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Ucal Fuel Systems Ltd.

BSE: 500464 Sector: Auto
NSE: UCALFUEL ISIN Code: INE139B01016
BSE 10:48 | 25 Oct 147.10 -1.70
(-1.14%)
OPEN

149.25

HIGH

149.50

LOW

144.05

NSE 10:39 | 25 Oct 146.70 -1.95
(-1.31%)
OPEN

148.05

HIGH

149.35

LOW

145.00

OPEN 149.25
PREVIOUS CLOSE 148.80
VOLUME 1395
52-Week high 206.10
52-Week low 108.20
P/E 7.45
Mkt Cap.(Rs cr) 325
Buy Price 146.45
Buy Qty 1.00
Sell Price 147.10
Sell Qty 19.00
OPEN 149.25
CLOSE 148.80
VOLUME 1395
52-Week high 206.10
52-Week low 108.20
P/E 7.45
Mkt Cap.(Rs cr) 325
Buy Price 146.45
Buy Qty 1.00
Sell Price 147.10
Sell Qty 19.00

Ucal Fuel Systems Ltd. (UCALFUEL) - Auditors Report

Company auditors report

M/S UCAL FUEL SYSTEMS LIMITED

Report on the audit of Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of UCAL FUELSYSTEMS LIMITED ("the Company") which comprise the Balance Sheet as at March31 2021 the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity the Statement of Cash Flows for the year ended on thatdate and Notes to the Financial Statements including a summary of the SignificantAccounting Policies and other explanatory information (hereinafter referred to as‘the Standalone Financial Statements’).

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 Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 the profit (Including OtherComprehensive Income) the changes in Equity and its cash flows for the year ended onthat 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 Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the 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 together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of Matter

We draw attention to:-i. Note 38 (c) forming part of the financial statements for theyear in connection with the non-availability of RBI approval for writing off made duringthe year 2017-18 in respect of Trade receivable and Loan receivable aggregating to`15191.85 Lakhs due from foreign subsidiary (UCAL Holdings Inc. formerly Amtec PrecisionProducts Inc.) Our opinion on the financial statements is not modified in respect of theabove matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of our audit of Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matters Response to Key Audit Matters
1. Evaluation of uncertain tax positions Principal Audit Procedures
The company has material uncertain tax positions including matters under dispute which involved significant judgement to determine the possible impact arising from the outcome of these disputes. We have carried out the validation of the information provided by the management by performing the following procedures:
Refer Note 43 to the standalone financial statements - Evaluating reasonableness of the underlying assumptions
- Examining the relevant documents on record
- Relying on relevant external evidence available including legal opinion relevant judicial precedents and industry practices
- Getting management confirmation wherever necessary

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information in theAnnual Report comprising of the Director’s report and its annexures but does notinclude the Standalone Financial Statements and our auditor’s report thereon.

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 when it is made available and in doing so considerwhether the other information is materially inconsistent with the Standalone FinancialStatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude that ifthere is a material misstatement of this other information we are required to report thatfact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the StandaloneFinancial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134 (5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the Financial Position Financial Performance(including Other Comprehensive Income) Changes in Equity and Cash Flows of the Company inaccordance with Ind AS prescribed under Section 133 of the Act and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS Financial Statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting 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 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 financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143 (3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate Internal Financial Controls system in place and the operating effectivenessof such controls.

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

• Conclude on the appropriateness of management’s use of the going concernbasis 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 conditionsmay cause 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.

Materiality is the magnitude of misstatements in the Standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and quantitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the Financialstatements. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant de_ciencies in Internal Control that we identify during ouraudit.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor’s 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 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 Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the Directors as on 31stMarch 2021 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlswith reference to Standalone Financial Statements.

g) 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 on its financialposition in its Standalone financial statements in Note 43.

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.

2. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143 (11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

3. With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197 (16) of the Act as amended: In ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.

FOR M/s R. SUBRAMANIAN AND COMPANY LLP
Chartered Accountants
ICAI regd. No. 004137S/S200041
K JAYASANKAR
Partner
Place : Chennai Membership No. 014156
Date : 30th June 2021 UDIN: 21014156AAAABA8481

ANNEXURE "A" TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF UCAL FUEL SYSTEMS LIMITED.

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

We have audited the Internal Financial Controls with reference to financial statementsof UCAL FUEL SYSTEMS LIMITED ("the Company") as of March 31 2021 in conjunctionwith our audit of the Standalone 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 and maintaining InternalFinancial Controls based on the Internal Control over Financial Reporting criteriaestablished by the Company considering the essential components of Internal Controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). 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 safeguardingof its 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.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s Internal FinancialControls with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note 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 ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate Internal Financial Controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe Internal Financial Controls System with reference to financial statements and theiroperating effectiveness. Our audit of Internal Financial Controls with reference tofinancial statements included obtaining an understanding of Internal Financial Controlswith reference to financial statements assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the Auditors’judgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany’s Internal Financial Controls System with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company’s Internal Financial Control 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 Controlwith reference to financial statements includes those policies and procedures that:

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

(ii) 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

(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company’s assets that could havea material effect on the financial 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 financial statements to future periods are subject to the risk that theInternal Financial Control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate InternalFinancial Controls System with reference to financial statements and such InternalFinancial Controls with reference to financial statements were operating effectively as atMarch 31 2021 based on the Internal Control over financial reporting criteriaestablished by the Company considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by ICAI.

FOR M/s R. SUBRAMANIAN AND COMPANY LLP
Chartered Accountants
ICAI regd. No. 004137S/S200041
K JAYASANKAR
Partner
Place : Chennai Membership No. 014156
Date : 30th June 2021 UDIN: 21014156AAAABA8481

ANNEXURE "B" TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF UCAL FUEL SYSTEMS LIMITED.

The Annexure referred to in Paragraph 2 under the heading ‘Report on Other Legaland Regulatory Requirements’ of our Report of even date:

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of property plant and equipment;

(b) As explained to us the property plant and equipment have been physically verifiedby the Management at reasonable intervals and the evaluation of the outcome ofverification is in progress. Consequent adjustments if any would be carried out oncompletion of the evaluation.

(c) According to the information and explanations given to us and based on theexamination of the documents provided to us we report that the title deeds of all theimmovable properties of land and buildings as disclosed in the Ind AS financial statementsare held in the name of the Company as at the Balance Sheet date.

(ii) The Management has conducted physical verification of inventory at reasonableintervals and no material discrepancies were noticed.

(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the company has not provided any loans secured orunsecured to companies firms or other parties covered in the register maintained underSection 189 of the Companies Act 2013. Consequently the provisions of clauses iii (a)iii (b) and iii (c) are not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the investments made and guarantees given by it. The Company has notprovided any loans or security to any company covered under Section 185 or 186 of theCompanies Act 2013

(v) The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

(vii) According to the information and explanations given to us in respect of Statutorydues:

(a) The Company is regular in depositing undisputed statutory dues including ProvidentFund Employees’ State Insurance Duty of Customs Goods and Service Tax and othermaterial Statutory Dues to the appropriate authorities advance tax. There were noundisputed amounts payable which were in arrears as at 31st March 2021 for a period ofmore than six months from the date they became payable except as below:

Nature of Dues Amount ` lakhs
Customs Duty 172.98

(b) As per the information and explanations given to us the company the following arethe statutory dues which have not been deposited on account of disputes:

Nature of Dues/Statute Period Amount ` in lakhs* Forum where dispute is pending
Income Tax Act1961 Income Tax AY 2000-01 3.59 High Court of Madras
Income Tax Act1961 Income Tax AY 2003-04 146.58 CIT (Appeals) Chennai
Income Tax Act1961 Income Tax AY 2017-18 388.56 CIT (Appeals) Chennai
Income Tax Act1961 Income Tax AY 2018-19 1561.67 Madras High Court
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 37.50 ETO cum Assessing Officer Gurgaon
Sales Tax and Value Added Tax

TN VAT and CST AY 2011-12 to AY 2015-16

1870.70 High Court of Madras
Sales Tax and Value Added Tax FY 2013-14 – VAT 158.75 Assessing Officer Pondicherry
Sales Tax and Value Added Tax FY 2011-12 – CST 78.16 Assessing Officer Pondicherry
Sales Tax and Value Added Tax FY 2012-13 – CST 210.51 Assessing Officer Pondicherry

*excluding interest

(viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.

(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. The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

(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 the Company has not noticed or reported any fraud by the Company orany fraud on the Company by its Officers or employees during the year.

(xi) In respect of the financial year 2020-21 the managerial remuneration paid orprovided by the company is in accordance with the provisions of section 197 of theCompanies Act 2013.

(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) The Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the Ind AS financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

(xiv) According to the information and explanations given to us and based on ourexamination of records of the company the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting under clause 3 (xiv) of the Order is not applicable tothe Company.

(xv) According to the information and explanations given to us and based on ourexamination of records of the company the Company has not entered into any non-cashtransactions with Directors or persons connected with its Directors. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

FOR M/s R. SUBRAMANIAN AND COMPANY LLP
Chartered Accountants
ICAI regd. No. 004137S/S200041
K JAYASANKAR
Partner
Place : Chennai Membership No. 014156
Date : 30th June 2021 UDIN: 21014156AAAABA8481

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