow in 2021 as a result of companies embracing the tool so as to gain more flexibility and access to data on the cloud, irrespective of the device used. SaaS is predominantly gaining traction for remote teams that require solutions which will help them optimise business processes and ensure that there are no challenges posed by the remote work model. SaaS focuses on achieving sustainable growth, which is very important in an uncertain period such as the present.

Top Outsourcing Trends

According to a NASSCOM report, enterprise CXOs anticipate that more work will shift from companies’ global headquarters to Global Inhouse Captives (GICs) in India in the next three to five years. Analytics, traditional IT, digital-age IT, domain expertise, leadership quality and cost savings are the six focus areas for Indian GICs to invest in, as per the report. CXOs are also pushing to reduce legacy IT spending so as to fund digital efforts in the new operating model.

As per Technavio’s IT outsourcing statistics, the value of the IT outsourcing market is expected to reach USD 486.16 billion by 2024, growing at 5 percent during 2020-2024.

Organisations across multiple sectors, especially fintech, healthcare and telecom, are seeking to accelerate their journey towards digital transformation. Businesses in these industries are following IT outsourcing trends and are the most likely clients who are searching for IT outsourcing services.

Companies are projected to increasingly outsource the migrations, maintenance, security, compliance, and day-to-day troubleshooting related to the cloud. According to Gartner, cloud system infrastructure services is expected to grow from USD 44 billion in 2019 and reach USD 81 billion by 2022.

A Deloitte report suggests that embracing disruptive technologies remains to be a top outsourcing trend this year. Alongside shoring up value and driving down costs, a renewed focus on risk management is expected.

While many players in the IT industry anticipated cost savings to be just an ancillary benefit to objectives such as increasing agility or improving the quality of service in the past, cost reduction has become a top priority this year. A number of companies are prioritising cost savings owing to the pandemic-induced global recession. It is expected that this trend will remain on top in the coming years as well.

Evolving business scenarios, heightened visa restrictions as well as rising client expectations are some reasons as to why it is vital for service providers to become more agile. Collaboration in a world where speed, quality, flexibility and cost are key for firms that are seeking to accelerate overall outsourcing. Deloitte suggests that service providers will need to reimagine how they provide effective remote services, build plug-and-play solutions that enable rapid integration, as well as have contracts that allow them to pivot according to everchanging business priorities.

Lastly, the shortage for technology skills is soaring, according to a KPMG survey. Eastern European countries are increasingly being considered as outsourcing destinations by many companies. Particularly, Ukraine, Poland and Romania are becoming top choices for software companies looking for a software development partner due to the solid talent pool, technological excellence and great pricequality ratio offered by companies in these countries.

MARKET OUTLOOK BY INDUSTRY

Medical Device

In 2020, the global medical devices market was USD 432.23 billion. It is projected to grow from USD 455.34 billion in 2021 to USD 657.98 billion in 2028 at a Compound Annual Growth Rate (CAGR) of 5.4 percent in the forecast period. Increasing investment of MedTech companies in research and development, and favourable scenarios by regulatory authorities for their approval is expected to further boost the industry through this time period.

The global healthcare ecosystem is undergoing a major technological transformation, due to a combination of factors such as changes in spending patterns in the medical devices industry, stronger focus on digitalisation, as well as rising emphasis on partnerships, including collaborations with start-ups, and ER&D service providers.

COVID-19 has positioned the MedTech industry at the centre stage with an unparalleled demand for diagnostic tests, ventilators, and other critical medical supplies. The pandemic has also led to a stronger demand for Remote Patient Monitoring (RPM) tools to monitor patients outside regular hospital settings. As a result, telemedicine, RPM tools, digital therapeutics, electronic healthcare records, and wearables are segments that are predicted to benefit.

One of the most noticeable changes in healthcare today is the use of medical devices that incorporate AI and ML. With the advances of these technologies, the medical device industry is able to diagnose diseases better and earlier, treat illnesses more precisely, and engage with patients more efficiently.

Yet another area of advancement in healthcare is the Internet of Medical Things (IoMT) – a connected infrastructure of medical devices, software applications, health systems, and services to a centralised healthcare IT system for a more refined and in-depth data analysis.

The field of robotics is also drastically changing today’s healthcare industry beyond the operating room in performing procedures beyond baseline programming.

Wearable technology has evolved and offers the potential to collect much more advanced data. This technology can also be used to relay vital information to doctors, patients, and health-conscious citizens. Needless to say, digitalisation is sweeping across the medical device industry and there is significant innovation happening in the ecosystem.

Another ever-growing segment is Healthcare Informatics. Currently, Mindteck is working on a major Information System of Oncology for patients who are being treated using radiotherapy. We have ample experience in Patient Monitoring and Digital Therapeutics. We are also in the process of building AI/ML-based tools for large amounts of healthcare data. Lastly, Mindteck is working on designing wireless medical gateways and IoT gateways to connect patients and healthcare providers.

Mindteck 2020–21 Annual Report 51 Management Discussion and Analysis

Analytical Instrument

According to Research and Markets, the global analytical laboratory instrument market is expected to grow from USD 87.96 billion in 2020 to USD 92.55 billion in 2021 at a CAGR of 5.2 percent. A rapid growth in population depending on the life sciences market will increase the necessity to conduct lab research, ultimately resulting in a rising demand for laboratory instruments.

Analytical instruments and systems are extensively used for product analysis in various industries and have widespread application in chemical and healthcare research. During the pandemic, the extensively used PCR test is carried out by a bio-analytical instrument. This device assists in precise substance separation, qualitative and quantitative identification, and evaluation with different techniques.

Increasing R&D across the globe is driving demand for analytical instruments. Moreover, with rising sample sizes and data generation through these samples, managing information has become crucial. Annually, industrial analytical laboratories generate large volumes of information that needs to be documented and processed. Information systems are developed to aid in managing the process and outcomes of the analytical tests. This is expected to fuel growth of the market over the forecast period.

Companies within the industry are increasingly investing in nanotechnology, automation and AI for the development of a new generation of instruments that are smaller, faster and more efficient when compared to traditional equipment.

Mindteck has strong domain experience and many years of industry experience in laboratory informatics. As part of an internal R&D programme, we recently developed laboratory business intelligence application software based on an internal platform. Currently, we are also providing business intelligence for the master data of one of the top five leading analytical instrument companies.

Semiconductor

While several industries worldwide have been severely impacted by the pandemic-induced uncertainties, the relatively quick recovery of the global semiconductor industry is an encouraging sign. In spite of the global supply chain disruption, the semiconductor industry’s revenue rose to USD 442 billion in 2020, up by 5.4 percent from 2019. During 2021, this is projected to rise to USD 476 billion, as per Statista.

The APAC region continues to be the largest growing producer of semiconductors, with an ever-rising consumption being witnessed by countries such as Japan, China and South Korea. Furthermore, emerging markets such as India, with its highly skilled and experienced workforce and innovative tech capabilities, will play a key role in this growth.

The usage of AI in everyday life is accelerating at a great speed. Technologies such as augmented and virtual realities, voice and facial recognition require high-processing speeds as well as components so as to execute complex mathematical computations. As per a McKinsey study, semiconductor manufacturers are projected to benefit by 50 percent of the total value from this technology stack. With AI going mainstream, this is the best opportunity that the semiconductor industry has ever witnessed, according to the study.

The continued growth in IoT is significant for the semiconductor industry, just as it is the case with other industries such as healthcare, manufacturing, consumer electronics and supply chain management.

The increasing popularity of this technology has also led to tech companies branching into the IoT ecosystem.

According to a report by Cybermedia, yet another driver of the industry’s growth is the emergence of 5G. It is expected that this will be a factor in the enhancement and adoption of technologies beyond smartphones, such as IoT, edge computing and automotive. Furthermore, semiconductor manufacturers that are not directly part of the 5G value chain are projected to benefit from this growth. Undoubtedly, with these advances, the semiconductor industry is bound to continue expanding in the coming years.

Data Storage

As per Statista, worldwide spending on data storage is expected to exceed USD 78 billion by 2021, due to the growing demand from organisations to store greater volumes of data.

Data storage trends indicate the extent of change witnessed by the industry. According to a report by Sirius, data storage systems have become a mission-critical component of enterprise IT infrastructure. Organisations will need to be prepared for the next wave of data boom by adopting storage solutions that are agile, scalable, secure and flexible. In addition to this, companies are having fewer conversations about how and where to store data, and more about the value that data brings to their business.

Since organisations are hesitant to move all their data to the cloud, the hybrid cloud model continues to be the strategy that businesses continue to choose. This ensures cost-effectiveness and increased data mobility between on-prem, public cloud and private cloud, without compromising on data integrity. Flexibility for collection and segregation (whether on- or off-prem), accelerated time-to-market, as well as easy deployment and management are a few advantages of the hybrid multi-cloud model. A cloud environment, along with AI, learns from the data it gathers, formulates predictions and troubleshoots problems before they occur.

As per Modor Intelligence, a market intelligence and advisory firm, the enterprise flash storage market is forecasted to register a CAGR of 13.67 percent during 2021 to 2026. It is predicted that all-flash storage will be a major component of enterprise data centres and therefore it will continue to be the trend among IT organisations – this is mainly attributed to its low power consumption, high performance, scalability and ease of management. Through all-flash storage, businesses can unlock the power of Non-Volatile Memory Express (NVMe), because of its ability to access high-speed storage media compared to legacy protocols. NVMe is delivering innovation by solving what businesses can do with their data – especially fast data for real-time analytics.

Companies are increasingly minimising the human element and investing in AI as a way to control data storage across multiple platforms to achieve efficiencies that result in cost and risk reduction. AI also ensures that the time taken for data processing is also significantly less.

Software-defined storage solutions are gaining a lot of importance within the data storage industry. These cost-effective and optimised solutions eliminate the complexity of hardware systems. With storage separated from its hardware, companies are able to dynamically adjust its capacity as their data needs change.

The adoption of as a Service (aaS) models continues to be a top trend of the year. Storage as a Service (STaaS) is a cloud-based storage model

52 Mindteck 2020–21 Annual Report Management Discussion and Analysis

that allows organisations to pay only for the capacity they use, thereby eliminating the long-term financial liability of investing in storage infrastructure. In the past, companies had to predict how much storage they needed in advance, resulting in the possibility of spending money on storage capacity they would never use. With STaaS, organisations can access capacity on a subscription basis and scale up or down on demand, most likely resulting in significant cost savings.

Energy and Utilities

According to the Business Research Company, the industry revenue is expected to grow from USD 4230.3 billion in 2020 to USD 4534.38 billion in 2021 at a CAGR of 7.2 percent. The growth is mainly because of companies rearranging their operations and recovering from the COVID-19 impact. The market is expected to reach USD 5996.57 billion in 2025 at a CAGR of 7 percent.

Numerous companies in the energy and utilities industry, as well as their host municipalities and customers, announced plans to fully decarbonise over the next 30 years – even in the aftermath of the pandemic-driven shocks to the electricity load. This is mainly attributed to the pressure from an extensive range of stakeholders, including citizens and shareholders. This pressure amplified in 2020, following the Paris Climate Accord recommendations. Deloitte forecasts that as a result, in 2021, the industry’s transition and convergence could be accelerated.

IoT solutions are increasingly being used in the energy and utilities industry. These provide better operational efficiency by capturing relevant data, as well as by deploying AI and ML. IoT solutions help in improved decision-making, reduced vulnerabilities and provide safer operations. The usage of drones and sensors to inspect and monitor facilities support predictive maintenance as well as early detection of faults.

According to a report by Deloitte, cloud services will constitute a substantial part of the IT portfolio of companies in the industry. Data analytics is expected to rule in the operations and maintenance of plant and network infrastructure. Furthermore, utility companies are projected to cut down on IT costs by migrating IT infrastructure into the public cloud.

While digital twin technology models a real-life object or process without replacing the physical system, it provides the means to analyse information gathered from its physical twin faster and efficiently. Such analysis gives early alerts to operators and helps fix operational issues. Mindteck has been deriving solutions for the energy and utilities industry for efficiency improvement by leveraging its expertise in IoT and digital twin technologies. We also have extensive experience in smart grid deployment, which provides trends and real-time updates to manage demand response management by utility companies engaged in distribution of water, electricity, oil and gas.

Manufacturing

Prior to the COVID-19 crisis, the manufacturing industry was working to regain the momentum it had attained after the 2008 recession. However, after the first wave of pandemic-driven shutdowns, segment recoveries for various manufacturers have been irregular. Recovery is expected to take longer to reach pre-pandemic levels. This is indicated by Deloitte’s predictions based on the Oxford Economic Model (OEM) project, which forecasts a decline in annual manufacturing GDP growth levels for 2020-2021 (-6.3 percent for 2020 and 3.5 percent for 2021).

Predictive maintenance in equipment is extremely critical for manufacturers. Predictive analytics enables companies to monitor equipment performance, as well as automate the data collection process using IoT. It provides manufacturers with better knowledge of when systems might fail, thereby enabling them to conduct predictive maintenance and save valuable time, money, and resources in the process. The introduction of smart devices in the manufacturing industry with Industry 4.0 helps in amplified profits, faster time-tomarket, brand and price control, and better customer data. These connected devices with self and remote monitoring capabilities, along with predictive maintenance based on AI/ML over Edge, are aiding manufacturers with automated decisions and operations.

A renewed interest in IoT and heightened emphasis on predictive maintenance signifies that big data is an even larger trend than ever before. As per a report by Hitachi Solutions, one can expect almost every surface to be transformed into a sensor for data collection in order to generate real-time insights for manufacturers. The ability to collect data from a variety of sources, combined with increasingly powerful cloud computing capabilities, enable manufacturers to analyse data in ways that provide them with an ample understanding of their business. This is very essential for manufacturers for reassessing their forecasting and planning models and further develop an effective COVID-19 exit strategy.

Indeed, there is a rising convergence of traditional manufacturing to smart manufacturing. Mindteck has been a part of this transformational journey of many companies. We provide solutions in connected machines with low-cost sensors, wired and wireless connectivity with analytics. Our smart manufacturing initiatives include intelligent manufacturing and automation.

Consumer Electronics

According to Statista, global consumer electronics spending is expected to rise by USD 36 billion and reach USD 1.06 trillion in 2021. By 2025, the unified market is forecast to reach a value of USD 1.16 trillion. The figures of global phone sales, including landline phones, mobile phones and smartphones, are expected to jump by 5.7 percent year-on-year and generate USD 512.1 billion – almost 50 percent of total revenues in 2021.

As the size of the consumer electronics market is growing rapidly, industry players are increasingly investing in R&D. There is also a rapid rise in connectivity and services requirements for newer products.

Tirias Research estimates that the ever-growing demand for remote learning, working, and entertainment, combined with new software and hardware technologies in areas such as gaming, will continue to fuel robust growth in consumer electronics, as well as servers and networking gear for cloud services and 5G.

The demand for new technologies has led to swift product lifecycle development, faster time-to-market and competitive pricing. The rising expectation for more products as a service, and the resulting delivery of better customer outcomes, is changing product development and delivery. Software companies are under significant competitive pressure and striving for quality and customer experiences. These companies are moving to a continuous innovation and delivery model by taking maximum advantage of agile development and cloud delivery. With software also leading the innovation in hardware products, a similar shift is expanding across an increasing number of technology products.

Mindteck 2020–21 Annual Report 53 Management Discussion and Analysis

OPPORTUNITIES AND THREATS

Opportunities

Niche Expertise and Knowledge: Clients across the globe value our unique blend of engineering expertise, domain knowledge and technology know-how. Our services and solutions, together with flexible and mindful approach, have consistently provided innovative options for R&D spend, cost and time advantages for technology investments, reduced integration risk, improved user productivity, and positive client experiences. The impact of the pandemic is anticipated to increase demand for wearables, localised asset tracking, remote monitoring, and point-of-care devices – all part of the Mindteck Solutions portfolio.
Emerging Technologies: Mindteck remains committed to building capacity in newer technologies. Currently, its legacy expertise in embedded systems, enterprise applications and testing are a powerful complement to competencies in data services, such as AI/ ML, and cloud, cybersecurity, and IoT.
Long-standing and Diverse Client Base: Our client relationships are strong, with some lasting for over 18 years across industries and geographies. Additionally, we have engaged with industry leaders, including the top 5 data storage companies, top 3 medical device companies, top 6 semiconductor companies, and top 7 analytical instrument companies.
Offshore Delivery Centres: Mindteck’s global delivery capabilities provide clients – multinational, in particular – the specialised knowledge and expertise they are increasingly seeking. The Company’s offshore delivery centres in Kolkata and Bengaluru, India provide a skilled pool of talent, agile processes, plus cost and productivity efficiencies for new, enhanced, and reengineered product development, software development and maintenance, as well as testing.
Practices Team: Enable continuous innovation and provide subject matter expertise in select technologies, such as data services, AI, IoT, cloud and edge computing for our focused industries – semiconductor, medical device, analytical instrument, data storage, energy and utilities, insurance, and consumer electronics.

RISKS AND CONCERNS

Risks

Offshore Delivery: As per Technavio’s IT outsourcing statistics, the value of the IT outsourcing market is expected to reach USD 486.16 billion by 2024, growing at 5 percent during 2020-2024. According to a NASSCOM report, enterprise CXOs anticipate that more work will shift from companies’ global headquarters to Global In-house Captives (GICs) in India in the next three to five years. Analytics, traditional IT, digital-age IT, domain expertise, leadership quality and cost savings are the six focus areas for Indian GICs to invest in, as per the report. CXOs are also pushing to reduce legacy IT spending so as to fund digital efforts in the new operating model. Mindteck operates an offshore development centre in India supported by highly qualified and talented teams with expertise in end-to-end product engineering, IT and testing. World-class infrastructure, best-in-class tools, methodologies and processes, and international quality accreditations are more of the many reasons why clients opt for this cost-efficient and high-performance model.
Global IT Skills Shortage: According to a KPMG survey, the shortage of technology skills is soaring. This often delays staffing for new projects. Mindteck reduces this risk by continually building the talent database and, when necessary, partnering with other companies who have their own talent pool. The Company, however, recognises the potential risks associated with changing US immigration policies as well as the pandemic’s impact on evolving workforce environments.
Attrition Rate: Market demand for highly skilled employees impacts attrition. Mindteck strives to mitigate this challenge through an Employees-First approach – continually focusing on providing a good work environment, a positive work-life balance and a strong culture. We also have a curated L&D programme, and an innovative endeavour under our We Care umbrella – Consultant Care, which helps retain valuable IT talent and avoid project disruption.
Reputation: There has always been a risk of direct or indirect actions adversely impacting Mindteck’s reputation. Clearly, the risk has become more difficult to manage due to social media and other channels and venues where information exchange is quick and easy. A small team continues to monitor and manage such activities.

Threats

Fierce Competition: Mindteck continues to face strong and varied market competition from domestic and international service providers who are both large and small. Nevertheless, our longstanding and enviable client relationships, financial strength, as well as niche knowledge and expertise, provides an edge for remaining relevant.
Increased Cost Burden: Most of our top-tier clients use upwards of ten or more service providers. Higher labour and benefits costs continues to impacted margins, thus threatening profitability. As in the recent past, Mindteck is striving to overcome such pressures via increased operational efficiencies, new sales models and, as appropriate, pitching the outcome-based business model.
Consolidations: M&A deal making appears to have become the way for developing and maturing companies to unlock growth and build capabilities to survive or win. Fallout from the pandemic, improved credit availability, and attractive interest rates could be key factors that will heighten the deal competition. Mindteck is currently focused on creating a strong partnership ecosystem, building delivery capacity and resource capabilities, improving client experience, as well as developing a future-ready solutions portfolio.

Concerns

Enormous Uncertainty: Prior to the global spread of COVID-19, economic, geopolitical, regulatory uncertainties were causes for concern to the Company. This uncertainty remains and is further exacerbated by the pandemic’s continuing waves and a relatively slow vaccination progress in many countries.
Reduced Demand: The COVID-19 pandemic paused, and in some cases, halted business that was anticipated to either close out in 2020-21 or put us on a good footing to start 2021-22. According to a NASSCOM report, the majority of Indian tech companies expect to focus on recovery and restart through 2021.
Selling, General and Administrative Cost Containment (SG&A): Throughout 2020-21, we continued our efforts to reengineer internal processes and systems, as well as restructure parts of the organisation, in order to contain costs and work as an ensemble more efficiently and productively.

54 Mindteck 2020–21 Annual Report Management Discussion and Analysis

DISCUSSION ON FINANCIAL PERFORMANCE

Business

During the year under review your Company recorded Consolidated Revenue of Rs. 2,867.2 million as against Rs. 2,761.3 million in the previous year. Of the revenues that were recorded, 54.6% is attributed to the US and the rest to Europe and Asia.

Mindteck’s Consolidated Net Profit for the year stood at Rs. 108.6 million, as against net loss of Rs. 648.0 million in the corresponding previous year. On an operating margin level, Mindteck recorded Consolidated EBITDA (including other income and excluding exceptional items) of Rs. 241.7 million this fiscal year as against of Rs 62.4 million last year.

Share Capital

As on March 31, 2021, Mindteck has an issued share capital base of 2,56,21,898 equity shares of Rs. 10/- each at face value. All shares are fully paid up. In addition, 38,579 equity shares are reserved for allotment to certain allottees as at March 31, 2021, in relation to discharge of consideration for the acquisition of Chendle Holdings Limited, one of the Company’s wholly owned subsidiaries. The allotment has been pending owing to the non–availability of Permanent Account Number (PAN) for these shareholders.

Further, issued capital also includes 4,16,000 equity shares allotted to the Mindteck Employees Welfare Trust (MEWT). The trust was set up with the objective of transferring its holding in Mindteck (India) Limited to deserving employees, by way of share-based compensation. Owing to the consolidation of the Trust’s accounts with that of Mindteck, the number of shares and corresponding capital and share premium held by the Trust are deducted from the issued share capital and securities.

Reserves and Surplus

Mindteck has accumulated losses of Rs. 89.7 million in the Consolidated Balance Sheet as at March 31, 2021. Shareholders’ Funds, excluding capital reserves, increased from Rs. 1,216.5 million in FY 2020 to Rs. 1,318.7 million in FY 2021 on account of profit earned during the year.

Non-Current Liabilities

Non-Current Liabilities in the Consolidated Balance Sheet include rental deposit, deferred rental income, provision towards service concession arrangement, lease liabilities, current portion of deferred social security taxes and provision for employee benefits. NonCurrent Liabilities decreased from Rs. 174.9 million in FY 2019-20 to Rs. 82.0 million in FY 2020-21. The decrease is mainly due to derecognition of lease liabilities and reversal of provision created towards future obligation under service concession arrangement with Bhopal Municipal Corporation (BMC). During the year ended March 31, 2021, the Company invoked force majeure clause and terminated the contract with BMC and accordingly, reversed all the assets and liabilities created due to termination of contract.

Current Liabilities

Current Liabilities in the Consolidated Balance Sheet include borrowings, trade payables, provision for employee benefits, provision for tax, and other current liabilities. Current Liabilities increased from Rs. 373.8 million in FY 2019-20 to Rs. 585.8 million in FY 2020-21.

The US Federal government in the wake of COVID-19 pandemic has provided support to business through Paycheck Protection Program (PPP). Mindteck, Inc. has obtained a benefit under this

scheme for Rs. 1,806 lakhs during April 2020. This loan is eligible for forgiveness on fulfilment of certain conditions. Mindteck, Inc. has applied for forgiveness.

Trade payables increased from Rs. 128.4 million in FY 2019-20 to Rs. 135.0 million in FY 2020-21. Other current liabilities comprise unearned income, statutory liabilities such as PF, TDS, etc., noncurrent portion of deferred social security taxes and payroll payables amounting to Rs. 75.5 million as at March 31, 2021 compared to Rs. 43.8 million as at March 31, 2020.

Provisions under Current Liabilities stood at Rs. 49.9 million as at March 31, 2021 compared to Rs. 51.5 million as at March 31, 2020.

Non-Current Assets

Consolidated Non-Current Assets include Property, Plant and Equipment, Right of use asset, Intangible assets, Investment property, Deferred Tax Asset (net), long-term loans and advances and other noncurrent assets.

Mindteck invested Rs. 5.6 million in Property, Plant and Equipment during the fiscal year, which primarily relates to Computer Equipment, Office Equipment in India and US, and leasehold improvements.

During the year ended March 31, 2021, the Company invoked force majeure clause and terminated the contract with BMC and accordingly, reversed all the assets and liabilities created due to termination of contract. As a result, company has de-recognized its intangible assets amounting to Rs. 71.4 million.

Decrease in right of use assets from Rs. 108.4 million in FY 2019-20 to Rs. 65.0 million, due to derecognition on termination of contract and amortisation during FY 2020-21.

Loans under Non-Current Assets comprise security deposits totalling to Rs. 34.1 million as at March 31, 2021 compared to Rs. 38.7 million as at March 31, 2020.

Other Non-Current Assets consist of prepaid expense amounting to Rs. 1.3 million as at March 31, 2021.

Current Assets

Consolidated Current Assets include trade receivables, cash and bank balances, investments, short-term loans and advances, and other current assets.

Mindteck’s accounts receivables as at March 31, 2021 amounts to Rs. 503.6 million, representing about 89 days of sales. All debts doubtful of recovery have been provided for in the financial statements.

Cash and Bank balances amounted to Rs. 776.6 million compared to Rs. 293.9 million in the previous year which includes both rupee and foreign currency accounts.

Loans under Current Assets include security deposits. The balance as at March 31, 2021 stood at Rs. 4.2 million compared to Rs. 2.5 million as at March 31, 2020.

Other current assets include prepaid expenses, advances recoverable and balances with government authorities. The balance as at March 31, 2021 stood at Rs. 56.8 million.

Mindteck 2020–21 Annual Report 55 Management Discussion and Analysis

Investments

Mindteck (India) Limited has six wholly owned subsidiaries and two step-down subsidiaries as at March 31, 2021. The nature of operations of these subsidiaries is as follows:

Mindteck, Inc. - Operating company
Mindteck Singapore Pte. Limited - Operating company
Mindteck (UK) Limited - Operating company
Mindteck Middle East Limited WLL - Operating company
Mindteck Software Malaysia SDN. BHD. - Operating company
Chendle Holdings Limited - Investment arm, holding stock in Mindteck, Inc., US
Mindteck Germany GmbH - Selling and marketing company (stepdown subsidiary)
Mindteck Canada, Inc.- Selling and marketing company (stepdown subsidiary)

Note: Mindteck Solutions Philippines Inc. and Hitech Parking Solutions Private Limited are under strike-off process.

Internal Control Systems and their adequacy

The CEO and CFO certification provided in the annual report discusses the adequacy of our internal control systems and procedures.

RESULTS OF OPERATION

Income

The Company recorded consolidated revenue from operations of Rs. 2,867.2 million in FY 2020-21 as against Rs. 2,761.3 million in FY 2019-20. The items of other income include rental income from owned property, net foreign exchange gain, government grants

received as part of COVID-19 relief, interest income from deposits, rent concession and other miscellaneous items. The company recorded other income of Rs. 45.5 million in FY 2020-21 as against Rs. 17.5 million in FY 2019-20.

Expenses

Employee benefit expenses and cost of technical sub-contractors for the FY 2020-21 stood at Rs. 2,438.9 million as against Rs. 2,409.5 million in FY 2019-20. Manpower expense decreased to 85% of revenue compared to 87% last year.

Finance cost in FY 2020-21 was Rs. 16.5 million as compared to Rs. 22.6 million in FY 2019-20. The decrease is mainly due to reduction in interest expense on service concession arrangement on account of Force Majeure clause invoked by the Company during the FY 2020-21.

Other expenses of FY 2020-21 amounted to Rs. 232.1 million compared to Rs. 306.9 million last year. The decrease is mainly due to reduction in travel and other expenses due to impact of COVID-19 and Provision created on doubtful input credit receivable during FY 2019-20. Mindteck will continue to focus on cost-effective measures to further improve productivity and increase efficiency in the operations. Tax expense for the year amounting to Rs. 52.7 million (net) is the aggregate of current tax liability in all tax jurisdictions in which the Company operates, and deferred tax. Tax provision in India is based on the normal tax computation in accordance with the prevailing tax laws.

Operating Profit and Net Profit

Consolidated EBITDA (including other income and excluding exceptional items) for the year amounted to Rs. 241.7 million as against Rs. 62.4 million the previous year. Net profit is Rs. 108.6 million in FY 2020-21, as against Net loss of Rs. 648.0 million in FY 2019-20.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations for Standalone Financial Statements:

Sl. No. Description As at March 31, 2021 i Debtors Turnover 5.32 ii InventoryTurnover NA iii Interest Coverage Ratio NA iv Current Ratio 3.24 v Debt EquityRatio 0.00 vi OperatingProft Margin (%) 11.96% vii Net Proft Margin (%) 8.20% viii Details of any change in Return on Net Worth as compared to the immediately previous fnancial year along with a detailed explanation thereof 7%	As at March 31, 2020 4.05 NA NA 2.66 0.00 1.25% (64.18%) (49%)	Reasons for variance

		Not applicable to IT Industry
		No Interest on Loans


		During the year ended March 31, 2020, the Company had made an impairment provision of Rs. 566.6 million towards the carrying value of investment in Mindteck, Inc. and Mindteck Singapore Pte. Ltd., a provision for impairment of loan amounting to Rs. 16.8 million, provision on receivables and intangible assets under a service concession arrangement amounting to Rs. 15.9 million which are of exceptional nature, and also made a provision on Input Credit on Service Tax amountingto Rs 18.0 million.

56 Mindteck 2020–21 Annual Report Management Discussion and Analysis

Human Resources Initiatives

During a year marked by varying fluctuations in the spread of COVID-19, the Company placed a special focus on ensuring employee well-being, health and safety. Specifically, this included:

Providing new and current employees the required tech and communications support to work from home.
Conducting virtual Employee Connect gatherings to keep the dialogue open between employees and their Managers, the CEO, and HR.
Administering a variety of technical, behavioural and leadership development training sessions online – curated to upskill, future skill, cross-skill, and foster learning overall.

The cadence of work-from-home notifications, cancelled business travel measures, and office lockdowns per governmental guidelines flowed as appropriate for each region in our global footprint.

Attrition Rate: Mindteck’s annualised attrition rate during 2020-21 was 19.3%.

Headcount Details:

Year	Permanent	Contractual	Total
2020-21	672	42	714
2019-20	625	16	641

Offering dental and eye check-up sessions, an exclusive COVID insurance policy, as well as opportunities to attend educational programs such as yoga and meditation, ergonomics tips, and maintaining a healthy diet for immunity.

Mindteck 2020–21 Annual Report CEO and CFO Certification

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

To,

The Board of Directors

Mindteck (India) Limited

We, Anand Balakrishnan, Managing Director and Chief Executive Officer, and Ramachandra M S, Chief Financial Officer, to the best of our knowledge and belief, certify that:

1) We have reviewed the financial statements for the Quarter and Year ended March 31, 2021 and that to the best of our knowledge and belief:
a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
b) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
2) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year ended March 31, 2021, which are fraudulent, illegal or which violate the Company’s code of conduct.
3) We are responsible for establishing and maintaining internal controls for financial reporting and we have:
a) Evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting;
b) Disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware; and
c) The steps we have taken or propose to take to rectify these deficiencies.
4) We have indicated to the Company’s Auditors and the Audit Committee of the Board of Directors
a) Significant changes that have occurred in the internal control over financial reporting during the quarter;
b) All significant changes in accounting policies during the quarter, if any, and that the same have been disclosed in the notes to the financial statements; and
c) Instances of significant fraud, if any, of which we are aware and the involvement therein of the management or an employee having a significant role in the Company’s internal control system over financial reporting;
d) All deficiencies, if any, in the design or operation of internal controls, which could adversely affect the Company’s ability to record, process, summarize and report financial data, and have identified for the Company’s Auditors, any material weaknesses in internal controls over financial reporting including any corrective actions with regard to deficiencies.

Bengaluru, India May 28, 2021

==> picture [72 x 46] intentionally omitted <==

Anand Balakrishnan Managing Director and CEO

==> picture [70 x 34] intentionally omitted <==

Ramachandra M S

Chief Financial Officer

58 Mindteck 2020–21 Annual Report Standalone Financial Statements

Independent Auditor’s Report

To the Members of Mindteck (India) Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Mindteck (India) Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss, including the statement of Other Comprehensive Income/(Loss), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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, as amended (“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, 2021, its profit including other comprehensive income/(loss), its 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 the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards 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’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the 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 audit opinion on the standalone financial statements.

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 for the financial year ended March 31, 2021. 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 on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters

How our audit addressed the key audit matter

Impairment of Investments in Subsidiaries (as described in Note 6 of the standalone financial statements)

As at March 31, 2021, the carrying value of investment in subsidiaries in the standalone balance sheet amounts to Rs. 6,724 lakhs, net of impairment.

The management assesses annually the existence of impairment indicators in respect of its investment in subsidiaries and such investments are subject to impairment test.

During the current year, an impairment assessment was carried out by the Company by comparing the carrying value of these investments to their recoverable amount to determine whether an impairment was required to be recognized.

For the above impairment testing, basis valuation conducted by an external valuation specialist (‘management’s expert’), value in use has been determined by forecasting and discounting future cash flows which has been reviewed and approved by Audit Committee / Board of Directors of the Company. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Further, the determination of the recoverable amount of the investments involved significant judgment due to inherent uncertainty in the assumptions supporting the recoverable amount of these investments.

Our audit procedures included the following amongst others:

We understood the Company’s process for identification of indicators for impairment and evaluated the Company’s internal controls over its impairment assessment of investment in subsidiaries. We understood the key assumptions applied by the management such as revenue growth, operating margins, discount rates and terminal growth rates in determining impairment.
We have obtained the valuation assessment and report from the management’s expert and assessed the key valuation assumptions and methodologies used by the management’s expert in their valuation reports.
We have evaluated the competences, capabilities and objectivity of the management’s expert and obtained an understanding of the scope of work and the terms of engagement.
We also assessed the recoverable value by performing sensitivity testing of key assumptions used.
We discussed potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.
We tested the arithmetical accuracy of the model.

Accordingly, the impairment of investments was determined to be a key audit matter in our audit of the standalone financial statements.

We also assessed the disclosures in the standalone financial statements for compliance with disclosure requirements under the accounting standards.

Mindteck 2020–21 Annual Report 59 Standalone Financial Statements

Contingencies in relation to tax litigations (as described in Note 34 of the standalone financial statements)

The Company is involved in various legal proceedings relating to taxes. As of March 31, 2021, there is Rs. 463 lakhs disclosed as contingent liability in the standalone financial statements. In relation to these proceedings, management assesses the impact of the eventual outcome on its standalone financial statements.

The Company discloses contingencies for income tax pending litigations when it is probable that the taxation authority will accept the uncertain tax treatment in accordance with the requirements of Appendix C to Ind AS 12 on ‘Uncertainty over Income tax treatment’.

Since the aforesaid estimates require significant judgments by management, based on the available information, including that obtained from its tax advisors, we identified it as a key audit matter in our audit of the standalone financial statements.

Our audit procedures included the following amongst others:

We obtained an understanding and assessed the internal control environment relating to the identification, recognition and measurement of provisions for disputes and disclosures of contingent liabilities in relation to taxes.
We obtained details of completed tax assessments, demands issued by tax authorities, orders/notices received in this regard from the management.
We held discussions with management to understand their assessment of the quantification and likelihood of significant exposures and the provision required in accordance with the requirements of Appendix C to Ind AS 12 which is supported by assessment reports from management’s expert.
We obtained confirmation from management’s expert on ongoing litigations along with risk assessment. We have evaluated the competences, capabilities and objectivity of the management’s expert and obtained an understanding of the scope of work and the terms of engagement.
We involved our tax specialists to obtain and evaluate management’s assessment of the likely outcome and potential exposures arising from all significant contingencies and considered the requirements of any provisions and related disclosures.
We also assessed the disclosures in the standalone financial statements for compliance with disclosure requirements under the accounting standards.

Other Information

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report and Corporate Governance Report, but does not include the standalone financial statements and our auditor’s 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 such 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.

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 the 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 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, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company’s Board of Directors is 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 financial position, financial performance including other comprehensive income/(loss), 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting

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.

60 Mindteck 2020–21 Annual Report 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 made by management.
Conclude on the appropriateness of management’s 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 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 for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor’s 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

As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the “Annexure 1” a

statement on the matters specified in paragraphs 3 and 4 of the Order.

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 Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income/(Loss), 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e. On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
g. In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
h. With respect to the other matters 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 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 financial statements – Refer Note 34 to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts – Refer Note 34 to the standalone financial statements; and
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 per Rajeev Kumar Partner Membership Number: 213803 UDIN: 21213803AAAABY6528

Place: Bengaluru Date : May 28, 2021

Mindteck 2020–21 Annual Report 61 Standalone Financial Statements

Annexure 1 to the Independent Auditor’s Report of even date on the Standalone Financial Statements of Mindteck (India) Limited Statement on the matters specified in paragraph 3 and 4 of the Companies (Auditor’s Report) Order, 2016 (“the Order”)

(i) a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
b. Property, plant and equipment have been physically verified by the management during the year and no material discrepancies were identified on such verification.
c. According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment/investment property are held in the name of the Company.
(ii) The Company’s business does not involve inventories and, accordingly, the requirements under paragraph 3(ii) of the Order are not applicable to the Company.
(iii) According to the information and explanations given to us, 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 Companies Act, 2013 (“the Act”). Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given by the management, the Company has complied with the provisions of section 185 and 186 of the Act in respect of grant of loans to directors including entities in which they are interested

and in respect of loans and advances given, making investments and providing guarantees and securities, as applicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under Section 148(1) of the Act for the services of the Company.
(vii) a. Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, duty of custom, goods and services tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been slight delays in remittance of provident fund, professional tax and goods and services tax in few cases.
b. According to the information and explanations given by the management, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, duty of customs, goods and services tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
c. According to the information and explanations given to us, there are no dues of income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and services tax and cess which have not been deposited on account of any dispute, except the following:

Name of the Statute Nature of the Dues Disputed amount (Rs. in Lakhs) Amount paid/refund adjusted under protest (Rs. in Lakhs) Period to which the amount relates (Assessment Year) Forum where dispute ispending	Name of the Statute Nature of the Dues Disputed amount (Rs. in Lakhs) Amount paid/refund adjusted under protest (Rs. in Lakhs) Period to which the amount relates (Assessment Year) Forum where dispute ispending
Income Tax Act, 1961 Income tax	82 82 2006-07 Commissioner of Income Tax (Appeals)/ DeputyCommissioner of Income Tax
	34 - 2012-13 Commissioner of Income Tax (Appeals)
	130 - 2016-17 Assistant Commissioner of Income Tax
	283 - 2017-18 Assistant Commissioner of Income Tax
	8 - 2018-19 Assistant Commissioner of Income Tax

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) According to the information and explanations given by the management, the Company has not raised any money by the way of initial public offer/further public offer (including debt instruments) and term loans during the year. Hence, reporting under clause 3(ix) of the Order is not applicable to the Company.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

62 Mindteck 2020–21 Annual Report Standalone Financial Statements

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the notes to the standalone financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803 UDIN: 21213803AAAABY6528

Place: Bengaluru Date: May 28, 2021

Mindteck 2020–21 Annual Report 63 Standalone Financial Statements

Annexure 2 to the Independent Auditor’s Report of even date on the Standalone Financial Statements of Mindteck (India) Limited

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls with reference to standalone financial statements of Mindteck (India) Limited (“the Company”) as of March 31, 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation 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 financial controls with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls with reference to these standalone financial statements.

Meaning of Internal Financial Controls With Reference to these Standalone Financial Statements

A company’s internal financial controls with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to these Standalone Financial Statements

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

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to these standalone financial statements and such internal financial controls with reference to these standalone financial statements were operating effectively as at March 31, 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803 UDIN: 21213803AAAABY6528

Place: Bengaluru Date : May 28, 2021

64 Mindteck 2020–21 Annual Report Standalone Financial Statements

Standalone Balance Sheet as at March 31, 2021

Standalone Balance Sheet as at March 31, 2021
All amou	nts in Rs. lakhs unless otherwise stated
Notes As at March 31, 2021 ASSETS Non-Current Assets Property,plant and equipment 3 228 Investmentproperty 4 65 Right-of-use assets 37 600 Intangible assets 5 15 Financial Assets Investments 6 6,724 Loans 7 553 Other fnancial assets 8 14 Deferred tax assets (net) 39 436 Income tax assets (net) 9 583 Other non-current assets 10 13 9,231 Current Assets *Financial assets* Investments 11 - Trade receivables 12 1,951 Cash and cash equivalents 13 425 Other bank balances 13 2,706 Loans 14 21 Other fnancial assets 15 1,064 Other current assets 16 334 6,501 Total assets 15,732	As at March 31, 2020
	320
	67
	1,056
	782

	6,724
	541
	11
	314
	1,186
	6
	11,007

	43
	1,956
	1,331
	33
	19
	898
	355
	4,635
	15,642

Mindteck 2020–21 Annual Report Standalone Financial Statements

Standalone Balance Sheet as at March 31, 2021 (cont’d.)

Standalone Balance Sheet as at March 31, 2021 (cont’d.)
All amou	nts in Rs. lakhs unless otherwise stated
Notes As at March 31, 2021 EQUITY AND LIABILITIES EQUITY Equityshare capital 17 2,562 Other equity 18 10,496 13,058 LIABILITIES Non-current liabilities *Financial liabilities* Lease liabilities 37 334 Other fnancial liabilities 19 16 Other non-current liabilities 20 7 Provisions 21 310 667 Current liabilities *Financial liabilities* Borrowings 22 2 Tradepayables (a) total outstanding dues of micro enterprises and small enterprises; and 23 39 (b) total outstanding dues of creditors other than micro enterprises and small enterprises 23 707 Lease liabilities 37 408 Other fnancial liabilities 24 116 Provisions 25 211 Income tax liabilities (net) 9 196 Other current liabilities 26 328 2,007 Total liabilities 2,674 Total equity and liabilities 15,732 Rounded-off to lakhs Corporate information and signifcant accounting policies 1 & 2	As at March 31, 2020
	2,562
	9,627
	12,189
	793
	16
	7
	895
	1,711


	-

	40
	765
	412
	56
	223
	117
	129
	1,742
	3,453
	15,642

The accompanying notes are an integral part of the standalone financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar

Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Anand Balakrishnan

Yusuf Lanewala Chairman DIN - 01770426

Managing Director and CEO DIN - 05311032

Jagdish Malkani Director DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

66 Mindteck 2020–21 Annual Report Standalone Financial Statements

Standalone Statement of Profit and Loss for the year ended March 31, 2021

	All amounts in Rs	. lakhs unless otherwise stated
Notes INCOME Revenue from operations 27 Other income 28 Total income EXPENSES Cost of technical sub-contractors Employee beneft expenses 29 Finance costs 30 Depreciation and amortization expense 31 Other expenses 32 Total expenses Proft before tax and exceptional items Exceptional Items 33 Provision for impairment of investment in subsidiaries Provision for expected losses under service concession arrangement Provision for impairment of loan Total exceptional items Proft/(Loss) before tax Tax expense (net): 39 Current tax Tax relatingto earlieryears Deferred tax charge/(credit) Total tax expense Proft/(Loss) for the year Other comprehensive income/(loss), net of tax Items that will not be reclassifed subsequently to proft or loss Re-measurement gain/(loss) on defned beneft plan Income tax relating to items that will not be reclassed to proft or loss Other comprehensive income/(loss) for theyear, (net of tax) Total comprehensive income/(loss) for theyear Earnings/(Loss) per share (equity shares, par value Rs. 10 each) (March 31, 2020: Rs. 10 each) 36 Basic (in Rs.) Diluted (in Rs.)	Year ended March 31, 2021 10,398 283 10,681 233 7,081 130 584 1,256 9,284 1,397 - - - - 1,397 467 202 (125) 544 853 12 (3) 9 862 3.33 3.32	Year ended March 31,2020
		9,231
		184
		9,415
		218
		6,624
		187
		615
		1,659
		9,303
		112

		(5,666)
		(159)
		(168)
		(5,993)
		(5,881)
		114
		-
		(71)
		43
		(5,924)
		(3) 1
		(2)
		(5,926)
		(23.12)
		(23.12)
Corporate information and signifcant accounting policies 1 & 2

The accompanying notes are an integral part of the standalone financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803

for and on behalf of the Board of Directors of

Mindteck (India) Limited

Anand Balakrishnan Managing Director and CEO DIN - 05311032

Yusuf Lanewala

Chairman

DIN - 01770426

Jagdish Malkani Director

DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

Mindteck 2020–21 Annual Report Standalone Financial Statements

Standalone Statement of Changes in Equity for the year ended March 31, 2021

Standalone Statement of Changes in Equity for the	year ended March 31, 2021	year ended March 31, 2021
A. Equity share capital	All amounts in Rs. lakhs unless otherwise stated
Particulars	Number Amount
Balance as at April 01, 2019	2,56,21,898 2,562
Changes in equityshare capital duringtheyear: 2019-20	- -
Balance as at March 31, 2020	2,56,21,898 2,562
Changes in equityshare capital duringtheyear: 2020-21	- -
Balance as at March 31, 2021	2,56,21,898 2,562
B. Other equity	All amounts in Rs. lakhs unless otherwise stated
Particulars Share application money pending allotment Balance as at April 01, 2019 28	Reserves & Surplus Capital reserve Securities premium Retained earnings Employee stock options reserve 357 10,518 4,744 334	Total other equity
		15,981
Less: Loss for theyear - Less: Changes in remeasurement of defned beneft plan through other comprehensive income/(loss), net of taxes - Less: Effect of adoption of Ind AS-116 Leases (refer Note 37) - Less: Cash dividend - Less: Dividend distribution tax - Add/(less): Transfer to retained earnings upon expiry or lapse of employee stock options after vesting - Less: Employee share-based expense (refer Note 43) - Balance as at March 31, 2020 28 Add: Proft for theyear - Add: Changes in remeasurement of defned beneft plan through other comprehensive income/(loss), net of taxes - Add/(Less): Transfer to retained earnings upon expiry or lapse of employee stock options after vesting - Add: Employee share-based expense (refer Note 43) - Balance as at March 31, 2021 28	- - (5,924) - - - (2) - - - (105) - - - (256) - - - (53) - - - 167 (167) - - - (14) 357 10,518 (1,429) 153 - - 853 - - - 9 - - - 13 (13) - - - 7 357 10,518 (554) 147	(5,924)
		(2)
		(105)
		(256)
		(53)
		-
		(14)
		9,627
		853
		9
		-
		7
		10,496

Corporate information and significant accounting policies (refer Notes 1 & 2)

The accompanying notes are an integral part of the standalone financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Anand Balakrishnan Jagdish Malkani Managing Director and CEO Director DIN - 05311032 DIN - 00326173

Yusuf Lanewala Chairman DIN - 01770426

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

68 Mindteck 2020–21 Annual Report Standalone Financial Statements

Standalone Statement of Cash Flows for the year ended March 31, 2021

Standalone Statement of Cash Flows for the year ended March 31, 2021	Standalone Statement of Cash Flows for the year ended March 31, 2021
All amounts in Rs. lakhs unless otherwise stated
Year ended March 31, 2021 Operating activities Proft/(Loss) before tax 1,397 Adjustments to reconcileproft/(loss) before tax to net cash flows: Depreciation and amortization expense 584 Provision for impairment of investment in subsidiaries (Refer Note 33(a)) - Provision for expected losses under service concession arrangement (Refer Note 33(b)) - Provision for doubtful deposits 1 Provision for impairment of loan (Refer Note 33(c)) - Finance costs 122 Interest income (203) Unrealised exchange differences (12) Gain on sale of assets - Impact due to termination of service concession arrangement (5) Provision for doubtful debts (net) and loss allowance 38 Provision for doubtful input credit receivable - Share basedpayment expenses 7 Fair valuegain on mutual fund at fair value throughproft or loss - Gain on sale of mutual funds (net) - Other non-operatingincome (44) Changes in operating assets and liabilities: (Increase)/Decrease in trade receivables (41) (Increase)/Decrease in loans and advances and other assets (127) Increase/(Decrease) in liabilities andprovisions 323 Net cash from operating activities before taxes 2,040 Income taxespaid (net of refunds) 13 Net cash from operating activities (A) 2,053 Investing activities Purchase of property, plant and equipment, intangible assets and capital work-in-progress (61) Proceeds from sale of assets 5 Movement in fxed deposits and other bank balances (net) (2,679) Investment in mutual funds - Proceeds from sale of mutual funds 43 Interest income received 165 Net cash from/(used in) investing activities (B) (2,527)	Year ended March 31,2020
	(5,881)

	615
	5,666
	159
	-
	168
	187
	(34)
	(40)
	(5)
	-
	12
	180
	-
	(23)
	(23)
	(9)

	674
	(195)
	(488)

	963
	(348)
	615

	(253)
	6
	87
	(6,068)
	7,422
	13
	1,207

Mindteck 2020–21 Annual Report Standalone Financial Statements

Standalone Statement of Cash Flows for the year ended March 31, 2021 (cont’d.)

Standalone Statement of Cash Flows for the year ended March 31, 2021 (cont’d.)	Standalone Statement of Cash Flows for the year ended March 31, 2021 (cont’d.)
All amounts in Rs. lakhs unless otherwise stated
Year ended March 31, 2021 Financing activities Repayment ofprincipalportion of lease liabilities (329) Finance cost on lease liabilities (100) Finance costpaid - Dividendspaid (includingdistribution tax and unpaid dividend) (3) Net cash used in fnancing activities (C) (432) Net increase/(decrease) in cash and cash equivalents (D)=(A)+(B)+(C ) (906) Cash and cash equivalents at the beginningof theperiod (E) 1,331 Cash and cash equivalents at the end of theyear (refer Note 13) (F)=(D)+(E ) 425	Year ended March 31,2020

	(334)
	(122)
	(5)
	(315)
	(776)
	1,046

	285
	1,331

Corporate information and significant accounting policies (refer Notes 1 & 2)

The accompanying notes are an integral part of the standalone financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar

Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Yusuf Lanewala Anand Balakrishnan Jagdish Malkani Chairman Managing Director and CEO Director DIN - 01770426 DIN - 05311032 DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S

Company Secretary

70 Mindteck 2020–21 Annual Report Standalone Financial Statements

Notes to Standalone Financial Statements for the year ended March 31, 2021

1. Corporate Information

Mindteck (India) Limited (‘Mindteck’ or ‘the Company’), a public limited company incorporated in the year 1991, is engaged in the business of rendering engineering and IT services to customers across various industry verticals in specific service horizontals. Mindteck’s core offerings are in Product Engineering, Application Software, Electronic Design, Testing and Enterprise Business services.

In the Product Engineering space, Mindteck renders Electronic Design, Firmware and Software in key vertical areas of Life Sciences and Analytical Instruments, Semiconductor Fab Equipment, Medical Instruments and in the high-end Storage Products segment. The Enterprise Business services line provides services in the areas of support and maintenance of enterprise-wide applications. Application Software services are centered around providing solutions to independent software vendors in the Banking and Financial Services Industry (BFSI) space and a broad range of services for custom Application Development, Application Management, Re-engineering, Validation and Verification across the spectrum.

The Company also provides offshore-based employee resourcing, marketing and pre-sales support and other services to its subsidiaries.

The standalone financial statements are presented in Rs. (‘₹’) and all the values are rounded off to the nearest lakhs (Rs. 00,000) except when otherwise indicated.

2.2. Summary of significant accounting policies

a. Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is treated as current when it is:

Expected to be realized in normal operating cycle or within twelve months after the reporting period,
Held primarily for the purpose of trading,
Expected to be realized within twelve months after the reporting period, or
Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

Mindteck has its registered office in Bengaluru, India and is headquartered in Bengaluru with a branch office in Kolkata and Mumbai. The software development centers in Bengaluru and Kolkata are 100% Export Oriented Units (‘EOU’) set up under the Software Technology Parks of India (STPI) Scheme of the Government of India.

Mindteck has subsidiaries (including step-down subsidiaries) in the United States of America, Canada, Singapore, Philippines (under closure), Malaysia, Bahrain, United Kingdom, Netherlands (closed w.e.f. January 14, 2020), Germany and India (under closure). Mindteck is listed in India on the Bombay Stock Exchange and National Stock Exchange.

These standalone financial statements for the year ended March 31, 2021 are approved by the Board of Directors on May 28, 2021.

2. Basis of Preparation and significant accounting policies:

2.1. Basis of preparation:

The standalone financial statements of the Company have been prepared and presented in accordance with accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) specified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III).

These standalone financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained further in the accounting policies below.

certain financial assets and liabilities that is measured at fair value/amortized cost,
defined benefit plans - plan assets measured at fair value,
Employee stock option contracts – measured at grant date fair value, and
Investment property – fair value for disclosure purpose.
It is expected to be settled in normal operating cycle,
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified period of twelve months as its operating cycle.

b. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s standalone financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, the accompanying disclosures, and the disclosure of contingent assets and contingent liabilities on the date of the standalone financial statements and the reported amounts of revenues and expenses for the year reported. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and future periods are affected.

Also, refer Note 48 of the standalone financial statements.

Key source of estimation of uncertainty as at the date of standalone financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of the following:

Mindteck 2020–21 Annual Report 71 Standalone Financial Statements

Revenue recognition:

The Company uses the percentage of completion method in accounting for revenue from implementation and customization projects. Use of the percentage of completion method requires the Company to estimate the efforts to date as a proportion of the total efforts. Efforts have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the year in which such losses become probable based on the expected contract estimates at the reporting date.

Employee stock options plan:

The Company initially measures the cost of equity-settled transactions with employees using Black Scholes model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 43.

Leases:

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Company’s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Company has concluded that no changes are required to lease period relating to the existing lease contracts. Refer Note 37.

Defined benefit plans (gratuity and other employee benefits):

The Company’s obligation on account of gratuity and compensated absences is determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the

management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

Further details about gratuity obligations are given in Note 40.

Appendix D of Service Concession Arrangement (‘SCA’), under Ind AS - 115 ‘Revenue from contracts with customers’ – Recognition and Measurement:

The Company had entered into concession arrangement in relation to smart/IoT based parking system with government/ statutory body under Public Private Partnership model. The arrangement gives Company right to design, construct, install and maintain the smart parking system. Management has evaluated the arrangement and concluded that Appendix D of Service Concession Arrangement (‘SCA’), under Ind AS - 115 ‘Revenue from contracts with customers’ applies. Refer Note 5, Note 15, Note 21 and Note 44.

Fair value measurement of financial instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 46 for further disclosures.

Impairment of non-financial assets:

Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (“DCF”) model. The cash flows are derived from the budget for future years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cashinflows and the growth rate used for extrapolation purposes. Also, refer Note 2.2(i).

Impairment of financial assets:

The Company assesses impairment of financial assets (‘Financial instruments’) and recognizes expected credit losses in accordance with Ind AS 109. Also, refer Note 2.2(d).

72 Mindteck 2020–21 Annual Report Standalone Financial Statements

The Company assesses for impairment of investment in subsidiaries. Impairment exists when there is a diminution in value of the investment and the recoverable value of such investment is lower than the carrying value of such investment.

d. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

i. Financial assets:

c. Fair value measurement

The Company measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

Initial recognition and measurement:

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in four broad categories:

Debt instruments assets at amortized cost
In the principal market for the asset or liability - or
In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Financial assets at fair value through Other Comprehensive Income/(Loss) (“OCI”) (FVTOCI)
Financial assets at fair value through Profit and Loss (FVTPL)
Equity instruments measured at fair value through other comprehensive income/(loss) (FVTOCI)

When assets are measured at fair value, gains and losses are either recognized entirely in the standalone statement of Profit and Loss (i.e. fair value through Profit and Loss) or recognized in other comprehensive income/(loss) (i.e. fair value through other comprehensive income/(loss)).

Debt instruments at amortized cost:

A Debt instrument is measured at amortized cost (net of any write down for impairment) if both the following conditions are met:

the asset is held to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realize its fair value changes), and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the standalone statement of Profit and Loss. The losses arising from impairment are recognized in the standalone statement of Profit and Loss.

Financial assets at fair value through OCI (FVTOCI):

A financial asset that meets the following two conditions is measured at fair value through OCI unless the asset is designated at fair value through Profit and Loss under fair value option.

The financial asset is held both to collect contractual cash flows and to sell.
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Mindteck 2020–21 Annual Report 73 Standalone Financial Statements

Instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in OCI. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Financial assets at fair value through Profit and Loss (‘FVTPL’):

FVTPL is a residual category for Company’s investment instruments. Any instruments which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

All investments (except investment in subsidiary) included within the FVTPL category are measured at fair value with all changes recognized in the standalone statement of Profit and Loss.

In addition, the Company may elect to designate an instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency.

Derecognition:

When the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; it evaluates if and to what extent it has retained the risks and rewards of ownership.

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized when:

The rights to receive cash flows from the asset have expired, or
Based on above evaluation, either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a bases that reflect the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets:

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 (‘Financial instruments’) requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

ii. Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through Profit and Loss or at amortized cost, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.

The Company’s financial liabilities include trade payables, lease obligations, and other payables.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortized cost

After initial recognition, interest-bearing loans and borrowings and other payables are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the standalone statement of Profit and Loss.

Derecognition:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the standalone statement of Profit and Loss.

iii. Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

74 Mindteck 2020–21 Annual Report Standalone Financial Statements

iv. Reclassification of financial assets:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company’s senior management determines change in the business model as a result of external or internal changes which are significant to the Company’s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

e. Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant if the recognition criteria are met.

Capital work in progress is stated at cost. Capital work-inprogress comprises of expenditure incurred for construction of leasehold improvements. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the plant and equipment to its working condition for the intended use and cost of replacing part of the plant and equipment.

Property, plant and equipment are eliminated from financial statements, either on disposal or when no future economic benefits are expected from its use or disposal. Losses arising in case of retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in standalone statement of Profit and Loss in the year of occurrence.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

f. Depreciation and amortization

Depreciation on property, plant and equipment with finite useful lives is calculated on a straight-line basis over the useful lives of the assets estimated by the management.

The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of property, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year and adjusted prospectively, if appropriate. The range of useful lives of the property, plant and equipment are as follows:

Property, plant and	Useful lives estimated by
equipment	the management (years)
Furniture and fxtures	5years
Computer equipment	3years
Offce equipment	5years
Vehicles	5years

Leasehold improvements are amortized over the period of lease term or the estimated useful life of assets, whichever is shorter.

g. Investment property

i. Recognition and measurement:

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses (if any).

Initial direct costs incurred by the Company in negotiating and arranging an operating lease are added to the carrying amount of the respective Investment property and are amortized over the lease term on the same basis as the lease income.

Though the Company measures investment properties using cost-based measurement, the fair value of investment properties are disclosed in the notes (Refer Note 4). Fair values are determined based on an annual evaluation performed by an accredited external independent valuer applying a valuation model recommended by the International Valuation Standards Committee.

ii. Depreciation:

Depreciation on investment properties is provided on the straight-line method as per the useful life estimated by the management.

The estimated useful life of building classified as an investment property is 58 years. The estimated useful life is different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the asset is likely to be used.

h. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.

Intangible assets are amortized on a straight-line basis over the estimated useful economic life. The Company uses a

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rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the affect that useful life of an intangible asset exceeds ten years, the Company amortizes the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the standalone statement of Profit and Loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

j. Leases

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern and are treated as changes in accounting estimates.

The estimated useful lives of the amortizable intangible assets are as follows:

The estimated useful lives assets are as follows:	of the amortizable intangible
Category	Useful life
Computer software	3years
Service concession arrangement	10 years

An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the standalone statement of Profit and Loss when the asset is derecognized.

i. Impairment of non-financial assets

Non-financial assets including property, plant and equipment, right of use assets and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized in the standalone statement of Profit and Loss.

The Company assesses at contract inception whether a contract is/ contains a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee:

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i. Right-of-use assets:

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer Note 2.2(i) Impairment of non-financial assets.

ii. Lease liabilities:

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

76 Mindteck 2020–21 Annual Report Standalone Financial Statements

During the year, there was an amendment to Ind AS 116 due to COVID related rent concessions. The amendment provides relief to the lessees in treating rent concessions arising as a direct consequence of the COVID-19 pandemic as a lease modification. The amendments are applicable for annual reporting periods beginning on or after the April 01, 2020. The amendment had an impact of Rs. 26 lakhs on the standalone financial statements.

iii. Short term leases and leases of low-value assets:

The Company applies the short-term lease recognition exemption to its short-term leased assets (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leased assets that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.

Company as a lessor:

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income.

k. Equity investments in subsidiaries

Investments in subsidiaries are classified as non-current investments. The Company has availed the option available in Ind AS 27 to carry its investment in subsidiaries at cost. Impairment recognized, if any, is reduced from the carrying value.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the standalone statement of Profit and Loss.

l. Revenue recognition

i. Revenue from contracts with customers:

The Company derives its revenues from software and ITenabled service including services provided to related parties.

Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.

Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expect to receive in exchange for those services.

The following specific recognition criteria must also be met before revenue is recognized:

Revenue from software services provided on a time-andmaterial basis is recognized upon performance of services and at the agreed contractual rates. Revenue from fixed price contracts is recognized over the period of the contracts using the percentage completion method determined by relating the actual cost incurred to date to the estimated total cost of the contract.

Revenue from implementation service under concession arrangement are recognized in line with Appendix D of Service Concession Arrangement (‘SCA’), under Ind AS - 115 ‘Revenue from contracts with customers’.

In case of multiple element arrangements for sale of software license, related implementation and maintenance services, the Company applies the guidance in Ind AS 115, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements generally meet the criteria for considering the sale of software license, related implementation and maintain services as distinct performance obligation. For allocating the consideration, the Company has measured the revenue in respect of each distinct performance obligation of a transaction at its standalone selling price, in accordance with principles given in Ind AS 115. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Company is unable to determine the standalone selling price, the Company has used a residual method to allocate the arrangement consideration. In these cases, the balance of the consideration, after allocating the standalone selling price of undelivered components of a transaction has been allocated to the delivered components for which specific standalone selling price do not exist.

Provisions for estimated losses on contracts are recorded in the period in which such losses become probable based on the current contract estimates. ‘Unbilled revenue’ included in the other financial assets represent revenues in excess of amounts billed to clients as at the balance sheet date. ‘Unearned revenue/contract liabilities’ included in the current liabilities represent billings in excess of revenues recognized.

The Company collects goods and services tax and other taxes as applicable in the respective tax jurisdictions where the Company operates, on behalf of the government and therefore it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue.

Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue.

Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance

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obligation related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis.

Provisions for estimated losses on contracts are recorded in the period in which such losses become probable based on the current contract estimates.

m. Foreign currencies

i. Initial recognition

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii. Conversion

ii. Other income:

Dividend income is recognized when the Company’s right to receive dividend is established, which is generally when shareholders approve the dividend.

Interest income is recognized as it accrues in the standalone statement of Profit and Loss using effective interest rate method.

iii. Service concession arrangement (SCA):

The Company implements or upgrades infrastructure (implementation or upgrade services) used to provide the smart/IoT-based parking service and maintains that infrastructure (operation service) for a specified period of time. This arrangement may include infrastructure used in a service concession arrangement for its entire useful life.

Under Appendix D – Service Concession Arrangement to Ind AS 115 –Revenue from contracts with customers, the arrangement is accounted for based on the nature of the consideration. The intangible asset model is used to the extent that the operator receives a right (i.e. a concessionaire) to charge users of the public service. The financial model is used when the operator has an unconditional contractual right to receive cash or other financial assets from or at the direction of the grantor for the construction/implementation service. When the unconditional right to receive cash covers only part of the service, the two models are combined to account separately for each component. If the operator performs more than one service (i.e. construction, implementation, upgrade services and operation services) under a single contract or arrangement, consideration received or receivable is allocated by reference to the relative fair values of the service delivered, when the amount are separately identifiable.

The intangible assets model recognizes the asset to the extent of cost incurred or to be incurred (including certain obligations arising out the arrangement) towards getting the right to charge users of the public service. The intangible asset is amortized over the concession period i.e. 10 years, from the date they are available for use.

An asset carried under concession arrangements is derecognized on disposal or when no future economic benefits are expected from its future use or disposal.

The Company recognizes a financial asset to the extent that it has an unconditional right to receive cash or another financial asset from or at the direction of the grantor.

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

iii. Exchange differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items of Company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise except those arising from investments in non-integral operations.

The Company’s standalone financial statements are presented in Rs. The Company determines the functional currency as Rs. on the basis of primary economic environment in which the entity operates.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.

n. Taxes

Tax expense comprises of current and deferred tax.

Current income tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

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are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company reflects the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

Deferred tax:

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences and the carry forward of any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax losses can be utilized, except:

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside Profit and Loss is recognized outside Profit and Loss (either in OCI or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

o. Provision and contingencies

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the standalone statement of Profit and Loss.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting obligations under a contract exceed the economic benefits expected to be received, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

A contingent asset is disclosed, where an inflow of economic benefits is probable.

p. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

q. Employee stock compensation cost

Employees (including senior executives) of the Company receive remuneration in the form of share-based payments in form of employee stock options, whereby employees

Mindteck 2020–21 Annual Report 79 Standalone Financial Statements

render services as consideration for equity instruments (equity-settled transactions).

The Company measures compensation cost relating to employee stock options plans using the fair valuation method in accordance with Ind AS 102, Share-Based Payment.

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using the Black Scholes valuation model. That cost is recognized in employee benefits expense, together with a corresponding increase in Stock Option Outstanding reserves in equity, over the vesting period of the option in which the performance and/or service conditions are fulfilled in a graded manner. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired (net of forfeitures) and the Company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company’s best estimate of the number of equity instruments that will ultimately vest. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

r. Segment reporting

In accordance with Ind AS 108 - Operating segments, segment information has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

s. Retirement and other employee benefits

Employee benefits include contribution to provident and other funds, gratuity and compensated absences.

Defined contribution plans:

Contributions payable to recognized provident and other funds, which are defined contribution schemes, are charged to the standalone statement of profit and loss.

Defined benefit plans:

Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on project unit credit method as at the balance sheet date. The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/ (asset) are recognized in other comprehensive income/(loss). In accordance with Ind AS, re-measurement gains and losses on defined benefit plans recognized in OCI are not to be subsequently reclassified to the standalone statement of Profit and Loss. As required under Ind AS compliant Schedule III, the Company transfers it immediately to “surplus/ (deficit) in the statement of Profit and Loss”.

The Company has an employees’ gratuity fund managed by the Life Insurance Corporation of India (LIC). Provision for gratuity liabilities, pending remittance to the fund, is carried in the balance sheet.

Short-term employee benefits:

Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. Compensated absences, which are expected to be utilized within the next 12 months, are treated as short-term employee benefits. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

Long-term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employees render the related services are treated as longterm employee benefits for measurement purpose. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end, less the fair value of the plan assets out of which the obligations are expected to be settled. Actuarial gains/losses are immediately taken to the standalone statement of Profit and Loss and are not deferred.

The Company presents the entire compensated absences balance as a current liability in the balance sheet since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

80 Mindteck 2020–21 Annual Report Standalone Financial Statements

t. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value are unrestricted for withdrawal and usage.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management.

Standalone statement of cash flow:

Cash flows are reported using the indirect method, whereby profit/(loss) for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

u. Cash dividend

The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised, and the distribution is no longer at the discretion of the Company. Final dividends on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.

v. Corporate Social Responsibility (CSR) expenditure

CSR expense is recognized as it is incurred by the Company or when the Company has entered into any legal or constructive obligation for incurring such an expense.

2.3. Changes in accounting policies and disclosures

a. Ind AS 116 Leases:

Refer Note 2.2(j) and Note 37.

Mindteck 2020–21 Annual Report Standalone Financial Statements

NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2021

3. Property, plant and equipment				(All amounts in Rs. lakhs, unless otherwise stated)	(All amounts in Rs. lakhs, unless otherwise stated)	(All amounts in Rs. lakhs, unless otherwise stated)
Particulars	Computer equipment	Offce equipment	Furniture and fxtures	Vehicles	Leasehold improvement	Total
Cost

As at April 01, 2019	177	167	20	3	174	541
Additions	139	37	1	-	-	177
Disposals/Adjustments	-	(4)	-	(3)	-	(7)
As at March 31, 2020	316	200	21	-	174	711

Additions	49	4	-	-	-	53
Disposals/Adjustments	(2)	(5)	-	-	-	(7)
Transfer	4	19	1	-	4	28
As at March 31, 2021	367	218	22	-	178	785

Accumulated depreciation
As at April 01, 2019	112	82	6	3	57	260
Charge for theyear	62	35	4	-	36	137
Disposals/Adjustments	-	(3)	-	(3)	-	(6)
As at March 31, 2020	174	114	10	-	93	391

Charge for theyear	86	38	4	-	39	167
Disposals/Adjustments	(1)	-	-	-	-	(1)
As at March 31, 2021	259	152	14	-	132	557

Net block as at March 31, 2020	142	86	11	-	81	320
Net block as at March 31, 2021	108	66	8	-	46	228
4. Investmentproperty						Amount in Rs. lakhs
Particulars				Building - Assetgiven under operating lease
Cost
As at April 01, 2019						73
Additions						-
As at March 31, 2020						73
Additions						-
As at March 31, 2021						73

Accumulated depreciation
As at April 01, 2019						5
Charge for theyear						1
As at March 31, 2020						6

Charge for theyear						2
As at March 31, 2021						8

Net block as at March 31, 2020						67
Net block as at March 31, 2021						65

82 Mindteck 2020–21 Annual Report Standalone Financial Statements

Information regarding income and expenditure of Investmentproperty	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Rental income derived from investmentproperty 21 Less: Direct operating expenses from property that generated rental income (includingrepairs and maintenance) - Less: Direct operating expenses from property that did not generate rental income (includingrepairs and maintenance) 1 Proft arising from investment properties before depreciation and indirect expenses 20 Less: Depreciation (2) Proft arising from investment property before indirect expenses 18	Year ended March 31, 2020
	24
	-
	1
	23
	(1)
	22

Determination of fair values

Description of valuation techniques used and key inputs to valuation on investment properties:

Particulars Valuation technique	Signifcant unobservable inputs	Range (weighted average)	Range (weighted average)
Investment properties Market Approach	Area of subject unit (sq. ft.) Adopted market rent per sq.ft.per month Derived unit rate (per sq.ft.) Estimated rental value (per sq. ft.) Discount rate	March 31, 2021 3,001 53 10,700 Rs. 53 - 70 12.00%	March 31, 2020
			3,001
			53
			10,500
			Rs. 53 - 70
			12.00%

The fair value of investment property has been determined by independent professional valuers. The independent professional valuers have appropriate recognised professional qualifications and recent experience in the location and category of the properties being valued.

The independent professional valuers have considered valuation techniques including direct comparison method and discounted cash flows in arriving at the fair value as at the reporting date. These valuation methods involve certain estimates. The management has exercised its judgement and is satisfied that the valuation methods and estimates are reflective of the current market conditions.

The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that reflective of the investment properties. The discounted cash flows method involves the estimation of an income stream over a period and discounting the income stream with an expected internal rate of return and terminal

yield. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs not paid by tenants. The expected cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms.

Significant increases/(decreases) in estimated rental value and rent growth per annum in isolation would result in a significantly higher/ (lower) fair value of the properties. Significant incerases/(decreases) in long-term vacancy rate and discount rate (and exit yield) in isolation would result in a significantly lower/ (higher) fair value.

All resulting fair value estimates for investment properties are included in level 3. Refer Note 45.

Reconciliation of fair value	Amount in Rs. lakhs
Particulars	Amount
Opening balance as at April 01, 2019	338
Fair value differences	(23)
Closing balance as at March 31, 2020	315
Fair value differences	6
Closing balance as at March 31, 2021	321

Mindteck 2020–21 Annual Report Standalone Financial Statements

5. Intangible assets Amount in Rs. lakhs	5. Intangible assets Amount in Rs. lakhs
Particulars Computer software Service concession arrangement# Total
Cost
As at April 01, 2019 109 1,002 1,111
Additions 20 21 41
Disposal/adjustments - (56) (56)
Provision for expected losses under service concession arrangement (refer Note 33(b)) - (48) (48)
As at March 31, 2020 129 919 1,048

Additions - - -
Disposals/Adjustments (refer Note 44) - (919) (919)
As at March 31, 2021 129 - 129

Accumulated amortisation
As at April 01, 2019 84 70 154
Charge for theyear 15 97 112
As at March 31, 2020 99 167 266

Charge for theyear 15 38 53
Disposal/adjustments (refer Note 44) - (205) (205)
As at March 31, 2021 114 - 114

Net block as at March 31, 2020 30 752 782
Net block as at March 31, 2021 15 - 15
# Refer Note 44 6. Investments - Non-current Amount in Rs. lakhs, unless otherwise stated
Particulars As at March 31, 2021 Un-quoted equity instruments, at cost Investment in equity instruments- subsidiaries 13,000 (March 31, 2020: 13,000) equity shares of USD 1 par value of Mindteck Inc, USA, fully paid, net of impairment provision of Rs. 5,274 lakhs (March 31, 2020: Rs. 5,274 lakhs) 4,096 2 (March 31, 2020: 2) equity shares of USD 1 par value of Chendle Holdings Limited, fully paid, net of impairment provision of Rs. 64 lakhs (March 31, 2020: Rs. 64 lakhs) 1,890 1,310,500 (March 31, 2020: 1,310,500) equity shares of SGD 1 par value of Mindteck Singapore Pte Ltd., fully paid, net of impairment provision of Rs. 328 lakhs (March 31, 2020: Rs. 328 lakhs) 524 968,408 (March 31, 2020: 968,408) equity shares of GBP 1 par value of Mindteck (UK) Limited, fully paid 153 250,000 (March 31, 2020: 250,000) equity shares of MYR 1 par value of Mindteck Software Malaysia SDN. BHD, fully paid 33 500 (March 31, 2020: 500) equity shares of BHD 100 par value of Mindteck Middle East WLL, Bahrain, fully paid 18 99,999 (March 31, 2020: 99,999) equity shares of Rs. 10 par value of Hitech Parking Solutions Pvt. Ltd., fully paid 10 Total 6,724 Aggregate amount of unquoted investments in subsidiaries 12,390 Aggregate amount of impairment on investments (5,666)	As at March 31, 2020

	4,096
	1,890
	524
	153
	33
	18
	10
	6,724
	12,390
	(5,666)

Also, refer Note 33(a) and 43(i).

84 Mindteck 2020–21 Annual Report Standalone Financial Statements

7. Loans - Non-current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unsecured, considered good Security deposits 320 Loan to Mindteck Employee Welfare Trust (refer Note41) 233 Unsecured, Credit Impaired Loan to Mindteck Employee Welfare Trust 168 Provision for impairment of loan (refer Note 33(c )) (168) Security deposits 51 Provision for doubtful deposits (51) Total 553	As at March 31, 2020
	308
	233

	168
	(168)
	50
	(50)
	541

8. Other fnancial assets - Non-current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Fixed deposits with bank with remainingmaturityof more than 12 months 14 Total 14*	As at March 31, 2020
	11
	11

*Represents restricted bank balances of Rs. 14 lakhs (March 31, 2020: Rs. 11 lakhs). The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

9. Taxes	Amount in Rs. lakhs
Particulars As at March 31, 2021 Income tax assets (net) - Non-current 583 Income tax liabilities (net) - Current 196	As at March 31, 2020
	1,186
	117
Also, refer Note 39 for further details. 10. Other non-current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Prepaid expense 13 Total 13	As at March 31, 2020
	6
	6
11. Investments - Current	Amount in Rs. lakhs
Particulars As at March 31, 2021 Quoted mutual funds measured at fair value through statement of proft and loss NIL (March 31, 2020 - 1,888.70) units in AXIS Treasury Advantage Fund - Growth - Total - Aggregate book value ofquoted investments in mutual funds - Aggregate market value ofquoted investments in mutual funds -	As at March 31, 2020

	43
	43
	43
	43

Mindteck 2020–21 Annual Report Standalone Financial Statements

12. Trade receivables - Current assets


12. Trade receivables - Current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unsecured, consideredgood Trade receivables from other than relatedparties 987 Trade receivables from relatedparties (refer Note 41) 964 Unsecured, credit impaired Trade receivables from other than relatedparties 125 2,076 Impairment allowance (allowance for expected credit loss) Receivables from other than relatedparties, credit impaired (125) Total 1,951	As at March 31, 2020

	1,013
	943

	87
	2,043

	(87)
	1,956

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Further, there are no trade or other receivables due from firms or private companies in which any director is a partner, a director or a member.

Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

13. Cash and cash equivalents - Current assets


13. Cash and cash equivalents - Current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Cash on hand 1 Balances with banks in current accounts 26 in fxed deposits with original maturityfor less than 3 months 398 425 Other bank balances - Current assets Balances with banks Fixed deposits with remainingmaturityless than 12 months 2,696 Unpaid dividend account 10 2,706 Total 3,131	As at March 31, 2020 1 1,175 155 1,331 20 13 33 1,364

Cash and cash equivalents as at March 31, 2021 and March 31, 2020 include restricted cash and bank balances of Rs.173 lakhs and Rs. 33 lakhs respectively. The restrictions are primarly on account of bank balances held as margin money deposits against guarantees and balances held in unpaid dividend bank accounts.

Changes in liabilities arising from financing activities:

Changes in liabilities arising from fnancing activities:
Particulars As at April 01, 2020 Borrowings - Lease liabilities 1,205 Total liabilities from fnancing activities 1,205*	Cash flows - (429) (429)	New leases/Others (Refer Note 37) 2 (34) (32)	As at March 31, 2021
			2
			742
			744

Particulars As at April 01, 2019 Borrowings - Lease liabilities 1,246 Total liabilities from fnancing activities 1,246*	Cash flows - (455) (455)	New leases/Others (Refer Note 37) - 414 414	As at March 31, 2020
			-
			1,205
			1,205

*Rounded-off to lakhs

14. Loans - Current assets

Particulars As at March 31, 2021 Unsecured, consideredgood Securitydeposits 21 Total 21	As at March 31, 2020

	19
	19

86 Mindteck 2020–21 Annual Report Standalone Financial Statements

15. Other fnancial assets - Current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unsecured, credit impaired Claimable expenses 237 Provision for expected losses under service concession arrangement (refer Note 33(b) and 44) (237) Unsecured, consideredgood Claimable expenses 69 Recoverable from relatedparties (refer Note 41) 152 Unbilled revenue 810 Accrued interest 20 Employee advances 13 Total 1,064 Break up of fnancial assets carried at amortized cost: Securitydeposits (non-current) (Note 7) 320 Advances to relatedparty(non-current) (Note 7) 233 Fixed deposits with bank with remaining maturity of more than 12 months (non-current) (Note 8) 14 Trade receivables (current) (Note 12) 1,951 Cash and cash equivalents (current) (Note 13) 425 Other bank balances (current) (Note 13) 2,706 Securitydeposits (current) (Note 14) 21 Claimable expenses (current) (Note 15) 69 Recoverable from relatedparties (current) (Note 15) 152 Unbilled revenue (current) (Note 15) 810 Accrued interest (current) (Note 15) 20 Employee advances (current) (Note 15) 13 Total 6,734	As at March 31, 2020

	111
	(111)

	11
	146
	698
	2
	41
	898
	308
	233
	11
	1,956
	1,331
	33
	19
	11
	146
	698
	2
	41
	4,789

16. Other current assets


16. Other current assets		Amount in Rs. lakhs
Particulars As at March 31, 2021 Advances recoverable in cash or kind 15 Balances withgovernment authorities 459 Less: Provision for doubtful input credit receivable (251) Net balance withgovernment authorities 208 Prepaid expenses 111 Total 334*		As at March 31, 2020
		33
		455
		(259)
		196
		126
		355
* Represents amount of service tax input credit receivable and goods and services tax input credit receivable 17. Equity		Amount in Rs. lakhs
Particulars	As at March 31, 2021 2,800 500 2,562 2,562	As at March 31, 2020
Authorised capital Equity shares
28,000,000 (March 31, 2020: 28,000,000) equityshares of Rs. 10 each		2,800
Preference shares 500,000 (March 31, 2020: 500,000) cumulative, non-convertible, redeemable preference shares of Rs. 100 each
		500

Issued, subscribed and paid-up share capital 25,621,898 (March 31, 2020: 25,621,898) equityshares of Rs. 10 each		2,562
		2,562

Mindteck 2020–21 Annual Report Standalone Financial Statements

Notes:

a. Mindteck Employees Welfare Trust (‘Trust’)

Issued equity shares includes 416,000 equity shares issued to Trust.
b. On April 01, 2008, the Company acquired 100% equity in its fellow subsidiary Chendle Holdings Limited, BVI (‘Chendle Holdings’) including its wholly owned subsidiary Primetech Solutions Inc., USA at an agreed valuation of USD 6,600,000 (approximately Rs 264,664,741) and the purchase consideration was agreed to be settled by a fresh issue of the equity shares of the Company to the shareholders of Chendle Holdings. The issue of equity shares to discharge the purchase consideration has been recorded at a price of Rs 73.54 per equity share, being the

fair value of the equity shares issued as per the valuation carried out by the independent valuer.

Of the total purchase consideration payable, 38,579 equity shares (March 31, 2020: 38,579 equity shares) have been reserved for allotment to certain shareholders of Chendle Holdings, subject to the furnishing of Permanent Account Number (‘PAN’) and other requirements by these shareholders. The submission of PAN is a pre-requisite to complete the allotment of shares. The Company is in the process of following up with the shareholders of Chendle Holdings to obtain the PAN and upon receiving the PAN, the Company would allot the remaining shares to these shareholders.

c. Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year is as given below:

Particulars	As at March 31, 2021 No. of shares Amount (Rs. in Lakhs) 2,56,21,898 2,562 - - 2,56,21,898 2,562	As at March 31, 2020
		No. of shares Amount (Rs. in Lakhs)
Outstandingat the beginningof theyear		2,56,21,898 2,562
Changes duringtheyear		- -
Outstanding at the end of theyear		2,56,21,898 2,562

d. Terms/rights attached to equity and preference shares

The Company has two class of shares referred to as equity shares having a par value of Rs 10 and cumulative, non-convertible, redeemable preference shares having a par value of Rs 100. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders meeting.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to

the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

e. Equity shares held by holding company and subsidiary of holding company is given below:

Name of the shareholder	As at March 31, 2021 No. of shares % 16,431,604 64.13%	As at March 31, 2020
		No. of shares %
Embtech Holdings Limited		16,431,604 64.13%

f. Equity shareholders holding more than 5 percent shares in the Company:

Name of the shareholder	As at March 31, 2021 No. of shares % 1,64,31,604 64.13% 13,90,569 5.43%	As at March 31, 2020
		No. of shares %
Embtech Holdings Limited		1,64,31,604 64.13%
First Asian Investments S.A		13,90,569 5.43%

g. The Company has not allotted any fully paid up equity shares by way of bonus shares nor has bought back any class of equity shares during the period of five years immediately preceding the balance sheet date.

h. Shares reserved for issue

Terms attached to stock options granted to employees are described in Note 43 on share based payments. Also, refer Note 17(b) above.

88 Mindteck 2020–21 Annual Report Standalone Financial Statements

18. Other Equity	Amount in Rs. lakhs
Particulars As at March 31, 2021 Capital reserve 357 Securitiespremium 10,518 Retained earnings (554) Other component of equity(Share application money pendingallotment) 28	As at March 31, 2020
	357
	10,518
	(1,429)
	28
Employee stock option reserve account 147 Total 10,496	153
	9,627
Refer Statement of Changes in Equity for movement.

Notes:

i. Capital reserve

The Company has created capital reserve in the earlier years.

ii. Securities premium

Security premium is used to record the premium received on issue of shares. It is utilized in accordance with the provisions of the Companies Act, 2013.

iii. Employee stock option reserve account

The Company has established various equity settled share based payment plans for certain categories of employees of the Company and subsidiaries. Refer Note 43 for further details on these plans.

iv. Distribution made and proposed

Particulars As at March 31, 2021 Cash dividends on equity shares declared andpaid Final dividend - Dividend distribution tax (DDT) - Total -	As at March 31, 2020

	256
	53
	309

Particulars As at March 31, 2021 Dividend Final dividend - Dividend distribution tax - Total -	As at March 31, 2020

	-
	-
	-
19. Other non-current fnancial liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Rental deposit 16 Total 16	As at March 31, 2020
	16
	16
20. Other non-current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Deferred lease rental income 7 Total 7	As at March 31, 2020
	7
	7
21. Provision - Non-current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Provision forgratuity(refer Note 40) 310 Provision towards obligation under service concession arrangements (refer Note 44) - Total 310	As at March 31, 2020
	265
	630
	895

Mindteck 2020–21 Annual Report Standalone Financial Statements

The table below gives the information about movement in provision towards obligation under service concession arrangments:

The table below gives the information about movement in provision towards obligation under service concession arrangments:
Particulars As at March 31, 2021 At the beginningof theyear 680 Reversal due to termination of sites (670) Finance costs 22 Other adjustments (includingclaimable expenses) (32) At the end of theyear -	As at March 31, 2020
	771
	(56)
	60
	(95)
	680
Current -	50
Non-current -	630

22. Borrowings - Current liabilities


22. Borrowings - Current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Loan repayable on demand from banks (Secured) Bank overdraft 2 Total 2*	As at March 31, 2020
	-
	-

*Rounded-off to lakhs

Note: Bank overdraft carry interest of 10.85 percent per annum, computed on a monthly basis on the actual amount utilized and/or repayable on demand. The bank overdraft is secured by way of first and exclusive charge in all present and future book debts which are lesser than 90 days.

23. Trade payables - Current liabilities


23. Tradepayables - Current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Dues to micro and small enterprises (refer note below) 39 Payable to relatedparties (refer Note 41) 252 Payable to other than relatedparties 455 Total 746	As at March 31, 2020
	40
	323
	442
	805

Terms and conditions of the above financial liabilities

trade payables are non-interest bearing and are normally settled on 30 - 45 days terms.
for explanations on the Company’s credit risk management, refer to Note 46.

The dues to Micro and Small enterprises as defined in “The Micro, Small & Medium Enterprises Development Act, 2006” are as follows:

Particulars As at March 31, 2021 (i) Principal amount remaining unpaid to any supplier as at the end of the accounting year. 39 (ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year. - (iii) The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year. - (iv) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specifed under the MSMED Act 2006. - (v) The amount of interest accrued and remaining unpaid at the end of the accounting year. - (vi) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid. -	As at March 31, 2020
	40
	-
	-
	-
	-
	-

90 Mindteck 2020–21 Annual Report Standalone Financial Statements

24. Other fnancial liabilities	24. Other fnancial liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unpaid dividend 10 Employee related liabilities 106 Total 116 Break up of fnancial liabilities carried at amortized cost: Lease liabilities (non-current) (Note 37) 334 Rental deposit (non-current) (Note 19) 16 Borrowings (current) (Note 22) 2 Tradepayables (current) (Note 23) 746 Lease liabilities (current) (Note 37) 408 Unpaid dividend (current) (Note 24) 10 Employee related liabilities (current) (Note 24) 106 Total 1,622		As at March 31, 2020
		13
		43
		56
		793
		16
		-
		805
		412
		13
		43
		2,082
25. Provisions - Current liabilities		Amount in Rs. lakhs
Particulars As at March 31, 2021 Provision forgratuity(refer Note 40) 68 Provision for compensated absences 143 Provision towards obligation under service concession arrangements (refer Note 44) - Total 211		As at March 31, 2020
		58
		115
		50
		223
26. Other current liabilities		Amount in Rs. lakhs
Particulars As at March 31, 2021 Unearned income 147 Capital creditors - Statutorydues 181 Total 328		As at March 31, 2020
		3
		8
		118
		129
27. Revenue from contracts with customers		Amount in Rs. lakhs
Particulars As at March 31, 2021 Sale of services 10,398 Total 10,398		As at March 31, 2020 9,231 9,231
a.	Disaggregated revenue information	Amount in Rs. lakhs
	Particulars As at March 31, 2021 *Revenue by contract type* Fixedprice 1,057 Time and material 9,341 Total 10,398	As at March 31, 2020 648 8,583 9,231
		Amount in Rs. lakhs
	Particulars As at March 31, 2021 *Timing of revenue recognition* Services transferred at apoint in time - Services transferred over time 10,398 Total 10,398	As at March 31, 2020 - 9,231 9,231

Mindteck 2020–21 Annual Report Standalone Financial Statements

b. Contract balances & performance obligations

Contract balances & performance obligations
	Amount in Rs. lakhs
Particulars As at March 31, 2021 Trade receivables 1,951 Unbilled revenue 810 Unearned income 147	As at March 31, 2020 1,956 698 3

c. Set out below is the amount of revenue recognised from

Amount in Rs. lakhs

Particulars As at March 31, 2021 Amounts included in contract liabilities at the beginningof theyear 3	As at March 31, 2020 40

d. Remaining performance obligation

As the duration of the contracts for customer and enterprise platform is less than one year, the Company has opted for practical expedient and decided not to disclose the amount of the remaining performance obligations.

28. Other income	Amount in Rs. lakhs
Particulars As at March 31, 2021 Finance income (includes interest income on deposits for year ended March 31, 2021: Rs. 126 lakhs; March 31, 2020: Rs. 13 lakhs) 203 Rental income 21 Fair valuegain on mutual fund at fair value throughproft or loss - Foreign exchangegain, net - Gain on sale of investments in mutual funds, net - Gain on sale of assets - Other non-operatingincome 59 Total 283	As at March 31, 2020
	34
	24
	23
	60
	23
	5
	15
	184
29. Employee beneft expenses	Amount in Rs. lakhs
Particulars As at March 31, 2021 Salaries and wages 6,552 Contribution toprovident and other funds 263 Gratuity(refer Note 40) 93 Share-basedpayment expense (refer Note 43) 7 Staff welfare expenses 166 Total 7,081	As at March 31, 2020
	6,165
	249
	77
	(19)
	152
	6,624
30. Finance costs	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Interest expense and bank charges 8	Year ended March 31, 2020
	5
Interest expense on lease liabilities (refer Note 37) 100	122
Interest expense on service concession arrangements (refer Note 21) 22 Total 130	60
	187

92 Mindteck 2020–21 Annual Report Standalone Financial Statements

31. Depreciation and amortisation expense	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Depreciation ofproperty,plant and equipment 167	Year ended March 31, 2020 137
Depreciation of right-of-use assets (refer Note 37) 362	365
Depreciation of investmentproperty 2	1
Amortisation of intangible assets 53 Total 584	112 615
32. Other expenses	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Rent 4 Hiringcharges 6 Directors sittingfees 48 Travel expenses 23 Foreign exchange loss, net 3 Power and fuel 98 Communication expenses 58 Professional charges 356 Repairs and maintenance -Buildings 1 -Others 125 Project supplyand services 248 Rates and taxes 50 Insurance 26 Remuneration to auditors (refer Note 35) 44 Membershipand subscription 35 Printingand stationery 5 Recruitment expenses 60 Provision for doubtful debts (net) and loss allowance 38 Contribution towards corporate social responsibility(refer Note 38) - Bad debts written off 10 Provision for doubtful input credit receivable - Miscellaneous expenses 18 Total 1,256	Year ended March 31, 2020
	7
	65
	46
	231
	-
	153
	63
	117

	1
	142
	333
	25
	21
	42
	45
	17
	63
	12
	15
	-
	180
	81
	1,659
33. Exceptional Items	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Provision for impairment of investment in subsidiaries - Provision for expected losses under service concession arrangement - Provision for impairment of loan - Total -	Year ended March 31, 2020
	(5,666)
	(159)
	(168)
	(5,993)

a. During the year ended March 31, 2020, as a part of impairment evaluation and considering the COVID-19 pandemic, impairment assessments were carried out in respect of investment in subsidiaries and basis valuation carried out by an external valuation expert, an impairment of Rs. 5,666 lakhs towards carrying value of investment in certain subsidiaries was recorded. Also, refer Note 6.
b. During the year ended March 31, 2020, the management had reassessed recoverability of investment in assets and amounts receivables from Bhopal Municipal Corporation (BMC) as at March 31, 2020 and created provision amounting to Rs. 159 lakhs.
c. Mindteck Employee Welfare Trust (MEWT) was created to administer the Employee Share Incentive Scheme 2000 for the benefit of its employees. For this purpose, the MEWT had borrowed funds from the Company and subscribed to 416,000 equity shares renounced in its favour by the Company’s promoters/directors in the Company’s earlier rights issue. During the year ended March 31, 2020, due to significant difference in the purchase price of these shares and average prevailing share price, the Company had made a provision of Rs. 168 lakhs. Also, refer Note 7.

Mindteck 2020–21 Annual Report 93 Standalone Financial Statements

34. Contingent liabilities and commitments

Amount in Rs. lakhs

(A) Particulars As at March 31, 2021 (i) Income tax matters: The Company is involved in certain tax disputes pertaining to transfer pricing and other adjustments which are pending at various forums. Management is confdent that the Company has a good case to defend and such cases are not tenable and no liability is expected in this regard. (a) in relation to AY: 2006-07, AY: 2012-13, AY: 2016-17, AY: 2017-18 and AY 2018-19 463 (b) in relation to AY: 2006-07, AY: 2010-11 and AY 2016-17 - (ii) Company has utilised bank guarantee facilities against the bank guarantees provided to Customers, Customs and Excise Departments for Software Technology Park of India (STPI) bonding facilities. 249	As at March 31, 2020

	-
	518
	236

(B) During the year ended March 31, 2020, the Company had accrued provision for material foreseable losses for a long term contract with respect to a customer. The Company had assessed the balance revenue amounting to Rs. 72 lakhs and balance costs to be accrued amounting to Rs. 125 lakhs for the commitment period, thereby recording provision amounting to Rs. 53 lakhs included in ‘Other expenses’.

35. Auditors’ remuneration	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 As auditor Audit fees 32 Tax audit fees 1 Other certifcation services 5 Reimbursement of expenses 6 Total 44	Year ended March 31, 2020
	32
	1
	3
	6
	42

36. Earnings/(Loss) per share

Basic earnings/ (loss) per share (EPS) amounts are calculated by dividing the profit/ (loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit/ (loss) attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

potential equity shares into equity shares.
The followingtable sets forth the computation of basic and diluted earningsper share:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Netproft/(loss) for theyear attributable to equityshareholders 853 Weighted average number of equity shares of Rs 10 each used for calculation of basic earningsper share (A) 2,56,21,898 Earnings/(loss)per share, basic (in Rs.) 3.33 Effect of dilutivepotential shares - Employee stock options 939 - Equityshares reserved for issuance 38,579 Total no. of dilutivepotential shares (B) 39,518 Weighted average number of equity shares outstanding during the year for calculation of diluted earningsper share (A+B) * 2,56,61,416 Earnings/(loss)per share, diluted (in Rs.) 3.32	Year ended March 31, 2020
	(5,924)
	2,56,21,898
	(23.12)


	2,985
	38,579
	41,564

	2,56,63,462
	(23.12)

The above potentional shares are anti-dilutive in nature for the year ended March 31, 2020 and accordingly was not considered for the purpose of calculation of diluted EPS.

94 Mindteck 2020–21 Annual Report Standalone Financial Statements

37. Leases

Company as a lessee

During the year ended March 31, 2021, the Company has vacated the existing office premises and have accordingly issued a notice to current lessor to this effect. Consequently, in accordance with Ind AS 116 – Leases, the Company has derecognized the amortized value of existing right-of-use asset of Rs. 109 lakhs and lease liability of Rs. 123 lakhs determined till the completion of notice period and vacation of existing premises and has recognized a net gain of Rs. 14 lakhs as ‘Other non operating income’.

Effective April 01, 2020, there was an amendment to Ind AS 116 - Leases. The amendment provides relief to the lessees in treating rent concessions arising as a direct consequence of the COVID-19 pandemic as a lease modification. The Company has applied the practical expedient as per Ind AS 116 – Leases. The impact of such rent concession was Rs. 26 lakhs under lease liabilities for the year ended March 31, 2021.

The details of the right-of-use asset held bythe Companyis as follows:	Amount in Rs. lakhs
Particulars	Buildings
Gross carrying value
As at April 1, 2019	1,111
Additions duringtheyear	310
Disposals duringtheyear	-
As at March 31, 2020	1,421

Additions duringtheyear	15
Disposals duringtheyear	(183)
As at March 31, 2021	1,253

Depreciation
Charge for theyear	365
Disposals	-
As at March 31, 2020	365

Charge for theyear	362
Disposals	(74)
As at March 31, 2021	653

Net block As at March 31, 2020	1,056
Net block As at March 31, 2021	600

Set out below are the carrying amounts of lease liabilities and the movements during the period:


Set out below are the carryingamounts of lease liabilities and the movements duringtheperiod:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Balance at the beginningof theyear 1,205 Additions 15 Interest on lease liabilities 100 Rent concession received duringtheyear (26) Write off on termination of contract (123) Payments (429) Balance at the end of theyear 742 Current 408 Non-current 334	Year ended March 31, 2020
	1,246
	292
	122
	-
	-
	(455)
	1,205
	412
	793

The effective interest rate for lease liabilities is 9.65% with maturity between 2022-2024. The maturity analysis of lease liabilities are disclosed in Note 46.

Mindteck 2020–21 Annual Report Standalone Financial Statements

The followingare the amounts recognised inproft or loss:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Other non-operatingincome (43) Depreciation expense of right-of-use assets 362 Interest expense on lease liabilities 100 Expense relatingto short-term leases (included in other expenses) 4 Total 423	Year ended March 31, 2020
	-
	365
	122
	7
	494

During the year ended March 31, 2021, the Company had total cash outflows for leases of Rs. 429 lakhs (March 31, 2020: Rs. 456 lakhs). The Company also had non-cash additions to right-of-use assets of Rs. 15 lakhs (March 31, 2020: Rs. 310 lakhs) and lease liabilities of Rs. 15 lakhs (March 31, 2020: Rs. 292 lakhs). There are no future cash outflows relating to leases that have not yet commenced.

The maturityanalysis of undiscounted lease liabilities are as follows:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Within 5years 756 More than 5years - Total 756	Year ended March 31, 2020
	1,391
	-
	1,391
38. Expenditure on corporate social responsibility activities	Amount in Rs. lakhs
Particulars Year ended March 31, 2021* a.Gross amount required to be spent by the Company during theyear - b.Amount spent during the year ending on March 31, 2021: In cash Yet to be paid in cash i) construction/acquisition of anyasset - - ii) on thepurposes other than (i) above - - c.Amount spent during the year ending on March 31, 2020: In cash Yet to be paid in cash i) construction/acquistion of anyasset - - ii) on thepurpose other than (i) above 15 -	Year ended March 31, 2020 15 Total - - Total - 15

As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (‘CSR’) committee has been formed by the Company. The primary function of the Committee is to assist the Board of Directors in formulating the CSR policy and review the implementation and progress of the same from time to time. During the year ended March 31, 2021, considering losses incurred in immediately preceding year, the Company does not have the obligation to incur expenses in relation to CSR.

39. Income tax

39. Income tax
Income tax expense in the statement ofproft and loss consists of:	Amount in Rs. lakhs
Statement ofproft or loss Year ended March 31, 2021 Current tax 467 Deferred tax charge/(credit) (125) Income tax expense related to currentyear 342 Tax relatingto earlieryears 202 Income tax expense reported in the statement of proft and loss 544 Income tax recognised in other comprehensive income/(loss) - Tax arising on income and expense recognised in other compre- hensive income/(loss) (3) Total (3)	Year ended March 31, 2020
	114
	(71)
	43
	-
	43
	1
	1

96 Mindteck 2020–21 Annual Report Standalone Financial Statements

The reconciliation between the provision of income tax of the Company and amounts computed by applying the Indian income tax rate to profit before taxes is as follows:

before taxes is as follows:
	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Proft/(Loss) before tax 1,397 Enacted income tax rate in India 25.17% Computed expected tax expense/(credit) 352 Effect of: Tax effect on changes in enacted tax rate to 25.17% - Deferred tax asset not recognised due to uncertainty of related future taxableprofts - Non-deductible expenses for taxpurpose 22 Tax relatingto earlieryears 202 Others (32) Total income tax expense 544	Year ended March 31, 2020
	(5,881)
	25.17%
	(1,480)

	19
	1,426
	66
	-
	12
	43

Deferred tax

Deferred tax
Deferred tax relates to the following:				Amount in Rs. lakhs
Particulars	Balance sheet		Statement of proft comprehensive	and loss and other income/(loss)
		As at March 31, 2020 (130) 45 29 81 289 314	Year ended March 31, 2021 207 3 7 14 (109) 122	Year ended March 31, 2020
Property,plant and equipment and intangible assets				58
				1
				3
				13
				37

				112

40. Employee benefits

A. Gratuity

The Company offers Gratuity benefits to employees, a defined benefit plan, Gratuity plan is governed by the Payment of Gratuity Act, 1972. Under gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables set out the funded status of the gratuity plan and the amount recognized in the Company’s financial statements as at and for the year ended March 31, 2021 and March 31, 2020:

Mindteck 2020–21 Annual Report Standalone Financial Statements

	Amount in Rs. lakhs
Particulars As at March 31, 2021 Change in beneft obligations Beneft obligations at the beginning 326 Service cost 65 Interest expense 24 Actuarial loss/(gain) due to change in fnancial assumptions 3 Actuarial loss/(gain) due to experience adjustments (17) Beneftspaid (21) Beneft obligations at the end 380 Change in plan assets Fair value ofplan assets at the beginning 3 Contribution 26 Interest income 2 Administration expenses (6) Return on plan assets excluding amounts included in interest income (2) Beneftspaid (21) Fair value ofplan assets at the end 2 Reconciliation of fair value of assets and defned beneft obligations Present value of obligation as at the end of theyear 380 Fair value ofplan assets as at the end of theyear 2 Amount recognised in the Balance Sheet 378	As at March 31, 2020
	284
	55
	22
	12
	(11)
	(36)
	326
	39
	2
	4
	(4)
	(2)
	(36)
	3


	326
	3
	323
Current 68	58
Non-current 310	265
Year ended March 31, 2021 Expense recognised in proft or loss Current service cost 65 Interest expense 24 Interest income (2) Administrative expenses 6 93 Remeasurement gain/(loss) recognised in other comprehensive income/(loss) Actuarial (loss)/gain due to change in fnancial assumptions (3) Actuarial (loss)/gain due to experience adjustments 17 Return onplan assets excludingamounts included in interest income (2) 12	Year ended March 31, 2020
	55
	22
	(4)
	4
	77

	(12)
	11
	(2)
	(3)

98 Mindteck 2020–21 Annual Report Standalone Financial Statements

	Amount in Rs. lakhs
Particulars As at March 31, 2021 Fiveyearpay-outs Year 1 70 Year 2 55 Year 3 58 Year 4 50 Year 5 44 After 5th Year 244 Actuarial assumptions Discount rate 6.30% Salary growth rate 7.00% Attrition rate 20.00% Retirement age 58years	As at March 31, 2020

	61
	47
	45
	46
	40
	213


	6.40%
	7.00%
	20.00%
	58years

Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

affected the defned beneft obligation by the amounts shown below:
		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 Increase Decrease (16) 17 19 (17) (6) 6	Year ended March 31, 2020
	Increase (16) 19 (6)	Increase (14) 16 (5)	Decrease
Discount rate (1% movement)			15
Salary growth rate (1% movement)			(15)
Attrition rate (10% movement)			5

The Company’s Gratuity Fund is managed by Life Insurance Corporation of India (LIC). The plan assets under the fund are deposited under approved securities.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The expected contribution in next year is Rs. 68 lakhs (March 31, 2020: Rs. 58 lakhs).

The obligations are measured at the present value of estimated future cash flows by using a discount rate that is determined with reference to the market yields at the Balance Sheet date on Government Bonds which is consistent with the estimated terms of the obligation.

The estimate of future salary increase, considered in the actuarial valuation, takes account of inflation, security, promotion and other relevant factors such as supply and demand in the employment market.

B. Contribution to Provident Fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund for the year aggregated to Rs. 263 lakhs (March 31, 2020: Rs. 248 lakhs).

Mindteck 2020–21 Annual Report 99 Standalone Financial Statements

41. Related party disclosures

(i) Names of related parties and description of relationship:

A. Enterprises who exercise Control

Transcompany Ltd., British Virgin Islands (BVI) - Ultimate holding company

Embtech Holdings Ltd., Mauritius - Holding company

B. Enterprises where control exists - Subsidiaries (including step down subsidiaries)

Mindteck, Inc., USA (formerly Infotech Consulting Inc.) Mindteck Software Malaysia SDN. BHD, Malaysia

Mindteck Middle East Limited WLL, Kingdom of Bahrain

Mindteck (UK) Limited, United Kingdom Mindteck Singapore Pte. Limited, Singapore Mindteck Solutions Philippines Inc. (under closure) Mindteck Netherlands BV, Netherlands (closed w.e.f. January 14, 2020) Mindteck Germany GmbH, Germany Chendle Holdings Ltd, BVI Mindteck Canada, Inc., Canada Hitech Parking Solutions Private Limited (under closure)

C. Enterprises where control exists - Other than subsidiaries

Mindteck Employees Welfare Trust

D. Enterprises in which relative of an Independent Director is a Partner

CounsePro

E. Key management personnel

E. Key management personnel
Meenaz Dhanani	Non-Executive Director
Anand Balakrishnan	Managing Director and Chief Executive Offcer (Appointed as an Additional Director w.e.f. February 14, 2020 and was elevated to the position of Managing Director & Chief Executive Offcer w.e.f. March 01, 2020) Chief Financial Offcer (Appointed as an Interim CFO w.e.f. August 13, 2019 and ceased to be Interim CFO w.e.f. March 01, 2020)
Sanjeev Kathpalia	Non-Executive Director (Ceased to be Managing Director and Chief Executive Offcer w.e.f. March 01, 2020 and continued to remain on the Board as a Non-Executive Director. Subsequently, resigned with effect from March 12, 2020)
Jagdish Malkani	Independent Director
Guhan Subramaniam	Independent Director
Prochie Mukherji	Independent Director
Satish Menon	Independent Director
Subhash Bhushan Dhar	Independent Director
Yusuf Lanewala	Chairman
Ramachandra Magadi	Chief Financial Offcer (Appointed as the Chief Financial Offcer w.e.f. March 01, 2020)
Prashanth Idgunji	Chief Financial Offcer (Resigned with effect from July 29, 2019)
Shivarama Adiga S.	Company Secretary

100 Mindteck 2020–21 Annual Report Standalone Financial Statements

(ii) Relatedparty transactions: Particulars For the Year ended March 31, 2021 a. Income from software and IT-enabled services: Mindteck, Inc. 4,787 Mindteck (UK) Limited 1,520 Mindteck Singapore Pte. Limited 345 Mindteck Middle East Limited WLL - Mindteck Software Malaysia SDN. BHD 101 Mindteck GermanyGmbH 60 Total 6,813 b. Cost of technical sub-contractors: Mindteck, Inc. 43 Mindteck Singapore Pte. Limited 13 Total 56 c. Professional charges: CounsePro 26 Total 26 d. Recovery of expenses from: Mindteck, Inc. 89 Mindteck (UK) Limited 58 Mindteck Singapore Pte. Limited 31 Mindteck Middle East Limited WLL 40 Mindteck Software Malaysia SDN. BHD 3 Mindteck GermanyGmbH - Total 221 e. Reimbursement of expenses to: Mindteck, Inc. 201 Mindteck (UK) Limited 4 Mindteck Singapore Pte. Limited 69 Mindteck GermanyGmbH 1 Mindteck Software Malaysia SDN. BHD - Total 275 f. Provision for impairment of investment in subsidiaries: Mindteck, Inc. - Mindteck Singapore Pte. Limited - Chendle Holdings Ltd - Total - g. Provision for impairment of loan: Mindteck Employees Welfare Trust - Total - h. Transactions with the key management persons for the year ended are as follows: Compensation of key managementpersonnel of the Company # Short-term employee benefts 241 Share-basedpayment transactions 7 Beneftspaid to Non-executive directors/independent directors 48 Total 296*	(ii) Relatedparty transactions: Particulars For the Year ended March 31, 2021 a. Income from software and IT-enabled services: Mindteck, Inc. 4,787 Mindteck (UK) Limited 1,520 Mindteck Singapore Pte. Limited 345 Mindteck Middle East Limited WLL - Mindteck Software Malaysia SDN. BHD 101 Mindteck GermanyGmbH 60 Total 6,813 b. Cost of technical sub-contractors: Mindteck, Inc. 43 Mindteck Singapore Pte. Limited 13 Total 56 c. Professional charges: CounsePro 26 Total 26 d. Recovery of expenses from: Mindteck, Inc. 89 Mindteck (UK) Limited 58 Mindteck Singapore Pte. Limited 31 Mindteck Middle East Limited WLL 40 Mindteck Software Malaysia SDN. BHD 3 Mindteck GermanyGmbH - Total 221 e. Reimbursement of expenses to: Mindteck, Inc. 201 Mindteck (UK) Limited 4 Mindteck Singapore Pte. Limited 69 Mindteck GermanyGmbH 1 Mindteck Software Malaysia SDN. BHD - Total 275 f. Provision for impairment of investment in subsidiaries: Mindteck, Inc. - Mindteck Singapore Pte. Limited - Chendle Holdings Ltd - Total - g. Provision for impairment of loan: Mindteck Employees Welfare Trust - Total - h. Transactions with the key management persons for the year ended are as follows: Compensation of key managementpersonnel of the Company # Short-term employee benefts 241 Share-basedpayment transactions 7 Beneftspaid to Non-executive directors/independent directors 48 Total 296*	Amount in Rs. lakhs
	Particulars For the Year ended March 31, 2021 Income from software and IT-enabled services: Mindteck, Inc. 4,787 Mindteck (UK) Limited 1,520 Mindteck Singapore Pte. Limited 345 Mindteck Middle East Limited WLL - Mindteck Software Malaysia SDN. BHD 101 Mindteck GermanyGmbH 60 Total 6,813	For the Year ended March 31, 2020
		3,883
		1,366
		187
		11
		105
		95
		5,647
	Cost of technical sub-contractors: Mindteck, Inc. 43 Mindteck Singapore Pte. Limited 13 Total 56
		80
		5
		85
	Professional charges: CounsePro 26 Total 26
		1
		1
	Recovery of expenses from: Mindteck, Inc. 89 Mindteck (UK) Limited 58 Mindteck Singapore Pte. Limited 31 Mindteck Middle East Limited WLL 40 Mindteck Software Malaysia SDN. BHD 3 Mindteck GermanyGmbH - Total 221	209
		76
		37
		7
		13
		11
		353
	Reimbursement of expenses to: Mindteck, Inc. 201 Mindteck (UK) Limited 4 Mindteck Singapore Pte. Limited 69 Mindteck GermanyGmbH 1 Mindteck Software Malaysia SDN. BHD - Total 275	108
		-
		46
		-
		2
		156
	Provision for impairment of investment in subsidiaries: Mindteck, Inc. - Mindteck Singapore Pte. Limited - Chendle Holdings Ltd - Total -	5,274
		328
		64
		5,666
	Provision for impairment of loan: Mindteck Employees Welfare Trust - Total -
		168
		168
	Transactions with the key management persons for the year ended are as follows: Compensation of key managementpersonnel of the Company # Short-term employee benefts 241 Share-basedpayment transactions 7 Beneftspaid to Non-executive directors/independent directors 48 Total 296*
		276
		(32)
		46
		290

For the year ended March 31, 2020 includes Rs. 12 lakhs paid to Managing Director and Chief Executive Officer which has been approved by the Board vide meeting dated February 14, 2020, subject to shareholder’s approval. Such approval was received on August 14, 2020.

The remuneration to the key managerial personnel does not include the provision/ accruals made on best estimate basis as they are determined for the Company as a whole.

i. Refer to Note 43(i) for grant of stock options to employees of the subsidiary companies.

Mindteck 2020–21 Annual Report Standalone Financial Statements

101

(iii) Amounts outstanding as at balance sheet date:

(iii a. b. c. d. e. f. g.	) Amounts outstanding as at balance sheet date:	Amount in Rs. lakhs
	Particulars As at March 31, 2021 Amounts receivable: Mindteck, Inc. 145 Mindteck (UK) Limited 371 Mindteck Singapore Pte. Limited 16 Mindteck Software Malaysia SDN. BHD (3) Mindteck Middle East Limited WLL - Mindteck GermanyGmbH 436 Total 965	As at March 31, 2020
		407
		143
		9
		4
		10
		370
		943
	Financial assets - loans: Mindteck, Inc. 55 Mindteck (UK) Limited 7 Mindteck Singapore Pte. Limited 25 Mindteck Middle East Limited WLL 20 Mindteck GermanyGmbH 44 Total 151	64
		9
		25
		4
		44
		146
	Unbilled revenue: Mindteck, Inc. 393 Mindteck (UK) Limited 9 Mindteck Singapore Pte. Limited 64 Mindteck Software Malaysia SDN. BHD 11 Mindteck GermanyGmbH 6 Total 483	266
		101
		30
		7
		6
		410
	Amounts payable: Mindteck, Inc. 201 Mindteck (UK) Limited 4 Mindteck Singapore Pte. Limited 37 Mindteck GermanyGmbH 1 Mindteck Software Malaysia SDN. BHD - Total 243	305
		-
		16
		-
		2
		323
	Unearned revenue: Mindteck, Inc. 119 Total 119	-
		-
	Claimable expenses: Mindteck Middle East Limited WLL 1 Total 1	-
		-
	Loans and advances: Mindteck Employees Welfare Trust (refer Note 33(c )) 233 Total 233	233
		233

42. Segment information

In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

43. Employee stock options

As at March 31, 2021, the Company has the following share-based payment arrangements

Trust’). The Trust, which was constituted for this purpose, subscribed to 416,000 equity shares renounced in its favour by the Company’s promoters/directors in the Company’s earlier rights issue. These shares are to be distributed amongst the employees, based on the recommendations made by the Company’s Nomination & Remuneration Committee. No equity shares have been distributed under the ESIS 2000 and therefore, no stock compensation expense has been recorded. The above Scheme has been replaced by Mindteck Employee Stock Option Scheme 2020.

a. Employee Share Incentive Scheme 2000

The Company has an Employee Share Incentive Scheme 2000 (‘ESIS 2000’) for the benefit of its employees administered through the Mindteck Employees Welfare Trust (‘The

b. Mindteck Employee Stock Option Scheme 2005 (ESOP 2005)

During the year ended March 31, 2006, the Company introduced the ‘Mindteck Employees Option Scheme 2005’

102 Mindteck 2020–21 Annual Report Standalone Financial Statements

(‘the Option Scheme 2005’) for the benefit of the employees of the Company and its subsidiaries, as approved by the Board of Directors in its meeting held on July 04, 2005 and the shareholders meeting held on July 29, 2005. The Option Scheme 2005 provides for the creation and issue of 500,000 options that would eventually convert into equity shares of Rs 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Compensation Committee of the Board of Directors. The options vest annually in a graded manner over a three year period and are exercisable during a maximum period of 5 years from the date of vesting.

During the year ended March 31, 2021, the Company has not granted any options.

During the year ended March 31, 2020, the Company has granted 50,000 options on August 13, 2019 at an exercise price of Rs. 36.40 per share.

c. Mindteck Employee Stock Option Scheme 2008 (ESOP 2008) During the year ended March 31, 2009, the Company introduced ‘Mindteck Employees Stock Option Scheme 2008’ (‘the Option Scheme 2008’) for the benefit of the employees of the Company and its subsidiaries, as approved by the Board of Directors in its meeting held on May 27, 2008 and the shareholders meeting held on July 30, 2008. The Option Scheme 2008 provides for the creation and issue of 1,200,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination & Remuneration Committee of the Board of Directors. The options will vest after the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to be decided by the Nomination & Remuneration Committee.

During the year ended March 31, 2021 and March 31, 2020, the Company has not granted any options.

d. Mindteck Employee Stock Option Scheme 2014 (ESOP 2014) During the year ended March 31, 2015, the Company introduced ‘Mindteck Employees Stock Option Scheme 2014’ (‘the Option Scheme 2014’) for the benefit of the employees of the Company and its subsidiaries, as approved by the Board of Directors in its

meeting held on May 29, 2014 and the shareholders meeting held on August 14, 2014. The Option Scheme 2014 provides for the creation and issue of 2,500,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination and Remuneration Committee of the Board of Directors. The options will vest after the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to be decided by the Nomination and Remuneration Committee.

During the year ended March 31, 2021 and March 31, 2020, the Company has not granted any options.

e. Mindteck Employee Stock Option Scheme 2020 (ESOP 2020) During the year ended March 31, 2021, the Company introduced ‘Mindteck Employees Stock Option Scheme 2020’ (‘the Option Scheme 2020’) for the benefit of its employees administered through the Mindteck Employees Welfare Trust (‘The Trust’) in lieu of Company’s earlier Employee Share Incentive Scheme 2000. The Trust, which was constituted for this purpose, subscribed to 416,000 equity shares renounced in its favour by the Company’s promoters/directors in the Company’s earlier rights issue. The Scheme was approved by the Board of Directors in its meeting held on December 11, 2020 and by the shareholders through postal ballot held on January 17, 2021. The Option Scheme 2020 provides for the issue of 416,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to yet to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination and Remuneration Committee of the Board of Directors. The option Scheme 2020 shall provide a minimum vesting period of one year from the grant date. The options will vest after as per the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to shall be decided by the Nomination and Remuneration Committee.

During the year ended March 31, 2021, the Company has not granted any options.

Mindteck 2020–21 Annual Report 103 Standalone Financial Statements

f. Employees’ Stock Options details as on the balance sheet date are:

Particulars	2020-21 Option (no.) Weighted average exercise price per stock option (Rs.) 1,39,500 56.05 3,29,719 77.64 1,00,000 34.70 - - - - - - 33,400 61.56 31,268 60.09 - - - - - - - - 1,06,100 54.32 2,98,451 79.48 1,00,000 34.70 71,167 62.69 2,98,451 79.48 66,667 34.70	2019-20	2019-20
	Option (no.) 1,39,500 3,29,719 1,00,000 - - - 33,400 31,268 - - - - 1,06,100 2,98,451 1,00,000 71,167 2,98,451 66,667	Option (no.) 1,22,600 6,14,419 6,00,000 50,000 - - 33,100 2,84,700 5,00,000 - - - 1,39,500 3,29,719 1,00,000 76,700 3,28,119 33,333	Weighted average exercise price per stock option (Rs.)
Options outstanding at the beginning of the year ESOP 2005			67.10
ESOP 2008			69.90
ESOP 2014			73.51
Options granted during the year ESOP 2005			36.40
ESOP 2008			-
ESOP 2014			-
Forfeited, cancelled, surrendered or lapsed during the year ESOP 2005			67.27
ESOP 2008			60.08
ESOP 2014			79.70
Exercised during the year on exercise of employee stock options/restricted shares+ ESOP 2005			-
ESOP 2008			-
ESOP 2014			-
Options outstanding at the end of the year ESOP 2005			56.05
ESOP 2008			77.64
ESOP 2014			34.70
Options exercisable at the end of the year ESOP 2005			67.62
ESOP 2008			77.66
ESOP 2014			34.70

g. Details of Weighted average remaining contractual life and range of exercise prices for the options outstanding at the balance sheet date

sheet date
Particulars	Weighted average remaining contractual life (years) 2020-21 2019-20* 2.26 3.10 1.53 2.21 4.91 5.91	Range of exerciseprices 2020-21 2019-20 13.55 - 92.10 13.55 - 92.10 43.60 - 130.80 43.60 - 130.80 34.70 - 34.70 34.70 - 34.70	Fair value	of options granted during theyear
	2020-21 2.26 1.53 4.91	2020-21 13.55 - 92.10 43.60 - 130.80 34.70 - 34.70	2020-21 - - -	2019-20
ESOP 2005				14.88
ESOP 2008				-
ESOP 2014				-

considering vesting and exercise period

h. Fair value methodology

The following table list the inputs to the models used for the three plans for the year ended March 31, 2021 and March 31, 2020, respectively:

Particulars		March 31, 2021		March 31, 2020
	ESOP 2005 - - - - -	ESOP 2008	ESOP 2005 48.57% 7.52% 2.07% 4.50 Black scholes	ESOP 2008 - - - - -	ESOP 2014
Risk-free interest rate		-			-
Expected volatilityof share		-			-
Expected dividendyield		-			-
Expected life (years)		-			-
Model used		-			-

The expected life of stock options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome. However, no options have been granted during the year ended March 31, 2021.

104 Mindteck 2020–21 Annual Report Standalone Financial Statements

i. The expense recognised for employee services received during the year is shown in the following table:

The expense recognised for employee services received during the year is shown in the following table:
	Amount in Rs. lakhs
Particulars For the year ended March 31, 2021 Expense arising from equity-settled share-based payment 7 Total expense arising from share-basedpayment 7	For the year ended March 31, 2020
	(19)
	(19)
Further, as a part of the above schemes, stock options are also granted to employees of the subsidiaries of the Company. Below is the entity-wise break-up of expenses:
Particulars As at March 31, 2021 Mindteck, Inc. USA - Total -	As at March 31, 2020
	5
	5

Accordingly, Rs. NIL (March 31, 2020: Rs. 5 lakhs) is treated as investments made in subsidiaries. Refer Note 6.

44. Service concession arrangement (SCA)

a. Significant terms of Service concession arrangement are provided below:

	Authorisation agreement signed with
Particulars	Municipal Corporation Bhopal (“MCB”)
Nature of the asset recognised under SCA accounting	Intangible assets
Carryingvalue	Rs. NIL (March 31, 2020 : Rs. 752 lakhs)
Year when SCAgranted	FY 2017-18
Concessionperiod	10years
Extension of concessionperiod	Not applicable
Work in progress - status	Phase 1 completed & Phase 2 partially completed (March 31, 2020 : Phase 1 completed & Phase 2partiallycompleted)
Brief description of concession	The Company has been awarded a contract under Public Private
	Partnership on July 26, 2017 with Municipal Corporation of Bhopal
	(MCB) for designing, implementation/ construction, installation,
	fnancing, and maintenance of Smart ParkingSystem (SPS).

b. Intangible asset under SCA

Intangible asset under SCA
	Amount in Rs. lakhs
Particulars As at March 31, 2021 OpeningBalance 752 Add: Cost of supplies including proft margin - Less: Amortization for theyear 38 Reversal due to termination of sites - Provision for expected losses under service concession arrangement - Written off on termination of contract 714 Total -	As at March 31, 2020
	932
	21

	97
	56
	48
	-
	752

During the year ended March 31, 2021, the Company terminated the contract with BMC and accordingly, reversed all the assets and liabilities created as per Appendix D of Ind AS 115. Also, refer Note 5, Note 15, Note 21 and Note 33(b).

Mindteck 2020–21 Annual Report Standalone Financial Statements

105

45. Financial instruments

The carrying value of financial instruments by categories is as below:

45. Financial instruments The carrying value of fnancial instruments by categories is as below:
	Amount in Rs. lakhs
Particulars As at March 31, 2021 Financial assets - Non-current (measured at amortized cost) Securitydeposits ^ 320 Advances to relatedparty# 233 Fixed deposits bank with remaining maturity of more than 12 months # 14 Financial assets - Current (measured at fair value through proft & loss) Investments in mutual funds $ - Financial assets - Current (measured at amortized cost) Trade receivables # 1,951 Cash and cash equivalents # 425 Other bank balances # 2,706 Securitydeposits ^ 21 Advances to relatedparty# 152 Claimable expenses # 69 Unbilled revenue # 810 Accrued interest # 20 Employee advances # 13 Total assets 6,734 Financial liabilities - Non-current (measured at amortized cost) Lease liabilities ^ 334 Rental deposit ^ 16 Financial liabilities - Current (measured at amortized cost) Bank overdraft * # 2 Tradepayables # 746 Lease liabilities ^ 408 Unpaid dividend # 10 Others # 106 Total liabilities 1,622	As at March 31, 2020
	308
	233
	11
	43
	1,956
	1,331
	33
	19
	146
	11
	698
	2
	41
	4,832
	793
	16
	-
	805
	412
	13
	43
	2,082

Rounded-off to lakhs

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

$ The carrying value of this account is measured at fair value through profit & loss and are classified as level 1 of fair value hierarchy.

Management has assessed these carrying balances approximates their fair value largely due to the short term maturities/liquid nature.

^ These balances are determined by using discounted cash flows using discount rate that reflects the issuer’s borrowing rate/ lending rate for the respective financial assets/liabilities as at the end of the reporting period.

106 Mindteck 2020–21 Annual Report Standalone Financial Statements

46. Financial risk management

The Company has exposure to following risks arising from financial instruments-

credit risk
market risk
interest risk
liquidity risk

Risk management framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relations to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

a. Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and unbilled revenue) from its financing activities including deposits with banks and financial institutions.

(i) Trade and other receivables:

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security.

Expected credit loss (ECL) assessment for corporate customers as at March 31, 2021 and March 31, 2020

The Company’s credit period generally ranges from 0-90 days. The credit risk exposure of the Company is as follows:

		Amount in Rs. lakhs
Particulars	As at March 31, 2021 Gross amount Provision and loss allowance 2,886 125 2,886 125	As at March 31, 2020
		Gross amount Provision and loss allowance
Trade receivables and unbilled revenue		2,741 87
Total		2,741 87

Reconciliation of provision for doubtful debts and loss allowance:

Reconciliation of provision for doubtful debts and loss allowance:
	Amount in Rs. lakhs
Particulars	Amount
Provision and loss allowance on April 01, 2019	75
Changes inprovision and loss allowance	12
Provision and loss allowance on March 31, 2020	87
Changes inprovision and loss allowance	38
Provision and loss allowance on March 31, 2021	125

(ii) Other financial assets and deposits with banks:

Credit risk on cash and cash equivalent (including bank balances, fixed deposits and margin money with banks) is limited as the Company generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

b. Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Company’s income and its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exchange risk arises from its foreign operations, foreign currency revenues and expenses, primarily in United States Dollars (‘USD’). The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. The Company also has exposures to Great Britain Pound (‘GBP’) and Singapore Dollar (‘SGD’).

Mindteck 2020–21 Annual Report Standalone Financial Statements

107

Unhedged foreign currency exposure

Foreign currency exposures that have not been hedged by derivative instruments or otherwise are as follows:

Particulars	Currency USD GBP BHD EUR SGD USD EUR SGD MYR GBP USD GBP MYR SGD	As at March 31, 2021 Amount in Rs. lakhs 331 368 - 319 10 547 14 64 10 7 208 4 - 31	As at March 31, 2020
			Amount in Rs. lakhs
Trade receivables towards services rendered			660
			137
			9
			250
			6
Other current assets			407
			14
			30
			7
			104
Trade payables for services availed			305
			-
			2
			16

Sensitivity analysis

Every 1% increase or decrease of the respective foreign currencies compared to functional currency of the Company would cause the profit before tax in proportion to revenue to increase or decrease respectively by 0.14% (loss before tax for the year ended March 31, 2020 by 0.14%).

c. Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest

rates relates primarily to its short term borrowings in nature of working capital loans, which carry floating interest rates. Accordingly, the Company’s risk of changes in interest rates relates primarily to the Company’s debt obligations with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant. The impact on entity’s loss before tax due to change in the interest rate/ fair value of financial liabilities are as disclosed below:

		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 Change in interest rate Effect on proft before tax +1% - -1% -	Year ended March 31, 2020
		Change in interest rate Effect on proft before tax
Borrowings*		+1% -
		-1% -

*Rounded-off to lakhs

d. Liquidity risk

Liquidity is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing the liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company believes that the cash and cash equivalents is sufficient to meet its current requirements. Accordingly no liquidity risk is perceived.

Exposure to liquidity risk

The table below details the Company’s remaining contractual maturity for its financial liabilities. The contractual cash flows reflect the cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

108 Mindteck 2020–21 Annual Report Standalone Financial Statements

	Amount in Rs. lakhs
Particulars Carrying value March 31, 2021 Lease liabilities 742 Rental deposit 16 Borrowings 2 Tradepayables 746 Unpaid dividend 10 Employee related liabilities 106 1,622 March 31, 2020 Lease Liabilities 1,205 Rental Deposits 16 Borrowings - Tradepayables 805 Unpaid dividend 13 Employee related liabilities 43 2,082*	Contractual cash flows
	Total On demand < 1 Yr >1 Yr
	742 - 408 334
	16 - - 16
	2 2 - -
	746 - 746 -
	10 10 - -
	106 - 106 -
	1,622 12 1,260 350
	1,205 - 412 793
	16 - - 16
	- - - -
	805 - 805 -
	13 13 - -
	43 - 43 -
	2,082 13 1,260 809

*Rounded-off to lakhs

Mindteck 2020–21 Annual Report 109 Standalone Financial Statements

47. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long-term and other strategic investment plans. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The current capital structure of the Company is equity based with no financing through borrowings.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2021 and March 31, 2020.

48. The Company has considered internal and certain external sources of information including economic forecasts, budgets required to meet performance obligations and likely delays on contractual commitments, upto the date of approval of these standalone financial statements, in determining the possible impact from the COVID-19 pandemic. The Company has used the principles of prudence in applying judgements, estimates and assumptions and based on the current estimates, the Company expects to fully recover the carrying amount of its assets. The impact of the global health pandemic may be different from that estimated as at the date of approval of these standalone financial results and the Company will continue to closely monitor any material changes to its assessment of economic impact of COVID-19 pandemic.

49. The Company has entered into ‘International transactions’ with ‘Associated Enterprises’ which are subject to Transfer Pricing regulations in India. The Company is in the process of carrying out transfer pricing study for the year ended March 31, 2021 in this regard, to comply with the requirements of the Income Tax Act, 1961. During the year ended March 31, 2021, the Company has re-assessed its inter-company transfer pricing arrangements effective from April 01, 2020 considering the benchmarking exercise carried out by the Company. The management of the Company is of the opinion that such transactions with Associated Enterprises are at arm’s length and hence in compliance with the aforesaid legislation. Consequently, this will not have any impact on the standalone financial statements, particularly on account of tax expense and that of provision for taxation.

50. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/ interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

As per our report of even date

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Yusuf Lanewala Anand Balakrishnan Jagdish Malkani Chairman Managing Director and CEO Director DIN - 01770426 DIN - 05311032 DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

110 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Independent Auditor’s Report

To the Members of Mindteck (India) Limited

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Mindteck (India) Limited (hereinafter referred to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) comprising of the consolidated Balance Sheet as at March 31, 2021, the consolidated Statement of Profit and Loss, including Other Comprehensive Income/(Loss), the consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013, as amended (“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 consolidated state of affairs of the Group as at March 31, 2021, their consolidated profit including other comprehensive income/ (loss), their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements’ section of our report. We

are independent of the Group in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the 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 audit opinion on the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the financial year ended March 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

Key audit matters

How our audit addressed the key audit matter

Impairment of Goodwill (as described in Note 6 of the consolidated financial statements)

The Group’s consolidated financial statements includes Rs. 2,815 lakhs of goodwill, net of impairment. In accordance with Ind AS, these balances are allocated to Cash Generating Unit (CGU) which is tested annually for impairment using discounted cash-flow model of the CGU’s recoverable value compared to the carrying value of the assets. A deficit between the recoverable value and the CGU’s net assets would result in impairment.

For the above impairment testing, basis valuation conducted by an external valuation specialist (‘management’s expert’), value in use has been determined by forecasting and discounting future cash flows which has been reviewed and approved by Audit Committee / Board of Directors of the Holding Company. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Further, the determination of the recoverable amount of the CGUs involved significant judgment due to inherent uncertainty in the assumptions supporting such recoverability.

Accordingly, the impairment of goodwill was determined to be a key audit matter in our audit of the consolidated financial statements.

Our audit procedures included the following, amongst others: ▪ We understood the Group’s process for identification of indicators for impairment and evaluated its internal controls over its impairment assessment of goodwill. We understood the key assumptions applied by the management such as revenue growth, operating margins, discount rates and terminal growth rates in determining impairment.
We have obtained the valuation assessment and report from the management’s expert and assessed the key valuation assumptions and methodologies used by the management’s expert in their valuation reports.
We have evaluated the competences, capabilities and objectivity of the management’s expert and obtained an understanding of the scope of work and the terms of engagement.
We also assessed the recoverable value by performing sensitivity testing of key assumptions used.
We discussed potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.
We tested the arithmetical accuracy of the impairment models.
We also assessed the disclosures in the consolidated financial statements in this regard for compliance with disclosure requirements under the accounting standards.

Mindteck 2020–21 Annual Report 111 Consolidated Financial Statements

Contingencies in relation to tax litigations (as described in Note 34 of the consolidated financial statements)

The Group is involved in various legal proceedings and uncertain tax positions relating to taxes. As of March 31, 2021, there is Rs. 463 lakhs disclosed as contingent liability in the consolidated financial statements. In relation to these proceedings, management assesses the impact of the eventual outcome on its consolidated financial statements.

The Group discloses contingencies for income tax pending litigations when it is probable that the taxation authority will accept the uncertain tax treatment in accordance with the requirements of Appendix C to Ind AS 12 on ‘Uncertainty over Income tax treatment’.

Since the aforesaid estimates require significant judgments by management, based on the available information, including that obtained from its tax advisors, we identified it as a key audit matter area in our audit of the consolidated financial statements.

Our audit procedures included the following:

We obtained an understanding and assessed the internal control environment relating to the identification, recognition and measurement of provisions for disputes and disclosures of contingent liabilities in relation to taxes.
We obtained details of completed tax assessments, demands issued by tax authorities, orders/notices received in this regard from the management.
We held discussions with management to understand their assessment of the quantification and likelihood of significant exposures and the provision required in accordance with the requirements of Appendix C to Ind AS 12 which is supported by assessment reports from management’s expert.
We obtained confirmation from management’s expert on ongoing litigations along with risk assessment. We have evaluated the competences, capabilities and objectivity of the management’s expert and obtained an understanding of the scope of work and the terms of engagement.
We involved our tax specialists to obtain and evaluate management’s assessment of the likely outcome and potential exposures arising from all significant contingencies and considered the requirements of any provisions and related disclosures.
We also assessed the disclosures in the consolidated financial statements for compliance with disclosure requirements under the accounting standards.

Other Information

The Holding Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report and Corporate Governance Report but does not include the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the consolidated 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.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated financial statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income/(loss), consolidated cash flows and consolidated statement of changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies

included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group 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 the 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 consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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

112 Mindteck 2020–21 Annual Report Consolidated Financial Statements

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 consolidated 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 consolidated 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 Holding 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 made by management.
Conclude on the appropriateness of management’s 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 ability of the Group 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 consolidated 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 Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group of which we are the independent auditors, to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated financial statements of which we are the independent auditors 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor’s 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

As required by Section 143(3) of the Act, 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 of the aforesaid consolidated financial statements;
b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors;
c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement of Other Comprehensive Income/(Loss), the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements;
d. In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e. On the basis of the written representations received from the directors of the Holding Company as on March 31, 2021 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its subsidiary companies, none of the directors of the Group’s companies, incorporated in India, is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy and the operating effectiveness of the internal financial controls with reference to these consolidated financial statements of the Holding Company and its Subsidiary Company incorporated in India, refer to our separate Report in “Annexure” to this report;

Mindteck 2020–21 Annual Report 113 Consolidated Financial Statements

g. In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Holding Company and its Subsidiary Company incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V to the Act;
h. With respect to the other matters 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 our information and according to the explanations given to us:
i. The consolidated financial statements disclose the impact of pending litigations on its consolidated financial position of the Group in its consolidated financial statements – Refer Note 34 to the consolidated financial statements;
ii. The Group has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts – Refer Note 34 to the consolidated financial statements; and
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company and its Subsidiary Company incorporated in India during the year ended March 31, 2021.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803 UDIN: 21213803AAAABZ1846

Place: Bengaluru Date: May 28, 2021

114 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Annexure to the Independent Auditor’s Report of even date on the Consolidated Financial Statements of Mindteck (India) Limited

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated financial statements of Mindteck (India) Limited (hereinafter referred to as the “Holding Company”) as of and for the year ended March 31, 2021, we have audited the internal financial controls with reference to consolidated financial statements of the Holding Company and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the companies included in the Group, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding Company, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Holding Company’s internal financial controls with reference to these consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to these consolidated financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to these consolidated financial statements and their operating effectiveness. Our audit of internal financial controls with reference to consolidated financial statements included obtaining an understanding of internal financial controls with reference to these consolidated financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls With Reference to these Consolidated Financial Statements

A company’s internal financial controls with reference to these consolidated financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference to these consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to these Consolidated Financial Statements

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

Opinion

In our opinion, the Group, which are companies incorporated in India, have in all material respects, adequate internal financial controls with reference to these consolidated financial statements and such internal financial controls with reference to these consolidated financial statements were operating effectively as at March 31, 2021, based on the internal control over financial reporting criteria established by the Holding Company, considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803 UDIN: 21213803AAAABZ1846

Place: Bengaluru Date: May 28, 2021

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with reference to these consolidated financial statements.

Mindteck 2020–21 Annual Report 115 Consolidated Financial Statements

Consolidated Balance Sheet as at March 31, 2021

Consolidated Balance Sheet as at March 31, 2021
All amou	nts in Rs. lakhs unless otherwise stated
Notes As at March 31, 2021 ASSETS Non-current assets Property,plant and equipment 3 232 Investmentproperty 4 65 Right-of-use assets 37 650 Investment in sub-lease 37 - Intangible assets 5 15 Goodwill on consolidation 6 2,815 Financial assets Loans 7 341 Other fnancial assets 8 14 Deferred tax assets (net) 39 436 Income tax assets (net) 9 610 Other non-current assets 10 13 5,191 Current assets *Financial assets* Investments 11 - Trade receivables 12 5,036 Cash and cash equivalents 13 5,060 Other bank balances 13 2,706 Loans 14 42 Other fnancial assets 15 2,060 Other current assets 16 568 15,472 Total assets 20,663	As at March 31, 2020
	332
	67
	1,084
	35
	782
	2,815


	387
	11
	314
	1,244
	6
	7,077

	43
	5,704
	2,906
	33
	25
	2,055
	607
	11,373
	18,450

116 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Consolidated Balance Sheet as at March 31, 2021 (cont’d.)

	All amou	nts in Rs. lakhs unless otherwise stated
Notes	As at March 31, 2021 2,521 11,464 13,985 346	As at March 31, 2020
EQUITY AND LIABILITIES EQUITY Equityshare capital 17		2,521
Other equity 18		10,442
Equity attributable to equity holders of theparent		12,963
LIABILITIES Non-current liabilities *Financial liabilities* Lease liabilities 37		793
Other fnancial liabilities 19	20	54
Other non-current liabilities 20	144	7
Provisions 21	310 820 1,808 1,350 447 752 499 247 755 5,858 6,678 20,663	895
		1,749
Current liabilities *Financial liabilities* Borrowings 22
		-
Tradepayables 23		1,284
Lease liabilities 37		483
Other fnancial liabilities 24		794
Provisions 25		515
Income tax liabilities (net) 9		224
Other current liabilities 26		438
		3,738
Total liabilities		5,487
Total equity and liabilities		18,450
Corporate information and signifcant accounting policies 1 & 2

The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar

Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Anand Balakrishnan Managing Director and CEO DIN - 05311032

Yusuf Lanewala Chairman DIN - 01770426

Jagdish Malkani Director DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S

Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S

Company Secretary

Mindteck 2020–21 Annual Report 117 Consolidated Financial Statements

Consolidated Statement of Profit and Loss for the year ended March 31, 2021

	All amounts in Rs. lakhs unless otherwise stated	All amounts in Rs. lakhs unless otherwise stated
Notes INCOME Revenue from operations 27 Other income 28 Total income EXPENSES Cost of technical sub-contractors Employee beneft expenses 29 Finance costs 30 Depreciation and amortisation expense 31 Other expenses 32 Total expenses Proft/(Loss) before tax and exceptional items Exceptional items 33 Impairment ofgoodwill Provision for expected losses under service concesssion arrangement Total exceptional items Proft/(Loss) before tax Tax expense (net): 39 Current tax Tax relatingto earlieryears Deferred tax charge/(credit) Total tax expense Proft/(Loss) for the year Other comprehensive income/(loss), net of tax *Items that will be reclassifed subsequently toproft or loss* Net exchange difference on translation of foreign operation *Items that will not be reclassifed subsequently toproft or loss* Re-measurementgain/(loss) on defned beneftplan Income tax relatingto items that will not be reclassed toproft or loss Other comprehensive income/(loss) for theyear, (net of tax) Total comprehensive income/(loss) for the year attributable to equity holders of theparent Earnings/(Loss) per share (equity shares, par value Rs. 10 each) (March 31, 2020: Rs. 10 each) attributable to equity holders of theparent 36 Basic (in Rs.) Diluted (in Rs.)	Year ended March 31, 2021 28,672 455 29,127 4,911 19,478 165 639 2,321 27,514 1,613 - - - 1,613 518 134 (125) 527 1,086 (80) 12 (3) (71) 1,015 4.31 4.23	Year ended March 31,2020
		27,613
		175
		27,788
		4,171
		19,924
		226
		704
		3,069
		28,094
		(306)

		(5,942)
		(159)
		(6,101)
		(6,407)
		172
		(28)
		(71)
		73
		(6,480)


		352

		(3)
		1
		350
		(6,130)

		(25.71)
		(25.71)
Corporate information and signifcant accounting policies 1 & 2

The accompanying notes are an integral part of the consolidated financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803

for and on behalf of the Board of Directors of

Mindteck (India) Limited

Anand Balakrishnan

Yusuf Lanewala

Chairman Managing Director and CEO DIN - 01770426 DIN - 05311032

Jagdish Malkani Director DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

118 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Consolidated Statement of Changes in Equity for the year ended March 31, 2021

A. Equity share capital	All amounts in R	s. lakhs unless otherwise stated
Particulars	Number	Amount
Balance as at April 01, 2019	2,52,05,898	2,521
Changes in equityshare capital duringtheyear: 2019-20	-	-
Balance as at March 31, 2020	2,52,05,898	2,521
Changes in equityshare capital duringtheyear: 2020-21	-	-
Balance as at March 31, 2021	2,52,05,898	2,521
B. Other equity	All amounts in R	s. lakhs unless otherwise stated
Particulars Share application money pending allotment Balance as at April 01, 2019 28	Reserves & Surplus Capital reserve Securities premium Retained earnings Employee stock options reserve 798 10,156 4,746 334	Foreign currency translation reserve Total other equity
		960 17,022
Less: Loss for theyear - Less: Changes in remeasurement of defned beneft plan through other comprehensive income/(loss), net of taxes - Less: Effect of adoption of Ind AS-116 Leases (refer Note 37) - Add: Exchange difference on translating the fnancial statement of foreign operations Less: Cash dividend - Less: Dividend distribution tax - Add/(less): Transfer to retained earnings upon expiry or lapse of employee stock options after vesting - Less: Employee share-based expense (refer Note 43) - Balance as at March 31, 2020 28 Add: Proft for theyear - Add: Changes in remeasurement of defned beneft plan through other comprehensive income/(loss), net of taxes - Less: Exchange difference on translating the fnancial statement of a foreign operations - Add/(Less): Transfer to retained earnings upon expiry or lapse of employee stock options after vesting - Add: Employee share-based expense (refer Note 43) - Balance as at March 31, 2021 28	- - (6,480) - - - (2) - - - (131) - - - - - (252) - - - (53) - - - 167 (167) - - - (14) 798 10,156 (2,005) 153 - - 1,086 - - - 9 - - - - - - - 13 (13) - - - 7 798 10,156 (897) 147	- (6,480)
		- (2)
		- (131)
		352 352
		- (252)
		- (53)
		- -
		- (14)
		1,312 10,442
		- 1,086
		- 9
		(80) (80)
		- -
		- 7
		1,232 11,464

Corporate information and significant accounting policies (refer Notes 1 & 2)

The accompanying notes are an integral part of the consolidated financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Yusuf Lanewala Anand Balakrishnan

Chairman

Managing Director and CEO DIN - 05311032

DIN - 01770426

Jagdish Malkani Director DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

Mindteck 2020–21 Annual Report Consolidated Financial Statements

119

Consolidated Statement of Cash Flows for the year ended March 31, 2021

Consolidated Statement of Cash Flows for the year ended March 31, 2021	Consolidated Statement of Cash Flows for the year ended March 31, 2021
All amounts in Rs. lakhs unless otherwise stated
Year ended March 31, 2021 Operating activities Proft/(Loss) before tax 1,613 Adjustments to reconcileproft/(loss) before tax to net cash flows: Depreciation and amortization expense 639 Impairment ofgoodwill (Refer Note 33(a)) - Provision for expected losses under service concession arrangement (Refer Note 33(b)) - Finance costs 125 Interest income (207) Unrealised exchange differences (28) Gain on sale of assets - Provision for doubtful deposits 1 Provision for doubtful debts (net) (including unbilled revenue) and loss allowance 88 Provision for doubtful input credit receivable - Share basedpayment expenses 7 Impact due to termination of service concession arrangement (5) Fair valuegain on mutual fund at fair value throughproft or loss - Gain on sale of mutual funds (net) - Other non-operatingincome (49) Changes in operating assets and liabilities (Increase)/Decrease in trade receivables 568 (Increase)/Decrease in loans and advances and other assets 47 Increase/(Decrease) in liabilities andprovisions 567 Net cash from operating activities before taxes 3,366 Income taxespaid (net of refunds) 5 Net cash from operating activities (A) 3,371	Year ended March 31,2020
	(6,407)

	704
	5,942
	159
	226
	(35)
	(40)
	(5)
	-
	(102)
	180
	-
	-
	(23)
	(23)
	(9)


	1,910
	(141)
	(484)

	1,852
	(336)
	1,516

120 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Consolidated Statement of Cash Flows for the year ended March 31, 2021 (cont’d.)

Consolidated Statement of Cash Flows for the year ended March 31, 2021 (cont’d.)	Consolidated Statement of Cash Flows for the year ended March 31, 2021 (cont’d.)
All amounts in Rs. lakhs unless otherwise stated
Year ended March 31, 2021 Investing activities Purchase of property, plant and equipment, intangible assets and capital work inprogress (65) Proceeds from sale of assets 5 Proceeds from subleaseproperty - Movement in fxed deposits and other bank balances (net) (2,679) Investment in mutual funds - Proceeds from sale of mutual funds 43 Interest income received 167 Net cash from/(used in) investing activities (B) (2,529) Financing activities Proceeds from short term borrowings (net) 1,828 Repayment ofprincipalportion of lease liabilities (409) Finance cost on lease liabilities (103) Finance costpaid - Dividendspaid (includingdistribution tax and unpaid dividend) (3) Net cash from/(used in) fnancing activities (C ) 1,313 Net increase in cash and cash equivalents (D)=(A)+(B)+(C) 2,155 Cash and cash equivalents at the beginningof theperiod (E) 2,906 Effect of exchange difference on translation of foreign currency cash and cash equivalents (F) (3) Cash and cash equivalents at the end of the year (refer Note 13) (G)=(D)+(E )+(F) 5,058	Year ended March 31,2020
	(241)
	6
	15
	87
	(6,068)
	7,422
	13
	1,234
	-
	(452)
	(127)
	(40)
	(311)
	(930)
	1,820

	1,016
	70
	2,906

Corporate information and significant accounting policies (refer Notes 1 & 2)

The accompanying notes are an integral part of the consolidated financial statements

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar

Partner Membership Number: 213803

for and on behalf of the Board of Directors of

Mindteck (India) Limited

Yusuf Lanewala Anand Balakrishnan Jagdish Malkani Chairman Managing Director and CEO Director DIN - 01770426 DIN - 05311032 DIN - 00326173

Ramachandra M S Shivarama Adiga S Chief Financial Officer Company Secretary

Place: Bengaluru Date: May 28, 2021

Mindteck 2020–21 Annual Report Consolidated Financial Statements

121

Notes to Consolidated Financial Statements for the year ended March 31, 2021

1. Corporate Information

Mindteck (India) Limited (‘Mindteck’ or ‘the Company’ or ‘parent’) with its subsidiaries, set out below, collectively, referred to as ‘the Group’, is a public limited company incorporated in 1991, a provider of complete range of Information Technology (‘IT’) services to a wide range of Fortune 500 companies, multinationals and small and medium enterprises worldwide. The Company renders engineering and IT services to customers spanning across various industry verticals in specific service horizontals. Mindteck’s core offerings are in Product Engineering, Application Software, Electronic Design, Testing, IT Infrastructure & Managed Services, R&D Services, Energy Management Software Solutions and Enterprise Business services.

The Group’s clientele constitutes varied industry verticals, including Public Sector (Government), High Technology (such as Semiconductor, Data Storage, Cloud Services), Smart Energy and Product Engineering

(such as Life Sciences and Analytical Instruments, Industrial Systems, Medical Systems).

The Company has its registered office in Bengaluru, India and the Group has two global delivery centers located in India (Bengaluru and Kolkata) and has sixteen offices across India, the United States, Canada, United Kingdom, Germany, Bahrain, Singapore, Philippines (under closure), Netherlands (closed w.e.f. January 14, 2020) and Malaysia.

Mindteck has subsidiaries (including step-down subsidiaries) in the United States of America, Canada, Singapore, Philippines (under closure), Netherlands (closed w.e.f. January 14, 2020), Malaysia, Bahrain, United Kingdom, Germany and India (under closure). Mindteck is the flagship Group and is listed in India on the Bombay Stock Exchange and National Stock Exchange.

List of subsidiaries with percentage holding
Subsidiaries	Country of incorporation and other particulars	Percentage of ultimate holding
		company (%)
		as at March 31, 2021 &
		March 31, 2020
Chendle Holdings Limited (‘Chendle’)	A subsidiary of Mindteck from April 01, 2008,	100
	incorporated under the laws of British Virgin Islands
Mindteck (UK) Limited (‘Mindteck UK’)	A subsidiary of Mindteck from April 01, 2008,	100
	incorporated under the laws of the United Kingdom
Mindteck Netherlands BV (‘Mindteck Nether-	A subsidiary of Mindteck UK from October 17, 2008,	100
lands’) (closed w.e.f. January 14, 2020)	incorporated under the laws of Netherlands
Mindteck Germany GmbH (‘Mindteck	A subsidiary of Mindteck UK from April 02, 2008,	100
Germany’)	incorporated under the laws of Germany
Mindteck Singapore Pte Ltd. (‘Mindteck	A subsidiary of Mindteck from April 01, 2008,	100
Singapore’)	incorporated under the laws of Singapore
Mindteck, Inc., USA *	A subsidiary of Mindteck incorporated under the laws of	100
	the Commonwealth of Pennsylvania, USA
Mindteck Software Malaysia SDN. BHD	A subsidiary of Mindteck incorporated under the laws of	100
(‘Mindteck Malaysia’)	Malaysia
Mindteck Middle East Ltd WLL, Kingdom of	A subsidiary of Mindteck incorporated under the laws of	100
Bahrain (‘Mindteck Middle East’)	the Kingdom of Bahrain
Mindteck Solutions Philippines Inc. (Mindteck	A subsidiary of Mindteck Singapore Pte Ltd. from March	99.99
Philippines - under closure)	08, 2016, incorporated under the laws of Philippines
Hitech Parking Solutions Private Limited	A subsidiary of Mindteck (India) Limited from March 14,	99.99
(under closure)	2018, incorporated under Companies Act, 2013.
Mindteck Canada, Inc.	A subsidiary of Mindteck, Inc. USA from January 10, 2018	100
	incorporated under Canadian law.

*Including shares held through Chendle Holdings Limited.

The Group had created an Employee Welfare Trust for providing share-based payments to it employees. The balances of the trust have been appropriately consolidated in the Company’s consolidated financial statements.

These consolidated financial statements for the year ended March 31, 2021 comprise financial statements of Mindteck Limited and its subsidiaries (collectively hereafter referred to as “the Group”).

These consolidated financial statements for the year ended March 31, 2021 are approved by the Board of Directors on May 28, 2021.

122 Mindteck 2020–21 Annual Report Consolidated Financial Statements

2. Basis of Preparation and Significant accounting policies:

2.1. Basis of preparation

The consolidated financial statements of the Company have been prepared and presented in accordance with accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) specified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III).

The consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained further in the accounting policies below.

Certain financial assets and liabilities that is measured at fair value/amortized cost
Defined benefit plans – plan assets measured at fair value
Employee stock option contracts – measured at grant date fair value, and
b. Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, the accompanying disclosures, and the disclosure of contingent assets and contingent liabilities on the date of the consolidated financial statements and the reported amounts of revenues and expenses for the year reported. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and future periods are affected.

Also, refer Note 49 of the consolidated financial statements.

Key source of estimation of uncertainty as at the date of consolidated financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of the following:

Investment property – fair value for disclosure purpose

The consolidated financial statements are presented in Rs. and all the values are rounded off to the nearest lakhs (Rs. 00,000) except when otherwise indicated.

2.2. Summary of significant accounting policies

a. Current versus non-current classification

The Group presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is treated as current when it is:

Expected to be realized in normal operating cycle or within twelve months after the reporting period,
Held primarily for the purpose of trading,
Expected to be realized within twelve months after the reporting period, or
Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in normal operating cycle,
It is due to be settled within twelve months after the reporting period or

Revenue recognition:

The Group uses the percentage of completion method in accounting for revenue from implementation and customization projects. Use of the percentage of completion method requires the Group to estimate the efforts to date as a proportion of the total efforts. Efforts have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the year in which such losses become probable based on the expected contract estimates at the reporting date.

Employee stock options plan:

The Group initially measures the cost of equity-settled transactions with employees using a Black Scholes model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 43.

Leases:

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Group has identified period of twelve months as its operating cycle.

Mindteck 2020–21 Annual Report 123 Consolidated Financial Statements

asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Group has concluded that no changes are required to lease period relating to the existing lease contracts Refer Note 37.

Defined benefit plans (gratuity and other employee benefits):

The Group’s obligation on account of gratuity and compensated absences is determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

Further details about gratuity obligations are given in Note 40.

Appendix D of Service Concession Arrangement (‘SCA’), under Ind AS - 115 ‘Revenue from contracts with customers’ - Recognition and Measurement:

The Group has entered into concession arrangement in relation to smart/IoT based parking system with government/ statutory body under Public Private Partnership model. The arrangement gives Group right to design, construct, install and maintain the smart parking system. Management has evaluated the arrangement and concluded that Appendix D of Service Concession Arrangement (‘SCA’), under Ind AS - 115 ‘Revenue from contracts with customers’ applies. Refer Note 5, Note 15, Note 21 and Note 44.

Fair value measurement of financial instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (‘DCF’) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 46 for further disclosures.

Impairment of non-financial assets:

Impairment exists when the carrying value of an asset or cash generating unit (‘CGU’) (including goodwill, where applicable) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on DCF model. The cash flows are derived from the budget for future years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. Also, refer Note 2.2(j).

Impairment of financial assets:

The Group assesses impairment of financial assets (‘Financial instruments’) and recognizes expected credit losses in accordance with Ind AS 109. Also, refer Note 2.2(e).

The Group assesses for impairment of investment in subsidiaries. Impairment exists when there is a diminution in value of the investment and the recoverable value of such investment is lower than the carrying value of such investment.

c. Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as disclosed in Note 1. Control exists when the parent has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. If a member of the Group uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to that Group member’s financial statements in preparing the consolidated financial statements to ensure conformity with the Group’s accounting policies.

124 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Consolidation procedure:

(i) Combine like items of assets, liabilities, income, expenses and cash flows of the parent with those of its subsidiaries. For this purpose, income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognized in the consolidated financial statements at the acquisition date.
(ii) Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary. The excess of cost to the Company of its investments in the subsidiary companies over its share of equity of the subsidiary companies, at the date on which the investment in the subsidiaries were made, is recognized as ‘Goodwill’ being an intangible asset in the consolidated financial statements and is tested for an impairment on an annual basis. On the other hand, where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of investments of the Company, it is recognized as ‘Capital Reserve’ and shown in Other equity, in the consolidated financial statements. The ‘Goodwill’ is determined separately for each subsidiary company and such amounts are not set off between different entities.
(iii) Eliminate in full intragroup assets and liabilities, income, expenses and cash flows relating to transactions between entities of the group (profits or losses resulting from intragroup transactions that are recognized in assets, such as fixed assets, are eliminated in full).

Profit or loss and each component of other comprehensive income/(loss) (‘OCI’) are attributed to the equity holders of the parent of the Group.

or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

e. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

i. Financial assets:

Initial recognition and measurement:

d. Fair value measurement

The Group measures financial instrument such as investments at fair value at each balance sheet date.

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit and loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in four broad categories:

Debt instruments assets at amortized cost
In the principal market for the asset or liability - or
In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured

Financial assets at fair value through Other Comprehensive Income/(Loss) (‘FVTOCI’)
Financial assets at fair value through profit and loss (‘FVTPL’)
Equity instruments measured at fair value through other comprehensive income/(loss) (‘FVTOCI’)

When assets are measured at fair value, gains and losses are either recognized entirely in the consolidated statement of profit and loss (i.e. fair value through profit and loss),or recognized in other comprehensive income/(loss) (i.e. fair value through other comprehensive income/(loss)).

Debt instruments at amortized cost:

A Debt instrument is measured at amortized cost (net of any write down for impairment) if both of the following conditions are met:

Mindteck 2020–21 Annual Report 125 Consolidated Financial Statements

the asset is held to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realize its fair value changes) and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (‘SPPI’) on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost using the effective interest rate (‘EIR’) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the consolidated statement of profit and loss. The losses arising from impairment are recognized in the consolidated statement of profit and loss.

Financial assets at fair value through OCI (‘FVTOCI’):

A financial asset that meets the following two conditions is measured at fair value through OCI unless the asset is designated at fair value through profit and loss under fair value option.

The financial asset is held both to collect contractual cash flows and to sell.
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in OCI. However, the Group recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the consolidated statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to the consolidated statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Financial assets at fair value through profit and loss (‘FVTPL’):

FVTPL is a residual category for Group’s investment instruments. Any instruments which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

All investments (except investment in subsidiary) included within the FVTPL category are measured at fair value with all changes recognized in the consolidated statement of Profit and Loss.

In addition, the Group may elect to designate an instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency.

Derecognition:

When the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; it evaluates

if and to what extent it has retained the risks and rewards of ownership.

A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is primarily derecognized when:

The rights to receive cash flows from the asset have expired, or
Based on above evaluation, either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflect the rights and obligations that the Group has retained.

Impairment of financial assets:

The Group assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 (‘Financial instruments’) requires expected credit losses to be measured through a loss allowance. The Group recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

ii. Financial liabilities:

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit and loss or at amortized cost, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.

The Group’s financial liabilities include trade payables, lease obligations, and other payables.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortized cost

126 Mindteck 2020–21 Annual Report Consolidated Financial Statements

and loss when the liabilities are derecognized as well as through the EIR amortization process.

Derecognition:

iii. Offsetting of financial instruments:

iv. Reclassification of financial assets:

The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Group’s senior management determines change in the business model as a result of external or internal changes which are significant to the Group’s operations. Such changes are evident to external parties. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Group does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

f. Property, plant and equipment

Property, plant and equipment are eliminated from financial statements, either on disposal or when no future economic benefits are expected from its use or disposal. Losses arising in case of retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in the consolidated statement of profit and loss in the year of occurrence.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

g. Depreciation and amortization

Depreciation on property, plant and equipment with finite useful lives is calculated on a straight-line basis over the useful lives of the assets estimated by the management.

The group, based on technical assessment made by technical expert and management estimate, depreciates certain items of property, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Property, plant and	Useful lives estimated by
equipment	the management (years)
Furniture and fxtures	5years
Computer equipment	3years
Offce equipment	5years
Vehicles	5years

Leasehold improvements are amortized over the period of lease term or the estimated useful life of assets, whichever is shorter.

h. Investment property

i. Recognition and measurement:

Initial direct costs incurred by the Group in negotiating and arranging an operating lease are added to the carrying amount of the respective Investment property and are amortized over the lease term on the same basis as the lease income.

Though the Group measures investment properties using cost-based measurement, the fair value of investment

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properties are disclosed in the notes (Refer Note 4). Fair values are determined based on an annual evaluation performed by an accredited external independent valuer applying a valuation model recommended by the International Valuation Standards Committee.

ii. Depreciation:

Depreciation on investment properties is provided on the straight-line method as per the useful life estimated by the management.

i. Intangible assets

Intangible assets are amortized on a straight-line basis over the estimated useful economic life. The Group uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the affect that useful life of an intangible asset exceeds ten years, the Group amortizes the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the CGU level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The estimated useful lives of the amortizable intangible assets are as follows:

assets are as follows:
Category	Useful life
Computer software	3years
Service concession arrangement	10years

An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated statement of profit and loss when the asset is derecognized.

j. Impairment of non-financial assets Non-financial assets including property, plant and equipment, right of use assets and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

k. Leases

The Group assesses at contract inception whether a contract is/ contains a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee:

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

(i) Right-of-use assets:

The Group recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.

128 Mindteck 2020–21 Annual Report Consolidated Financial Statements

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer Note 2.2(j) Impairment of non-financial assets.

(ii) Lease liabilities:

At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

(iii) Short-term leases and leases of low-value assets:

The Group applies the short-term lease recognition exemption to its short-term leased assets (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leased assets that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.

Group as a lessor:

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income.

l. Business combination and goodwill

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous

interest held, over the net identifiable assets acquired and liabilities assumed. After initial recognition, Goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

A cash generating unit to which goodwill has been allocated is tested for impairment annually as at March 31 or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized in the consolidated statement of profit and loss. An impairment loss recognized is not reversed in subsequent periods.

m. Revenue recognition

i. Revenue from contracts with customers:

The Group derives its revenues from software service.

Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Group expect to receive in exchange for those services.

The following specific recognition criteria must also be met before revenue is recognized:

Revenue from software services provided on a timeand-material basis is recognized upon performance of services and at the agreed contractual rates. Revenue from fixed price contracts is recognized over the period of the contracts using the percentage completion method determined by relating the actual cost incurred to date to the estimated total cost of the contract.

In case of multiple element arrangements for sale of

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software license, related implementation and maintenance services, the Group applies the guidance in Ind AS 115, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements generally meet the criteria for considering the sale of software license, related implementation and maintain services as distinct performance obligation. For allocating the consideration, the Group has measured the revenue in respect of each distinct performance obligation of a transaction at its standalone selling price, in accordance with principles given in Ind AS 115. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Group is unable to determine the standalone selling price, the Group has used a residual method to allocate the arrangement consideration. In these cases, the balance of the consideration, after allocating the standalone selling price of undelivered components of a transaction has been allocated to the delivered components for which specific standalone selling price do not exist.

The Group collects goods and services tax and other taxes as applicable in the respective tax jurisdictions where the Group operates, on behalf of the government and therefore it is not an economic benefit flowing to the Group. Hence, it is excluded from revenue.

Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Group expects to recognize these amounts in revenue.

Applying the practical expedient as given in Ind AS 115, the Group has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis.

ii. Other income:

Dividend income is recognized when the Group’s right to receive dividend is established by the reporting date. The right to receive dividend is generally established when shareholders approve the dividend.

Interest income is recognized as it accrues in the consolidated statement of profit and loss using effective interest rate method.

iii. Service concession arrangement (SCA):

The Group implements or upgrades infrastructure (implementation or upgrade services) used to provide the smart/IoT-based parking service and maintains that infrastructure (operation service) for a specified period of time. This arrangement may include infrastructure used in a service concession arrangement for its entire useful life.

An asset carried under concession arrangements is derecognized on disposal or when no future economic benefits are expected from its future use or disposal.

The Group recognizes a financial asset to the extent that it has an unconditional right to receive cash or another financial asset from or at the direction of the grantor.

Provisions for estimated losses on contracts are recorded in the period in which such losses become probable based on the current contract estimates.

n. Foreign currency translation and transactions: Functional and presentation currency

Items included in the consolidated financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Indian currency (‘Rs.’), which is the Group’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates

130 Mindteck 2020–21 Annual Report Consolidated Financial Statements

of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the period end exchange rates are recognized in the consolidated statement of profit and loss.

Assets and liabilities of entities with functional currency other than presentation currency have been translated to the presentation currency using exchange rates prevailing on the balance sheet date. The statement of profit and loss have been translated using average exchange rates. The exchange differences arising on translation for consolidation are recognized in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in the consolidated statement of profit and loss.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group initially recognizes the non-monetary asset or nonmonetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of advance consideration.

o. Taxes

Tax expense comprises of current and deferred tax.

Current income tax:

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income/(loss) or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company reflects the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

Deferred tax:

Deferred tax liabilities are recognized for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that

is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

In respect of taxable temporary differences associated with investments in subsidiaries when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax relating to items recognized outside profit and loss is recognized outside the consolidated statement of profit and loss (either in OCI or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

p. Provisions, contingent liabilities, contingent assets and commitments

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the consolidated statement of profit and loss.

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Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. The Group does not recognize a contingent liability but discloses its existence in the consolidated financial statements.

A contingent asset is disclosed, where an inflow of economic benefits is probable.

q. Earnings per share

r. Employee stock compensation cost

Employees (including senior executives) of the Group receive remuneration in the form of share-based payments in form of employee stock options, whereby employees render services as consideration for equity instruments (equity-settled transactions).

The Group measures compensation cost relating to employee stock options plans using the fair valuation method in accordance with Ind AS 102, Share-Based Payment.

for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired (net of forfeitures) and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

s. Segment reporting

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about services, geographic areas and major customers.

The Group identifies primary segments based on the dominant source, nature of risks and returns, internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/ loss amounts are evaluated regularly by the Executive Management in deciding how to allocate resources and in assessing performance. The analysis of geographical segments is based on the areas in which major operating divisions of the Group operate.

Segment revenue, segment expenses, segment assets and segment liabilities have been identified to the segments on the basis of their relationship to the operating activities of the segment.

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Revenue, expenses, assets and liabilities which relate to the Group as a whole and are not allocable to segments on a reasonable basis have been included under ‘unallocated revenue/expenses/assets/liabilities.

t. Retirement and other employee benefits

Employee benefits include contribution to provident and other funds, gratuity and compensated absences.

Defined contribution plans:

Contributions payable to recognized provident and other

132 Mindteck 2020–21 Annual Report Consolidated Financial Statements

funds, which are defined contribution schemes, are charged to the consolidated statement of profit and loss.

Contributions payable to the recognized provident fund, employee pension and social security schemes in certain

overseas subsidiaries, which are defined contribution schemes are charged to the statement of profit and loss.

Defined benefit plans:

Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on project unit credit method as at the balance sheet date. The Group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/ (asset) are recognized in other comprehensive income/(loss). In accordance with Ind AS, re-measurement gains and losses on defined benefit plans recognized in OCI are not to be subsequently reclassified to the consolidated statement of profit and loss. As required under Ind AS compliant Schedule III, the Group transfers it immediately to ‘surplus/ (deficit) in the consolidated statement of profit and loss’.

The Group has an employees’ gratuity fund managed by the Life Insurance Corporation of India (‘LIC’). Provision for gratuity liabilities, pending remittance to the fund, is carried in the balance sheet. The Group also provides certain additional post employment healthcare benefits to employees in the United States. These healthcare benefits are unfunded.

Short-term employee benefits:

Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. Compensated absences, which are expected to be utilized within the next 12 months, are treated as shortterm employee benefits. The Group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

Long-term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employees render the related services are treated as long-term employee benefits for measurement purpose. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end, less the fair value of the plan assets out of which the obligations are expected to be settled. Actuarial gains/losses are immediately taken to the consolidated statement of profit and loss and are not deferred.

does not have an unconditional right to defer its settlement for twelve months after the reporting date.

u. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and shortterm deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.

Consolidated statement of cash flow

v. Cash dividend

w. Corporate Social Responsibility (‘CSR’) expenditure

CSR expense is recognized as it is incurred by the Group or when Group has entered into any legal or constructive obligation for incurring such an expense

x. Government grants

The Group recognizes Government grants where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. Accordingly, the Group has chosen to present grants related to an expense item as other operating income in the consolidated statement of profit and loss.

The Group recognizes Government grants as a loan when loans or similar assistance are provided by governments or related institutions. The loan is measured as per the accounting policy applicable to financial liabilities.

2.3. Changes in accounting policies and disclosures

The Group presents the entire compensated absences balance as a current liability in the balance sheet since it

a. Ind AS 116 Leases:

Refer Note 2.2(j) and Note 37.

Mindteck 2020–21 Annual Report 133 Consolidated Financial Statements

3. Property, plant and equipment

Amount in Rs. lakhs

3. Property, plant and equipment						Amount in Rs. lakhs
Particulars	Computer equipment	Offce equipment	Furniture and fxtures	Vehicles	Leasehold improvement	Total
Cost
As at April 01, 2019	239	173	48	3	173	636
Additions	142	38	1	-	-	181
Disposals/Adjustments	(86)	(5)	(8)	(3)	-	(102)
Foreign exchange difference	19	1	19	1	-	40
As at March 31, 2020	314	207	60	1	173	755

Additions	51	5	-	-	-	56
Disposals/Adjustments	(68)	(7)	(1)	-	(24)	(100)
Transfer	4	19	1	-	4	28
Foreign exchange difference	1	-	(3)	-	-	(2)
As at March 31, 2021	302	224	57	1	153	737

Accumulated depreciation
As at April 01, 2019	166	86	24	3	56	335
Charge for theyear	67	37	9	-	36	149
Disposals/Adjustments	(85)	(4)	(8)	(3)	-	(100)
Foreign exchange difference	19	1	18	1	-	39
As at March 31, 2020	167	120	43	1	92	423

Charge for theyear	92	39	5	-	42	178
Disposals/Adjustments	(67)	(3)	(1)	-	(24)	(95)
Foreign exchange difference	1	-	(2)	-	-	(1)
As at March 31, 2021	193	156	45	1	110	505

Net block as at March 31, 2020	147	87	17	-	81	332
Net block as at March 31, 2021	109	68	12	-	43	232
4. Investmentproperty						Amount in Rs. lakhs
Particulars				Building - Assetgiven under operating lease
Cost
As at April 01, 2019						73
Additions						-
As at March 31, 2020						73
Additions						-
As at March 31, 2021						73

Accumulated depreciation
As at April 01, 2019						5
Charge for the year						1
As at March 31, 2020						6

Charge for the year						2
As at March 31, 2021						8

Net block as at March 31, 2020						67
Net block as at March 31, 2021						65

134 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Information regarding income and expenditure of Investment property


Information regarding income and expenditure of Investmentproperty	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Rental income derived from investment property 21 Less: Direct operating expenses from property that generated rental income (including repairs and maintenance) - Less: Direct operating expenses from property that did not generate rental income (including repairs and maintenance) 1 Proft arising from investment properties before depreciation and indirect expenses 20 Less: Depreciation (2) Proft arising from investment property before indirect expenses 18	Year ended March 31, 2020
	24
	-
	1
	23
	(1)
	22

Determination of fair values

Determination of fair values	Determination of fair values
Description of valuation techniques used and keyinputs to valuation on investmentproperties:
Particulars Valuation technique	Signifcant unobservable inputs	Range (weighted average)
Investment properties Market Approach	Area of subject unit (sq. ft.) Adopted market rent per sq.ft. per month Derived unit rate (per sq.ft.) Estimated rental value (per sq. ft.) Discount rate	March 31, 2021 3,001 53 10,700 Rs. 53-70 12.00%	March 31, 2020
			3,001
			53
			10,500
			Rs. 53-70
			12.00%

return and terminal yield. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs not paid by tenants. The expected cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms.

Significant increases/(decreases) in estimated rental value and rent growth per annum in isolation would result in a significantly higher/ (lower) fair value of the properties. Significant increases/(decreases) in long-term vacancy rate and discount rate (and exit yield) in isolation would result in a significantly lower/ (higher) fair value.

All resulting fair value estimates for investment properties are included in level 3. Refer Note 45.

Reconciliation of fair value	Amount in Rs. lakhs
Particulars	Amount
Opening balance as at April 1, 2019	338
Fair value differences	(23)
Closing balance as at March 31, 2020	315
Fair value differences	6
Closing balance as at March 31, 2021	321

Mindteck 2020–21 Annual Report 135 Consolidated Financial Statements

5. Intangible assets				Amount in Rs. lakhs
		Service concession	Goodwill (acquisition
Particulars	Computer software	arrangement#	of Business)*	Total
Cost
As at April 01, 2019	97	1,002	273	1,372
Additions	20	21	-	41
Disposals/Adjustments	-	(56)	-	(56)
Impairment of goodwill (refer Note 33(a))	-	-	(281)	(281)
Provision for expected losses under
service concession arrangement	-	(48)	-	(48)
(refer Note 33(b))
Foreign exchange difference	2	-	8	10
As at March 31, 2020	119	919	-	1,038

Additions	-	-	-	-
Disposals/Adjustments (refer Note 44)	-	(919)	-	(919)
Foreign exchange difference	1	-	-	1
As at March 31, 2021	120	-	-	120

Accumulated amortisation
As at April 01, 2019	73	70	-	143
Charge for theyear	15	97	-	112
Foreign exchange difference	1	-	-	1
As at March 31, 2020	89	167	-	256

Charge for theyear	15	38	-	53
Disposal/adjustments (refer Note 44)	-	(205)	-	(205)
Foreign exchange difference	1	-	-	1
As at March 31, 2021	105	-	-	105

Net block as at March 31, 2020	30	752	-	782
Net block as at March 31, 2021	15	-	-	15

Net block as at March 31, 2020 30 752 Net block as at March 31, 2021 15 -	- 782 - 15
# Refer Note 44 Also refer Note 6 6. Goodwill on consolidation*	Amount in Rs. lakhs
Particulars As at March 31, 2021 Followingis the movement of carryingvalue ofgoodwill: Balance at the beginningof theyear 2,815 Add/(less): Impairment duringtheyear (refer Note 33(a)) - Balance at the end of theyear 2,815	As at March 31, 2020

	8,481
	(5,666)
	2,815
Below is the Cash Generating Unit (‘CGU’) wise break-up of Goodwill:	Amount in Rs. lakhs
Particulars As at March 31, 2021 Mindteck, Inc., USA 2,447 Mindteck Singapore Pte. Ltd 25 Mindteck UK Limited 259 Mindteck Middle East Limited WLL 84 Total Goodwill 2,815	As at March 31, 2020
	2,447
	25
	259
	84
	2,815

136 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Goodwill impairment testing:

The Group tests whether goodwill has suffered any impairment on an annual basis as at each reporting date. The recoverable amount of a CGU is determined based on value-in-use calculations which require the use of several assumptions. The calculations use cash

flow projections (based on financial budgets approved by the management), revenue/ earning multiples. An average of the range of each assumption used is mentioned below:

	Amount in Rs. lakhs
Particulars As at March 31, 2021 Growth rate 2% to 23% Operatingmargin 7% to 10% Discount rate 14% to 23%	As at March 31, 2020
	1% to 11%
	6% to 10%
	12% to 25%

The above discount rate is based on the Weighted Average Cost of Capital (WACC) which represents the weighted average return attributable to all the assets of the CGU. These estimates are likely to differ from future actual results of operations and cash flows. Management believes that any reasonable possible changes in the key assumptions would not cause the carrying amount to exceed the recoverable amount of the CGU.

Based on the above testing, provision for impairment amounting to Rs. NIL (March 31, 2020 : Rs. 5,947 lakhs (including impairment of goodwill on acquisition of business in Singapore amounting to Rs. NIL (March 31, 2020 : Rs. 281 lakhs)) was recorded as at March 31, 2021.

7. Loans - Non-current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unsecured, consideredgood Security deposits 341 Unsecured, credit impaired Security deposits 51 Provision for doubtful deposits (51) Total 341	As at March 31, 2020

	387

	50
	(50)
	387
8. Other fnancial assets - Non-current assets	Amount in Rs. lakhs
Particulars As at March 31, 2021 Fixed deposits with bank with remaining maturity of more than 12 months 14 Total 14*	As at March 31, 2020
	11
	11

*Represents restricted bank balances of Rs. 14 lakhs (March 31, 2020: Rs. 11 lakhs). The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

9. Taxes	Amount in Rs. lakhs
Particulars As at March 31, 2021 Income tax assets (net) - Non-current 610 Income tax liabilities (net) - Current 247	As at March 31, 2020
	1,244
	224

Also, refer Note 39 for further details.

Mindteck 2020–21 Annual Report Consolidated Financial Statements

137

10. Other non-current assets		Amount in Rs. lakhs
Particulars	As at March 31, 2021 13 13	As at March 31, 2020
Prepaid expense		6
Total		6
11. Investments - Current assets		Amount in Rs. lakhs
Particulars	As at March 31, 2021 - - - -	As at March 31, 2020
Quoted mutual funds measured at fair value through statement ofproft and loss
NIL (March 31, 2020 - 1,888.70) units in AXIS Treasury Advantage Fund - Growth		43
Total		43
Aggregate book value ofquoted investments in mutual funds		43
Aggregate market value ofquoted investments in mutual funds		43

12. Trade receivables - Current assets


12. Trade receivables - Current assets		Amount in Rs. lakhs
Particulars	As at March 31, 2021 5,036 325 5,361 (325) 5,036	As at March 31, 2020
Unsecured, consideredgood
Trade receivables from other than relatedparties		5,704
Unsecured, credit impaired
Trade receivables from other than relatedparties		270
		5,974
Impairment allowance (allowance for expected credit loss) Receivables from other than relatedparties, credit impaired		(270)
Total		5,704

Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

13. Cash and cash equivalents - Current assets


13. Cash and cash equivalents - Current assets		Amount in Rs. lakhs
Particulars	As at March 31, 2021 2 4,659 399 5,060 2,696 10 2,706 7,766	As at March 31, 2020 4 2,742 160 2,906 20 13 33 2,939
Cash on hand
Balances with banks - in current accounts
- in fxed deposits with original maturityfor less than 3 months

Other bank balances Balances with banks - Fixed deposits with remainingmaturityless than 12 months
- unpaid dividend account

Total

Cash and cash equivalents* as at March 31, 2021 and March 31, 2020 include restricted cash and bank balances of Rs. 173 lakhs and Rs. 33 lakhs respectively. The restrictions are primarly on account of bank balances held as margin money deposits against guarantees and balances held in unpaid dividend bank accounts.

Considered for the purpose of the statement of cash flows, cash and cash equivalents.

Changes in liabilities arising from financing activities:

Particulars As at April 01, 2020 Borrowings - Lease liabilities 1,276 Total liabilities from fnancing activities 1,276*	Cash flows - (512) (512)	New leases/Others (Refer Note 37) 1,808 29 1,837	As at March 31, 2021
			1,808
			793
			2,601

*Rounded-off to lakhs

138 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Changes in liabilities arising from financing activities:

Changes in liabilities arising from fnancing activities:
Particulars As at April 01, 2019 Borrowings - Lease liabilities 1,393 Total liabilities from fnancing activities 1,393*	Cash flows - (570) (570)	New leases/Others (Refer Note 37) As at March 31, 2020
			- -
			453 1,276
			453 1,276
Rounded-off to lakhs 14. Loans - Current assets*			Amount in Rs. lakhs
Particulars		As at March 31, 2021 42 42	As at March 31, 2020
Unsecured, consideredgood
Securitydeposits			25
Total			25
15. Other fnancial assets - Current assets			Amount in Rs. lakhs
Particulars		As at March 31, 2021 237 (237) - 59 1,957 20 24 2,060 341 14 5,036 5,060 2,706 42 59 1,957 20 24 15,259	As at March 31, 2020
Unsecured, credit impaired
Claimable expenses			111
Provision for expected losses under service concession arrangement (refer Note 33(b) and 44)			(111)
			-
Unsecured, consideredgood
Claimable expenses			8
Unbilled revenue			1,963
Accrued interest			2
Employee advances			82
Total			2,055
Break up of fnancial assets carried at amortised cost: Securitydeposits (non-current) (Note 7)			387
Fixed deposits with bank with remaining maturity of more than 12 months (non-current) (Note 8)			11
Trade receivables (current) (Note 12)			5,704
Cash and cash equivalents (current) (Note 13)			2,906
Other bank balances (current) (Note 13)			33
Securitydeposits (current) (Note 14)			25
Claimable expenses (current) (Note 15)			8
Unbilled revenue (current) (Note 15)			1,963
Accrued interest (current) (Note 15)			2
Employee advances (current) (Note 15)			82
Total			11,121
16. Other current assets			Amount in Rs. lakhs
Particulars		As at March 31, 2021 35 465 (251) 214 319 568	As at March 31, 2020
Advances recoverable in cash or kind			48
Balances withgovernment authorities*			477
Less: Provision for doubtful input credit receivable			(259)
Net balance withgovernment authorities			218
Prepaid expenses			341
Total			607

Represents amount of service tax input credit receivable and goods and service tax input credit receivable.

Mindteck 2020–21 Annual Report Consolidated Financial Statements

139

17. Equity


17. Equity	Amount in Rs. lakhs
Particulars As at March 31, 2021 Authorised capital Equity shares 28,000,000 (March 31, 2020: 28,000,000) equityshares of Rs. 10 each 2,800 Preference shares 500 500,000 (March 31, 2020: 500,000) cumulative, non-convertible, redeemable preference shares of Rs. 100 each Issued, subscribed and paid-up share capital 25,621,898 (March 31, 2020: 25,621,898) equity shares of Rs. 10 each 2,562 Less: 416,000 (March 31, 2020: 416,000) equity shares of Rs. 10 each fully paid-up held bythe Mindteck Employees Welfare Trust 41 Total 2,521	As at March 31, 2020

	2,800
	500
	2,562 41
	2,521

Notes:

a. Consolidation of the Mindteck Employees Welfare Trust (‘Trust’)

The investment in the equity shares of the Company held by the Trust has been reduced from the share capital and securities premium account. Further, the opening retained earnings of the Trust has been included in the Company’s opening retained earnings. Balances, after inter-company eliminations, have been appropriately consolidated in the Company’s financial statements on a line-by-line basis.

b. On April 01, 2008, the Company acquired 100% equity in its fellow subsidiary Chendle Holdings Limited, BVI (‘Chendle Holdings’) including its wholly owned subsidiary Primetech Solutions Inc., USA, at an agreed valuation of USD 6,600,000 (approximately Rs. 264,664,741) and the purchase consideration was agreed to be settled by a fresh issue of the equity shares of the Company to

the shareholders of Chendle Holdings. The issue of equity shares to discharge the purchase consideration has been recorded at a price of Rs. 73.54 per equity share, being the fair value of the equity shares issued as per the valuation carried out by the independent valuer.

c. Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year is as given below:

Particulars	As at March 31, 2021 No. of shares Amount (Rs. in Lakhs) 2,52,05,898 2,521 - - 2,52,05,898 2,521	As at March 31, 2020
		No. of shares Amount (Rs. in Lakhs)
Outstandingat the beginningof theyear		2,52,05,898 2,521
Changes duringtheyear		- -
Outstanding at the end of theyear		2,52,05,898 2,521

d. Terms/rights attached to equity and preference shares

The Company has two class of shares referred to as equity shares having a par value of Rs. 10 and cumulative, non-convertible, redeemable preference shares having a par value of Rs. 100. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders meeting.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

140 Mindteck 2020–21 Annual Report Consolidated Financial Statements

e. Equity shares held by holding company and subsidiary of holding company is given below:

Name of the shareholder	As at March 31, 2021 No. of shares % 16,431,604 64.13%	As at March 31, 2020
		No. of shares %
Embtech Holdings Limited		16,431,604 64.13%

f. Equity shareholders holding more than 5 percent shares in the Company:

Name of the shareholder	As at March 31, 2021 No. of shares % 16,431,604 64.13% 1,390,569 5.43%	As at March 31, 2020
		No. of shares %
Embtech Holdings Limited		16,431,604 64.13%
First Asian Investments S.A		1,390,569 5.43%

g. The Company has not allotted any fully paid up equity shares by way of bonus shares nor has bought back any class of equity shares during the period of five years immediately preceding the balance sheet date.

h. Shares reserved for issue

Terms attached to stock options granted to employees are described in Note 43 on share based payments. Also, refer Note 17(b) above.

18. Other Equity	Amount in Rs. lakhs
Particulars As at March 31, 2021 Capital reserve 798 Securitiespremium 10,156 Retained earnings (897) Other component of equity (Share application money pendingallotment) 28 Employee stock options reserve 147	As at March 31, 2020
	798
	10,156
	(2,005)
	28
	153
Foreign currencytranslation reserve 1,232 Total 11,464	1,312
	10,442

Refer Statement of Changes in Equity for movement.

Notes:

i. Capital reserve

The Company has created capital reserve in the earlier years.

ii. Securities premium

Security premium is used to record the premium received on issue of shares. It is utilized in accordance with the provisions of the Companies Act, 2013.

iii. Employee stock option reserve account

The Company has established various equity settled share based payment plans for certain categories of employees of the Company and subsidiaries. Refer Note 43 for further details on these plans.

iv. Distribution made and proposed

iv. Distribution made and proposed
Particulars As at March 31, 2021 Cash dividends on equity shares declared andpaid Final dividend - Tax on dividend distribution - Total -	As at March 31, 2020

	252
	52
	304

Particulars As at March 31, 2021 Dividendproposed Final dividend - Dividend distribution tax (DDT) - Total -	As at March 31, 2020

	-
	-
	-

Mindteck 2020–21 Annual Report Consolidated Financial Statements

141

19. Other non-current fnancial liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Rental deposit 20 Total 20	As at March 31, 2020
	54
	54
20. Other non-current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Deferred lease rental income 7 Statutorydues 137 Total 144	As at March 31, 2020
	7
	-
	7
21. Provision - Non-current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Provision forgratuity(refer Note 40) 310 Provision towards obligation under service concession arrangements (refer Note 44) - Total 310	As at March 31, 2020
	265
	630
	895
The table below gives the information about movement in provision towards obligation under service concession arrangments:
Particulars As at March 31, 2021 At the beginningof theyear 680 Reversal due to termination of sites (670) Finance costs 22 Other adjustments (includingclaimable expenses) (32) At the end of theyear -	As at March 31, 2020
	771
	(56)
	60
	(95)
	680
Current -	50
Non-current -	630
22. Borrowings - Current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Loan repayable on demand from banks (Secured) Bank overdraft 2 Paycheck Protection Program (PPP) Loan # 1,806 Total 1,808*	As at March 31, 2020
	-
	-
	-

*Rounded-off to lakhs Note: Bank overdraft carry interest of 10.85 percent per annum, computed on a monthly basis on the actual amount utilized and / or repayable on demand. The bank overdraft is secured by way of first and exclusive charge in all present and future book debts which are lesser than 90 days. # The US Federal government in the wake of COVID-19 pandemic has provided support to business through Paycheck Protection Program (PPP). Mindteck, Inc. have obtained a benefit under this scheme for Rs. 1,806 lakhs during April 2020. This loan is eligible for forgiveness on fulfillment of certain conditions. Pending approval of the forgiveness application, the benefit is reflected as borrowings and in the event the application is not approved, the benefit needs to be refunded along with interest @ 1% p.a. Mindteck, Inc. has applied for forgiveness and application is pending with Small Business Administration, United States government agency for review and approval (SBA).

23. Trade payables - Current liabilities


23. Tradepayables - Current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Dues to micro and small enterprises (refer Note below) 39 Others 1,311 Total 1,350	As at March 31, 2020
	40
	1,244
	1,284
Terms and conditions of the above fnancial liabilities

trade payables are non-interest bearing and are normally settled on 30-45 day terms.
for explanations on the Company’s credit risk management, refer to Note 46.

142 Mindteck 2020–21 Annual Report Consolidated Financial Statements

The dues to Micro and Small enterprises as defined in “The Micro, Small & Medium Enterprises Development Act, 2006” are as follows:

Particulars As at March 31, 2021 (i) Principal amount remaining unpaid to any supplier as at the end of the accounting year. 39 (ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year. - (iii) The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year. - (iv) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specifed under the MSMED Act 2006. - (v) The amount of interest accrued and remaining unpaid at the end of the accounting year. - (vi) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually. -	As at March 31, 2020
	40
	- -
	-
	-
	-
24. Other fnancial liabilities - Current	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unpaid dividend 10 Employee related liabilities 742 Total 752 Break up of fnancial liabilities carried at amortised cost: Lease liabilities (non-current) (Note 37) 346 Rental deposit (non-current) (Note 19) 20 Borrowings (current) (Note 22) 1,808 Trade and otherpayables (current) (Note 23) 1,350 Lease liabilities (current) (Note 37) 447 Unpaid dividend (current) (Note 24) 10 Employee related liabilities (current) (Note 24) 742 Total 4,723	As at March 31, 2020
	13
	781
	794
	793
	54
	-
	1,284
	483
	13
	781
	3,408
25. Provisions - Current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Provision forgratuity(refer Note 40) 68 Provision for compensated absences 431 Provision towards obligation under service concession arrangements (refer Note 44) - Total 499	As at March 31, 2020
	58
	407
	50
	515
26. Other current liabilities	Amount in Rs. lakhs
Particulars As at March 31, 2021 Unearned income 188 Capital creditors - Statutorydues 567 Total 755	As at March 31, 2020
	15
	8
	415
	438

Mindteck 2020–21 Annual Report Consolidated Financial Statements

143

27. Revenue from contracts with customers	27. Revenue from contracts with customers	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Sale of services 28,672 Total 28,672 a. Disaggregated revenue information Particulars As at March 31, 2021 *Revenue by contract type* Fixedprice 1,213 Time and material 27,459 Total 28,672 Particulars As at March 31, 2021 *Timing of revenue recognition* Services transferred at apoint in time - Services transferred over time 28,672 Total 28,672 b. Contract balances & performance obligations Particulars As at March 31, 2021 Trade receivables 5,036 Unbilled revenue 1,957 Unearned income 188 c. Set out below is the amount of revenue recognised from Particulars As at March 31, 2021 Amounts included in contract liabilities at the beginningof theyear 15		Year ended March 31, 2020
		27,613
		27,613
		Amount in Rs. lakhs
	Particulars As at March 31, 2021 *Revenue by contract type* Fixedprice 1,213 Time and material 27,459 Total 28,672	As at March 31, 2020 692 26,921 27,613
		Amount in Rs. lakhs
	Particulars As at March 31, 2021 *Timing of revenue recognition* Services transferred at apoint in time - Services transferred over time 28,672 Total 28,672	As at March 31, 2020 - 27,613 27,613
		Amount in Rs. lakhs
	Particulars As at March 31, 2021 Trade receivables 5,036 Unbilled revenue 1,957 Unearned income 188 Set out below is the amount of revenue recognised from	As at March 31, 2020 5,704 1,963 15 Amount in Rs. lakhs
	Particulars As at March 31, 2021 Amounts included in contract liabilities at the beginningof theyear 15	As at March 31, 2020 54

d. Remaining performance obligation

28. Other income	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Finance income (includes interest income on deposits for year ended March 31, 2021: Rs. 126 lakhs; March 31, 2020: Rs. 13 lakhs) 207	Year ended March 31, 2020
	35
Rental income 21 Fair valuegain on mutual fund at fair value throughproft or loss - Foreign exchangegain, net - Gain on sale of investments in mutual funds, net -	29
	23
	33
	23
Gain on sale of assets - Other non-operatingincome 227 Total 455	5
	27
	175

144 Mindteck 2020–21 Annual Report Consolidated Financial Statements

29. Employee beneft expense		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 17,789 929 93 7 660 19,478	Year ended March 31, 2020
Salaries and wages		18,175
Contribution toprovident and other funds		997
Gratuity(refer Note 40)		77
Share-basedpayment expense (refer Note 43)		(14)
Staff welfare expenses		689
Total		19,924
30. Finance costs		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 40 103 22 165	Year ended March 31, 2020
Interest expense and bank charges		39
Interest expense on lease liabilities (refer Note 37)		127
Interest expense on service concession arrangements (refer Note 21)		60
Total		226
31. Depreciation and amortisation expense		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 178	Year ended March 31, 2020
Depreciation ofproperty,plant and equipment		149
Depreciation of right-of-use assets (refer Note 37)	406	442
Depreciation of investmentproperty	2	1
Amortisation of intangible assets	53 639	112
Total		704
32. Other expenses		Amount in Rs. lakhs
Particulars		Year ended March 31, 2020
Rent		94
Hiringcharges		66
Directors sittingfees		46
Travel expenses		568
Foreign exchange loss, net		-
Power and fuel		157
Communication expenses		143
Professional charges		572
Repairs and maintenance
- Buildings		1
- Others		157
Project supplyand services		390
Rates and taxes		53
Insurance		49
Remuneration to auditors (refer Note 35)		49
Membershipand subscription		293
Printingand stationery		25
Recruitment expenses		144
		(102)
		15
		27
		180
		142
		3,069

Mindteck 2020–21 Annual Report 145 Consolidated Financial Statements

33. Exceptional Items	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Impairment ofgoodwill - Provision for expected losses under service concesssion arrangement - Total -	Year ended March 31, 2020
	(5,942)
	(159)
	(6,101)

a. During the year ended March 31, 2020, as a part of impairment evaluation and considering the COVID-19 pandemic, impairment assessments were carried out in respect of carrying value of goodwill and basis valuation carried out by an external valuation expert, an impairment of Rs. 5,942 lakhs towards carrying value of goodwill was recorded. Also, refer Note 5 and Note 6.
b. During the year ended March 31, 2020, the management had reassessed recoverability of investment in assets and amounts receivables from Bhopal Municipal Corporation (BMC) as at March 31, 2020 and created provision amounting to Rs. 159 lakhs.

34. Contingent liabilities and commitments


34. Contingent liabilities and commitments	Amount in Rs. lakhs
(A) Particulars As at March 31, 2021 (i) Income tax matters: The Company is involved in certain tax disputes pertaining to transfer pricing and other adjustments which are pending at various forums. Management is confdent that the Company has a good case to defend and such cases are not tenable and no liability is expected in this regard. - in relation to AY: 2006-07, AY: 2012-13, AY: 2016-17, AY: 2017-18 and AY 2018-19 463 - in relation to AY: 2006-07, AY: 2010-11 and AY 2016-17 - (ii) Company has utilised bank guarantee facilities against the bank guarantees provided to customers, Customs and Excise Departments for Software Technology Park of India (STPI) bonding facilities. 249	As at March 31, 2020

	-
	518
	236

(B) During the year ended March 31, 2020, the Company had accrued provision for material foreseable losses for a long term contract with respect to a customer. The Company had assessed the balance revenue amounting to Rs. 72 lakhs and balance costs to be accrued amounting to Rs. 125 lakhs for the commitment period, thereby recording provision amounting to Rs. 53 lakhs included in ‘Other expenses’.

35. Auditors’ remuneration	Amount in Rs. lakhs
Particulars As at March 31, 2021 As auditor Audit fees 39 Tax audit fees 1 Other certifcation services 5 Reimbursement of expenses 6 Total 51	As at March 31, 2020
	39
	1
	3
	6
	49

146 Mindteck 2020–21 Annual Report Consolidated Financial Statements

36. Earnings/(Loss) per share

The following table sets forth the computation of basic and diluted earnings per share:


The followingtable sets forth the computation of basic and diluted earningsper share:	Amount in Rs. lakhs
Particulars As at March 31, 2021 Netproft/(loss) for theyear attributable to equityshareholders 1,086 Weighted average number of equity shares of Rs 10 each used for calculation of basic earningsper share (A) 2,52,05,898 Earnings/(loss)per share, basic (in Rs.) 4.31 Effect of dilutivepotential shares - Employee stock options 939 - Equityshares reserved for issuance 38,579 - Equity shares held by Mindteck Employees Welfare Trust (reduced for calculation of basic earningsper share) 4,16,000 Total no. of dilutivepotential shares (B) 4,55,518 Weighted average number of equity shares outstanding during the year for calculation of diluted earningsper share (A+B) * # 2,56,61,416 Earnings/(loss)per share, diluted (in Rs.) 4.23	As at March 31, 2020
	(6,480)
	2,52,05,898
	(25.71)

	2,985
	38,579
	4,16,000
	4,57,564
	2,56,63,462
	(25.71)

*The weighted average number of shares takes into account the weighted average effect of changes in treasury shares transactions during the year.

The above potentional shares are anti-dilutive in nature for the year ended March 31, 2020 and accordingly was not considered for the purpose of calculation of diluted EPS.

37. Leases

Group as a lessee

During the year ended March 31, 2021, the Group has vacated the existing office premises and have accordingly issued a notice to current lessor to this effect. Consequently, in accordance with Ind AS 116 – Leases, the Group has derecognized the amortized value of existing right-of-use asset of Rs. 108 lakhs and lease liability of Rs. 123 lakhs determined till the completion of notice period and vacation of existing premises and has recognized a net gain of Rs. 15 lakhs as ‘Other non operating income’.

practical expedient as per Ind AS 116 – Leases. The impact of such rent concession was Rs. 32 lakhs under lease liabilities for the year ended March 31, 2021.

The Group has entered into new lease agreements and recognized a lease liability measured at the present value of the remaining lease payments amounting to Rs. 65 lakhs. The right-of-use asset is recognized by discounting using the lessee’s incremental borrowing rate amounting to Rs. 65 lakhs. The average incremental borrowing rate of 6.75% has been applied to lease liabilities recognised in the balance sheet at the date of commencement of lease.

Mindteck 2020–21 Annual Report 147 Consolidated Financial Statements

The details of the right-of-use asset held bythe Companyis as follows:	Amount in Rs. lakhs
Particulars Gross carrying value As at April 1, 2019 Additions duringtheyear Disposals duringtheyear Exchange differences As at March 31, 2020 Additions duringtheyear Disposals duringtheyear Exchange differences As at March 31, 2021 Depreciation Charge for theyear Disposals Exchange differences As at March 31, 2020 Charge for the year Disposals Exchange differences As at March 31, 2021 Net block As at March 31, 2020 Net block As at March 31, 2021	Buildings

	1,232
	310
	(47)
	31
	1,526

	80
	(270)
	1
	1,337


	442
	-
	-
	442

	406
	(162)
	1
	687

	1,084
	650

The details of the investments in sub-lease held bythe Groupis as follows:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Gross carrying value Balance at the beginningof theyear 35 Additions duringtheyear - Finance income 1 Received duringtheyear (35) Exchange differences (1) Balance at the end of theyear -	Year ended March 31, 2020

	-
	49
	(15)
	-
	1
	35

Set out below are the carryingamounts of lease liabilities and the movements duringtheperiod:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Balance at the beginningof theyear 1,276 Additions 80 Interest on lease liabilities 103 Payments (512) Write-back on termination of contract (123) Rent concession received duringtheyear (32) Exchange differences 1 Balance at the end of theyear 793 Current 447 Non-current 346	Year ended March 31, 2020
	1,393
	292
	127
	(570)
	-
	-
	34
	1,276
	483
	793

The maturity analysis of lease liabilities are disclosed in Note 46.

The effective interest rate for lease liabilities is 9.65% for India, 4.67% for USA, 4.73% for Middle East, 8.50% for Malaysia and 5.25% for Singapore with maturity between 2022-2024.

148 Mindteck 2020–21 Annual Report Consolidated Financial Statements

The followingare the amounts recognised inproft or loss:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Other non-operatingincome (49) Finance income on investment in sub-lease (1) Depreciation expense of right-of-use assets 406 Interest expense on lease liabilities 103 Expense relatingto short-term leases (included in other expenses) 77	Year ended March 31, 2020
	-
	(15)
	442
	127
	94
Total 536	648

During the year ended March 31, 2021, the Group had total cash outflows for leases of Rs. 512 lakhs (March 31, 2020: Rs. 579 lakhs). The Group also had non-cash additions to right-of-use assets of Rs. 80 lakhs (March 31, 2020: Rs. 310 lakhs) and lease liabilities of Rs. 80 lakhs (March 31, 2020: Rs. 292 lakhs). There are no future cash outflows relating to leases that have not yet commenced.

The maturityanalysis of undiscounted lease liabilities are as follows:	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Within 5years 806 More than 5years -	Year ended March 31, 2020
	1,463
	-
Total 806	1,463

38. Expenditure on corporate social responsibility activities


38. Expenditure on corporate social responsibility activities	Amount in Rs. lakhs
Particulars Year ended March 31, 2021* a.Gross amount required to be spent by the Group during theyear - b.Amount spent during the year ending on March 31, 2021: In Cash Yet to be paid in cash i) construction acquisition of anyasset - - ii) on thepurpose other than (i) above - - c.Amount spent during the year ending on March 31, 2020: In Cash Yet to be paid in cash i) construction acquisition of anyasset - - ii) on thepurpose other than (i) above 15 -	Year ended March 31, 2020
	15
	Total -
	-
	Total -
	15

*As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (‘CSR’) committee has been formed by the Company. The primary function of the Committee is to assist the Board of Directors in formulating the CSR policy and review the implementation and progress of the same from time to time. During the year ended March 31, 2021, considering losses incurred immediately preceding year, the Group does not have the obligation to incur expenses in relation to CSR.

39. Income tax

Income tax expense in the statement of profit and loss consists of:

39. Income tax
Income tax expense in the statement ofproft and loss consists of:	Amount in Rs. lakhs
Statement ofproft or loss Year ended March 31, 2021 Current tax 518 Deferred tax charge/(credit) (125) Income tax expense related to currentyear 393 Tax relatingto earlieryears 134 Income tax expense reported in the statement of proft or loss 527 Income tax recognised in other comprehensive income/ (loss) Tax arising on income and expense recognised in other comprehensive income/(loss) (3) Total (3)	Year ended March 31, 2020
	172
	(71)
	101
	(28)
	73
	1
	1

Mindteck 2020–21 Annual Report Consolidated Financial Statements

149

The reconciliation between the provision of income tax of the Company and amounts computed by applying the Indian statutory income tax rate to profit before taxes is as follows:

proft before taxes is as follows:
	Amount in Rs. lakhs
Particulars Year ended March 31, 2021 Proft/(loss) before tax 1,613 Enacted income tax rate in India 25.17% Computed expected tax expense/(credit) 406 Impact due to: Tax effect on changes in enacted tax rate to 25.17% - Deferred tax asset not recognised due to uncertainty of related future taxableprofts - Non-deductible expenses for taxpurpose 34 Tax relatingto earlieryears 134 Impact due to differential overseas effective tax rates (15) Others (32) Total income tax expense 527	Year ended March 31, 2020
	(6,407)
	25.17%
	(1,613)

	19
	1,426
	24
	(28)
	228
	17
	73

Deferred tax

Deferred tax
Deferred tax relates to the following:				Amount in Rs. lakhs
Particulars	Balance sheet		Statement of proft comprehensive	and loss and other income/(loss)
	As at March 31, 2021 77 48 36 95 180 436	As at March 31, 2020 (130) 45 29 81 289 314	Year ended March 31, 2021 207 3 7 14 (109)	Year ended March 31, 2020
Property,plant and equipment and intangible assets				58
Provision for doubtful debts, loss allowance and deposits				1
Compensated absences				3
Gratuity				12
Others				38
Net deferred tax assets (net)
Net deferred tax credit/(charge)			122	112

150 Mindteck 2020–21 Annual Report Consolidated Financial Statements

40. Employee benefits

A. Gratuity

The following tables set out the funded status of the gratuity plan and the amount recognized in the Company’s financial statements as at and for the year ended March 31, 2021 and March 31, 2020:

	Amount in Rs. lakhs
Particulars As at March 31, 2021 Change in beneft obligations Beneft obligations at the beginning 326 Service cost 65 Interest expense 24 Actuarial loss/(gain) due to change in fnancial assumptions 3 Actuarial loss/(gain) due to experience adjustments (17) Beneftspaid (21) Beneft obligations at the end 380 Change in plan assets Fair value ofplan assets at the beginning 3 Contribution 26 Interest income 2 Administration expenses (6) Return onplan assets excludingamounts included in interest income (2) Beneftspaid (21) Fair value ofplan assets at the end 2 Reconciliation of fair value of assets and defned beneft obligations Present value of obligation as at the end of theyear 380 Fair value ofplan assets as at the end of theyear 2 Amount recognised in the Balance Sheet 378	As at March 31, 2020
	284
	55
	22
	12
	(11)
	(36)
	326

	39
	2
	4
	(4)
	(2)
	(36)
	3

	326
	3
	323
Current 68	58
Non-current 310	265
Expense recognised in proft or loss Current service cost 65 Interest expense 24 Interest income (2) Administrative expenses 6 93 Remeasurement gain/(loss) recognised in other comprehensive income/(loss) Actuarialgain/(loss) due to change in fnancial assumptions (3) Actuarialgain/(loss) due to experience adjustments 17 Return onplan assets excludingamounts included in interest income (2) 12
	55
	22
	(4)
	4
	77
	(12)
	11
	(2)
	(3)

Mindteck 2020–21 Annual Report Consolidated Financial Statements

151

	Amount in Rs. lakhs
Particulars As at March 31, 2021 Fiveyearpay-outs Year 1 70 Year 2 55 Year 3 58 Year 4 50 Year 5 44 After 5th Year 244 Actuarial assumptions Discount rate 6.30% Salary growth rate 7.00% Attrition rate 20.00% Retirement age 58years	As at March 31, 2020

	61
	47
	45
	46
	40
	213


	6.40%
	7.00%
	20.00%
	58years

Sensitivity analysis

affected the defned beneft obligation by the amounts shown below:
		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 Increase Decrease (16) 17 19 (17) (6) 6	Year ended March 31, 2020
	Increase (16) 19 (6)	Increase (14) 16 (5)	Decrease
Discount rate (1% movement)			15
Salary growth rate (1% movement)			(15)
Attrition rate (10% movement)			5

The Group’s Gratuity Fund is managed by Life Insurance Corporation of India (LIC). The plan assets under the fund are deposited under approved securities.

The expected rate of return on assets is based on the expectation of the average long term rate of return on investment of the fund, during the estimated term of obligation.

The expected contribution in next year is Rs. 68 lakhs (March 31, 2020: Rs. 58 lakhs).

B. Contribution to provident fund

152 Mindteck 2020–21 Annual Report Consolidated Financial Statements

41. Related party disclosures

(i) Names of related parties and description of relationship:

A. Enterprises who exercise Control

Transcompany Ltd., British Virgin Islands (BVI) - Ultimate holding company

Embtech Holdings Ltd., Mauritius - Holding company

B. Enterprises in which relative of an Independent Director is a Partner

CounsePro

C. Key management personnel

Key management personnel
Meenaz Dhanani	Non-Executive Director
Anand Balakrishnan	Managing Director and Chief Executive Offcer (Appointed as an Additional Director w.e.f. February 14, 2020 and was elevated to the position of Managing Director & Chief Executive Offcer w.e.f. March 01, 2020) Chief Financial Offcer (Appointed as an Interim CFO w.e.f. August 13, 2019 and ceased to be Interim CFO w.e.f. March 01, 2020)
Sanjeev Kathpalia	Non-Executive Director (Ceased to be Managing Director and Chief Executive Offcer w.e.f. March 01, 2020 and continued to remain on the Board as a Non-Executive Director. Subsequently, resigned with effect from March 12, 2020)
Jagdish Malkani	Independent Director
Guhan Subramaniam	Independent Director
Prochie Mukherji	Independent Director
Satish Menon	Independent Director
Subhash Bhushan Dhar	Independent Director
Yusuf Lanewala	Chairman
Ramachandra Magadi	Chief Financial Offcer (Appointed as the Chief Financial Offcer w.e.f. March 01, 2020)
Prashanth Idgunji	Chief Financial Offcer (Resigned with effect from July 29, 2019)
Shivarama Adiga S.	Company Secretary

(ii) Related party transactions:

Rel a. b.	atedparty transactions:	Amount in Rs. lakhs
	Particulars Year ended March 31, 2021	Year ended March 31, 2020
	Professional charges: CounsePro 26 Total 26 Transactions with the key management persons for the year ended are as follows: *Compensation of key managementpersonnel of the Group #* Short-term employee benefts 385 Share-basedpayment transactions 7 Beneftspaid to non-executive directors/independent directors 48 Total 440*
		1
		1

		412
		(27)
		46
		431

For the year ended March 31, 2020 includes Rs. 12 lakhs paid to Managing Director and Chief Executive Officer which has been approved by the Board vide meeting dated February 14, 2020, subject to shareholder’s approval. Such approval was received on August 14, 2020.

The remuneration to the key managerial personnel does not include the provision/ accruals made on best estimate basis as they are determined for the Group as a whole.

Mindteck 2020–21 Annual Report Consolidated Financial Statements

153

42. Segment information

A. Description of segments and principal activities

The Mindteck Group’s operations predominantly relate to providing software services to external customers and providing IT-enabled services to subsidiaries within the Group.

Since IT-enabled services are rendered to subsidiaries which are consolidated, the disclosure of a separate IT-enabled services segment as a separate primary segment is not applicable. The Group is therefore considered to constitute a single primary business segment and accordingly primary segment disclosures have not been presented.

Based on the “management approach” as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker also evaluates the Group performance and allocates resources based on an analysis of various performance indicators by geographical areas. Accordingly, information has been presented in respect of such geographical segments.

The accounting principles consistently used in the preparation of the consolidated financial statements are also consistently applied to record income and expenditure in the individual segments.

B. Geographical Segments

Geographical Segments
	Amount in Rs. lakhs
Revenue Year ended March 31, 2021 United States of America 15,659 India 3,584 Rest of the world 9,429 Total 28,672	Year ended March 31, 2020
	15,779
	3,582
	8,252
	27,613

Revenue from one customer amounted to more than 10% of the total revenue of the Group amounting to Rs. 3,477 lakhs for the year ended March 31, 2021 (March 31, 2020 : Rs. 3,227 lakhs).

	Amount in Rs. lakhs
Carrying amount of segment assets Year ended March 31, 2021 United States of America 6,561 India 7,177 Rest of the world 4,110 Unallocated Corporate asset - Goodwill on consolidation 2,815 Total 20,663	Year ended March 31, 2020
	5,093
	7,195
	3,347
	2,815
	18,450

	Amount in Rs. lakhs
Cost to acquire tangible and intangible fxed assets Year ended March 31, 2021 United States of America 1 India 53 Rest of the world 2 Total 56	Year ended March 31, 2020
	2
	218
	2
	222

154 Mindteck 2020–21 Annual Report Consolidated Financial Statements

43. Employee stock options

As at March 31, 2021, the Company has the following share-based payment arrangements:

options are granted. The vesting term and the period over which the options are exercisable is to be decided by the Nomination & Remuneration Committee.

a. Employee Share Incentive Scheme 2000

The Company has an Employee Share Incentive Scheme 2000 (‘ESIS 2000’) for the benefit of its employees administered through the Mindteck Employees Welfare Trust (‘The Trust’). The Trust, which was constituted for this purpose, subscribed to 416,000 equity shares renounced in its favour by the Company’s promoters/directors in the Company’s earlier rights issue. These shares are to be distributed amongst the employees, based on the recommendations made by the Company’s Nomination & Remuneration Committee. No equity shares have been distributed under the ESIS 2000 and therefore, no stock compensation expense has been recorded. The above Scheme has been replaced by Mindteck Employee Stock Option Scheme 2020.

b. Mindteck Employees Stock Option Scheme 2005 (ESOP 2005)

During the year ended March 31, 2006, the Company introduced the ‘Mindteck Employees Option Scheme 2005’ (‘the Option Scheme 2005’) for the benefit of the employees of the Group, as approved by the Board of Directors in its meeting held on July 4, 2005 and the shareholders meeting held on July 29, 2005. The Option Scheme 2005 provides for the creation and issue of 500,000 options that would eventually convert into equity shares of Rs 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Compensation Committee of the Board of Directors. The options vest annually in a graded manner over a three year period and are exercisable during a maximum period of 5 years from the date of vesting.

During the year ended March 31, 2021, the Company has not granted any options

During the year ended March 31, 2020, the Company has granted 50,000 options on August 13, 2019 at an exercise price of Rs. 36.40 per share.

c. Mindteck Employees Stock Option Scheme 2008 (ESOP 2008)

During the year ended March 31, 2009, the Company introduced ‘Mindteck Employees Stock Option Scheme 2008’ (‘the Option Scheme 2008’) for the benefit of the employees of the Group, as approved by the Board of Directors in its meeting held on May 27, 2008 and the shareholders meeting held on July 30, 2008. The Option Scheme 2008 provides for the creation and issue of 1,200,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination & Remuneration Committee of the Board of Directors. The options will vest after the expiry of a period of twelve months from the date on which the

During the year ended March 31, 2021 and March 31, 2020, the Company has not granted any options.

d. Mindteck Employees Stock Option Scheme 2014 (ESOP 2014)

During the year ended March 31, 2015, the Company introduced ‘Mindteck Employees Stock Option Scheme 2014’ (‘the Option Scheme 2014’) for the benefit of the employees of the Group, as approved by the Board of Directors in its meeting held on May 29, 2014 and the shareholders meeting held on August 14, 2014. The Option Scheme 2014 provides for the creation and issue of 2,500,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination and Remuneration Committee of the Board of Directors. The options will vest after the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to be decided by the Nomination and Remuneration Committee.

During the year ended March 31, 2021 and March 31, 2020, the Company has not granted any options.

e. Mindteck Employee Stock Option Scheme 2020 (ESOP 2020)

During the year ended March 31, 2021, the Company introduced ‘Mindteck Employees Stock Option Scheme 2020’ (‘the Option Scheme 2020’) for the benefit of its employees administered through the Mindteck Employees Welfare Trust (‘The Trust’) in lieu of Company’s earlier Employee Share Incentive Scheme 2000. The Trust, which was constituted for this purpose, subscribed to 416,000 equity shares renounced in its favour by the Company’s promoters/ directors in the Company’s earlier rights issue. The Scheme was approved by the Board of Directors in its meeting held on December 11, 2020 and by the shareholders through postal ballot held on January 17, 2021. The Option Scheme 2020 provides for the issue of 416,000 options that would eventually convert into equity shares of Rs. 10 each in the hands of the employees. The options are to yet to be granted to the eligible employees at the discretion of and at the exercise price determined by the Nomination and Remuneration Committee of the Board of Directors. The option Scheme 2020 shall provide a minimum vesting period of one year from the grant date. The options will vest after as per the expiry of a period of twelve months from the date on which the options are granted. The vesting term and the period over which the options are exercisable is to shall be decided by the Nomination and Remuneration Committee.

During the year ended March 31, 2021, the Company has not granted any options.

Mindteck 2020–21 Annual Report 155 Consolidated Financial Statements

f. Employees’ Stock Options details as on the balance sheet date are:

Particulars	2020-21 Option (no.) Weighted average exercise price per stock option 1,39,500 56.05 3,29,719 77.64 1,00,000 34.70 - - - - - - 33,400 61.56 31,268 60.09 - - - - - - - - 1,06,100 54.32 2,98,451 79.48 1,00,000 34.70 71,167 62.69 2,98,451 79.48 66,667 34.70	2019-20	2019-20
	Option (no.) 1,39,500 3,29,719 1,00,000 - - - 33,400 31,268 - - - - 1,06,100 2,98,451 1,00,000 71,167 2,98,451 66,667	Option (no.) 1,22,600 6,14,419 6,00,000 50,000 - - 33,100 2,84,700 5,00,000 - - - 1,39,500 3,29,719 1,00,000 76,700 3,28,119 33,333	Weighted average exercise price per stock option
Options outstanding at the beginning of the year ESOP 2005			67.10
ESOP 2008			69.90
ESOP 2014			73.51
Options granted during the year ESOP 2005			36.40
ESOP 2008			-
ESOP 2014			-
Forfeited, cancelled, surrendered or lapsed during the year ESOP 2005			67.27
ESOP 2008			60.08
ESOP 2014			79.70
Exercised during the year on exercise of employee stock options/restricted shares+ ESOP 2005			-
ESOP 2008			-
ESOP 2014			-
Options outstanding at the end of the year ESOP 2005			56.05
ESOP 2008			77.64
ESOP 2014			34.70
Options exercisable at the end of the year ESOP 2005			67.62
ESOP 2008			77.66
ESOP 2014			34.70

g. Details of Weighted average remaining contractual life and range of exercise prices for the options outstanding at the balance sheet date

sheet date
Particulars	Weighted average remaining contractual life (years) 2020-21 2019-20* 2.26 3.10 1.53 2.21 4.91 5.91	Range of exerciseprices 2020-21 2019-20 13.55 - 92.10 13.55 - 92.10 43.60 - 130.80 43.60 - 130.80 34.70 - 34.70 34.70 - 34.70	Fair value of options granted during theyear
	2020-21 2.26 1.53 4.91	2020-21 13.55 - 92.10 43.60 - 130.80 34.70 - 34.70	2020-21 - - -	2019-20
ESOP 2005				14.88
ESOP 2008				-
ESOP 2014				-

considering vesting and exercise period

h. Fair value methodology

The following table list the inputs to the models used for the three plans for the year ended March 31, 2021 and March 31, 2020, respectively::

Particulars		March 31, 2021		March 31, 2020
	ESOP 2005 - - - - -	ESOP 2008 - - - - -	ESOP 2005 48.57% 7.52% 2.07% 4.50 Black scholes	ESOP 2008 - - - - -	ESOP 2014
Expected volatilityof share					-
Risk-free interest rate					-
Expected dividendyield					-
Expected life (years)					-
Model used					-

156 Mindteck 2020–21 Annual Report Consolidated Financial Statements

i. The expense recognised for employee services received during the year is shown in the following table:

The expense recognised for employee services received during the year is shown in the following table:
	Amount in Rs. lakhs
Particulars For the year ended March 31, 2021 Expense arisingfrom equity-settled share-basedpayment 7 Total expense arising from share-basedpayment 7	For the year ended March 31, 2020
	(14)
	(14)

44. Service concession arrangement (SCA)

a. Significant terms of Service concession arrangement are provided below:

	Authorisation agreement signed with Bhopal Municipal Corporation
Particulars	(BMC)
Nature of the asset recognised under SCA accounting	Intangible assets
Carryingvalue	Rs. NIL (March 31, 2020 : Rs. 752 lakhs)
Year when SCAgranted	FY 2017-18
Concessionperiod	10years
Extension of concessionperiod	Not applicable
Work in progress - status	Phase 1 completed & Phase 2 partially completed (March 31, 2020: Phase 1 completed & Phase 2partiallycompleted)
Brief description of concession	The Company has been awarded a contract under Public Private
	Partnership on July 26, 2017 with Bhopal Municipal Corporation (BMC)
	for designing, implementation/construction, installation, fnancing, and
	maintenance of Smart ParkingSystem (SPS).

b. Intangible asset under SCA

Intangible asset under SCA
	Amount in Rs. lakhs
Particulars As at March 31, 2021 OpeningBalance 752 Add: Cost of supplies including proft margin - Provision towards obligation under service concession arrangements - Less: Amortization for theyear 38 Reversal due to termination of sites - Provision for expected losses under service concession arrangement - Written off on termination of contract 714 Total -	As at March 31, 2020
	932
	21
	-

	97
	56
	48
	-
	752

Mindteck 2020–21 Annual Report Consolidated Financial Statements

157

45. Financial instruments

The carrying value of financial instruments by categories is as below:

45. Financial instruments The carrying value of fnancial instruments by categories is as below:
	Amount in Rs. lakhs
Particulars As at March 31, 2021 Financial assets - Non-current (measured at amortized cost) Securitydeposits ^ 341 Fixed deposits bank with remaining maturity of more than 12 months # 14 Financial assets - Current (measured at fair value through proft & loss) Investments in mutual funds $ - Financial assets - Current (measured at amortized cost) Trade receivables # 5,036 Cash and cash equivalents # 5,060 Other bank balances # 2,706 Securitydeposits ^ 42 Claimable expenses # 59 Unbilled revenue # 1,957 Accrued interest # 20 Employee advances # 24 Total assets 15,259 Financial liabilities - Non-current (measured at amortized cost) Lease liabilities ^ 346 Rental deposit ^ 20 Financial liabilities - Current (measured at amortized cost) Bank overdraft * # 2 PPP Loan # 1,806 Tradepayables # 1,350 Lease liabilities ^ 447 Unpaid dividend # 10 Others # 742 Total liabilities 4,723*	As at March 31, 2020
	387
	11
	43
	5,704
	2,906
	33
	25
	8
	1,963
	2
	82
	11,164
	793
	54
	-
	-
	1,284
	483
	13
	781
	3,408

*Rounded-off to lakhs

Fair value hierarchy

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

$ The carrying value of this account is measured at fair value through profit & loss and are classified as level 1 of fair value hierarchy.

Management has assessed these carrying balances approximates their fair value largely due to the short term maturities/liquid nature.

^ These balances are determined by using discounted cash flows using discount rate that reflects the issuer’s borrowing rate/lending rate for the respective financial assets/liabilities as at the end of the reporting period.

158 Mindteck 2020–21 Annual Report Consolidated Financial Statements

46. Financial risk management

The Group has exposure to following risks arising from financial instruments-

credit risk
market risk
interest risk
liquidity risk

b. Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables and unbilled revenue) from its financing activities including deposits with banks and financial institutions.

a. Risk management framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Company’s audit committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relations to the risks faced by the Group. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

i) Trade and other receivables:

Credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

Expected credit loss (ECL) assessment for corporate customers as at March 31, 2021 and March 31, 2020

The Company’s credit period generally ranges from 0-90 days. The credit risk exposure of the Company is as follows:

		Amount in Rs. lakhs
Particulars	As at March 31, 2021 Gross amount Provision and loss allowance 7,318 325 7,318 325	As at March 31, 2020
		Gross amount Provision and loss allowance
Trade receivables and unbilled revenue		7,937 270
Total		7,937 270
Reconciliation ofprovision for doubtful debts	and loss allowance:	Amount in Rs. lakhs
Particulars		Amount
Provision and loss allowance on April 01, 2019		361
Changes inprovision and loss allowance		(91)
Provision and loss allowance on March 31, 2020		270
Changes inprovision and loss allowance		55
Provision and loss allowance on March 31, 2021		325

ii) Other financial assets and deposits with banks:

Credit risk on cash and cash equivalent (including bank balances, fixed deposits and margin money with banks) is limited as the Group generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c. Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Group’s income and its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in United States Dollars (‘USD’). The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities. The Group also has exposures to Great Britain Pound (‘GBP’) and Singapore Dollar (‘SGD’).

Mindteck 2020–21 Annual Report Consolidated Financial Statements

159

Unhedged foreign currency exposure

Foreign currency exposures that have not been hedged by derivative instruments or otherwise are as follows:

Particulars	Currency USD QAR USD CHF QAR USD QAR	As at March 31, 2021 Amount in Rs. lakhs 85 - 18 - - 14 8	As at March 31, 2020
			Amount in Rs. lakhs
Trade receivables towards services rendered			138
			1
Other current assets Trade payables for services availed			15
			12
			1
			33
			-

Sensitivity analysis

Every 1% increase or decrease of the respective foreign currencies compared to functional currency of the Group would cause the profit before tax in proportion to revenue to increase or decrease respectively by NIL % (profit before tax for the year ended March 31, 2020 by 0.01%).

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market

interest rates relates primarily to its short term borrowings in nature of working capital loans, which carry floating interest rates. Accordingly, the Group’s risk of changes in interest rates relates primarily to the Group’s debt obligations with floating interest rates.

		Amount in Rs. lakhs
Particulars	Year ended March 31, 2021 Change in interest rate Effect on proft before tax +1% - -1% -	Year ended March 31, 2020
		Change in interest rate Effect on proft before tax
Borrowings*		+1% -
		-1% -

*Rounded-off to lakhs

d. Liquidity risk

Liquidity is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing the liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Group believes that the cash and cash equivalents is sufficient to meet its current requirements. Accordingly no liquidity risk is perceived.

160 Mindteck 2020–21 Annual Report Consolidated Financial Statements

Exposure to liquidity risk

The table below details the Group’s remaining contractual maturity for its financial liabilities. The contractual cash flows reflect the cash

flows of financial liabilities based on the earliest date on which the Group can be required to pay.

	Amount in Rs. lakhs
Particulars Carrying value March 31, 2021 Lease liabilities 793 Rental deposit 20 Borrowings 1,808 Tradepayables 1,350 Unpaid dividend 10 Employee related liabilities 742 4,723 March 31, 2020 Lease liabilities 1,276 Rental deposit 54 Borrowings - Tradepayables 1,284 Unpaid dividend 13 Employee related liabilities 781 3,408*	Contractual cash flows
	Total On demand < 1 Yr >1 Yr
	793 - 447 346
	20 - - 20
	1,808 1,808 - -
	1,350 - 1,350 -
	10 10 - -
	742 - 742 -
	4,723 1,818 2,539 366
	1,276 - 483 793
	54 - - 54
	- - - -
	1,284 - 1,284 -
	13 13 - -
	781 - 781 -
	3,408 13 2,548 847

Rounded-off to lakhs.

47. Capital management

For the purpose of the Group’s capital management, capital includes issued equity capital, securities premium and all other equity reserves. The primary objective of the Group’s capital management is to maximise the shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long-term and other strategic investment plans. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to

shareholders or issue new shares. The current capital structure of the Group is equity based with no financing through borrowings.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2021 and March 31, 2020.

Mindteck 2020–21 Annual Report Consolidated Financial Statements

161

48. Additional information pursuant to para 2 of general instructions for the preparation of consolidated financial statements

A. Contribution of net assets/(liability) in the consolidated financial statements:

		Amount in Rs. lakhs
Particulars	As at March 31, 2021 Amount % of total 7,675 55% 3,520 25% 891 6% 741 5% 519 4% 211 2% - 0% 214 2% - 0% 166 1% 38 0% 10 0% 13,985 100% - 0% 13,985 100%	As at March 31, 2020
		Amount % of total
Parent
Mindteck (India) Limited		6,870 53%
Foreign entities
Mindteck, Inc.		3,753 29%
Mindteck Singapore Pte Ltd.		780 6%
Mindteck Software Malaysia SDN. BHD		729 6%
Mindteck UK Limited		358 3%
Mindteck Middle East Ltd WLL, Kingdom of Bahrain		179 1%
Mindteck Solutions Philippines Inc.		- 0%
Mindteck Canada, Inc.		126 1%
Mindteck Netherlands BV		- 0%
Mindteck GermanyGmbH		120 1%
Indian entities
Mindteck Employee Welfare Trust		38 0%
Hitech ParkingSolutions Private Ltd.		10 0%
Total		12,963 100%
Adjustments arisingout of consolidation		- 0%
Total		12,963 100%

B. Contribution of profit/(loss) in the consolidated financial statements:

		Amount in Rs. lakhs
Particulars	As at March 31, 2021 Amount % of total 853 79% 66 6% 70 6% 11 1% (8) -1% 80 7% (8) -1% 53 5% 7 1% (38) -3% - 0% - 0% 1,086 100% - 0% 1,086 100%	As at March 31, 2020
		Amount % of total
Parent
Mindteck (India) Limited		(5,924) 92%
Foreign entities
Mindteck, Inc.		(528) 8%
Mindteck Singapore Pte Ltd.		(169) 3%
Mindteck Software Malaysia SDN. BHD		100 -2%
Mindteck UK Limited		(46) 1%
Mindteck Middle East Ltd WLL, Kingdom of Bahrain		48 -1%
Mindteck Solutions Philippines Inc.		(8) 0%
Mindteck Canada, Inc.		(41) 1%
Mindteck Netherlands BV		- 0%
Mindteck GermanyGmbH		(84) 1%
Indian entities
Mindteck Employee Welfare Trust		4 0%
Hitech ParkingSolutions Private Ltd.		- 0%
Total		(6,648) 103%
Adjustments arisingout of consolidation		168 -3%
Total		(6,480) 100%

162 Mindteck 2020–21 Annual Report Consolidated Financial Statements

C. Share in other comprehensive income/(loss):

Share in other comprehensive income/(loss):
		Amount in Rs. lakhs
Particulars	As at March 31, 2021 Amount % of total 9 -13% (117) 164% 23 -32% 6 -8% 12 -17% 1 -1% - 0% 13 -18% - 0% (18) 25% - 0% - 0% (71) 100% - 0% (71) 100%	As at March 31, 2020
		Amount % of total
Parent
Mindteck (India) Limited		(2) -1%
Foreign entities
Mindteck, Inc.		324 93%
Mindteck Singapore Pte Ltd.		30 9%
Mindteck Software Malaysia SDN. BHD		24 7%
Mindteck UK Limited		9 3%
Mindteck Middle East Ltd WLL, Kingdom of Bahrain		(9) -3%
Mindteck Solutions Philippines Inc.		1 0%
Mindteck Canada, Inc.		4 1%
Mindteck Netherlands BV		(2) -1%
Mindteck GermanyGmbH		(29) -8%
Indian entities
Mindteck Employee Welfare Trust		- 0%
Hitech ParkingSolutions Private Ltd.		- 0%
Total		350 100%
Adjustments arisingout of consolidation		- 0%
Total		350 100%

D. Share in total comprehensive income/(loss):

Share in total comprehensive income/(loss):
		Amount in Rs. lakhs
Particulars	As at March 31, 2021 Amount % of total 862 85% (51) -5% 93 9% 17 2% 4 0% 81 8% (8) -1% 66 7% 7 1% (56) -6% - 0% - 0% 1,015 100% - 0% 1,015 100%	As at March 31, 2020
		Amount % of total
Parent
Mindteck (India) Limited		(5,926) 97%
Foreign entities
Mindteck, Inc.		(204) 3%
Mindteck Singapore Pte Ltd.		(139) 2%
Mindteck Software Malaysia SDN. BHD		124 -2%
Mindteck UK Limited		(37) 1%
Mindteck Middle East Ltd WLL, Kingdom of Bahrain		39 -1%
Mindteck Solutions Philippines Inc.		(7) 0%
Mindteck Canada, Inc.		(37) 1%
Mindteck Netherlands BV		(2) 0%
Mindteck GermanyGmbH		(113) 2%
Indian entities
Mindteck Employee Welfare Trust		4 0%
Hitech ParkingSolutions Private Ltd.		- 0%
Total		(6,298) 103%
Adjustments arisingout of consolidation		168 -3%
Total		(6,130) 100%

Mindteck 2020–21 Annual Report 163 Consolidated Financial Statements

49. The Group has considered internal and certain external sources of information including economic forecasts, budgets required to meet performance obligations and likely delays on contractual commitments, upto the date of approval of these consolidated financial statements, in determining the possible impact from the COVID-19 pandemic. The Group has used the principles of prudence in applying judgements, estimates and assumptions and based on the current estimates, the Group expects to fully recover the carrying amount of its assets. The impact of the global health pandemic may be different from that estimated as at the date of approval of these consolidated financial results and the Group will continue to closely monitor any material changes to its assessment of economic impact of COVID- 19 pandemic.

50. The Company has entered into ‘International transactions’ with ‘Associated Enterprises’ which are subject to Transfer Pricing regulations in India. The Company is in the process of carrying out transfer pricing study for the year ended March 31, 2021 in this regard, to comply with the requirements of the Income Tax Act, 1961. During the year ended March 31, 2021, the Company

has re-assessed its inter-company transfer pricing arrangements effective from April 01, 2020 considering the benchmarking exercise carried out by the Company. The management of the Company is of the opinion that such transactions with Associated Enterprises are at arm’s length and hence in compliance with the aforesaid legislation. Consequently, this will not have any impact on the standalone financial statements, particularly on account of tax expense and that of provision for taxation.

51. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Group will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

As per our report of even date

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number: 101049W/E300004

per Rajeev Kumar Partner Membership Number: 213803

for and on behalf of the Board of Directors of Mindteck (India) Limited

Yusuf Lanewala Anand Balakrishnan Jagdish Malkani Chairman Managing Director and CEO Director DIN - 01770426 DIN - 05311032 DIN - 00326173

Place: Bengaluru Date: May 28, 2021

Ramachandra M S Chief Financial Officer

Place: Bengaluru Date: May 28, 2021

Shivarama Adiga S Company Secretary

164 Mindteck 2020–21 Annual Report AGM Notice

Notice of the Annual General Meeting

(CIN: L30007KA1991PLC039702)

NOTICE is hereby given that the THIRTIETH ANNUAL GENERAL MEETING of the Members of Mindteck (India) Limited will be held on Friday, August 13, 2021, at 12:00 Noon through Video Conferencing (VC)/Other Audio Visual Means (OAVM), to transact the following business:

AS ORDINARY BUSINESS:

1. Adoption of Financial Statements

To receive, consider and adopt the Audited Financial Statements, including the Consolidated Financial Statements of the Company, for the financial year ended March 31, 2021, together with the Board’s Report and Auditor’s Report thereon.

2. Re-Appointment of Mr. Meenaz Dhanani who Retires by Rotation

To appoint a Director in place of Mr. Meenaz Dhanani [DIN: 06705048], who retires by rotation and being eligible, offers himself for re-appointment.

AS SPECIAL BUSINESS:

3. Re-appointment of Mr. Guhan Subramaniam as an Independent Director

To consider and if thought fit, to pass with or without modification(s), the following Resolution as a Special Resolution :

“RESOLVED THAT pursuant to Section 149, 152 and any other applicable provisions of the Companies Act, 2013 and Rules made thereunder, read with Schedule IV to the Companies Act, 2013, including any statutory modification(s) or re-enactment(s) thereof for the time being in force and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, Mr. Guhan Subramaniam (DIN: 00131687), who was appointed as an Independent Director by the Members of the Company on August 11, 2016 at their Annual General Meeting for a term of five (5) years with effect from May 20, 2016 up to May 19, 2021, has submitted a declaration that he meets the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and being eligible for re-appointment, as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors, be and is hereby re-appointed as an Independent Director for the second term of five (5) years from May 20, 2021 up to May 19, 2026 and shall not be liable to retire by rotation.

RESOLVED FURTHER THAT any Director and/or the Company Secretary of the Company, be and are hereby severally authorised to take such steps, actions and do things, deeds, matters, including the filing of necessary forms with the Ministry of Corporate Affairs and intimate the Stock Exchanges, as may be required, so as to give proper effect to this Resolution.”

Registered Office BY ORDER OF THE BOARD A. M. R. Tech Park for Mindteck (India) Limited Block-1, 3rd Floor Shivarama Adiga S. #664, 23/24 Vice President Hosur Main Road Bommanahalli Legal and Company Secretary Bengaluru-560068 India May 28, 2021

NOTES:

In light of the prevailing COVID-19 pandemic and the requirement of social distancing, the Ministry of Corporate Affairs (“MCA”) vide Circular No. 02/2021 dated January 13, 2021 in continuation to its earlier Circular No. 14/2020 dated April 08, 2020, Circular No. 17/2020 dated April 13, 2020 and Circular No. 20/2020 dated May 05, 2020 (collectively referred to as “MCA Circulars”) has authorised all the Companies whose Annual General Meetings (AGM) are due to be held in the year 2021, to conduct their AGMs through VC/OAVM and Securities and Exchange Board of India (SEBI) vide its Circular dated January 15, 2021, has also authorised the Company to hold the AGM through VC/OAVM. In compliance with the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [hereinafter referred as SEBI (LODR) Regulations] and above MCA Circulars, the AGM of the Company will be held through VC/ OAVM. Hence, Members can attend and participate in the ensuing AGM through VC/OAVM only.
Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the Special Business, is annexed hereto.
Pursuant to MCA Circulars, the facility to appoint proxy to attend and cast votes for the Members is not available for this AGM. However, in pursuance of Section 112 and Section 113 of the Companies Act, 2013, representatives of the members such as the President of India or the Governor of a State or body corporate can attend the AGM through VC/OAVM and cast their votes through e-voting.
Pursuant to the provisions of Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management and Administration) Rules, 2014 and Regulation 44 of SEBI (LODR) Regulations 2015, as amended from time to time, and as per the above MCA Circulars, the Company is providing the facility of remote e-voting to its Members in respect of all the business to be transacted at the AGM. For this purpose, the Company has entered into an agreement with Central Depository Services (India) Limited (CDSL) for facilitating voting through electronic means, as an authorised e-voting agency. The facility of casting votes by a Member using remote e-voting, as well as the e-voting system on the date of the AGM, will be directly provided by CDSL.
Members may join the AGM through VC/OAVM mode 15 minutes before and after the scheduled time of the commencement of the Meeting by following the procedure mentioned in the Notice. The facility for participating at the AGM through VC/OAVM will be made available to 1000 Members on a first come, first serve basis. This will not include large Shareholders (Shareholders holding 2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, Auditors etc. who are allowed to attend the AGM without any restriction on account of the first come, first serve basis.

Mindteck 2020–21 Annual Report 165 AGM Notice

The attendance of the Members attending the AGM through VC/ OAVM will be counted for the purpose of ascertaining the quorum under Section 103 of the Companies Act, 2013.
Pursuant to Section 91 of the Companies Act, 2013, the Register of Members and Share Transfer Register shall remain closed from July 31, 2021 to August 13, 2021 (both days inclusive) for the purpose of AGM.
The Register of Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Companies Act, 2013, the Register of Contracts or Arrangements in which the Directors are interested, maintained under Section 189 of the Companies Act, 2013 and the relevant documents referred to in the Notice will be available electronically for inspection by the Members from August 10, 2021, 9:00 a.m. onwards, till the conclusion of the AGM. Members may log into the CDSL website (www.evotingindia.com) with their respective credentials and inspect the above referred documents and registers which will be made available under the Company’s EVSN.
Members holding shares in dematerialised mode are requested to intimate any changes pertaining to their name, address, email IDs, bank details, Electronic Clearing Services (ECS) or (NECS) compliant bank account numbers, mandates, nominations, Power of Attorney, etc., to their respective Depository Participant (DP). Changes intimated to the DP will be automatically reflected in the Company’s records that will help the Company and its Registrar and Share Transfer Agent (RTA) to provide efficient and better services to Members. Members holding shares in physical mode are requested to intimate such changes to the RTA, Universal Capital Securities Private Limited at C 101, 247 Park, LBS Road, Vikhroli West, Mumbai – 400083, Contact No.: 022-2820 7203/04/05, Fax No.: 022-2820 7207, Email ID: [email protected] . For Members holding shares in physical mode, the formats to update your Electronic Clearing Services (ECS) and email IDs are made available as part of the Annual Report.
AS PER SEBI CIRCULAR NO. SEBI/HO/MIRSD/DOP1/ CIR/P/2018/73 DATED APRIL 20, 2018, ANY MEMBERS STILL HOLDING THEIR SHARES IN PHYSICAL MODE ARE REQUESTED TO SUBMIT THE PARTICULARS OF THEIR PAN NUMBER AND BANK ACCOUNT, i.e. BANK ACCOUNT NUMBER, NAME OF THE BANK, ADDRESS OF THE BRANCH, IFSC, MICR CODE OF THE BRANCH AND TYPE OF ACCOUNT, TO THE COMPANY’S RTA AT UNIVERSAL CAPITAL SECURITIES PRIVATE LIMITED AT C 101, 247 PARK, LBS ROAD, VIKHROLI WEST, MUMBAI – 400083, CONTACT NO.: 0222820 7203/04/05, FAX NO.: 022-2820 7207, EMAIL ID: gamare@ unisec.in, IN RESPECT OF WHICH SEPARATE COMMUNICATIONS HAVE ALREADY BEEN SENT TO SUCH SHAREHOLDERS BY THE COMPANY IN LINE WITH SEBI REQUIREMENTS.
AS PER REGULATION 40 OF SEBI (LODR) REGULATIONS, AS AMENDED FROM TIME TO TIME, SECURITIES OF LISTED COMPANIES CAN BE TRANSFERRED ONLY IN DEMATERIALISED MODE WITH EFFECT FROM APRIL 01, 2019, EXCEPT IN CASE OF REQUEST RECEIVED FOR TRANSMISSION OR TRANSPOSITION AND RE-LODGED TRANSFERS OF SECURITIES. FURTHER, SEBI VIDE ITS CIRCULAR NO. SEBI/HO/MIRSD/RTAMB/ CIR/P/2020/236 DATED DECEMBER 02, 2020 HAD FIXED MARCH 31, 2021 AS THE CUT-OFF DATE FOR RE-LODGEMENT OF TRANSFER DEEDS AND THE SHARES THAT ARE RE-LODGED FOR TRANSFER SHALL BE ISSUED IN DEMAT MODE ONLY.
MEMBERS HOLDING SHARES IN PHYSICAL MODE ARE REQUESTED TO CONVERT THEIR HOLDING TO DEMATERIALISED MODE TO ELIMINATE ANY KIND OF RISKS ASSOCIATED WITH THE PHYSICAL SHARES AND FOR EASE IN PORTFOLIO MANAGEMENT, SINCE PHYSICAL SHARE TRANSFERS ARE PROHIBITED BY SEBI FROM APRIL 01, 2019.
MEMBERS ARE REQUESTED TO NOTE THAT, IF THE DIVIDENDS ARE NOT ENCASHED FOR A CONSECUTIVE PERIOD OF SEVEN (7) YEARS FROM THE DATE OF TRANSFER TO THE UNPAID DIVIDEND ACCOUNT OF THE COMPANY, IT SHALL BE TRANSFERRED TO THE INVESTOR EDUCATION AND PROTECTION FUND (“IEPF”). THE SHARES IN RESPECT OF SUCH UNCLAIMED DIVIDENDS, SHALL ALSO BE TRANSFERRED TO THE DEMAT ACCOUNT OF THE IEPF AUTHORITY. IN THIS REGARD, MEMBERS ARE REQUESTED TO CLAIM THEIR DIVIDENDS FROM THE COMPANY. MEMBERS WHOSE UNCLAIMED DIVIDENDS/SHARES ARE ALREADY TRANSFERRED TO IEPF MAY CLAIM THE SAME BY MAKING AN ONLINE APPLICATION TO THE IEPF AUTHORITY THROUGH E-FORM NO. IEPF-5 AVAILABLE ON WWW. IEPF.GOV. IN. MEMBERS ARE REQUESTED TO CLAIM ANY OUTSTANDING DIVIDENDS BY WRITING TO THE COMPANY SECRETARY AT [email protected] OR TO THE COMPANY’S RTA AT [email protected] . MEMBERS’ ATTENTION IS PARTICULARLY DRAWN TO THE “CORPORATE GOVERNANCE REPORT” OF THE ANNUAL REPORT IN RESPECT OF UNCLAIMED DIVIDENDS ON PAGE NUMBER 44 .
Pursuant to MCA and SEBI Circulars, the Notice of the AGM along with the Annual Report for FY 2020-21 is sent only through electronic mode to those Members whose email IDs are registered with the Company/Depositories. Members may note that the AGM Notice and Annual Report for FY 2020-21 will also be available on the Company’s website at www.mindteck.com and websites of the Stock Exchanges: BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com , respectively. The AGM Notice is also disseminated on the website of CDSL (agency for providing the Remote e-voting facility and e-voting system during the AGM) at www.evotingindia.com . The AGM has been convened through VC/OAVM in compliance with applicable provisions of the Companies Act, 2013 read with above mentioned Circulars.
Members requiring any information or copies of financials of the Subsidiaries may refer the same on the website of the Company under the Investors Section.
Since the AGM will be held through VC/OAVM, the Route Map, Proxy form and Attendance Slip are not annexed to this Notice.
In compliance with the provisions of Section 108 of the Companies Act, 2013 read with Rules framed thereunder and Regulation 44 of SEBI (LODR) Regulations, Members are provided with the facility to cast their vote electronically through the e-voting services provided by CDSL on all resolutions set forth in this Notice.

A. Instructions for shareholders voting electronically are as under:

(i) The voting period begins on August 10, 2021 (9.00 a.m.) and ends on August 12, 2021 (5.00 p.m.). During this period, shareholders’ of the Company, holding shares either in physical mode or in dematerialised mode, as on the cut-off date (record date) of August 06, 2021 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

166 Mindteck 2020–21 Annual Report AGM Notice

(ii) Shareholders who have already voted prior to the meeting date shall not be entitled to vote on the meeting date.
(iii) Pursuant to SEBI Circular No. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated December 09, 2020, under the Regulation 44 of SEBI LODR Regulations, listed entities are required to provide remote e-voting facility to its shareholders, in respect of all resolutions. However, it has been observed that the participation by the public non-institutional shareholders/retail shareholders is at a negligible level. Currently, there are multiple E-voting Service Providers (ESPs) providing e-voting facility to listed entities in India. This necessitates registration on various ESPs and maintenance of multiple user IDs and passwords by the shareholders. In order to increase the efficiency of the voting process, pursuant to a public consultation, it has been decided to enable e-voting to

all the demat account holders, by way of a single login credential, through their demat accounts/ websites of Depositories/ Depository Participants. Demat account holders would be able to cast their vote without having to register again with the ESPs, thereby, not only facilitating seamless authentication but also enhancing ease and convenience of participating in e-voting process.

(iv) In terms of SEBI Circular no. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated December 09, 2020 on e-Voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories and Depository Participants. Shareholders are advised to update their mobile number and email ID their demat accounts in order to access e-Voting facility.

Pursuant to aforesaid SEBI Circular, Login method for e-Voting and joining virtual meeting for Individual shareholders holding securities in Demat mode is given below:

Type of Shareholders	Login Method
Individual Shareholders	• Users who have opted for CDSL Easi/Easiest facility, can login through their existing user ID and password. Option will
holding securities in Demat	be made available to reach e-Voting page without any further authentication. The URL for users to login to Easi / Easiest
mode with CDSL	are_https://web.cdslindia.com/myeasi/home/login_or visit_www.cdslindia.com_and click on Login icon and select New
	System Myeasi.
	• After successful login, the Easi/Easiest user will be able to see the e-Voting option for eligible companies where the
	evoting is in progress as per the information provided by company. On clicking the e-Voting option, the user will be able
	to see e-Voting page of the e-Voting service provider for casting your vote during the remote e-Voting period or joining
	virtual meeting and voting during the meeting. Additionally, there are also links provided to access the system of all
	e-Voting Service Providers i.e. CDSL/NSDL/KARVY/LINKINTIME, so that the user can visit the e-Voting service
	providers’ website directly.
	• If the user is not registered for Easi/Easiest, option to register is available at_https://web.cdslindia.com/myeasi/_
	Registration/EasiRegistration.
	• Alternatively, the user can directly access e-Voting page by providing Demat Account Number and PAN No. from an
	e-Voting link available on www.cdslindia.com home page. The system will authenticate the user by sending OTP on
	registered Mobile and Email as recorded in the Demat Account. After successful authentication, user will be able to see
	the e-Voting option where the evoting is in progress and also able to directly access the system of all e-Voting Service
	Providers.
Individual Shareholders	• If you are already registered for NSDL IDeAS facility, please visit the e-Services website of NSDL. Open web browser by
holding securities in demat mode with NSDL	typing the following URL:_https://eservices.nsdl.com_either on a Personal Computer or on a mobile. Once the home page of e-Services is launched, click on the “Benefcial Owner” icon under “Login” which is available under ‘IDeAS’ section.
	A new screen will open. You will have to enter your User ID and Password. After successful authentication, you will be
	able to see e-Voting services. Click on “Access to e-Voting” under e-Voting services and you will be able to see e-Voting
	page. Click on Company name or e-Voting service provider name and you will be re-directed to e-Voting service
	provider website for casting your vote during the remote e-Voting period or joining virtual meeting and voting during the
	meeting.
	• If the user is not registered for IDeAS e-Services, option to register is available at https://eservices.nsdl.com. Select
	“Register Online for IDeAS “Portal or click at_https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp_.
	• Visit the e-Voting website of NSDL. Open web browser by typing the following URL:https://www.evoting.nsdl.com/
	either on a Personal Computer or on a mobile. Once the home page of e-Voting system is launched, click on the icon
	“Login” which is available under ‘Shareholder/Member’ section. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number hold with NSDL), Password/OTP and a Verifcation Code as shown
	on the screen. After successful authentication, you will be redirected to NSDL Depository site wherein you can see
	e-Voting page. Click on Company name or e-Voting service provider name and you will be redirected to e-Voting service
	provider website for casting your vote during the remote e-Voting period or joining virtual meeting and voting during .
Individual Shareholders	• You can also login using the login credentials of your demat account through your Depository Participant registered with
(holding securities in demat	NSDL/CDSL for e-Voting facility. After successful login, you will be able to see e-Voting option. Once you click on
mode) login through their	e-Voting option, you will be redirected to NSDL/CDSL Depository site after successful authentication, wherein you can
Depository Participants	see e-Voting feature. Click on Company name or e-Voting service provider name and you will be redirected to e-Voting
	service provider website for casting your vote during the remote e-Voting period or joining virtual meeting and voting
	during the meeting.

Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and Forget Password option available at above mentioned website.

Mindteck 2020–21 Annual Report 167 AGM Notice

Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. CDSL and NSDL:

Login type	Helpdesk details
Individual	Members facing any technical issue in
Shareholders	login can contact CDSL helpdesk by
holding securities	sending a request at helpdesk.
in Demat mode	[email protected]_or
with CDSL	contact at 022- 23058738 or
	022-23058542-43
Individual	Members facing any technical issue in
Shareholders	login can contact NSDL helpdesk by
holding securities	sending a request [email protected]._
in Demat mode	_in_or call at toll free no.: 1800 1020
with NSDL	990 or 1800 22 44 30.

(v) Login method for e-Voting and joining virtual meeting for physical shareholders and shareholders other than individual holding shares in demat mode:
a. Log on to the e-voting website www.evotingindia.com.
b. Click on “Shareholders” module.
c. Now, enter your User ID
- For CDSL: 16 digits beneficiary ID
- For NSDL: 8 Character DP ID followed by 8 Digits Client ID
- Members holding shares in Physical mode should enter Folio Number registered with the Company.
d. Next, enter the Image Verification as displayed and Click on Login.
e. If you are holding shares in Demat mode and had logged on to www.evotingindia.com and voted on an earlier e-voting of any Company, then your existing password is required to be used.
f. If you are a first-time user follow the steps provided below:

For Members holding shares in Demat mode (other than individual) and Physical mode

PAN • Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both Demat shareholders as well as physical shareholders)
- If you have not updated your PAN with the Company/Depository Participant, you are requested to use the sequence number sent by Company/RTA or contact Company/RTA. In case the sequence number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Example: if your name is Ramesh Kumar with sequence number 1 then enter RA00000001 in the PAN field.
Dividend • Enter the Dividend Bank Details or Date of Birth Bank (in DD/MM/YYYY format) as recorded in your Details Demat account or in the Company records in order to login.
OR Date of Birth • If both the details are not recorded with the (DOB) Depository or Company please enter the Member ID/Folio number in the Dividend Bank details field as mentioned in instruction (v)(c).
(vi) After entering the above details appropriately, click on “SUBMIT” tab.
(vii) If you hold shares in physical mode, you will directly reach the Company selection screen. However, if you hold shares in Demat mode, you will reach ‘Password Creation’ menu wherein you are required to mandatorily enter your login password in the new password field. Kindly note that this password is to be also used by the Demat holders for voting on resolutions of any other Company on which they are eligible to vote, provided that Company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
(viii) If you hold shares in physical mode, the details can be used only for e-voting on the resolutions contained in this Notice.
(ix) Click on the EVSN for Mindteck (India) Limited on which you choose to vote.
(x) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/ NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xi) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(xii) After selecting the resolution, if you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
(xiii) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(xiv) You can also take a printout of the votes cast by clicking on “Click here to print” option on the Voting page.
(xv) If a Demat account holder has forgotten the login password, then enter the User ID and the image verification code and click on “Forgot Password”, and enter the details as prompted by the system.
(xvi) Facility for Non-Individual Shareholders and Custodians
Remote Voting
a. Non-Individual Shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodians are required to log on to www.evotingindia.com and register themselves in the ‘Corporates’ module.
b. A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected] .
c. After receiving the login details, a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.
d. The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.
e. A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

168 Mindteck 2020–21 Annual Report AGM Notice

f. Alternatively, Non-Individual shareholders are required to send the relevant Board Resolution/ Authority letter etc. together with attested specimen signature of the duly authorised signatory who is authorised to vote, to the Scrutinizer and to the Company at the email address viz; [email protected] , if they have voted from individual tab and have not uploaded the same in the CDSL e-voting system for scrutinizer’s verification.

Process for those Shareholders whose Email/Mobile No. are not Registered with the Company/Depositories:

For Physical shareholders: please provide necessary details like Folio No., Name of shareholder, scanned copy of the share certificate (front and back), PAN (self attested scanned copy of PAN card), AADHAAR (self attested scanned copy of Aadhaar Card) by email to Company/RTA.
For Demat Shareholders (other than Individuals) – Please update your email IDs and Mobile No. with your respective Depository Participants (DP).
For Individual Demat shareholders – Please update your email ID and Mobile No. with your respective Depository Participants (DP) which is mandatory for e-Voting and joining virtual meeting through Depository.

Instructions to Shareholders attending the AGM through VC/ OAVM and E-voting during the meeting are as under:

The procedure for attending the meeting and e-voting on the day of the AGM is same as per the instructions mentioned above for Remote e-voting.
The link for VC/OAVM to attend the AGM will be available where the EVSN of Company will be displayed after successful login as per the instructions mentioned above for Remote e-voting.
Shareholders who have voted through remote e-Voting will be eligible to attend the meeting. However, they will not be eligible to vote at the AGM.
The above link shall be open 15 minutes before the scheduled AGM time i.e. 11.45 A.M. on Friday, August 13, 2021.
Shareholders are encouraged to join the Meeting through Laptops/IPads for better experience
Further, shareholders will be required to allow Camera and use Internet with a good speed to avoid any disturbance during the meeting.
Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.
Shareholders who would like to express their views/ask any questions during the meeting may register themselves as a speaker by sending their request in advance at least 7 days prior to the meeting mentioning their name, demat account number/ folio number, email ID, mobile number at shivarama.adiga@ mindteck.com . The shareholders who do not wish to speak during the AGM but have queries may send their queries in advance, 7 days prior to meeting mentioning their name, demat account number/folio number, email ID, mobile number at [email protected] . These queries will be replied by the company suitably by email.
Those shareholders who have registered themselves as a speaker will only be allowed to express their views/ask questions during the meeting.
Only those shareholders, who are present at the AGM through VC/OAVM facility and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system available during the AGM.
If any Votes are cast by the shareholders through the e-voting available during the AGM and if the same shareholders have not participated in the meeting through VC/OAVM facility, then the votes cast by such shareholders shall be considered invalid as the facility of e-voting during the meeting is available only to the shareholders attending the meeting.

In case you have any queries or issues regarding attending AGM and e-Voting from the CDSL e-Voting System, you can write an email to [email protected] or contact at 022- 23058738 or 022-23058542/43.

All grievances connected with the facility for voting by electronic means may be addressed to Mr. Rakesh Dalvi, Senior Manager, Central Depository Services (India) Limited, A Wing, 25th Floor, Marathon Futurex, Mafatlal Mill Compounds, N M Joshi Marg, Lower Parel (East), Mumbai - 400013 or send an email to [email protected] or call on 022-23058542/43.

B. Other Instructions:

i. The remote e-voting period commences on August 10, 2021 (9.00 a.m.) and ends on August 12, 2021 (5.00 p.m.). During this period, Members of the Company holding shares either in physical mode or in dematerialised mode, as on August 06, 2021 (cut-off date) , may cast their vote electronically.
ii. The voting rights of Members shall be in proportion to their shares of the paid-up equity share capital of the Company as on August 06, 2021 (cut-off date).
iii. Those investors who became shareholders of the Company after dispatch of the AGM Notice and holding shares as of August 06, 2021 (cut-off date) may obtain the login ID and password by sending a request at [email protected] or shivarama.adiga@ mindteck.com .
iv. Mr. Gopalakrishnaraj H H., Practicing Company Secretary (Membership No. FCS 5654), has been appointed as the Scrutiniser to scrutinise the e-voting process in a fair and transparent manner.
v. The Scrutinizer shall, within a period not exceeding two (2) working days from the conclusion of the AGM, unblock all the votes in the presence of at least two witnesses not in the employment of the Company and make a Scrutiniser’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.
vi. The results declared, along with the Scrutiniser’s Report, shall be placed on the Company’s website (www.mindteck.com) and on the website of CDSL (www.evotingindia.com) within two (2) working days of the passing of the Resolutions at the Thirtieth AGM of the Company on August 13, 2021 and shall be communicated to the Stock Exchanges, where the shares of the Company are listed.

Mindteck 2020–21 Annual Report 169 AGM Notice

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No. 3: Re-appointment of Mr. Guhan Subramaniam as an Independent Director.

Mr. Guhan Subramaniam (DIN: 00131687) was appointed as an Independent Director of the Company from May 20, 2016 to May 19, 2021. Upon completion of his term, he was eligible for re-appointment for a second term of up to five (5) years. Accordingly, the Board has reappointed Mr. Guhan Subramaniam as an Independent Director of the Company for another term of five (5) years from May 20, 2021 subject to the approval of the Members at the ensuing AGM.

Mr. Guhan Subramaniam has given a declaration to the Company that he meets the criteria of Independence as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) & 25 of SEBI (LODR) Regulations. Further, he has also provided to the Company his consent in writing to act as a Director in Form DIR-2 and intimation in Form DIR-8 in terms of Companies (Appointment and Qualification of Directors) Rules 2014, to the effect that he is not disqualified under Sub-Section (2) of Section 164 of the Companies Act, 2013.

In the opinion of the Board, Mr. Guhan Subramaniam fulfills the conditions specified in the Companies Act, 2013 and Rules framed thereunder as well as SEBI (LODR) Regulations, for the re-appointment as an Independent Director for a second term of 5 years and he is Independent of the Management.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, the re-appointment of Mr. Guhan Subramaniam as an Independent Director of the Company for a term of five (5) years from May 20, 2021, is placed before the Shareholders for approval.

The terms and conditions of re-appointment of the Independent Director shall be open for inspection by the Shareholders at the Registered Office of the Company during normal working hours on any working day, excluding Saturday and Sunday.

None of the Directors, Key Managerial Personnel or their relatives, except Mr. Guhan Subramaniam and his relatives, are in any way concerned or interested in the resolution set out at Item No. 3 of the Notice.

The Board recommends the resolution for the approval of the Members.

Information as per Secretarial Standards

Information as per Secretarial Standards
Name	Mr. Guhan Subramaniam
Age	67years
Date of frst appointment on the Board	May20, 2016
	Mr. Guhan Subramaniam received a bachelor’s degree in Economics from Nowrosjee Wadia College
Qualifcations	of the University of Pune (India). He also completed a postgraduate programme in Business
	Management at the university’s Symbiosis Institute of Management.
Experience	Over 40years
	No remuneration drawn except sitting fees for attending the Board and Committee Meetings, if any,
Remuneration last drawn	as approved by the Board and the proft-related Commission as approved by the Board and the
	Members of the Companyfrom time to time.
Shareholding in the Company	NIL
Relationship with other Directors/KMP of the Company	NIL
Number of Board Meetings attended during the FY 2020-21	Four (4) Board Meetings
Directorships in other Companies (Including Section 8 Company)	Two (2) companies
Chairman/Member of the Committee(s) of
Board of Directors in other Companies in	NIL
which he is a Director
	Mr. Guhan Subramaniam was re-appointed as an Independent Director of the Company for a period
Terms and Conditions of Re-appointment	of fve (5) years from May 20, 2021 to May 19, 2026 by the Board, subject to the approval of the
	shareholders in the ensuingAGM.
	Mr. Guhan Subramaniam shall be paid the sitting fees for attending the Board and Committee
Remuneration to be paid	Meetings, if any, as approved by the Board, the proft-related Commission and any other remuneration that he is eligible for under the Companies Act, 2013, as approved by the Board and/
	or the Members of the Companyfrom time to time.
	The detailed performance evaluation of Mr. Guhan Subramaniam, an Independent Director, was
Performance evaluation report/ summary	done by the Company on a regular basis, and in the opinion of the Chairman and the Nomination and
thereof	Remuneration Committee of the Company, the evaluation/rating of the Director exceeds the
	expectation level.

Registered Office

A. M. R. Tech Park Block-1, 3rd Floor #664, 23/24, Hosur Main Road, Bommanahalli Bengaluru-560068 India

May 28, 2021

BY ORDER OF THE BOARD for Mindteck (India) Limited Shivarama Adiga S. Vice President Legal and Company Secretary

170 Mindteck 2020–21 Annual Report AGM Notice

ANNEXURE TO THE NOTICE

INFORMATION PURSUANT TO REGULATION 36(3) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 REGARDING APPOINTMENT AND RE-APPOINTMENT OF DIRECTORS

Name of the Director Appointment/ Re-appointment Brief Resume and nature of expertise in specifc functional areas List of other Listed Companies in which Directorship is held Chairman/Member of the Committee(s) of Board of Directors of other Listed Companies in which he/ she is a Director Shareholding/Stock Options in the Company Relationship with other Directors/KMP of the Company	Mr. Meenaz Dhanani Re-appointment of Director liable to retire by rotation Meenaz Dhanani, a Non-Executive Director of Mindteck (India) Limited, serves as President of Mindteck, Inc. He manages the Company’s operations in the US and Canada, and also oversees the region’s IT Talent business. Meenaz is a 30-plus year investment banking veteran with deep knowledge and expertise in international credit, trade and project fnance, corporate fnance, real estate, private equity, and venture capital investments. Prior to joining Mindteck in 2013, Meenaz headed the investment advisory subsidiary of Bahrain-based TAIB Bank where he managed the frm’s portfolio of US real estate and technology investments. He holds a B.A. from Bernard M. Baruch College, where he majored in Finance and Investment Analysis. NIL NIL 100,000 Stock Options NIL	Mr. Guhan Subramaniam
		Re-appointment of Independent Director
		Guhan Subramaniam is an independent professional consultant who advises select enterprises on growth strategies and capital infusion. Earlier in his career, Guhan Subramaniam was Managing Partner at IL&FS Private Equity, one of the largest private equity fund managers in India. Guhan Subramaniam’s experience spans over 40 years in advisory and consulting services, private equity investments and multi-functional, multi-industry operations roles predominantly in information technology and software solutions. He held senior management and leadership positions with leading corporations in India, with a successful career extending across functions such as business planning, strategy, sales, marketing, business development, human resources development and operations. Guhan Subramaniam received a bachelor’s degree in Economics from Nowrosjee Wadia College of the University of Pune (India). He also completed a postgraduate programme in Business Management at the university’s Symbiosis Institute of Management.
		NIL
		NIL
		NIL
		NIL

Mindteck 2020–21 Annual Report 171 Form for Registering E-mail ID

FORM FOR REGISTERING EMAIL ID

FOR SHARES HELD IN PHYSICAL MODE

Please complete this form and send it to:

Shivarama Adiga S.

SHAREHOLDERS HOLDING SHARES IN DEMAT MODE

Please inform your respective Depository Participant

VP- Legal and Company Secretary Mindteck (India) Limited

A. M. R. Tech Park, Block-1, 3rd Floor #664 23/24, Hosur Main Road Bommanahalli Bengaluru -560068

E-mail: [email protected]

Dear Sir,

I hereby request the Company to register my e-mail address as given below and give my consent for service of documents including the Notice of Shareholders' Meeting & Postal Ballot, Balance Sheet, Profit & Loss Account, Auditor's Report, Board's Report etc., through e-mail:

Folio No.
Name of the 1st Registered Holder
E-mail address

specimen signature with the Company

Name

Place

Date _ /_ /____

172 Mindteck 2020–21 Annual Report ECS Mandate Form

ECS MANDATE FORM

FOR SHARES HELD IN PHYSICAL MODE

Please complete this form and send it to:

SHAREHOLDERS HOLDING SHARES IN DEMAT MODE

Please inform your respective Depository Participant

Shivarama Adiga S.

VP-Legal & Company Secretary

Mindteck (India) Limited

A. M. R. Tech Park, Block-1, 3rd Floor #664, 23/24, Hosur Main Road, Bommanahalli Bengaluru - 560068

E mail: [email protected]

Dear Sir,

I hereby declare to have the amount of dividend on my equity shares through the Electronic Clearing Service (ECS). The particulars are as under:

1) Folio No.

2) Name of the 1st Registered Holder
3) E-mail ID of the 1st Registered Holder
4) Bank Details

Name of the Bank Full Address of the Branch

Complete Account Number

Account Type: (Please tick the relevant box for Savings Account or Current Account

Savings Account Current Account

Nine-Digit Code Number of the Bank and Branch appearing on the MICR Cheque issued by the Bank (Please attach a cancelled or photocopy of cheque )

I hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of incomplete or incorrect information, I will not hold the Company responsible.

signature with the Company

Date://____

Name: _____ Address: _________

Note:

This form is meant for shareholders holding shares in physical mode.
Shareholders holding shares in Demat mode should register their ECS particulars with their Depository Participants (DPs).

Mindteck 2020–21 Annual Report 173

INFORMATION AT A GLANCE

==> picture [451 x 21] intentionally omitted <==

----- Start of picture text -----

Particulars Details
----- End of picture text -----

Date and time of AGM	Friday, August 13, 2021 at 12:00 Noon
Mode	Video Conferencing(VC) or Other Audio-Visual Means (OAVM)
Participation through Video Conferencing	https://www.evotingindia.com
Helpline number for VCparticipation	1800225533
AGM Transcript*	https://www.mindteck.com/investors
Cut-off date for e-voting	Friday, August 06, 2021
Remote E-voting start time and date	Tuesday, August 10, 2021 at 9:00 a.m.
Remote E-voting end time and date	Thursday, August 12, 2021 at 5.00p.m.
E-voting website of CDSL	https://www.evotingindia.com
	Contact name:Mr. Rakesh Dalvi, Manager
	Central Depository Services (India) Limited
	A Wing, 25th Floor, Marathon Futurex
Name, address and contact details	Mafatlal Mills Compound, N.M. Joshi Marg
of e-voting service provider	Lower Parel (E) Mumbai – 400013, India
	Contact details:
	Email ID:[email protected]
	Contact number: 91 22 23058542/ 1800225533
	Contact name:Mr. Santosh Gamare
	Universal Capital Securities Private Limited
	C 101, 247 Park, LBS Road,
Name, address and contact details	Vikhroli West,
of Registrar and Transfer Agent.	Mumbai – 400083, India
	Contact details:
	Email ID:[email protected]
	Contact number: 91 22 28207203-05

*The AGM Transcript will be available for Shareholders’ review after 48 hours from the conclusion of the AGM.

BSE Scrip Code: 517344 NSE: MINDTECK

Global Locations

INDIA

Bengaluru

(Global Headquarters) A. M. R. Tech Park Block-1, 3rd Floor #664, 23/24 Hosur Main Road Bommanahalli Bengaluru - 560068 Tel: 91 80 4154 8000 Fax: 91 80 4112 5813

Solitaire Building, 40/A, 2nd Floor, Doddenakundi Industrial Area Phase 2 KR Puram Hobli, Whitefield Bengaluru - 560048 Tel: 91 80 4551 1666

Kolkata

Millennium Towers Unit: T-2 9C Tower II, Level IX Plot No: 62, Block DN Sector V, Salt Lake Kolkata - 700091 Tel: 91 33 2367 4337/8 Fax: 91 33 2367 4336

Mumbai

T-361, 6th Floor Tower No. 8 Belapur Station Building CBD Belapur Navi Mumbai - 400614

SINGAPORE

7B Keppel Road #05-09 PSA Tanjong Pagar Complex Singapore 089055 Tel: 65 6225 4516, 65 6372 0067 Fax: 65 6225 4517

MALAYSIA

Galleria@Cyberjaya Unit 16-5 Jalan Tecknokrat 6, Cyber 5 63000 Cyberjaya Selangor Darul Ehsan, Malaysia

Tel: 603 8325 1365 Fax: 603 8325 1364

Suite 451, L3A-2, Level 3A SPICE Arena 180 Jalan Tun Dr. Awang 11900 Relau Pulau Pinang, Malaysia Tel: 604 6158 029

BAHRAIN

Office #44, 3rd Floor Suhail Center, Building 81 Road 1702, Block 317 Diplomatic Area PO Box 10795, Manama Kingdom of Bahrain Tel: 973 1753 4469 Fax: 973 1753 6332

UNITED STATES

Pennsylvania

(US Headquarters) 205 Grandview Avenue Suite 302 Camp Hill, PA 17011 Tel: 1 717 732 2211 Fax: 1 717 732 2927

California

39899 Balentine Drive Suite 200 Newark, CA 94560 Tel: 1 510 490 1905 Fax: 1 717 732 2927

Florida

5150 North Tamiami Trail Suite 200 Naples Florida 34103 Tel: 1 239 631 7379

Missouri

2 CityPlace Drive Suite 200 St. Louis, MO 63141

New Jersey

379 Thornall Street 6th Floor Edison, NJ 08837 Tel: 1 732 828 1792

CANADA

Ontario

2-215 Traders Boulevard East Mississauga, ON L4Z 3K5

GERMANY

Herriotstrasse 1 60528 Frankfurt am Main Germany Tel: 49 (0) 696 7733 488 Fax: 49 (0) 696 7733 200

UNITED KINGDOM

4 Imperial Place Maxwell Road, Borehamwood Hertfordshire WD6 1JN United Kingdom Tel: 44 (0) 208 213 3121 Fax: 44 (0) 208 213 3001

Mindteck is a global engineering and technology solutions company devoted to delivering knowledge that matters to help clients compete, innovate and propel forward along the digital continuum. The company’s legacy expertise in embedded systems, enterprise applications and testing are a powerful complement to competencies in data services, such as AI/ML, and cloud, cybersecurity, and IoT. Since its establishment in 1991, Mindteck’s clientele has included top-tier Fortune 1000 companies, start-ups, leading universities, and government entities. The company is publicly traded on the BSE Limited (BSE: 517344) and the National Stock Exchange of India Limited (NSE: MINDTECK). Founding Member: ‘The Atlas of Economic Complexity’ for the Center for International Development (CID) at Harvard University. Appraised at Level 5 of the CMMI Institute’s Capability Maturity Model Integration (CMMI)® . Development Centres: Kolkata and Bengaluru, India

www.mindteck.com

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Mindteck (India) Ltd — Annual Report 2021

60261_rns_2021-07-20_ee50a6ed-bdac-4e24-9c6a-f61e155b9d27.pdf

Table of Contents

Consolidated Financial Highlights

Letter to Shareholders

Dear Shareholders,

Expression of Gratitude

Resolute and Proactive

Driving Performance

Delivery Excellence

Quality Assurance

Notable Highlights

Key new client highlights

Key existing client highlights

Marking Another Milestone

Legal and Company Secretary

Registered Office

Auditors

Registrar and Share Transfer Agent

Bankers

S.R. Batliboi & Associates LLP

Leadership Team

Anand Balakrishnan

Pradeep K

Karen Stark

Harish Nair

Practice Team

Board’s Report

To the Members,

1. FINANCIAL RESULTS

2. COMPANY AFFAIRS

Standalone

Consolidated

3. DIVIDEND

4. BUSINESS FOCUS AND HIGHLIGHTS

Data Services

Product Engineering

Digital Engineering

Internet of Things (IoT)

Cloud

Mobility

Cybersecurity

Testing

IT Infrastructure Services

Vulnerability Assessment and Penetration Testing (VA/PT)

Change in Nature of Business

5. QUALITY

Remote Infrastructure Support

ITIL-Compliance, Processes, SLA

6. INFRASTRUCTURE

7. SUBSIDIARIES

8. RELATED PARTY TRANSACTIONS

9. LITIGATION

10. CHANGES TO SHARE CAPITAL

11. FIXED DEPOSITS

13. TRANSFER TO RESERVES

14. DIRECTORS

Declarations by Independent Directors

Secretarial Auditor

Board Evaluation

Cost Auditor

Board Diversity

Policy on Directors’ Appointment and Remuneration

Number of Meetings of the Board

Vigil Mechanism/Whistleblower Policy

Constitution of Internal Complaints Committee

15. AUDITORS

Statutory Auditor

16. ANNUAL RETURN

17. SIGNIFICANT AND MATERIAL ORDERS

18. INTERNAL FINANCIAL CONTROL

19. INDEPENDENT DIRECTORS FAMILIARISATION PROGRAMME

20. PARTICULARS OF EMPLOYEES

Board’s Report

Top 10 employees of the Company based upon the remuneration drawn during the FY 2020-21

21. COMMITTEES OF THE BOARD

22. RISK MANAGEMENT

23. CORPORATE GOVERNANCE REPORT

24. MANAGEMENT DISCUSSION AND ANALYSIS

Mindteck (India) Ltd Annual Report 2021