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Ucal Fuel Systems Ltd.

BSE: 500464 Sector: Auto
NSE: UCALFUEL ISIN Code: INE139B01016
BSE 00:00 | 22 Mar 165.25 -2.90
(-1.72%)
OPEN

167.35

HIGH

167.45

LOW

165.00

NSE 00:00 | 22 Mar 164.70 -3.00
(-1.79%)
OPEN

168.05

HIGH

168.05

LOW

164.15

OPEN 167.35
PREVIOUS CLOSE 168.15
VOLUME 2376
52-Week high 284.60
52-Week low 147.00
P/E 3.79
Mkt Cap.(Rs cr) 365
Buy Price 165.00
Buy Qty 712.00
Sell Price 170.00
Sell Qty 1.00
OPEN 167.35
CLOSE 168.15
VOLUME 2376
52-Week high 284.60
52-Week low 147.00
P/E 3.79
Mkt Cap.(Rs cr) 365
Buy Price 165.00
Buy Qty 712.00
Sell Price 170.00
Sell Qty 1.00

Ucal Fuel Systems Ltd. (UCALFUEL) - Auditors Report

Company auditors report

FOR THE YEAR ENDED 31st MARCH 2018 TO THE MEMBERS OF UCAL FUEL SYSTEMSLIMITED

Report on the Standalone Indian Accounting standards (Ind AS) Financial Statements

We have audited the accompanying standalone Ind AS financial statements of UCAL FuelSystems Limited ('the Company') which comprises the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit. In conducting our audit we have taken into account theprovisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 and its Loss total comprehensive income itscash flows and the changes in equity for the year ended on that date.

Emphasis of Matters

Without qualifying our opinion we draw attention to Note 37(c). forming part of thefinancial results for the year in respect of the following matters relating to theforeign subsidiary of the Company

i. During the current year receivables amounting to '2854.06 lakhs and loans andadvances amounting to '12337.79 lakhs due to the Company from the foreign subsidiary" Amtec Precision Products Inc. USA (AMTEC) has been written off and the companyhas initiated the process of getting the approval from Reserve Bank of India for suchwrite off.

ii. We also draw your attention to Note 32 forming part of the financial statements forthe year in respect of impairment of investment in the same subsidiary of '20877.28lakhs being technical matter subject to uncertainty we have relied on the estimates andassumptions made by the Company. Accordingly provision for impairment/diminution as on 31stMarch 2018 has not been considered.

Other Matters

1. The comparative financial information of the Company for the year ended 31stMarch 2017 and the transition date opening balance sheet as at 1st April 2016included in these standalone Ind AS financial statements are based on the previouslyissued statutory financial statements prepared in accordance with the Companies(Accounting Standards) Rules 2006 (as amended) audited by previous auditors for the yearended 31st March 2017 and 31st March 2016 dated 30/05/2017 and30/05/2016 respectively expressed an unmodified opinion on those Standalone FinancialStatements. The adjustments to those financial statements for the differences in theaccounting principles adopted by the Company on transition to the Ind AS have been auditedby us.

Our opinion on the Standalone Ind As financial statements and our report on other Legaland Regulatory requirements below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

2. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of Section 143 of the Act wegive in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of thesaid Order to the extent applicable.

3. 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 Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account;

(d) in our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act;

(e) on the basis of written representations received from the directors as on 31stMarch 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B; Our Report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's Internal Financial controls over financialreporting and

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

i. ihe Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No. 44 to the Standalone Ind ASfinancial statements.

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

iii. there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

FOR M/s R. SUBRAMANIAN AND COMPANY LLP
Chartered Accountants
ICAI regd. No. 004137S/S200041
K JAYASANKAR
Place : Chennai Partner
Date : 21st May 2018 Membership No.014156

Annexure A to Independent Auditors' Report - 31st March 2018

(Referred to in our report of even date)

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

(b) As explained to us these fixed assets have been physically verified by themanagement at regular intervals; as informed to us no material discrepancies were noticedon such verification;

(c) According to the information and explanations given to us on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. The inventories have been physically verified by the management during the year. Inour opinion the frequency of physical verification is reasonable. The discrepanciesnoticed on verification between the physical stocks and the book stocks have been properlydealt with in the books of account.

iii. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company during the year has not provided anyloans secured or unsecured to companies firms or other parties covered in the registermaintained under Section 189 of the Companies Act 2013. Consequently the provisions ofclauses iii (a) and iii (b) are not applicable.

iv. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company during the year has not provided any loanor investment or Guarantees or Securities which falls under the purview of Section 185 and186 of the Companies Act 2013. in respect of grant of loans making investments andproviding guarantees and securities as applicable.

v. According to the information and explanations given to us the Company has notaccepted any deposits from the public and consequently the directives issued by theReserve Bank of India and provisions of Section 73 to 76 or any other relevant provisionsof the Companies Act 2013 and Companies (Acceptance of Deposits) amended Rules 2015 arenot applicable.

vi. On the basis of the records produced to us we are of the opinion that primafacie the cost records prescribed by the Central Government under sub-section (1) ofSection 148 of the Act have been made and maintained. However we are not required to andhave not carried out any detailed examination of such records.

vii. According to the information and explanations given to us the Company is regularin depositing with the appropriate authorities the undisputed statutory dues in the caseof Provident Fund Employees' State Insurance Income Tax Service Tax Sales Tax CustomsDuty Goods and service Tax Excise Duty and Cess Value Added Tax and other materialStatutory dues. To the best of our knowledge and according to the information andexplanations given to us there are no arrears of outstanding statutory dues as at March31 2018 for a period of more than six months from the date they become payable.

As per the information and explanations given to us following are the statutory dueswhich have not been deposited on account of disputes.

Statutory Dues

Nature of Dues / Statute Nature of the Dues Amount Rs. In lakhs Forum where dispute is pending
Income Tax Act Income Tax -AY-2000-01 3.59 High Court of Madras
Income Tax Act Income Tax -AY-2003-04 146.58 CIT (Appeals) Chennai
Central Excise Act Central Excise - (August 2003 - June-2004) 1.83 Asst Commissioner of GST & Central Excise Maraimalainagar Division

 

Nature of Dues / Statute Nature of the Dues Amount Rs. In lakhs Forum where dispute is pending
Central Excise Act Central Excise - (April 2015- November2016) 37.67 Asst Commissioner of GST & Central Excise Maraimalainagar Division
Sales Tax and Value Added Tax Central Sales Tax - FY 2006-07 - Plant 8 4.77 Additional Deputy Commissioner (Appellate) Chennai
Sales Tax and Value Added Tax Haryana -VAT-AY 2014-15 50.93 ETO cum Assessing Officer Gurgaon

viii) On the basis of verification of records and according to the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to Financial Institutions/banks Government or dues to Debenture holders.

ix) In our opinion and according to the information and explanations given to us theterm loans availed by the Company have been applied for the purpose for which they wereobtained. In our opinion and according to the information and explanations given to usthe Company has not raised monies by way of initial public offer (including debtinstruments) during the year and hence his clause is not applicable.

x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given tous by the Management no fraud has been noticed or reported during the year.

xi) In respect of the financial year 2017-18 the company has paid or providedManagerial remuneration in accordance with the approvals by the Ministry of CompanyAffairs Government of India vide their letter dated 12th July 2017.

xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and reporting under clause 3 (xii) of the order is notapplicable.

xiii) According to the information and explanations given to us and based on ourexamination of records of the company transactions with related parties are in compliancewith sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the Ind As Standalone financial statements as required by theapplicable Indian accounting standards.

xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause 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 of the company the Company has not entered into any non-cashtransactions with its directors or persons connected with its Directors.

xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

FOR M/s R. SUBRAMANIAN AND COMPANY LLP
Chartered Accountants
ICAI regd. No. 004137S/S200041
K JAYASANKAR
Place : Chennai Partner
Date : 21st May 2018 Membership No.014156

Annexure - B to the Independent Auditors' Report - 31st March 2018 (Referredto in our report of even date)

Report on the Internal Financial Controls under clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (" the Act")

1. We have audited the internal financial controls over financial reporting of UCALFuel Systems Limited ("the Company") as of March 31 2018 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

Managements' Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. 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 systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

c) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial control system with reference to financial statements and such internalfinancial controls over financial reporting were operating effectively as at March 312018 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India.

FOR M/s R. SUBRAMANIAN AND COMPANY LLP
Chartered Accountants
ICAI regd. No. 004137S/S200041
K JAYASANKAR
Place : Chennai Partner
Date : 21st May 2018 Membership No.014156