Report on the Audit of the Standalone Financial StatementsOpinion
We have audited the standalone financial statements of Thyrocare Technologies Limited ("the Company”), which comprise the Balance Sheet as at March 31, 2022, and the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of 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, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, and profit, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the standalone financial statements for the year ended March 31,2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key Audit Matter
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How the matter was addressed in our audit
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Impairment testing of investment in Subsidiary. See Note
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In view of the significance of the matter, we applied the
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2D, 3H and 7A to the Standalone Financial Statements
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following audit procedures in this area, among others to
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The company has significant investment in its wholly owned
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obtain sufficient and appropriate audit evidence:
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subsidiary, Nueclear Healthcare Limited (‘NHL’). The
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a)
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Evaluated the process followed by the Company in
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investment is carried at cost less any impairment. NHL has
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respect of performing the annual impairment analysis
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continued to incur losses since inception and consequently
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of investment in subsidiary.
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the Company is required to perform impairment testing of the
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b)
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Evaluated the design and implementation and tested
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carrying value of the investment at each reporting date.
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the operating effectiveness of the key internal controls
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The company is required to test the investment for indicators
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related to the Company’s process of relating to review
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of existence of impairment if any, annually and frequently
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of the annual impairment analysis, including controls
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as and when there is an indication that the investment may
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over determination of key assumptions underlying
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be impaired.
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the valuation.
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Changes in the business environment can have a significant
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c)
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Evaluated the reasonableness of the assumptions,
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impact on the valuation of these investments. The annual
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particularly forecasted revenue growth rate and related
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impairment testing of the investment in NHL comprises
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costs based on our knowledge of the Company’s
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estimating the recoverable value of the investment by
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business and the nature of its operations. Assessed the
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using the Discounted Forecast Cashflow Model (DCF) and
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reasonableness of the forecast based on comparison
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comparing it with the carrying value of the said investment
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with the actual results till date.
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at the reporting date. In cases where the recoverable value
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d)
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1 nvolved the valuation professionals with specialized
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of the investment is observed to be lower than carrying value
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skills and knowledge to assist in evaluating the valuation
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thereof, an impairment loss is recognized in the statement of
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model used and the underlying assumptions.
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Profit and loss.
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The valuation process involves making significant judgements based on assumptions and estimates as a result the process is complex. There is certain amount of uncertainty involved in forecasting the future cashflows and discounting the same which form the basis of the assessment of recoverability of the investment.
In view of the complexities, judgements and estimates involved in the process and the magnitude of the likely impact, we have identified testing of impairment in the value of investment in NHL as a key audit matter.
The recoverable amount is based on the value in use model and has been derived from discounted forecast cash flow model.
We identified the impairment indicators and resultant provisions, if any, in respect of investment in subsidiary as a key audit matter considering:
a) The significance of the value of these investments in the Standalone Balance Sheet of the Company
b) Performance and net worth of this entity and
c) The degree of judgement involved in determining the recoverable amount of this investment including:
i) Valuation assumptions such as discount rate and terminal growth rate.
ii) Business assumptions such as revenue growth rate, related costs and the resultant cash flows projected to be generated from this investment over period.
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e) Evaluated the assumptions used by the company in performing the impairment analysis such as EBITDA, revenue growth rate, terminal growth rate, discount rate by comparing it to the publicly available to the market indices and industry specific indices.
f) Tested the arithmetical accuracy of the Cashflow Projections and reasonableness of the impairment assessment performed based on the same.
g) Performed a sensitivity analysis to evaluate the impact of changes in key assumptions individually or collectively to the recoverable value.
h) Assessed the adequacy of disclosures in the standalone financial statements.
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Recognition of revenue from sale of testing services. See
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In view of the significance of the matter, we applied the
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Note 2D, 3K and 25 to the Standalone Financial Statements.
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following audit procedures in this area, among others to
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The Company earns a significant amount of revenue from
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obtain sufficient and appropriate audit evidence:
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"testing services”, which is the key stream of revenue presently.
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a) Obtained an understanding of the systems, processes
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Revenue from sale of testing services is recognized at a point
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and controls implemented by the company and evaluated the design and implementation of internal
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in time once the testing samples are analysed for requisitioned diagnostics test. We have identified recognition of revenue
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controls for measuring and recording revenue. b) Tested the design, implementation and operating effectiveness of the Company’s key Information
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from sale of testing services as a key audit matter because
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revenue is the key performance indicator. In addition, there
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Technology (IT) General controls, key IT applications/
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is a risk that revenue is recognized at a point in time different
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manual controls including testing of controls relating to
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from the time of fulfilment of the performance obligation and
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timing of revenue recognition, by involving IT specialists.
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consequent rendering of testing services by the company,
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This includes access controls, change controls, program
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due to pressure to achieve performance targets and to meet
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development controls and IT operation controls;
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external expectations at the year end.
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c) For selected sample of transactions (using statistical sampling), we analysed when the testing samples are processed for requisitioned diagnostic tests and matched it with the timing of recognition of revenue;
d) Tested the reconciliation of revenue recorded as per the Billing system to the revenue recorded as per the Accounting system;
e) 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 evidence of tests conducted and results concluded.
f) Verified manual journal entries, if any, posted to revenue account to identify unusual adjustments to revenue, If any.
g) Verified the adequacy of disclosures in respect of revenue in the standalone financial statements.
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Information Other than the Standalone Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the Director’s report but does not include the standalone financial statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial Statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
We give in "Annexure A” a detailed description of Auditor’s responsibilities for Audit of the Standalone financial statements.
Other Matter
The standalone Ind AS financial statements of the Company for the year ended March 31,2021, were audited by another auditor whose report dated May 08, 2021 expressed an unmodified opinion on those statements.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 ("the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) I n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C”.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 35 to the Standalone Financial Statements;
ii) The Company did not have any longterm contracts including derivative contracts for which there were any material foreseeable losses.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv) 1. The Management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (‘Intermediaries’), with the understanding, whether recorded in writing or otherwise, that the Intermediary has, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries;
2. The Management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons / entities, including foreign entities, that the Company has directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
3. Based on our audit procedures which we have considered reasonable and appropriate in the circumstances and according to the information and explanations provided to us by the Management in this regard, nothing has come to our notice that has caused us to believe that the representations made by the Management under sub-clause (i) and (ii) contain any material misstatement.
3) The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Companies Act 2013.
4. As required by The Companies (Amendment) Act, 2017, in our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is within the limits laid prescribed under Section 197 of the Act and the rules thereunder.
For M S K A & Associates
Chartered Accountants ICAI Firm Registration No. 105047W
Vaijayantimala Belsare
Partner
Membership No. 049902 UDIN: 22049902AIDSRX1487
Place: Mumbai
Date: April 29, 2022
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