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Cura Technologies Ltd.

BSE: 532332 Sector: IT
NSE: CURATECH ISIN Code: INE117B01012
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NSE 05:30 | 01 Jan Cura Technologies Ltd
OPEN 1.72
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VOLUME 270
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OPEN 1.72
CLOSE 1.62
VOLUME 270
52-Week high 2.06
52-Week low 1.62
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Cura Technologies Ltd. (CURATECH) - Auditors Report

Company auditors report

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 TechnologiesLimited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31st March 2019 and its financial performanceincluding other comprehensive income its cash flows and changes in equity for the yearended on that date.

Basis for Qualified Opinion

I. In respect of preparation of financial statements of the company on going concernbasis during the year the company has incurred a Net Loss of Rs. 105.94 Lakhs resultinginto accumulated losses of Rs.7088.31 Lakhs and erosion of its net worth as at 31stMarch 2019. These conditions indicate the existence of a material uncertainty that maycast significant doubt on the company's ability to continue as going concern and thereforethe company may be unable to realize its assets and discharge its liabilities in thenormal course of business.

The ultimate outcome of these matters is at present not ascertainable. Accordingly weare unable to comment on the consequential impact if any on the accompanying financialresults.

II. The Company has defaulted in repayment of dues to Andhra Bank for the year ended31st March 2019. The loan outstanding was classified as NPA by the Bank. The balanceoutstanding as at 31.03.2019 is Rs. 4.83 Crores. (Including Principal and Interest butexcluding Penal Interest if any) and Interest was not provided during the year which isnot in accordance with the generally accepted accounting principles. The loss of theCompany has been understated by Rs. 92.30 Lakhs for the year ended 31st March 2019 inview of non- provision of Interest amount

III. The company has written off advances receivable from Cura GRC Pvt. Ltd. amountingto Rs. 17553253/- and trade payables amounting to Rs. 4946955/- for which no evidencewas provided by the management.

IV. The Company is not regular in payment of undisputed statutory dues towards TDS PFESI 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 variousadvances and in the absence of alternative corroborative evidence we are unable tocomment on the extent to which such balances are recoverable.

VI. In view of non-availability of confirmations from Trade Payables and variousadvances/borrowings and in the absence of alternative corroborative evidence we areunable to comment on the extent to which such balances are payable.

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

These Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit Procedures that is appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability 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 inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

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

• Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

• We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

• We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

• From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters Specified in paragraphs 3and 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 bestof 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 theCompany so far as it appears from our examination of those books.

iii) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

iv) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder 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 March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

vi) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an modified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

vii) With respect to the other matters to be included in the Auditor's Report inaccordance 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 explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

viii) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

• The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

• The Company has not made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.

• There has been no delay in transferring amounts required to be transferred tothe 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 TechnologiesLimited on the Ind AS Financial Statements for the year ended 31st March 2019 we reportthat:

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As per the information and explanations given by the management the fixed assetshave been physically verified by the management but due to lack of corroborative evidencewe 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 ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company as at the Balance Sheet date.

ii. As per the information and explanations given by the management the Inventory hasbeen physically verified during the year by the Management but due to the lack ofcorroborative evidence in regard to the same we are unable to ascertain the verificationof inventory by the management.

iii. The Company has not granted any loans secured or unsecured to companies firmsand Limited Liability partnerships or other parties covered in the register maintainedunder 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 inrespect to loans investments guarantees and securities provisions of section 185 and186 of the Companies Act 2013 has been complied with.

v. The Company has not accepted any deposits from the public covered under Section 73to 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 Governmentunder section 148(1) of the Companies Act 2013 for business activities carried out by theCompany. 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 therecords of the company examined by us the company is not regular in depositing theUndisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Custom Duty Goods and Services Tax as applicable with the appropriateauthorities;

(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 arrearsas 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 3853276
ESI Payable 62056
Professional Tax Payable 33150
TDS Payable 1109428
Service Tax Payable 4689140
VAT Payable 53988

c) According to the information and explanations given to us there are no dues ofWealth tax duty of customs duty of excise which have not been deposited on account ofany 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 Act1961 Income Tax 2014-15 CIT(A) 43865021
APVAT 2005 Value Added Tax 2005-06 AP High Court 1058047
APVAT 2005 Value Added Tax 2006-07 AP High Court 1358171
APVAT 2005 Value Added Tax 2007-08 AP High Court 1760163

viii. The Company has taken term loans from Banks and Financial institutions. Thecompany has defaulted in payment of dues of interest and principal. (Refer Basis forQualified Opinion Paragraph in Audit Report).

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans are utilized for the purpose forwhich they are obtained.

x. According to the information and explanations given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our Audit.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not paid/provided any managerial remunerationduring the year under Audit

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto 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 theyear 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 withrelevant 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 sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions 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 orpersons connected with him. Accordingly the provisions of clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of The ReserveBank of India Act 1934. Accordingly the provisions of clause 3(xvi) of the order are notapplicable 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 Auditor's Report

Report on the Internal Financial Controls over Financial Reporting under clause (i) ofthe 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 CuraTechnologies Limited (‘the company') as of 31st March 2019 in conjunction with ouraudit of IND AS 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting based on our Audit. We conducted our audit in accordancewith the Guidance note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an Audit of InternalFinancial Controls both applicable to an audit of Internal Financial Controls and bothissued by the ICAI. These standards and guidance note require that we comply with ethicalrequirements and plan and performed the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our Audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the Auditor's Judgment including the assessment of the risk ofmaterial 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 toprovide a basis for our audit opinion and the company's internal financial control systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes these policies and procedures that (1) pertain to themaintenance of records that in reasonable detailed accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASFinancial Statements in accordance with generally accepted principles and that receiptsand expenditures are being made only in accordance with authorization of management anddirectors of the Company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the Company's assetsthat 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also Projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe 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 opinionparagraph in the Audit report of the company we have not obtained sufficient appropriateaudit evidence in respect of those matters specified in the Basis of Qualified opinionparagraph. We are unable to determine whether the company has established adequateinternal financial controls over Financial Reporting and also whether such internalfinancial controls were operating effectively as at March 31st 2019 based on the internalcontrol over financial reporting criteria established by the company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute Of CharteredAccountants of India.

For P. Murali & Co.
Chartered Accountants
FRN: 007257S
P. Murali Mohana Rao
Place: Hyderabad Partner
Date: 30.05.2019 M.No. 023412

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