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Uni Abex Alloy Products Ltd.

BSE: 504605 Sector: Engineering
NSE: N.A. ISIN Code: INE361D01012
BSE 00:00 | 22 May 370.00 -6.20
(-1.65%)
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370.00

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NSE 05:30 | 01 Jan Uni Abex Alloy Products Ltd
OPEN 370.00
PREVIOUS CLOSE 376.20
VOLUME 50
52-Week high 582.85
52-Week low 338.00
P/E 5.22
Mkt Cap.(Rs cr) 73
Buy Price 358.25
Buy Qty 10.00
Sell Price 370.00
Sell Qty 10.00
OPEN 370.00
CLOSE 376.20
VOLUME 50
52-Week high 582.85
52-Week low 338.00
P/E 5.22
Mkt Cap.(Rs cr) 73
Buy Price 358.25
Buy Qty 10.00
Sell Price 370.00
Sell Qty 10.00

Uni Abex Alloy Products Ltd. (UNIABEXALLOY) - Auditors Report

Company auditors report

TO THE MEMBERS OF UNI ABEX ALLOY PRODUCTS LIMITED

Report on the Audit of the Financial Statements

Opinion

1. We have audited the accompanying financial statements of Uni Abex Alloy ProductsLimited (‘the Company') which comprise the Balance Sheet as at 31 March 2019 theStatement Profitand Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (‘Act') in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India including IndianAccounting Standards (‘Ind AS') specified under section 133 of the Act of the stateof affairs (financial position) of the Company as at 31 March 2019 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act.

Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (‘ICAI') together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion these matters.

5. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Valuation of inventory Our procedures included but were not limited to the following:
Refer Note 2(q) to the accompanying financial statements for accounting policy for valuation of inventory balance and refer Note 13 for the closing inventory balance as at 31 March 2019 which comprises of ? 451.23 lacs of Raw material ? 67.99 lacs of Stores and spares ? 2281.15 lacs of work-in- progress and ? 291.66 lacs of finished goods inventory. Obtained an understanding of management process for inventory valuation;
The work-in-progress inventory includes inventory relating to ‘Turnings' which is produced as a by- product in the process of production of ‘Decanters' and consumed again in the production cycle to produce billets and chips. Further the production process of alloy products involve mixing of different types of purchased metals such as nickel ferroalloy chromium and billets. Conducted physical verification of inventory as at 31 March 2019;
The valuation of semi-finished and finished goods is a complex exercise and is carried using standard costing method which is adjusted with the various production and price variances computed manually through excel spreadsheets. The valuation process also involves estimation in determination of: Evaluated design effectiveness and tested the design effectiveness of controls over inventory valuation process;
Overhead absorption rates; Determination of yield; and Tested key inputs used in the valuation process from source documents/ general ledger accounts;
Determination of value of by-products Accordingly valuation of year-end inventory balance which is significant with respect to the total assets held by the Company and which involves complex computations estimates and significant management judgement is considered to be one of the areas which requires significant auditor's attention and therefore determined to be a key audit matter for the current year audit. Tested reconciliation of opening inventory purchase/ production sales and year-end inventory to validate the yield during the year and to identify any abnormal production lossCompared key estimates including those involved in computation of alloy rates and overhead absorption to prior years and enquired reasons for any significant variationsOn a sample basis recomputed the value of inventory and the value of self-generated raw materials items using the management's model of valuation ensuring consistency from previous year and
Tested arithmetical accuracy of valuation calculations.

Information other than the Financial Statements and Auditor's Report thereon

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The Annual Report is expectedto be made available to us after the date of this auditor's report.

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

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

7. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparationofthesefinancialstatements that give atrue and fair view of the state of affairs (financial position) profit and loss(financial performance including other comprehensive income) changes in cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

10. 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 a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

•Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

•Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

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

•Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

•Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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

15. As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

17. Further to our comments in Annexure I as required by section 143(3) of the Actwe 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 purpose 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 financial statements dealt with by this report are in agreement with the booksof account

d) in our opinion the aforesaid financial statements comply with IndAS specified undersection 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2019 from being appointed as a director in terms of section 164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of the financialstatements of the Company for the year ended on that date and our report dated 28 May 2019as per Annexure II expressed unmodified;

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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in note 42 to the financial statements has disclosed theimpact of pending litigations on its financial position as at 31 March 2019;

ii. Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2019;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2019;

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these financial statements. Hence reporting under this clause is notapplicable.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No. 001076N/N500013
Per Khushroo B. Panthaky
Place: Mumbai Partner
Date: 28th May 2019 Membership No.: 42423

ANNEXURE I TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE

TO MEMBERS OF UNI ABEX ALLOY PRODUCTS LTD. ON THE FINANCIAL STATEMENTS AS AT AND FORTHE YEAR ENDED 31 MARCH 2019.

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

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

(b) All property plant and equipment have not been physically verified by themanagement during the year however there is a regular program of verification once inthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (which are included under the head‘Property plant and equipment') are held in the name of the Company.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships(LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable. (iv) In our opinion the Company hascomplied with the provisions of Sections 185 and 186 of the Act in respect of loansinvestments guarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products/services andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. However we have not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues as applicable have generally beenregularly deposited to the appropriate authorities though there has been a slight delayin a few cases. Further no undisputed amounts payable in respect thereof were outstandingat the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:Statement of Disputed Dues

Name of the statute Nature of dues Amount (` in lakhs) Amount paid under Protest (? in Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act 1956 Sales Tax 150.69 29.87 1997-98 1999- 2000 2001-02 2003-04 2011-12 2012-13 2013-14 Commissioner of Sales Tax Appeals
Central Sales Tax Act 1956 Sales Tax 538.33 34.00 2004-05 2010-11 Deputy Commissioner of Sales Tax
Central Sales Tax Act 1956 Sales Tax 44.00 13.00 2013-14 Assit. Commissioner of Sales Tax (Dharwad)
Central Excise Act 1944 CENVAT Credit Disallowance 3.83 - Various years Commissioner of Central Excise (Appeals)
Central Excise Act 1944 CENVAT Credit Disallowance 106.01 - Various years Commissioner of Central Excise (Appeals)
Central Excise Act 1944 CENVAT Credit Disallowance 26.40 - Various years CESTAT

(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or a bank or government or any dues to debenture-holders during theyear.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained though idle/ surplus funds which were notrequired for immediate utilisation have been invested in liquid investments payable ondemand.

(x) In our opinion no fraud by the Company or on the company by its officers oremployees has been noticed or reported during the period covered by our audit.

(xi) The Company has not paid or provided for any managerial remuneration. Accordinglythe provisions of Clause 3(xi) of the Order are not applicable.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

(xiv) During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.

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

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No. 001076N/N500013
Per Khushroo B. Panthaky
Place: Mumbai Partner
Date: 238th May 2019 Membership No. 42423

ANNEXURE II TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE

TO MEMBERS OF UNI ABEX ALLOY PRODUCTS LTD. ON THE FINANCIAL STATEMENTS AS AT AND FORTHE YEAR ENDED 31 MARCH 2019

Annexure II

Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (‘the Act')

1. In conjunction with our audit of the financial statements of Uni Abex Alloy ProductsLimited (‘the Company') as at and for the year ended 31 March 2019 we have auditedthe internal financial controls over financial reporting(‘IFCoFR') of the Company asat that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial based on the internal control over financial reporting criteriaestablished by the Company considering essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance ofadequateinternalfinancialcontrols that wereoperating effectively for ensuring the orderly and efficient conduct of the Company'sbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (‘ICAI') and deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘theGuidance Note') issued by the ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate IFCoFR were established and maintained and if suchcontrols operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 Financial Reporting

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that the IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls wereoperating effectively as at 31 March 2019 based on the internal control over financialreporting criteria established by the Company considering of internal control stated inthe Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Per Khushroo B. Panthaky
Place: Mumbai Partner
Date: 28th May 2019 Membership No. 42423