We have audited the Standalone Ind AS financial
statements of MSTC Limited ("the Company"), which
comprise the balance sheet as at 31st March, 2026 and
the statement of Profit and Loss, including the statement
of Other Comprehensive Income, statement of cash
flows and statement of changes in equity for the year
then ended, and notes to the Ind AS financial statements,
including a summary of material 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 Ind AS financial statements give the
information required by the Act in the manner so required
and give a true and fair view in conformity with the Ind
AS and the accounting principles generally accepted
in India, of the state of affairs of the Company as at 31st
March, 2026 and profit, changes in equity and its cash
flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under section 143(10) of
the Companies Act, 2013. 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 standalone Ind AS financial statements
under the provisions of the Companies Act, 2013 and the
Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Emphasis of Matter
We draw attention to the following:
♦ Management's outlook on the current status of
borrowings from Standard Chartered Bank (Refer Note
no. 18B (b) to the standalone financial statements).
♦ Increase in Employee Benefit Expenses amounting to
' 238.17 Lakhs pertaining to enhancement in Gratuity
limit from ' 20 Lakhs to ' 25 Lakhs as a result of increase
in DA above 50% of Basic Pay as calculated by actuary
based on internal assessment of the Company (Refer
Note no. 25(b) to the standalone financial statements).
♦ The Company has provided for ' 10.20 Lakhs on account
of Gratuity liability of fixed term employees in respect
of Actuarial Valuation based on internal assessment
of the Company. The Company is monitoring the
notification of State Rules and clarifications from the
Government on other aspects of the Labour Code. It is
also in the process of detailed assessment and would
provide appropriate accounting effect based on such
developments as needed (Refer Note no. 27 to the
standalone financial statements).
♦ Other Income includes ' 1,471.19 Lakhs in respect of
liabilities ageing more than five years written back
in terms of Accounting Policy approved by the Board
(Refer Note no. 24(b) to the standalone financial
statements).
♦ The Company carried out the annual impairment
testing under Ind AS 36; the recoverable amount of
investment in Mahindra MSTC Recycling Private Limited
(MMRPL) was determined based on the fair value
derived using the Discounted Cash Flow (DCF) method
at ' 2,850 Lakhs compared to the carrying amount of
' 4,000 Lakhs. Accordingly, an impairment loss of ' 144
Lakhs (f.Y. 2024-25: ' 1,006 Lakhs) has been recognised
in the Statement of Profit and Loss. The cumulative
impairment loss till date stands at ' 1,150 Lakhs. (Refer
Note no. 26A to the standalone financial statements).
Our opinion is not modified on the above matters.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in our
audit of the Standalone Ind AS financial statements of
the current period. These matters were addressed in the
context of our audit of the Standalone Ind AS financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters. These matters were addressed in the
context of our audit of the Standalone Ind AS 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 Ind
AS 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 Ind AS 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 Ind AS financial
statements.
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Key audit matters
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How our audit addressed the key audit matter
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1. Recoverability of Trade Receivables
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Trade Receivables-Gross is ' 66,792.80 lakhs
(Net ' 22,690.48 lakhs) with ' 44,102.32 lakhs
being considered as credit impaired for which
a provision for doubtful debts is held in the
books.
In the event of reference of each case of
debt with impaired credit to NCLT and/or
other forums for adjudication, the Company
is exposed to potential risk of financial loss
when the recoveries become subjected to long
processes of litigation and eventually doubtful.
The recoverable amounts are estimated
by management based on their specific
recoverability assessment on individual debtor
as well as consideration and application of a
provisioning policy.
The disclosures relating to Trade Receivables
of the Company are provided in Note 8 (8.1 to
8.6) of the Standalone Financial Statements.
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While examining details of Receivables and transactions during the
year ended 31st March, 2026, we have observed the nature of the
Trade Receivables including those Advance to Customers classified
as such, the sustainability and the likelihood of recoverability of
Receivables. In terms of Accounting Policy all such debts considered
doubtful of recovery have been provided for in the books as
of 31st March, 2026. Since the Company's obtaining of balance
confirmation from Parties is an ongoing process (as referred to
in Note-38) substantive audit procedures have been followed to
ensure accuracy of balances. We have assessed the recoverability
of the unsettled receivables on a sample basis through our
evaluation of management's assessment with reference to the
credit profile of the customers and their historical payment pattern,
wherever applicable, along with the latest correspondences with
the customers, as available read with Company's existing Risk
Management Policy.
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2. IT Systems & Control
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Preparation and presentation of Standalone
Ind AS Financial Statements are dependent
on the Company's supporting software and
hardware controls involving risk management
exercise for maximum elimination of erroneous
data. Thus, quality of audit outcome and its
authenticity are dependent on the extent of IT
controls and systems.
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We have planned, designed and carried out the desired audit
procedures and sample checks, which in our opinion are adequate
to provide reasonable assurance on the adequacy of IT controls in
place.
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3. Assessment of allowance for Bad and Doubtful Advances and Contingent Liabilities
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Assessment of allowance for Bad and Doubtful
Advances reversed during the year and
Contingent liabilities requires assessment of
probable outcomes and cash flows.
The identification and quantification require
estimation and judgement by the management.
The disclosure related to reversal of allowance
for Bad and Doubtful Advances during the
year and Contingent liabilities are provided in
Note no. 27 and 30 (a) to the accompanying
Standalone Ind AS Financial Statements.
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We have carried out the validation of information provided by the
management by performing the following procedures:
♦ Evaluating reasonableness of the underlying assumptions.
♦ Understanding the status of the litigations.
♦ Examining the relevant documents on available records.
♦ Reviewing legal opinion/industry practices wherever necessary.
♦ Verification of various disclosures made by the management.
♦ Obtaining Management's Representation as per guidelines of the
ICAI.
♦ Company's Accounting Policy.
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Other Matter
With reference to Note no. 38, confirmation of balances
was not available in many cases of Trade and other
Receivables, Trade and other Payables, Loans and
Advances, Deposits made and received and the impact
of consequent adjustments required, if any, is not
ascertained.
Our opinion is not modified in respect of the above matter.
Information Other than the Standalone Financial
Statements and Auditor's Report Thereon
♦ The Company's Board of Directors is responsible for
the other information. The other information comprises
the information included in the management report
but does not include the Standalone Ind AS financial
statements and our auditor's report thereon.
♦ Our opinion on the Standalone Ind AS 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 Ind AS
financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent with
the Standalone Ind AS financial statements, or our
knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report in this
regard.
Management's Responsibility for the Standalone
Financial Statements
The Company's Board of Directors is responsible for
the matters stated in section 134(5) of the Companies
Act, 2013 ("the Act") with respect to the preparation of
these Standalone Ind AS financial statements that give
a true and fair view of the financial position, financial
performance including Other Comprehensive Income,
cash flows and changes in equity of the Company in
accordance with the Indian Accounting Standards (Ind AS)
prescribed under section 133 of the Act. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting
policies; making judgements and estimates that are
reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant
to the preparation and presentation of the financial
statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the Standalone Ind AS 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.
Auditor's Responsibilities for the Audit of the Standalone
Financial Statements
Our objectives are to obtain reasonable assurance about
whether the Standalone Ind AS 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 Ind AS financial
statements.
As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional
skepticism throughout the audit. We also:
♦ Identify and assess the risks of material misstatement
of the Standalone Ind AS 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 Companies Act, 2013, we are also responsible
for expressing our opinion on whether the Company
has adequate internal financial controls system 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 Standalone Ind AS 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 Ind AS financial statements,
including the disclosures, and whether the 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 financial
statements of the current period 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,
2020 ("the Order"), issued by the Central Government
of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the "Annexure-A" a
statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.
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 Other Comprehensive Income, Statement
of Changes in Equity and the Cash Flow Statement
dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid Standalone Ind AS
financial statements comply with the Accounting
Standards specified under Section 133 of the Act,
read with relevant rules of the Companies (Accounts)
Rules, 2014.
e) Notification no. G.S.R. 463 (e) dated 5th June, 2015
as amended on 13th June 2017, issued by Ministry of
Corporate Affairs, Section 164 (2) of the Companies
Act, 2013 regarding disqualification of the Director
is not applicable to the Company, since it is a
Government Company.
f) With respect to the adequacy of the internal financial
controls with reference to these standalone Ind
AS financial statements of the Company and the
operating effectiveness of such controls, refer to our
separate Report in "Annexure B".
g) The Company being a Government Company,
provisions of Section 197 (16) of the Companies Act,
2013 regarding managerial remuneration are not
applicable to the Company as per notification no.
G.S.R. 463 (e) dated 5th June, 2015.
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, 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 lying in the name of the Company as
on 31st March, 2026 on its financial position in its
standalone Ind AS financial statements-Refer
Note 30(a) to the Standalone Ind AS Financial
Statements.
ii. The Company did not have any long-term
contracts, including derivative contracts for which
there were any material foreseeable losses.
iii. There has been no delay in transferring the
amounts required to be transferred to the Investor
Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to
the best of its knowledge and belief, no funds
have been advanced or loaned or invested
(either from borrowed funds or share premium
or any other sources or kind of funds) by the
Company to or in any other person or entity,
including a foreign entity ("Intermediaries"),
with the understanding, whether recorded
in writing or otherwise, that the Intermediary
shall, whether directly or indirectly, lend or
invest in other persons or entities identified in
any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf of
the Ultimate Beneficiaries;
(b) The Management has represented, that, to
the best of its knowledge and belief, no funds
have been received by the Company from
any person or entity, including a foreign entity
("Funding Parties"), with the understanding,
whether recorded in writing or otherwise,
that the Company shall, whether, directly or
indirectly, lend or invest in other persons or
entities identified in any manner whatsoever
by or on behalf of the Funding Party("Ultimate
Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries; and
(c) Based on the audit procedures that have
been considered reasonable and appropriate
in the circumstances, nothing has come to
our notice that has caused us to believe that
the representations under sub-clause (i) and
(ii) of Rule 11(e) of the Companies (Audit and
Auditors) Rules, 2014, as amended, as provided
under and (b) above, contain any material
mis-statement.
(d) The final dividend paid by the Company during
the year in respect of the same declared for the
previous year is in accordance with section 123
of the Act to the extent it applies to payment of
dividends. The interim dividend declared and
paid by the Company during the year and until
the date of this audit report is in accordance
with section 123 of the Act.
i) Based on our examination, which included test checks,
the company has used an accounting software for
maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same
has operated throughout the year for all relevant
transactions recorded in the software. Further, during
the course of our audit we did not come across any
instance of audit trail feature being tampered with.
The audit trail has been preserved as per the statutory
requirements for record retention.
j) As required by Section 143 (5) of the Companies Act,
2013 the directions and sub-directions issued by
the Comptroller & Auditor General of India, we give
our comments on the Standalone Ind AS Financial
Statements in "Annexure-C" annexed herewith.
For S. Guha & Associates
Chartered Accountants
Firm's Registration No.- 322493E
Sd/-
CA Sourabh Mitra
Partner
Membership No.- 308743
UDIN: 26308743AIGGFW1656
Place: Kolkata
Date: July 22, 2026
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