To the Members of
CURA TECHNOLOGIES LIMITED
Report on the Financial Statements
Qualified Opinion
We have audited the accompanying financial statements of M/s. Cura Technologies
Limited ("the Company"), which comprise the Balance Sheet as at March 31,
2019, the Statement of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that
date, and a summary of the 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, except for the possible effects of the matter described in the Basis for
Qualified Opinion paragraph the aforesaid Ind AS Financial Statements give the information
required by the Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India including the Ind AS, of the
financial position of the Company as at 31st March 2019, and its financial performance
including other comprehensive income, its cash flows and changes in equity for the year
ended on that date.
Basis for Qualified Opinion
I. In respect of preparation of financial statements of the company on going concern
basis, during the year the company has incurred a Net Loss of Rs. 105.94 Lakhs resulting
into accumulated losses of Rs.7088.31 Lakhs, and erosion of its net worth as at 31st
March, 2019. These conditions indicate the existence of a material uncertainty that may
cast significant doubt on the companys ability to continue as going concern and therefore
the company may be unable to realize its assets and discharge its liabilities in the
normal course of business.
The ultimate outcome of these matters is at present not ascertainable. Accordingly we
are unable to comment on the consequential impact, if any, on the accompanying financial
results.
II. The Company has defaulted in repayment of dues to Andhra Bank for the year ended
31st March, 2019. The loan outstanding was classified as NPA by the Bank. The balance
outstanding as at 31.03.2019 is Rs. 4.83 Crores. (Including Principal and Interest but
excluding Penal Interest if any) and Interest was not provided during the year which is
not in accordance with the generally accepted accounting principles. The loss of the
Company has been understated by Rs. 92.30 Lakhs for the year ended 31st March, 2019 in
view of non- provision of Interest amount
III. The company has written off advances receivable from Cura GRC Pvt. Ltd. amounting
to Rs. 1,75,53,253/- and trade payables amounting to Rs. 49,46,955/- for which no evidence
was provided by the management.
IV. The Company is not regular in payment of undisputed statutory dues towards TDS, PF,
ESI, Services Tax, Professional Tax and VAT for the year ended 31st March, 2019.
V. In view of non-availability of confirmations from Trade Receivables and various
advances and in the absence of alternative corroborative evidence, we are unable to
comment on the extent to which such balances are recoverable.
VI. In view of non-availability of confirmations from Trade Payables and various
advances/borrowings and in the absence of alternative corroborative evidence, we are
unable to comment on the extent to which such balances are payable.
We conducted our audit in accordance with Standards on Auditing (SAs) specified under
section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are
further described in the Auditors Responsibilities for the Audit of the 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 Companies Act, 2013 and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our qualified opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Managements Responsibility for the Financial Statements
The Companys 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 financial statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the accounting Standards specified under
section 133 of the Act. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for ensuring 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 financial statements, management is responsible for assessing the
Companys 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.
These Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors 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 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 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 financial controls relevant to the audit in
order to design audit Procedures that is 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 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 managements 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 Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists;
we are required to draw attention in our auditors 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 auditors
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 financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit
work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
• 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 auditors report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the Annexure A, a statement on the matters Specified in paragraphs 3
and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit we report that:
i) 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.
ii) 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.
iii) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this
Report are in agreement with the relevant books of account.
iv) In our opinion, the aforesaid financial statements comply with the Ind AS specified
under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
v) On the basis of the written representations received from the directors as on March
31, 2019 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the
Act.
vi) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B". Our report expresses an modified opinion on the
adequacy and operating effectiveness of the Companys internal financial controls over
financial reporting.
vii) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
viii) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in
our opinion and to the best of our information and according to the explanations given to
us:
• The Company has disclosed the impact of pending litigations on its financial
position in its financial statements.
• The Company has not made provision, as required under the applicable law or
accounting standards, for material foreseeable losses, if any, on long-term contracts
including derivative contracts.
• There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
|
For P. Murali & Co., |
|
Chartered Accountants |
|
FRN: 007257S |
|
P. Murali Mohana Rao |
| Place: Hyderabad |
Partner |
| Date: 30.05.2019 |
M.No. 023412 |
"Annexure A" to the Independent Auditors Report
Annexure referred to in Independent Auditors Report to the Members of Cura Technologies
Limited on the Ind AS Financial Statements for the year ended 31st March 2019, we report
that:
i. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) As per the information and explanations given by the management, the fixed assets
have been physically verified by the management but due to lack of corroborative evidence,
we are unable to ascertain the verification of fixed assets by the management
(c) According to the information and explanations given to us and on the basis of our
examination of records of the Company, the title deeds of immovable properties are held in
the name of the Company as at the Balance Sheet date.
ii. As per the information and explanations given by the management the Inventory has
been physically verified during the year by the Management but due to the lack of
corroborative evidence in regard to the same, we are unable to ascertain the verification
of inventory by the management.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms,
and Limited Liability partnerships or other parties covered in the register maintained
under section 189 of the Companies Act, 2013. Therefore, the provisions of Clause 3(iii),
(iii)(a), (iii)(b) and (iii)(c) of the said order are not applicable to the company.
iv. In our opinion and according to the information and explanation provided to us, in
respect to loans, investments, guarantees and securities, provisions of section 185 and
186 of the Companies Act, 2013 has been complied with.
v. The Company has not accepted any deposits from the public covered under Section 73
to 76 of the Companies Act, 2013 and rules framed there under to the extent notified.
vi. The maintenance of cost records has not been specified by the Central Government
under section 148(1) of the Companies Act, 2013 for business activities carried out by the
Company. Thus reporting under clause 3(vi) of the order is not applicable to the company.
vii. (a) According to the information and explanations given to us and based on the
records of the company examined by us, the company is not regular in depositing the
Undisputed statutory dues, including Provident Fund, Employees State Insurance,
Income-tax, Custom Duty, Goods and Services Tax, as applicable, with the appropriate
authorities;
(b) There were Undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Professional Tax, TDS, Service Tax, and Value Added Tax dues in arrears
as at 31st March 2019 for a period of more than 6 months from the date they became payable
:
| Nature of Due |
Amount in Rs. |
| PF Payable |
38,53,276 |
| ESI Payable |
62,056 |
| Professional Tax Payable |
33,150 |
| TDS Payable |
11,09,428 |
| Service Tax Payable |
46,89,140 |
| VAT Payable |
53,988 |
c) According to the information and explanations given to us, there are no dues of
Wealth tax, duty of customs, duty of excise which have not been deposited on account of
any dispute except the following:
| Name of the Statute |
Nature of the dues |
Year to which the amount relates |
Forum where dispute is pending |
Amount in dispute (Rs.) |
| Income Tax Act,1961 |
Income Tax |
2014-15 |
CIT(A) |
4,38,65,021 |
| APVAT, 2005 |
Value Added Tax |
2005-06 |
AP High Court |
10,58,047 |
| APVAT, 2005 |
Value Added Tax |
2006-07 |
AP High Court |
13,58,171 |
| APVAT, 2005 |
Value Added Tax |
2007-08 |
AP High Court |
17,60,163 |
viii. The Company has taken term loans from Banks and Financial institutions. The
company has defaulted in payment of dues of interest and principal. (Refer Basis for
Qualified Opinion Paragraph in Audit Report).
ix. The Company has not raised any moneys by way of initial public offer, further
public offer (including debt instruments) and term loans are utilized for the purpose for
which they are obtained.
x. According to the information and explanations given to us, no material fraud by the
company or on the company by its officers or employees has been noticed or reported during
the course of our Audit.
xi. Based upon the audit procedures performed and the information and explanations
given by the management, the company has not paid/provided any managerial remuneration
during the year under Audit
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable
to it; the Provisions of clause 3(xii) of the order are not applicable to the company.
xiii. The Company has not entered into transactions with related parties during the
year, However the related party disclosures as required under Indian Accounting standard
(Ind AS) 24, related party disclosures specified under section 133 of the Act, read with
relevant rules issued there under have been disclosed in the Ind AS Financial Statements
(Refer Note No.26).
xiv. The Company has not made any preferential allotment or private placement of shares
or fully or partly convertible debentures during the year under review. Accordingly, the
provisions of clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into non-cash transactions with its directors or
persons connected with him. Accordingly, the provisions of clause 3(xv) of the Order are
not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of The Reserve
Bank of India Act 1934. Accordingly, the provisions of clause 3(xvi) of the order are not
applicable to the Company.
|
For P. Murali & Co., |
|
Chartered Accountants |
|
FRN: 007257S |
|
P. Murali Mohana Rao |
| Place: Hyderabad |
Partner |
| Date: 30.05.2019 |
M.No. 023412 |
Annexure B to the Independent Auditors Report
Report on the Internal Financial Controls over Financial Reporting under clause (i) of
the Sub-section 3 of the Section 143 of the Companies Act, 2013 (‘The Act)
We have audited the internal financial controls over financial reporting of Cura
Technologies Limited (‘the company) as of 31st March 2019 in conjunction with our
audit of IND AS Financial Statements of the company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 companys 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 Act.
Auditors Responsibility
Our responsibility is to express an opinion on the companys internal financial
controls over financial reporting 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 deemed to be prescribed
under section 143(10) of the Act to the extent applicable to an Audit of Internal
Financial Controls, both applicable to an audit of Internal Financial Controls and both
issued by the ICAI. These standards and guidance note require that we comply with ethical
requirements and plan and performed the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting 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 system over financial reporting and their operating
effectiveness. Our Audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
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 Auditors Judgment, including the assessment of the risk of
material misstatement of the IND AS 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 and the companys internal financial control system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of Ind AS Financial Statements for external purposes in accordance with
generally accepted accounting principles. A Companys internal financial control over
financial reporting includes these policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detailed, 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 Ind AS
Financial Statements in accordance with generally accepted principles, and that receipts
and expenditures are being made only in accordance with authorization of management and
directors of the Company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the Companys assets
that could have a material effect on the Ind AS Financial Statements.
Inherent Limitation of Internal Financial Controls over Financial Reporting
Because of the inherent limitation of internal financial controls over financial
reporting, 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 over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Qualified Opinion
In our opinion, as a result of the matters given in the Basis of Qualified opinion
paragraph in the Audit report of the company, we have not obtained sufficient appropriate
audit evidence in respect of those matters specified in the Basis of Qualified opinion
paragraph. We are unable to determine whether the company has established adequate
internal financial controls over Financial Reporting and also whether such internal
financial controls were operating effectively as at March 31st, 2019 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.
|
For P. Murali & Co., |
|
Chartered Accountants |
|
FRN: 007257S |
|
P. Murali Mohana Rao |
| Place: Hyderabad |
Partner |
| Date: 30.05.2019 |
M.No. 023412 |
+91-9892691696
