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Euro Leder Fashion Ltd.

BSE: 526468 Sector: Others
NSE: N.A. ISIN Code: INE940E01011
BSE 00:00 | 03 Dec 12.88 -0.66
(-4.87%)
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NSE 05:30 | 01 Jan Euro Leder Fashion Ltd
OPEN 14.20
PREVIOUS CLOSE 13.54
VOLUME 3099
52-Week high 23.75
52-Week low 11.67
P/E 29.95
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 14.20
CLOSE 13.54
VOLUME 3099
52-Week high 23.75
52-Week low 11.67
P/E 29.95
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Euro Leder Fashion Ltd. (EUROLEDERFASH) - Auditors Report

Company auditors report

To the Members of Euro Leder Fashion Limited

Opinion

We have audited the accompanying Standalone financial statements of Euro Leder FashionLimited (hereinafter referred to as "the Company") comprising of the BalanceSheet as at 31st March 2021 the Statement of Profit and Loss the Statement of Changesin Equity and the Statement of Cash Flows for the year then ended and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the companyas at March 31 2021; and its Profit Total Comprehensive Income the changes in Equityand Cash Flows for the year ended on that date.

Basis for Opinion

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 opinion.

Key Audit Matters

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 on these matters.

No Key Audit Matter Auditors' Response
1 Revenue Recognition Sale of Goods We have performed the following principal audit procedures in relation to revenue recognised.
Revenue from sale of goods is recognized when the control of goods is transferred to the customers. In terms of the application of the new revenue accounting standard Ind AS 115 (Revenue from Contracts with Customers) for some contracts control is transferred either when the product is delivered to the customer's site or when the product is shipped depending on the applicable terms. The Management has exercised judgement in applying the revenue accounting policy while recognising revenue. Understood the revenue recognition process evaluated the design and implementation and operating effectiveness of internal controls relating to revenue recognised.
Selected samples and tested the operating effectiveness of internal controls relating to transfer of control. W e carried out a combination of procedures involving enquiry observation and inspection of evidence in respect of operation of these controls.
Tested the relevant information technology general controls automated controls and the related information used in recording and disclosing revenue.
In respect of the selected sample of transactions:
o Tested whether the revenue is recognised upon transfer of control to customer.
o We have evaluated the delivery and shipping terms of the contracts for revenue recognised during the period.
o We have also tested the location stock reports from Company warehouses where applicable for confirmation on sales quantity made during the year.
o Tested that the revenue recorded is after considering the applicable rebates and discounts.
o For samples near to period end tested the acknowledgments of customers.
2.Property Plant and Equipment We have done verification of controls in place over the fixed assets cycle evaluated the appropriateness of capitalisation process performed tests to verify the capitalised costs assessed the timelines of the capitalisation of the assets and assessed the derecognition criteria for assets retired from active use.
Management judgement is utilised for determining the carrying value of property plant and equipment intangible assets and their respective depreciation/ amortization rates. These include the decision to capitalise or expense costs; the annual asset life review; the timelines of the capitalisation of assets and the measurement and recognition criteria for assets retired from active use. Useful life review of assets has been assessed by the management. In performing these procedures we reviewed the judgements made by management including the nature of underlying costs capitalised; determination of realizable value of the assets retired from active use; the appropriateness of asset lives applied in the calculation of depreciation/ amortization; and the useful lives of assets prescribed in Schedule II of the Companies Act 2013.
Please refer accounting policy.
3 Provisions and Contingent Liabilities Our audit procedure in response to same is included among others
The Company is involved in certain legal and tax disputes and the assessment of the risks associated with the litigations is based on Management assumptions which require the use of judgment and such judgment relates primarily to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings. Assessment of the process to identify legal and tax litigations and pending administrative proceedings.
Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the Company considering the legal precedence and other rulings/judgement in similar cases. Analysis of opinion received from the tax consultant where available.
Review of the adequacy of the disclosures in the notes to the financial statements.

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sreport Management discussion and analysis and Report on corporate governance but doesnot 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 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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is no materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

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.

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

Auditor's Responsibilities for the Audit of the 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 a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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.

Paragraph 40(b) of this SA explains that the shaded material below can be located in anAppendix to the auditor's report. Paragraph 40(c) explains that when law regulation orapplicable auditing standards expressly permit reference can be made to a website of anappropriate authority that contains the description of the auditor's responsibilitiesrather than including this material in the auditor's report provided that the descriptionon the website addresses and is not inconsistent with the description of the auditor'sresponsibilities below.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the financial statements whether due to fraud or errordesign and perform audit procedures responsive to those risks and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control. Obtain an understanding ofinternal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 weare also responsible for expressing our opinion on whether the company has adequateinternal financial controls system in place and the operating effectiveness of suchcontrols.

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 exists we are required to draw attention inour auditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based 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.

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 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act based on the comments in the auditors' reports of the Company we give in theAnnexure-A statement on the matters specified in paragraphs 3 and 4 of the Order to theextent applicable.

2. As required by Section 143(3) of the Act we report to the extent applicable 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 of the aforesaidStandalone financial statements.

(b) In our opinion proper books of account as required by law relating to preparationof the aforesaid Standalone financial statements have been kept so far as it appears fromour examination of those books and the reports of the other auditors.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the relevant books of account maintainedfor the purpose of preparation of the Standalone financial statements.

(d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified 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 of theCompany as on 31st March 2021 taken on record by the Board of Directors of the Companynone of the directors of the Company are disqualified as on 31st March 2021 from beingappointed as a director in terms of Section 164 (2) of the Act. Further Mr. R M Lakshmanan(DIN:00039603) who was disqualified by Registrar of Companies Chennai under section164(2) of the Companies Act 2013 for a period of 5 years and consequently demitted theoffice of Director of the Company Suffering a loss of income with impugned notificationundue hardship huge reputation and prejudice Mr. Lakshmanan filed a Writ Petition withMadras High Court for an interim injunction staying the operation of the said impugnednotification with a prayer permitting him to continue as director of Euro Leder FashionLimited.

The Honourable High Court of Madras vide its order dated 18th December 2020 allowedthe writ petition directed ROC Chennai to activate his DIN and continue as Director innon-defaulting companies. Accordingly Mr. Lakshmanan has been proposed to be appointed asManaging Director of the Company on 28th June 2021.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Group and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

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

i. There were no pending litigations which would impact the financial position of theCompany.

ii. The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts.

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

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in Paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of Euro LederFashion Limited ("the Company") on the accounts of the company for the periodended 31st March 2021]

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

(b) The fixed assets have been physically verified by the management at reasonableintervals; no material discrepancies were noticed on such verification.

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

2. The inventory has been physically verified during the year by the management atreasonable intervals.In our opinion and according to the information and explanationsgiven to us the procedures for physical verification of inventory followed by themanagement were reasonable and adequate in relation to the size of the company and thenature of its business. In our opinion the company has maintained proper records ofinventory. We are informed that no major discrepancies were noticed on verificationbetween the physical stock and book records.

3. According to the information given to us the Company has not granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013. Thereforeclauses (iii) (a) (iii) (b) and (iii) (c) of Paragraph 3 of the Order are not applicableto the Company.

4. The company has followed the provisions of Section 185 and 186 of Companies Act inrespect of loans investments guarantees and securities.

5. The Company has not accepted any deposits from the public within the meaning of thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed thereunder

6. The provisions of the order made by the Central Government for the maintenance ofcost records under Section 148(1) of the Companies Act 2013 do not apply to the Company.

7. (a) According to the information and explanation given to us and based on therecords of the company the company has been regular in depositing undisputed statutorydues including Provident Fund Employees' State Insurance Income-tax Sales-tax WealthTax Service Tax Custom Duty Excise Duty cess to the extent applicable and any otherstatutory dues with the appropriate authorities. According to the information andexplanations given to us there were no outstanding statutory dues as on 31st of March2021 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us the particulars of dueswhich have not been deposited with the appropriate authorities on account of any disputeare as follows:

S.No Name of the Statute Nature of Dues Amt. in Rs. Pertaining Forum where the dispute is pending
1 Income Tax Income tax demand 404363 AY 2001-02 ITAT appeal

8. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of dues to afinancial institution and banks.

9. Based on our audit procedures and according to the information and explanationsgiven to us the Company did not raise any money by way of further public offer (includingdebt instruments) during the year. According to the information and explanations given bythe management term loans were applied for the purpose for which the loans were obtained.

10. Based on the audit procedures performed and the information and explanations givento us we report that no fraud on or by the Company has been noticed or reported duringthe year nor have we been informed of such case by the management.

11. According to the information and explanation given to us in respect of ManagerialRemuneration the company has followed the provision of Section 197 read with Schedule Vto the companies Act. 12. In our Opinion the company is not a Nidhi Company. Thereforeclause 3 (xii) of the Companies (Auditor's Report) Order 2016 is not applicable to theCompany.

13. According to the information and explanation given to usin respect of transactionswith related parties the company has complied with the provision of Section 177 and 188 ofCompanies Act 2013 and the same has been disclosed in the Standalone Financial Statementsetc. as required by the Accounting Standard.

14. Based on the audit procedures performed and the information and explanations givento us by the management we report that the company has not made any preferentialallotment of shares during the year.

15. According to the information and explanation given to usthe Company has compliedwith the provisions of Section 192 of Companies Act 2013 in respect of non-cashtransactions with directors or persons connected with.

16. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

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 Euro LederFashion Limited ("the Company") as of 31st March 2021 in conjunction with ouraudit of the Standalone financial 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'). 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 safeguarding ofits 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 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 ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgment 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 audit opinion on the Company's internal financial controls systemover 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 reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company.

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone financial 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2021 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 S Ramakrishnan Associates

Chartered Accountants

FRN No.06637S
(S Ramakrishnan)
Place: Chennai

Partner

Date: June 28 2021 M.No.025936
UDIN: 21025936AAAAAU4899

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