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Nureca Ltd.

BSE: 543264 Sector: Others
NSE: NURECA ISIN Code: INE0DSF01015
BSE 16:01 | 01 Jul 981.00 -13.60
(-1.37%)
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986.90

HIGH

1004.00

LOW

981.00

NSE 15:43 | 01 Jul 984.35 -5.90
(-0.60%)
OPEN

1002.70

HIGH

1003.65

LOW

980.00

OPEN 986.90
PREVIOUS CLOSE 994.60
VOLUME 248
52-Week high 2316.60
52-Week low 939.35
P/E 21.65
Mkt Cap.(Rs cr) 981
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 986.90
CLOSE 994.60
VOLUME 248
52-Week high 2316.60
52-Week low 939.35
P/E 21.65
Mkt Cap.(Rs cr) 981
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nureca Ltd. (NURECA) - Auditors Report

Company auditors report

To the Members of Nureca Limited

Report on the Audit of the Standalone Financial Statements

1. Opinion

We have audited the standalone financial statements of Nureca Limited ("theCompany") which comprise the standalone balance sheet as at 31 March 2021 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone 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 standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the standalone financial statements.

3. Key Audit Matters

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

Description of Key Audit Matter

The key audit matter How the matter was addressed in our audit
Revenue recognition - fraud risk Refer to note 2.3.7 and 21 to the standalone financial statements In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient audit evidence:
Revenue from the sale of goods is recognised when control in goods is transferred to the customer and is measured net of rebates discounts and returns. • We assessed the appropriateness of the accounting policies in respect of revenue recognition with reference to the applicable accounting standards.
There is presumed fraud risk as per Standards on Auditing with regard to revenue recognition. We focussed on this area since there is a risk that revenue may be overstated because of fraud resulting from the • We evaluated the design and implementation of key internal financial controls in relation to revenue recognition and tested the operating effectiveness of such controls for a sample of transactions selected using random sampling.
pressure the Board of Directors may feel to achieve performance targets. Also revenue is a key performance indicator for the Company which makes it susceptible to misstatement because the timing of revenue recognition requires exercise of judgement. • We performed testing by selecting samples (using statistical sampling) of revenue transactions recorded during the year. For such samples verified the underlying documents including invoices purchase orders and customer acceptances to assess whether revenue is recognised in the appropriate period in which control is transferred.
In view of the above we have identified risk of fraud in revenue recognition as a key audit matter. • We performed analytical procedures on revenue recognised during the year to identify any unusual variances.
• We tested on a sample basis (selected based on specified risk-based criteria) specific revenue transactions recorded before and after the financial year end date to determine whether the revenue had been recognised in the appropriate reporting period.
• We tested sample manual journal entries for revenue selected based on specified risk-based criteria to identify unusual items.
• We assessed the adequacy of the disclosures made in accordance with the relevant accounting standard.

4. Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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

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

5. Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

6. Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

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

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

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

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or 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.

7. Report on Other Legal and Regulatory Requirements

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

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

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

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

e) On the basis of the written representations received from the directors as on 31March 2021 and 02 April 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Gaurav Mahajan Partner
Place: Chandigarh Membership No. 507857
Date: 16 June 2021 UDIN No.: 21507857AAAABA2108

Annexure A referred to in paragraph 7(1) of the Independent Auditors' Report to theMembers of Nureca Limited for the year ended 31 March 2021 we report that:

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

(b) According to the information and explanations given to us the Company has aregular programme of physical verification of its fixed assets by which all fixed assetsare verified every year. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Asinformed to us no discrepancies were noticed on such verification.

(c) The Company does not have any immovable property. Accordingly paragraph 3(i)(c) ofthe order is not applicable.

(ii) According to the information and explanation given to us the inventories exceptgoods-in-transit and stocks lying with third parties have been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable. As informed to us the discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly adjusted inthe books of account. For inventory lying with third parties at year-end the stocklisting has been obtained from online portal of third parties.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted loans secured or unsecured to companies covered in the registermaintained under Section 189 of the Act. Further there are no limited liabilitypartnerships firms and other parties covered in the register required under section 189of the Act.

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in respect of loans and investments made by theCompany the provisions of section 185 and 186 of the Act have been complied with. Asinformed to us the Company has not provided any guarantee or security as specified undersection 185 or 186 of the Act.

(v) In our opinion and according to the information and explanations given to us thedeposits taken by the Company are not covered under the provision of section 73 to 76 orother provisions of the Act and rules framed thereunder. Accordingly paragraph 3(v) ofthe Order is not applicable.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under section 148(1) of the Act.Accordingly paragraph 3(vi) of the Order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Employees' State Insurance Dutyof Customs Cess and other material statutory dues have been regularly deposited by theCompany with the appropriate authorities. Undisputed dues relating to Goods and Servicestax Provident fund and Income Tax have not been regularly deposited with the appropriateauthorities and there have been serious delays in a large number of cases which weredeposited prior to year end.

According to the information and explanations given to us no undisputed amountsProvident fund Income Tax Goods and Services tax Employees' State Insurance Duty ofCustoms Cess and other material statutory dues were in arrears as at 31 March 2021 for aperiod of more than six months from the date they become payable except as follow:

INR in million

Name of the Statute Nature of Dues Amount * Period to which amounts relates Due Date Date of Payment Remarks (if any)
Income Tax Act. 1961 Income Tax August 2020 07 September 2020 30April 2021 -

including interest as applicable

The Company does not have liability in respect of Service tax Duty of excise Salestax and Value added tax during the year since effective 1 July 2017 these statutory dueshas been subsumed into GST.

(b) According to information and explanation given to us there are no dues of Salestax Value added tax Income Tax Service tax Duty of Excise Duty of custom and Goodsand Service Tax which have not been deposits with the appropriate authorities on accountof any dispute.

(viii) According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of borrowing to thebank during the year. The Company did not have any loans or borrowings from FinancialInstitution Government and did not issue any debentures during the year nor has anyoutstanding debentures as at the balance sheet date.

(ix) During the year the Company has raised Rs. 967.79 million by way of initialpublic offering (IPO) of fresh equity shares. According to the information andexplanations given to us and based on our examination of the records of the Company Rs.190.53 million have been utilized for the purpose for which it was raised and Rs. 777.26million of proceeds of the IPO remained unutilised till year end. As further informed tous the Company has not raised any money by way of term loan or debt instruments.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the managerial remuneration has been paid orprovided by the Company in accordance with the provision of section 197 read with ScheduleV of the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3 (xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company transactions with the related parties arein compliance with section 177 and section 188 of the Act and the details have beendisclosed in the standalone financial statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations give to us in respect of privateplacement of shares made during the year the Company has duly complied with therequirements of section 42 of the Act. The proceeds from issue of equity shares have beenused for the purpose for which the funds were raised. The Company has neither made anypreferential allotment of shares nor issued any fully or partly debenture during the year.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with the directors or persons connected with themduring the year. Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W / W-100022
Gaurav Mahajan Partner
Place: Chandigarh Membership No. 507857
Date: 16 June 2021 UDIN No.: 21507857AAAABA2108

Annexure B to the Independent Auditors' report on the standalone financial statementsof Nureca Limited for the period ended 31 March 2021.

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 7 II (A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Nureca Limited ("the Company") as of 31 March 2021 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements 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 (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to standalone financial statements to future periods are subject to the riskthat the internal financial controls with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W / W-100022
Gaurav Mahajan Partner
Place: Chandigarh Membership No. 507857
Date: 16 June 2021 UDIN No.: 21507857AAAABA2108

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