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U. Y. Fincorp Ltd.

BSE: 530579 Sector: Financials
NSE: N.A. ISIN Code: INE152C01025
BSE 00:00 | 22 Oct 14.50 -0.05
(-0.34%)
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NSE 05:30 | 01 Jan U. Y. Fincorp Ltd
OPEN 14.90
PREVIOUS CLOSE 14.55
VOLUME 160057
52-Week high 19.25
52-Week low 1.75
P/E 21.64
Mkt Cap.(Rs cr) 276
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 14.90
CLOSE 14.55
VOLUME 160057
52-Week high 19.25
52-Week low 1.75
P/E 21.64
Mkt Cap.(Rs cr) 276
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

U. Y. Fincorp Ltd. (UYFINCORP) - Auditors Report

Company auditors report

TO THE MEMBERS OF U.Y. FINCORP LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of U.Y. Fincorp Limited ("the Company") which comprise the Balance Sheet as at March312020 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 theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312020the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis of Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Emphasis of Matter

Note no 32(e) to the standalone financial statements which explains theuncertainties and management's assessment of the financial impact due to thelock-down and other restrictions and conditions related to the COVID-19 pandemicsituation for which a definitive assessment of the impact in subsequent period is highlydependent upon circumstances they evolve.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

SL. Key Audit Matter (KAM) Auditor's Response
1 Transition to Ind AS Our audit procedure includes
In accordance with the roadmap for implementation of Ind AS for non banking financial companies as announced by the Ministry of Corporate Affairs the Company has adopted Ind AS from April 12019 with an effective date of April 1 2018 for such transition. For periods upto and including the year ended March 31 2019 the Company had prepared and presented its financial statements in accordance with the erstwhile generally accepted accounting principles in India (Indian GAAP). In order to give effect of the transition to Ind AS these financial statements for the year ended March 31 2020 together with the comparative financial information for the previous year ended March 312019 and the transition date balance sheet as at April 12018 have been prepared under Ind AS. • Read the Ind AS impact assessment performed by the management to identify areas to be impacted on account of Ind AS transition.
• Understood the financial statement closure process established by the Company for transition to Ind AS.
• Read changes made to the accounting policies in light of the requirements of the new framework.
• Assessed the judgement exercised by the management in applying the first-time adoption principles of Ind AS 101 especially in respect of fair valuation of assets and liabilities existing as at transition date.
• Assessed the judgement applied by the Company in determining its business model for classification of financial assets.
The transition has involved significant change in the Company's policies and processes relating to financial reporting including generation of reliable and supportable information.
Tested the accounting adjustments posted as at the transition date and in respect of the previous year to convert the financial information reported under erstwhile Indian GAAP to Ind AS.
In view of the complexity arising from implementing the
SL. Key Audit Matter (KAM) Auditor's Response
principles of Ind AS at the transition date which could result in a misstatement in these Ind AS financials statements this has been an area of key focus in our audit. Assessed disclosures included in the Ind AS financial statements in accordance with the requirements of Ind AS 101 with respect to the previous periods presented.
2 ImDairment loss allowance of loans and advances We started our audit procedures with the understanding of the internal control environment related to Impairment loss allowance. Our procedures over internal controls focused on recognition and measurement of impairment loss allowance. We assessed the design and tested the operating effectiveness of the selected key controls implemented by the Company. We also assessed whether the impairment methodology used by the Company is in line with the requirements of Ind AS 109 "Financial instruments". More particularly we assessed the approach of the Company regarding the definition of default Probability of Default Loss Given Default and incorporation of forward-looking information for the calculation of ECL. For loans and advances which are assessed for impairment on a portfolio basis we performed particularly the following procedures:
Impairment loss allowance of loans and advances ("Impairment loss allowance") is a key audit matter as the Company has significant credit risk exposure. The value of loans and advances on the balance sheet is significant and there is a high degree of complexity and judgment involved for the Company in estimating individual and collective credit impairment provisions and write-offs against these loans. The Company's model to calculate expected credit loss ("ECL") is inherently complex and judgment is applied in determining the three-stage impairment model ("ECL Model") including the selection and input of forwardlooking information. ECL provision calculations require the use of large volumes of data. The completeness and reliability of data can significantly impact the accuracy of the modelled impairment provisions. The accuracy of data flows and the implementation of related controls are critical for the integrity of the estimated impairment provisions.
• tested the reliability of key data inputs and related management controls;
• checked the stage classification as at the balance sheet date as per definition of default;
• validated the ECL model and calculation by involving our Information Technology Expert;
• calculated the ECL provision manually for a selected sample; and
• assessed the assumptions made by the Company in making accelerated provision considering forward looking information and based on the status of a particular industry as on the reporting date. For loans and advances which are written off during the year under audit we read and understood the methodology and policy laid down and implemented by the Company in this regard along with its compliance on sample basis.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Analysis Board's Report including Annexures to Board's ReportCorporate Governance and Shareholder's Information but does not include thestandalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged With Governance forthe Standalone Financial Statement

The Company's Board of Directors is 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 financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS

and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements Board of Directors isresponsible 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also :

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters 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 wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS 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 thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements as stated in Note No 28 to the Ind ASfinancial statements.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts to the InvestorEducation and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For Das & Prasad

Chartered Accountants (Firm's Registration No.303054E)

Sd/-

Sumit Kumar Rajgarhia

(Partner)

(Membership No. 068270) UDIN - 20068270AAAAAM1255

Place: Kolkata Date: August 07 2020

Annexure - A to the Auditor's Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of U. Y Fincorp Limited ("the Company") as of March 312020 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the Ind AS financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor

Annexure - A to the Auditor's Report (Contd.)

that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 312020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Das & Prasad

Chartered Accountants (Firm's Registration No.303054E)

Sd/-

Sumit Kumar Rajgarhia

(Partner)

(Membership No. 068270) UDIN - 20068270AAAAAM1255

Place: Kolkata Date: August 07 2020

Annexure - B to the Auditor's Report

The Annexure referred to in Independent Auditors' Report to the membersof the Company on the standalone Ind AS financial statements for the period ended March312020 we report that:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of

the fixed assets;

(b) The fixed assets were physically verified during the year underaudit by the Management in accordance with a regular programme of verification which inour opinion provides for physical verification of all the fixed assets at reasonableintervals. According to the information and explanation given to us no materialdiscrepancies were noticed on the such verification;

(c) As per information and explanation given to us by the managementand the records verified by us and based on the examination of the registered sale deed /lease deed provided to us we report that all the immovable properties are held in thename of the Company.

(ii) In our opinion the inventories which include shares indematerialised were verified through demat statement during the year by the Management atreasonable intervals and as explained to us no material discrepancies were noticed onphysical verification.

(iii) In respect of the loans secured or unsecured granted by theCompany to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under Section 189 of the Companies Act 2013:

(a) In our opinion and according to the information given to us theterms and conditions of the loans given by the Company are prima facie not prejudicial tothe interest of the Company.

(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments of principal amounts and /or receipts of interest have beenregular as per stipulations.

(c) There are no overdue amounts in respect of the loan granted to theaforesaid listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanationgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made and guarantee and security provided.

(v) The Company has not accepted any deposit from the public coveredunder Section 73 to 76 of the Companies Act 2013. Therefore the provisions of paragraph3(v) of the Order is not applicable to the Company.

(vi) Being a Non-Banking Financial Company the provisions of paragraph3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the records of the Company undisputed statutorydues including Provident Fund Income Tax Service Tax Cess or other material statutorydues have been generally regularly deposited during the year by the Company withappropriate authorities. According to the information and explanation given to us noundisputed statutory dues including Provident Fund Income Tax Service Tax Value AddedTaxGST Cess or other material statutory dues were in arrears as at March 312020 for aperiod of more than six months from the date they become payable.

(b) According to the information and explanation given to us therewere no disputed dues which have not been deposited by the company on account of disputeas at March 312020

(viii) The Company does not have any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.Accordingly paragraph 3(viii) of the Order is not applicable.

(ix) According to information and explanation given to us the Companyhas not raised moneys by way of initial public offer or further public offer (includingdebt instruments) and term loans during the year ended March 31 2020. Accordinglyparagraph 3(ix) of the Order is not applicable.

(x) Based on the audit procedures performed and the information andexplanations given to us we report that no material fraud on or by the Company has beennoticed or reported during the period nor have we been informed of such case by themanagement;

(xi) According to information and explanation given to us the Companyhas paid or provided managerial remuneration in accordance with the provisions of section197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationgiven to us the Company is not a Nidhi Company and hence the paragraph 3(xii) is notapplicable;

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company

Annexure - B to the Auditor's Report (Contd.)

transactions with the related parties are in compliance with section177 and 188 of the Act where applicable and details of such transactions have beendisclosed in the financial statements as required by the applicable Indian accountingstandards

(xiv) According to information and explanation given to us the Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the period under review;

(xv) According to information and explanation given to us the Companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly the paragraph 3(xv) is not applicable the Company;

(xvi) In our opinion and on the basis of information and explanationgiven to us by the management the Company is required to be registered under section45-IA of the Reserve Bank of India Act 1934 and the company has obtained the necessaryregistration.

For Das & Prasad

Chartered Accountants (Firm's Registration No.303054E)

Sd/-

Sumit Kumar Rajgarhia

(Partner)

(Membership No. 068270) UDIN - 20068270AAAAAM1255

Place: Kolkata

Date: August 07 2020

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