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Thyrocare Technologies Ltd.

BSE: 539871 Sector: Health care
NSE: THYROCARE ISIN Code: INE594H01019
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OPEN 1059.45
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VOLUME 7253
52-Week high 1465.90
52-Week low 832.00
P/E 30.66
Mkt Cap.(Rs cr) 5,472
Buy Price 1032.70
Buy Qty 3.00
Sell Price 1034.45
Sell Qty 9.00
OPEN 1059.45
CLOSE 1059.45
VOLUME 7253
52-Week high 1465.90
52-Week low 832.00
P/E 30.66
Mkt Cap.(Rs cr) 5,472
Buy Price 1032.70
Buy Qty 3.00
Sell Price 1034.45
Sell Qty 9.00

Thyrocare Technologies Ltd. (THYROCARE) - Auditors Report

Company auditors report

To the Members of ThyrocareTechnologies Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Thyrocare Technologies Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant 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.

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.

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
Impairment testing of investment in subsidiary See note 2D 3H and 7A to the standalone financial statements
The Company has significant investment in its wholly owned subsidiary Nueclear Healthcare Limited (‘NHL'). The investment is carried at cost less any impairment. NHL has continued to incur losses since inception and consequently the Company is required to perform impairment testing of the carrying value of the investment at each reporting date. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
— Evaluated the process followed by the Company to obtain forecasts of NHL;
Company is required to test the investment for indicators of impairment annually or more frequently when there is an indication this investment may be impaired. — Obtained the Company's assessment of the recoverable value of the investment basis the valuation prepared by the Company and assumptions used to determine the recoverable value;
The process of annual impairment testing of investment in NHL involves estimating the recoverable value of the investment by using Discounted Cashflow model (DCF) and comparing it with the carrying value of the investment. The valuation process is complex and involves significant judgment in considering various forward-looking assumptions and estimates — Tested the arithmetical accuracy of the cash flow projections and impairment assessment made by the Company;
There is inherent uncertainty involved in forecasting and discounting future cashflows including the possible effects of COVID-19 pandemic which are the basis of the assessment of recoverability. Considering the complexities the magnitude of potential impact and the judgement involved we have identified impairment testing of investment in NHL as a key audit matter. — Involved valuation specialist to test the appropriateness of the valuation model and the critical judgements made by the Company;
— Assessed and challenged the Company's assumptions used in impairment analysis such as projected EBITDA and revenue growth rate terminal growth rate and discount rate including considering impact of Covid-19 by:
- comparing the same to externally derived data and industry comparators where available;
- Performing sensitivity analysis around the key assumptions including forecasted revenue costs discount rates etc. to ascertain the extent to which adverse changes both individually or in aggregate could impact the analysis;
- Assessing the accuracy of prior period forecasts with the actual financial performance;
This was based on our knowledge of the Company and the markets in which NHL operates.
— Evaluated impairment assessment of investment performed by the Company;
— Assessed the adequacy of disclosures in the standalone financial statements.
Revenue recognition Recognition of revenue from sale of testing services See note 2D 3K and 25 to the standalone financial statements
One of the streams of revenue Company earns is from sale of testing services. Revenue from sale of testing services is recognized at a point in time once the testing samples are processed for requisitioned diagnostic tests. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
We have identified recognition of revenue from sale of testing services as a key audit matter because revenue is a key performance indicator. • Obtained an understanding of the systems processes and controls implemented by the Company and evaluated the design and implementation of internal controls for measuring and recording revenue;
In addition there is a risk that revenue could be recognized at a time which is different from transfer of control due to pressure to achieve performance targets and meeting external expectations at the year end. • Tested the design implementation and operating effectiveness of the Company's key general Information Technology (IT) controls key IT applications/ manual controls including testing of controls relating to timing of revenue recognition by involving IT specialists. This includes access controls program change controls program development controls and IT operation controls;
• For selected samples of transactions (using statistical sampling) we inspected when the testing samples are processed for requisitioned diagnostic tests and matched it with the timing of recognition of revenue;
• Tested the reconciliation of revenue recorded as per the billing system to the revenue recorded as per the accounting system;
• Performed substantive testing by selecting samples (using statistical sampling) of revenue transactions recorded during the year (and before and after the financial year end) and traced to the underlying documentation;
• Assessed manual journals posted to revenue to identify unusual items;
• Assessed the adequacy of disclosures in respect of revenue in the standalone financial statements.

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.

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 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.

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)(l)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.

Report on Other Legal and Regulatory Requirements

1. 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.

2. (A) As reuqired 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 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(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 has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements - Refer Note 35 to thestandalone financial statements;

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
Amar Sunder
Partner
Place: Mumbai Membership Number: 078305
Date: 8 May 2021 ICAI UDIN: 1078305AAAAAW4568

Annexure A to the Independent Auditors' report on the standalone financial statementsof

Thyrocare Technologies Limited for the year ended 31 March 2021

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets(Property plant and equipment) by which all fixed assets (Property plant and equipment)are verified once 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. Nomaterial discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties as disclosed in Note 4Ato the standalone financial statements are held in thename of the Company.

(ii) The inventory except goods in transit has been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. The discrepancies noticed on verification between the physicalstocks and the book records were not material and have been properly dealt with in booksof account.

(iii) The Company has granted unsecured loans to a company covered in the registermaintained under section 189 of the Act. According to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured to any limitedliability partnerships body corporates firms or other parties covered in the registerrequired to be maintained under section 189 of the Act.

(a) According to the information and explanation given to us and based on the auditprocedures conducted by us we are of the opinion that the rate of interest and otherterms and conditions of the unsecured loans granted by the Company to a company covered inthe register required to be maintained under Section 189 of the Act are not prima facieprejudicial to the interest of the Company.

(b) According to the information and explanation given to us the schedule of repaymentof principal and interest has been stipulated and the repayments have been regular inaccordance with the terms of the loan.

(c) There is no overdue amount of more than 90 days in respect of the unsecured loansgranted by the Company.

(iv) The Company has not granted any loans or provided any guarantees or security tothe parties covered under section 185 of the Act. The Company has complied with theprovisions of section 186 of the Act in respect of investments made and loans provided toa subsidiary. The Company has not provided any guarantees or security to which theprovisions of section 186 apply.

(v) According to information and explanations given to us the Company has not acceptedany deposits from the public within the meaning of the directives issued by the ReserveBank of India provisions of section 73 to 76 of the Act any other relevant provisions ofthe Act and the relevant rules framed thereunder.

(vi) We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by Central Government for maintenance of cost records under section148(1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofthe records.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees state insurance income taxgoods and services tax duty of customs cess profession tax and other material statutorydues as applicable with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax goods andservices tax duty of customs cess profession tax and other material statutory dues werein arrears as at 31 March 2021 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax goods and services tax duty ofcustoms duty of excise which have not been deposited with the appropriate authorities onaccount of any dispute other than those mentioned in Appendix I to this report.

(viii) According to the information and explanations given to us the Company has nottaken any loans or borrowings from any financial institution bank or Government nor hasit issued any debentures. Accordingly paragraph 3 (viii) of the Order is not applicableto the Company.

(ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) or term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year nor have we been informed of anysuch case by the Management.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid or provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3 (xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexaminations of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by applicable Indian Accounting Standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3 (xv) of the Order is notapplicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable tothe Company.

For B S R & Co. LLP
Chartered Accountants
Firrm's Registration No. 101248W/W-100022
Amar Sunder
Partner
Place: Mumbai Membership No. 078305
Date: 8 May 2021 ICAI UDIN: 21078305AAAAAW4568

Appendix I

Name of the Statute Nature of dues Amount Demanded Rs. in crores Amount Paid Rs. in crores Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 14.04 1.00 2008-09 and 2009-10 Income tax Appellate Tribunal
Income Tax Act 1961 Income Tax 22.81 1.00 2010-11 and 2011-12 Income tax Appellate Tribunal
Income Tax Act 1961 Income Tax 12.38 Nil 2012-13 Commissioner of Income tax (Appeals)
Income Tax Act 1961 Income Tax 0.33 Nil 2017-18 Commissioner of Income tax (Appeals)

Annexure B to the Independent Auditors' report on the standalone financial statementsof Thyrocare Technologies Limited for the year 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 2(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 financial statementsof Thyrocare Technologies Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that 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").

Auditor's 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 under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand whether such controls operated effectively 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
Amar Sunder
Partner
Place: Mumbai Membership No. 078305
Date: 8 May 2021 ICAI UDIN: 21078305AAAAAW4568

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