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Easun Reyrolle Ltd.

BSE: 532751 Sector: Engineering
NSE: EASUNREYRL ISIN Code: INE268C01029
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OPEN 2.98
CLOSE 2.85
VOLUME 2302
52-Week high 3.47
52-Week low 1.74
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Easun Reyrolle Ltd. (EASUNREYRL) - Auditors Report

Company auditors report

To

Members of Easun Reyrolle Limited

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the standalone financial statements of EasunReyrolle Limited ("theCompany") which comprise the Balance Sheet as at March 31 2019 and the Statementof Profit and Loss (including Other Comprehensive Income) the Statement of Cash Flows andthe Statement of Changes in Equity for the year then ended and notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report 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 accounting principlesgenerally accepted in India including Indian Accounting Standards (‘Ind AS')specified under section 133 of the Act of the state of affairs of the Company as at March31 2019 and its loss including other comprehensive income its changes in equity andcash flows for the year ended on that date.

Basis for Qualified Opinion

1. Note 44 to the Financial Statements relating to balances due from and due by thecompany towards Long Term / Short Term borrowings balances with banks debtors includingdues from various electricity boards and creditors for supplies and erections andexecution of projects net off adjustments and including debit balances in creditoraccounts and credit balances in debtors account advances other current assets andcurrent liabilities in respect of which confirmations have not been received. Pendingreceipt of confirmation of balances and consequent adjustments arising on account of suchreconciliations if any including differences arising on account of netted off balances ofcertain debtors and creditors if any and the resultant impact on the financial statementsincluding the operating results is not ascertainable at this stage.

2. Note 45 to the Financial Statements which explains the aspects relating to projectsunder Turn-Key basis undertaken by the company. There are no confirmations from thecustomers on the status of the project. However the management has provided itsassertions and estimates in respect of stage of completion costs to completion includingprovisions made for supplies to be effected and installation activities to be implementedand on the projections of revenues expected from projects and releasability of work inprogress and project receivables whether confirmed or otherwise. Therefore owing to thetechnical nature of such estimates on the basis of which profits / losses of such turnkeyprojects have been accounted we are unable to express our view on the appropriateness ofthe management's estimates including its assertions and its implications on the operationsof the company.

3. Note 46 to the Financial Statements relating to Liquidated Damages recovered by thecustomers from running bills amounting to Rs.1224.75 lakhs and encashment of bank

guarantees given by the company amounting to Rs.7500.89 lakhs (net) shown recoverablefrom parties in respect of which negotiation with the customers are stated to be inprogress and part of these recoverable are sub-judice. In the opinion of the managementthe levy of liquidity damages and encashment bank guarantees for non-compliances of thecontract terms by the customers is completely incorrect and the company envisages noobligation and in the opinion of the company no claim shall be entertainable. Pending theoutcome of legal proceedings and negotiations with customers the eventual impact is notquantifiable and the same is not provided for. In the absence of current status of theongoing proceedings and the negotiations we are unable to express our opinion on theappropriateness of the management's assessment in this regard resulting innon-provisioning of the relevant receivables.

4. Note 47 of the Financial Statements relating to company's borrowings from variouslenders were classified as NPA (Non-Performing Assets). Consequently the company madeproposals for settlement of the dues with the lenders (for Term Loans and Demand Loans).Based on which no interest has been provided including for the current year. In theabsence of any sanction from the lenders we are unable to express our opinion on thevalidity of the reversal of unpaid interest in the earlier years as well as non-provisionof interest for the current year is dependent on the final outcome of the settlementproposals filed by the Company. The company has not quantified the impact of suchnonprovisioning of interest of debts outstanding.

5. Note 48 of the Financial Statements the company's inventory amounting toRs.6880.56 lakhs mostly comprising slow moving and non-moving inventories (includinginventory pertaining to ‘Metering Business' amounting to Rs.350.51 lakhs for whichthe Company is pursuing alternate utilisation) which has not been tested for any potentialimpact on account of obsolescence. We are therefore unable to express our opinion on theappropriateness of the carrying value stated in the Financial Statements.

6. Note 49 of the Financial Statements which explains that the company is in theprocess of reconciling and complying with required filings as required under theapplicable laws. We are unable to comment on the possible implications in terms ofpenalties and other levies that could possibly be levied on the company which is notdetermined by the company at this time and the implications of going concern ability onaccount of these non-compliances is also not determinable at this stage.

7. Note 50 to the Financial Statements which explains the Advance to Vendors amountingto Rs.542.78 lakhs out of which amount due for more than three years is Rs.445.12 lakhs.The management explained that these advances are under negotiation for recovery oradjustment against dues. However in the absence of any information to substantiate thestated process we are unable to express our opinion on the appropriateness of the amountstated as Advances to Vendors in terms of their recoverability / adjustability.

8. Note 51 to the Financial Statements the company is in the process of filings withappropriate authorities (as required under The Foreign Exchange Management Act 1999)letters seeking regularisation of various delays in regard to (i) recovery of duesreceivable from foreign customers amounting to Rs.590.75 lakhs; (ii) recovery of advancesto associate enterprises to the extent of Rs.2928.69 lakhs financial implications if anyarising on account of such non-compliance is unascertainable at this stage.

9. Note 52 relating to the Financial Statements explaining the pending position ofvarious litigations involving claims against and made by the company and the management

assessment of these pending litigations indicate that there is no provision that iswarranted at this stage. However in the absence of any independent assessment by legalexperts on the merits of the ongoing litigations the amount of provision that may bewarranted is not quantifiable at this stage.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our Qualified Opinion.

Material Uncertainty Related to Going Concern

Note 53 to the Financial Statements notwithstanding various unmitigated uncertaintiesexplained above including (i) current liabilities in excess of current assets with unpaidfinancial obligations to lenders and dues to statutory authorities and non complianceunder various statutes (ii) incurring operating losses continuously poses significantuncertainty on the ability of the company to continue as going concern however pendingthe outcome of different proposals with lenders and other initiatives such as disposal ofnon core assets and infusion of additional capital by the promotors and taking intoaccount the product range the company manufactures and their strong underlying demand themanagement is confident of arriving at an implementable revival of operations to make thecompany sustainable in its operations hence the Financial Statements have been prepared onthe basis of going concern. We are of the opinion that the appropriateness of assumptionof going concern is significantly dependent upon Company's ability to reach an agreementwith lenders and raise requisite additional finance and generate cash flows to meet itsobligations including the increasing current ratio.

Our Opinion is not qualified in respect of this matter.

Emphasis of Matter

1. Note 54 to the Financial Statements relating to stock in Transit lying at CustomsBonded Warehouse for Rs.580.17 lakhs are subject to confirmation from customs department.Out of the above inventory valuing Rs.255.66 lakhsis pending clearance from CustomsWarehouse for more than 3 years and in respect of which impairment if any is notascertainable at this stage.

2. Note 55 to the Financial Statements notwithstanding the erosion in the net worth ofsubsidiaries including overseas subsidiaries no impairment is considered necessary inview of management's assessment that the investments are of long term strategic in natureand short-term aberrations if any are not considered.

3. Note 56 to the Financial Statements explains the recoverability of Earnest MoneyDeposit to be recoverable from the customers amounting to Rs.184.09 lakhs. The managementasserts that it is in the process of negotiating with customers for recovery of thesedeposits on completion of certain warranty conditions. Pending the compliance with the

warranty conditions and based on the ongoing negotiations the amount ofirrecoverability if any is unascertainable hence no provision is contemplated in thisregard.

Our Opinion is not qualified in respect of these matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon except for the matter describedin the Basis for Qualified Opinion paragraph and Material Uncertainty Related to GoingConcern paragraph we have determined that there are no other key audit matters tocommunicate in our Report.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the management discussion and analysisBoard's Report including annexures to Board's Report and Report on Corporate Governancebut does not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we will 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

Other Information is not made available to us at the date of this auditor's Report. Wehave 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 Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under section 133 of theAct read with relevant rules issued thereunder. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; the selection and application of appropriate accounting policies;making judgments and the estimates that are reasonable and prudent; and the 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 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 management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters

related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those 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 standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of 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 concern basisof accounting 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 our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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.

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

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 the matter orwhen 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 ‘the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Sub section (11) ofSection 143 of the Act we give in the "Annexure A" statement on the mattersspecified in the paragraph 3 and 4 of the order.

2. As required by Section 143 (3) of the Act we report that:

a) Except for the effects of the matters described in the Basis for Qualified OpinionParagraph above we have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purpose of our audit.

b) Except for the effects of the matter described in the Basis for Qualified OpinionParagraph above in our opinion proper books of account as required by law have been keptby the Company so far as appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified OpinionParagraph above in our opinion the aforesaid Standalone Financial Statementscomply withthe Indian Accounting Standards specified under Section 133 of the Companies Act 2013readwith Rule 7 of the Companies (Accounts) Rules 2014

e) The matter described in the Basis for Qualified Opinion Paragraph and Paragraphrelated to Material uncertainty Related to Going Concern in our opinion may have anadverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2019 from being appointed as a director in terms of Section 164(2) of theAct.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion Paragraph above.

h) With respect to the adequacy of the Internal financial control over financialreporting of the company and operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

i) With respect to the other matters to be included in the Auditors Report inaccordance with the requirements of section 197(16) of the Companies Act 2013 asamended 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 Companies Act 2013 and isnot in excess of the limit laid down under this section.

j) With respect to the other matters to be included Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the bestof 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 StandaloneFinancial Statements.Refer Note 37 to the Standalone FinancialStatements and Paragraph 9 of Basis for Qualified Opinion Section;

ii. The Company has disclosed the impact of material foreseeable losses on long termcontracts including derivative contracts in Note 37 45 46 47 50 52 55 and 56 ofStandalone Financial Statements;

iii. There are no amounts which were required to be transferred to the InvestorEducationand Protection Fund by the Company.

For K S Rao & Co.

Chartered Accountants Firm Registration No. 003109S

K. Krishna Chaitanya

Partner

Membership No. 231282

Place : Chennai

Date : 26th October 2019

Annexure "A" to the Independent Auditor's Report

Referred to in Clause 1 of "Report on Other Legal and RegulatoryRequirements" Paragraph of the Independent Auditors' Report of even date the membersof "EasunReyrolle Limited" on the Standalone Ind AS Financial Statements as ofand for the year ended March 31 2019.

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

(b) As explained to us fixed assets have been physically verified by the management atregular intervals which however in our opinion needs to be strengthened further havingregard to the size of the company and nature of assets. As informed to us no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the Balance Sheet date.

(ii) (a) The Stock of Finished Goods Stores and Spare Parts and Raw Materials exceptstock

lying with sub-contractors and project sites for which confirmation have been soughtfor have been physically verified by the Company at year end as per programme ofverification drawn up by the management.

(b) In our opinion the procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the company andnature of its business.

(c) On the basis of the records examined by us and relying on the information providedto us in our opinion the Company is maintaining proper records of inventories and nomaterial discrepancies were noticed on physical verification as compared to the bookrecord of inventories.

(iii) The Company has granted interest free advances to wholly owned overseassubsidiary and two step down subsidiaries. The outstanding balance at year end amounted toRs.2928.69 lakhs.

(a) The terms of advance given are not prima facie prejudicial to the interests of thecompany.

(b) In the absence of any specific terms as regards the terms of advance and terms ofrepayment of the advances given we are unable to comment about the recovery of interestand principal due on those advances provided.

(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 Act with respectto the loans given investments made guarantees given and securities given.

(v) In our opinion and according to the information and explanation given to us theCompany has not accepted deposits from the public during this year and does not have anyunclaimed deposits as at March 31 2019. Therefore the provisions of clause (v) of theCompanies (Auditor's Report) Order 2016 are not applicable to the company.

(vi) We have broadly reviewed the books of account and records maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of Company's productsand are of the opinion that prima facie the records maintained by the company are to beaugmented. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) According to the information and explanation given to us in respect of statutorydues:

(a) The undisputed statutory dues including provident fund employee's state insuranceincome tax sales tax service tax duty of custom duty of excise value added tax cessand other material statutory dues as applicable have not been regularly deposited withthe appropriate authorities and there have been significant delays.

Undisputed statutory dues payable in respect thereof which were outstanding at theyear- end for a period of more than six months from the date they became payable are asfollows:

Name of the Statute Nature of Dues Amount Period to which the amount relates Date of Payment
Employees Provident Funds and Miscellaneous Provisions Act 1952 Provident Fund 348.02 November 2015 to March 2019 Yet to be remitted
Interest payable 101.73 November 2015 to March 2019 Yet to be remitted
Penalty payable 211.94 November 2015 to March 2019 Yet to be remitted
The Tamilnadu Panchayats Act 1994 Professional Tax- Hosur 19.06 April 2015 to March 2019 Yet to be remitted
The Maharashtra State Tax on profession trads callings and employments Act 1979 Professional Tax- Mumbai 0.11 April 2015 to March 2019 Yet to be remitted
The West Bengal State Tax on profession trads callings and employments Act 1979 Professional Tax- Kolkata 0.45 April 2015 to March 2019 Yet to be remitted
Tax Deducted at Source (TDS) 168.16 April 2016 to March 2019
Income Tax Act 1961 Interest payable 73.96 April 2016 to March 2019 Yet to be remitted
Inspection/ Warehouse Charges/late filing 19.91 April 2016 to March 2019
The Central Sales Tax Act1956 Central Sales Tax - Hosur 66.80 January 2015 to June 2016 Yet to be remitted
The Central Sales Tax Act1956 Interest payable 58.64 January 2015 to June 2016 Yet to be remitted
- do - Central Sales Tax - MP 4.52 April 2015 to March 2019 - do -
- do - Interest payable 0.36 April 2015 to March 2019 - do -
Tamil Nadu Value Added Tax Act 2006 Value Added Tax - Hosur 10.70 March 2013 Yet to be remitted
Chhattisgarh Value Added Tax Act 2003 Value Added Tax - Chhattisgarh 3.99 March 2013 to February 2016 Yet to be remitted
- do - Interest payable 2.17 March 2013 to February 2016 - do -
Chapter V of the Finance Act 1994 Service Tax - Madhya Pradesh 91.36 April 2010 to March 2016 Yet to be remitted
- do - Interest payable 103.33 April 2010 to March 2016 - do -
- do - Late filing fee payable 1.40 April 2010 to March 2016 - do -
- do - Service Tax - Maharashtra 2.26 April 2010 to September 2010 - do -
- do - Interest payable 2.66 April 2010 to September 2010 - do -
- do - Late filing fee payable 1.40 April 2010 to September 2010 - do -
- do - Service Tax - Harohalli 0.90 October 2014 to March 2015 - do -
- do - Interest payable 0.99 October 2014 to March 2015 - do -
- do - Late filing fee payable 1.00 October 2014 to March 2015 - do -
- do - Service Tax - Chhattisgarh 7.78 October 2013 to March 2015 - do -
- do - Interest payable 9.03 October 2013 to March 2015 - do -
- do - Late filing fee payable 1.40 October 2013 to March 2015 - do -
Goods and Services Tax Act 2017 GST Hosur 72.36 Sept- 2017 - March -2019 Yet to be remitted
- do - Interest payable 13.87 Sept- 2017 - March -2019 - do -
- do - Late filing fee payable 1.35 Sept- 2017 - March -2019 - do -

(b) According to the information and explanations given to us the details of dues ofIncome tax which is not deposited on account of dispute as on March 31 2019 is givenbelow:

Nature of Statute Nature of Dues Tax Amount Disputed (Rs. In Lakhs Period to which the amount relates Forum where the dispute is pending
Income Tax Act1961 Income Tax *47.85 2002-03 Tribunal (Appeals)
Income Tax Act1961 Income Tax *26.13 2003-04 Tribunal (Appeals)
Income Tax Act1961 Income Tax #55.42 2005-06 CIT (Appeals)
Income Tax Act1961 Income Tax 59.72 2006-07 CIT (Appeals)
Income Tax Act1961 Income Tax *306.33 2007-08 CIT (Appeals)
Income Tax Act1961 Income Tax @57.59 2008-09 CIT (Appeals)
Income Tax Act1961 Income Tax @2012.79 2009-10 CIT (Appeals)
Income Tax Act1961 Income Tax @108.86 2010-11 CIT (Appeals)
Income Tax Act1961 Income Tax @63.81 2011-12 CIT (Appeals)
West Bengal Value Added Tax Act 2003 Value Added Tax @6.18 2009-10 VAT (Appeals)
Customs Act1962 Customs Tax #66.38 2011-12 CESTAT
Tamil Nadu Value Added Tax Act 2006 CST &37.98 2006-07 -
Tamil Nadu Value Added Tax Act 2006 CST @8.38 2007-08 -
Tamil Nadu Value Added Tax Act 2006 CST @29.63 2008-09 -
Nature of Statute Nature of Dues Tax Amount Disputed (Rs. In Lakhs Period to which the amount relates Forum where the dispute is pending
Tamil Nadu Value Added Tax Act 2006 CST @30.44 2009-10 -
The Maharashtra Value Added Tax Act2002 Value Added Tax @46.87 2008-09 Deputy Commissioner. of Sales Tax (Appeals)-1 Mumbai
The Central Sales Tax Act1956 Central Sales Tax @125.13 2008-09 Deputy Commissioner. of Sales Tax (Appeals)-1 Mumbai
The Maharashtra Value Added Tax Act2002 Value Added Tax @42.92 2010-11 Deputy Commissioner Of State Tax (MUM- VAT-E-810) Nodal Div.-2 Mumbai
The Central Sales Tax Act1956 Central Sales Tax @194.33 2010-11 Deputy Commissioner Of State Tax (MUM- VAT-E-810) Nodal Div.-2 Mumbai
The Maharashtra Value Added Tax Act2002 Value Added Tax @177.94 2011-12 Sales Tax Officer (C-813) Nodal Div.2 Mumbai-10
The Central Sales Tax Act1956 Central Sales Tax @33.69 2011-12 Sales Tax Officer (C-813) Nodal Div.2 Mumbai-10
The Maharashtra Value Added Tax Act2002 Value Added Tax @4.90 2012-13 Sales Tax Officer (C-813) Nodal Div.2 Mumbai-10
Chapter V of the Finance Act1994 Service Tax @26.29 April 2011 to March 2014 Superintendent (Service Tax) Office of the AC Service Tax Div. Raipur (C.G)
Madhya Pradesh Value Added Tax Act2001 Value Added Tax @256.89 1995 - 2000 Collector of Chennai - Lt. from Additional Collector/ Deputy Commissioner CT Bhopal Div.1 No.2308 Dated 01.09.2016
Nature of Statute Nature of Dues Tax Amount Disputed (Rs. In Lakhs Period to which the amount relates Forum where the dispute is pending
The Central Sales Tax Act1956 Central Sales Tax @1.20 2010-11 Appellate Board M.P Commercial Tax Bhopal
The Central Sales Tax Act1956 Central Sales Tax @5.57 2010-11 Appellate Board M.P Commercial Tax Bhopal
The Central Sales Tax Act1956 Central Sales Tax @3.79 2009 - 10 - do -
Madhya Pradesh Value Added Tax Act2001 Value Added Tax @95.57 2012 - 13 Commercial Tax Officer & Additional Tahsildar Office of AC Commercial Tax Circle-6 Div-1 Bhopal M.P
Entry Tax Act 1976 Entry Tax @27.57 2012 - 13 - do -
The Central Sales Tax Act1956 Central Sales Tax @27.57 2012 - 13 - do -
Madhya Pradesh Value Added Tax Act2001 Value Added Tax @158.19 2013 - 14 - do -
The Central Sales Tax Act 1956 Central Sales Tax @41.35 2013 - 14 - do -
The Central Sales Tax Act 1956 Central Sales Tax @204.65 2013 - 14 - do -
Madhya Pradesh Value Added Tax Act2001 Value Added Tax @46.05 2014 - 15 - do -
Entry Tax Act1976 Entry Tax @7.87 2014 - 15 - do -
The Central Sales Tax Act 1956 Central Sales Tax @22.99 2014 - 15 - do -

# paid

* Adjusted against refund @ Unpaid

& Rs.5 Lakhs paid Rs.14.21 Lakhs adjusted against refund and Balance not paid

(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 a financial institution bank government or dues to debenture holders as on reportingdate except

Bank/ Financial Institution Nature of dues Amount (Rs.in lakhs) Due date Actual date of payment
DBS Bank External Commercial Borrowing 2593.92 Feb-15 to Feb-17 Yet to be paid
Standard Chartered Bank External Commercial Borrowing 1729.28 27/06/2018

Yet to be paid

Cash Credit 1651.83 24/07/2018
Working Capital Demand Loan 1714.00 24/07/2018
Packing Credit 816.00 24/07/2018
State Bank of India Cash Credit 11518.07 02/07/2018 Yet to be paid
Axis Bank Cash Credit 1015.94 13/07/2018

Yet to be paid

Letter of Credit/ Bank Guarantee devolved 2188.40 13/07/2018
Bills Discounting Facility 13.77 01/04/2018
Canara Bank Cash Credit 3921.93 07/06/2018 Yet to be paid

(ix) According to the information and explanations given to us and based on theverification of records and documents the Company has not raised moneys by way of initialpublic offer or further public offer (including debt instruments) or term loans during theyear and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company.

(x) According to the information and explanations given to us and based on theverification of examination of records of the Company carried in accordance with theauditing standards generally accepted in India we have neither come across any instanceof fraud on or by the Company noticed or reported during the course of our audit nor havewe been informed of any such instance by the management of the company.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Therefore the provisions of Clause (xii) of Paragraph 3of the Order are not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act. Where applicable the details of suchtransactions have been disclosed in the Standalone Financial Statements as required by theapplicable 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 duringthe year. Therefore the provisions of Clause (xiv) of Paragraph 3 of the Order are notapplicable.

(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 directors or persons connected with them covered under section 192 ofthe Companies Act 2013. Therefore the provisions of Clause (xv) of Paragraph 3 of theOrder are not applicable.

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934. Therefore the provisions ofClause (xvi) of Paragraph 3 of the Order is not applicable to the company.

For K S Rao & Co.
Chartered Accountants
Firm Registration No. 003109S
Place : Chennai K. Krishna Chaitanya
Date : 26th October 2019 Partner
Membership No. 231282

Annexure "B" to the Independent Auditor's Report

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 over financial reporting of EasunReyrolle Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the StandaloneFinancial Statements of the Company for the year ended on thatdate.

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 control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

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.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone 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 (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 StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneFinancial Statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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.

Basis for Qualified Opinion

According to the information and explanations given to us and based on the reportsissued on internal controls over financial reporting certain material weakness have beenidentified as at March 31 2019 concerning design and implementation of internal controlcomponents which as represented by the management are in the process of being remediated.A ‘material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the annual or internal financial statements will not beprevented or detected on a timely basis.

Qualified Opinion

In our opinion except for the possible effects of the material weaknesses described inthe Basis for Qualified Opinion Paragraph in all material respects maintained adequateinternal financial control over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For K S Rao & Co.
Chartered Accountants
Firm Registration No. 003109S
Place : Chennai K. Krishna Chaitanya
Date : 26th October 2019 Partner
Membership No. 231282

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