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Ricoh India Ltd.

BSE: 517496 Sector: Others
NSE: N.A. ISIN Code: INE291B01015
BSE 00:00 | 04 Mar Ricoh India Ltd
NSE 05:30 | 01 Jan Ricoh India Ltd
OPEN 507.00
PREVIOUS CLOSE 470.40
VOLUME 91598
52-Week high 509.60
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 1,871
Buy Price 0.00
Buy Qty 0.00
Sell Price 470.00
Sell Qty 95.00
OPEN 507.00
CLOSE 470.40
VOLUME 91598
52-Week high 509.60
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 1,871
Buy Price 0.00
Buy Qty 0.00
Sell Price 470.00
Sell Qty 95.00

Ricoh India Ltd. (RICOHINDIA) - Auditors Report

Company auditors report

To the members of Ricoh India Limited

Report on the audit of Ind AS financial statements

1 Qualified Opinion

We have audited the accompanying Ind AS financial statements of Ricoh India Limited(‘the Company’) which comprise the Balance Sheet as at March 312019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe Ind AS financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible impacts of the matters described in the Basis forQualified Opinion paragraph of our report the aforesaid Ind AS financial statements givethe information 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 of the state of affairs of the Company as at March 31 2019and its loss (including other comprehensive income) changes in equity and cash flows forthe year then ended.

We have not been able to obtain sufficient and appropriate audit evidences to ascertainthe combined impact of the items noted in "Basis for Qualified Opinion"paragraph hence unable to comment thereon.

2 Basis for Qualified Opinion

2.1 Attention is drawn to Note No. 1(B) to the Ind AS financial statements stating thatin view of irregularities and suspected fraudulent transactions noted in earlier financialyears upon which the Company carried out internal investigations and as a result recordedsignificant adjustments in its books of accounts in earlier years. Securities and ExchangeBoard of India (‘SEBI’) had issued an interim order on February 12 2018 inresponse to the communications by the Company to it intimating the Company aboutfalsification of accounts which was highlighted in its forensic review. Hence at behestof SEBI the BSE appointed an independent firm to conduct forensic audit of the books ofaccount of the Company from Financial Year 2012-13 onwards. Thereafter SEBI vide itsorder dated March 052019 appointed another firm of Independent Chartered Accountants asthe Forensic Auditors to conduct forensic audit of the Company for the financial yearsended March 312013 March 312014 March 312015 March 312016 March 312017 and March31 2018. The reports of these forensic audits and further orders from SEBI are awaited bythe Company. In view of these pending matters we are unable to comment on theconsequential impact if any on the Ind AS financial statements due to outcome of suchinquiry / investigations by the law enforcing agencies and outcome of related litigationsand claims.

2.2 The Statutory Auditors of the Company for the year ended March 31 2018(‘Erstwhile Auditors’) have stated their inability to express an opinion on theInd AS financial statements for the financial year ended March 31 2018 and made variousobservations in their audit report dated November 21 2018 which inter alia includedapart from other matters limitations with regard to availability of necessary auditevidences including original documents and information satisfactory explanationsandjustifications required for audit observations for the year ended March 31 2018.

Further Erstwhile Auditors have stated that they had made various observations in theiraudit report dated May 262017 on the financial statements for the year ended March312017 which inter alia included apart from other matters limitations with regard toavailability of necessary audit evidences including original documents and informationsatisfactory explanations and justifications required for audit for the years ended March312016 and March 312017. In view of the limitations and uncertainties involved they hadexpressed their inability to express an opinion on the financial statements for theaforesaid years.

Our qualified opinion on the Ind AS financial statements for the year ended March 312019 is because of the possible impacts of the above matters on the figures for the yearended March 31 2019 and on the corresponding figures for the year ended March 31 2018which affects the comparability with figures of year under report.

2.3 Attention is invited to Note No. 2(A)(d) to the Ind AS financial statements whereinit is stated that the Company has used significant assumptions / estimates in accountingof certain critical areas such as revenue contracts and provision for doubtful receivablesin respect of outstanding trade receivables / supplier advances. In view of thesignificance of these assumptions / estimates and in the absence of substantive auditevidence including past trends reconciliation with customers / vendors reliable estimateof future developments etc. we are unable to validate the reasonableness of theseassumptions / estimates. The impact of the said observations on the Ind AS financialstatements is not ascertained.

2.4 As part of Corporate Insolvency Resolution Process (‘CIRP’) the Companyreceived claims aggregating to INR 134681 lakhs till January 24 2019 from its vendorsand other parties. The Resolution Professional (‘RP’) admitted claims of INR79017 lakhs. As per the books of Account of the Company the provision made by theCompany amounted to INR 78882 lakhs. The management believes provision made in the booksof accounts is appropriate. In absence of the evidences confirmations and basis ofprovision made by the management of the Company we are unable to comment on the impactif any thereof on the Ind AS financial statements under report.

2.5 (a) The balances of trade receivables other receivables and trade payables aresubject to confirmation and consequent reconciliation

Further the trade receivables include sum of INR 629 lakhs being unreconciled dues from3 (three) overseas related parties of the Company which are outstanding for periodexceeding 545 days.

(b) Some of the foreign currency balances (both receivable and payable) have beenoutstanding for a period which is beyond the prescribed period for settlement of suchbalances as per the Reserve Bank of India (RBI) guidelines. Non-compliance with theprovisions ofRBI guidelines may result in imposition of penalties on the Company whichhave not been quantified.

(c) A letter seeking confirmation from the Company by an overseas related partyreceived by the Company shows sum of INR 936 lakhs (USD 14 lakhs) payable as at theBalance sheet date by that overseas entity to the Company; but the Company’s books ofaccount do not reflect any such sum receivable from the said entity.

(d) Financial Deposit amounting to INR 5696 lakhs grouped under non-current loans andadvances as at March 31 2019 could not be verified with confirmations or any othercorroborative evidences in course of our audit.

Impact if any of the above observations on the Ind AS financial statements cannot becommented upon in absence of necessary satisfactory explanations.

2.6 Attention is invited to Note No. 16(b) of the Ind AS financial statements whereinit is stated that as a part of Ricoh Company Limited’s (‘RCL’ or‘ultimate parent company’) intimation of October 272017 to not provide anyadditional financial support going forward to the Company the ultimate parent company hasrepaid all outstanding balances of the Company’s bankers aggregating INR 129528lakhs since the same had been guaranteed by the ultimate parent company. The ultimateparent company has further claimed an interest of INR 13313 lakhs on the said amount tillMarch 31 2019. As informed by the management in absence of any agreement regardingterms the Company has not acknowledged the amount of interest claimed by the ultimateparent company as debt. The duration of this loan has not been determined though it hasbeen included under Borrowings as current liabilities in the Ind AS financial statements.

Further the claims of the ultimate parent company and other overseas related partiesfor their trade receivables totaling to INR 139 lakhs and interest on redeemablenon-convertible debentures of the face value of INR 20000 lakhs amounting to INR 1400lakhs for the year under report are not recognized in the books of account.

Moreover the Company has also not recognized the impact of Ind AS 109 "FinancialInstruments" on the accounting and classification of these amounts (claimed by theultimate parent company and other overseas related parties) including for the face valueof redeemable non-convertible debentures.

Hence we are unable to comment on the impacts of the above on the Ind AS financialstatements under report.

2.7 The Company needs to strengthen its internal control systems in particular its ITapplication and general controls and those relating to existence of contractwork-in-progress; revenue from leases including ascertaining accurate bifurcation / natureof lease; reconciliation of consumables and spares consumed with related sales; accountsreceivables including periodic reconciliations with customers age wise analysis;classification of costs relating to items of purchase of traded goods including costsincurred towards warranty and certain contract expenses; assessment of warrantyobligations and liquidated damages provisioning; recording of numerous manual entries andstrengthening of automated controls in all the operational areas. The combinedconsequential impacts of these control weakness if any cannot be commented upon.

2.8 The Company has not filed its financial results for the quarter and year-to-dateperiod ended June 30 2018 September 30 2018 December 312018 and subsequent periodstill date as prescribed under regulation 33 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. Impact if any of this non-compliance on theInd AS financial statements under report cannot be commented upon.

2.9 In absence of party-wise details pertaining to sums due to Micro Small &Medium Enterprises (‘MSME’) vendors amounting to INR 696 lakhs as at April012018 and company’s inability to identify the MSME vendors we are unable to verifythe accuracy of provision for interest on overdue amounts payable to MSMEs as also theclosing balance of outstanding dues to MSMEs as at March 31 2019.

3 Material Uncertainty Related to Going Concern

We draw the attention to Note No. 1(A) to the Ind AS financial statements which bringsout in details the fact that the business operations of the Company being hampered dueto withdrawal of financial and operational support from the ultimate parent company fromOctober 27 2017 and initiation of CIRP vide the Company’s petition under Section 10of the Insolvency and Bankruptcy Code 2016 (‘IBC’). The resolution plan wasduly approved by the Committee of Creditors (‘CoC’) and filed with NationalCompany Law Tribunal (‘NCLT’). The Order of NCLT approving the resolution planis passed on November 282019. Hence the Ind AS financial statements of the Company havebeen drawn on ‘going concern’ basis. Our report is not modified in respect ofthis matter.

4 Emphasis of Matter

We draw attention to Note No.1(A) to the Financial Statements which describes thestatus of Corporate Insolvency Resolution Process that the Company underwent. Theresolution plan was duly approved by the Committee of Creditors (‘CoC’) andfiled with National Company Law Tribunal (‘NCLT’). The Order of NCLT approvingthe resolution plan is passed on November 28 2019. The approval of the AdjudicatingAuthority subsequent to the end of financial year under report has been considered asnon-adjusting event for the purpose of financial statements for the year ended March 312019; hence the reported numbers for the year ended/as at the said date are not adjusted.Our report is not modified in respect of this matter.

5 Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the year under report.These matters were addressed in the context of our audit of the Ind AS financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Audit approach adopted to assessed risk
Use of estimates and judgements for revenue recognition in case of contractual arrangement towards Information Technology Enables Services (ITES)
Revenue in case of ITES contracts with customer include multiple performance obligations and involves substantial degree of accounting assumptions / estimates for determination of extent and timing of revenue recognition based on nature of contract and system integration services embedded therein. We obtained an understanding of management’s revenue recognition process and evaluated the design and tested the operating effectiveness of controls over revenue recognition with particular focus on the controls executed for the identification of performance obligations within revenue contracts and determination of the timing of recognition for each revenue milestone.
Such arrangements require management to identify all the performance obligations in the arrangement and recognize revenue based on the fair value of those performance obligations at the appropriate time generally upon delivery / installation of equipment or acceptance of products and services. These arrangements may give rise to the risk of material misstatement due to the incorrect identification of performance obligations and timing of revenue recognition for each obligation. The above included obtaining list of ongoing contracts and analysis of the performance obligation therein.
We carried out detailed testing procedures over revenue arrangements that we selected based on size and complexity to assess the appropriateness of judgements made by management regarding performance obligations the determination of fair value of deliverables and the appropriateness of recognition triggers.
Hence it is considered as key audit matter. We tested a sample of revenue transactions recorded during the year by tracing them to supporting evidence of delivery installations acceptance and assessed the revenue recorded for the period by comparing it to contractual terms.

6 Information Other than the Ind AS Financial Statements and Auditor’s ReportThereon

The Company being under CIRP the power of its Board of Directors being suspended theRP and the management of the Company are responsible for the preparation of the otherinformation comprising of the information included in the Management Discussion andAnalysis Directors’ Report including Annexures thereto Corporate Governance andsuch other disclosures related Information excluding the Ind AS financial statements andauditors’ report thereon (‘Other Information’). Our opinion on the Ind ASfinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon. The draft of such other information is made available tous.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information when it becomes available and in doing so consider whetherthe other information is materially inconsistent with the Ind AS financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. When we read the Other Information and if we conclude that there isa material misstatement therein we are required to communicate the matter to thosecharges with governance as required under SA 720 ‘The Auditor’s responsibilitiesRelating to Other Information’

Based on review of the draft of such ‘Other Information’ we have noreportable observation.

7 Responsibility of Management for Ind AS Financial Statements

The Company being under CIRP the power of its Board of Directors being suspended theRP and the management of the Company are responsible forthe matters stated in section134(5) ofthe Act withrespectto the preparation ofthese Ind AS financial statements thatgive a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under section 133 of the Act. 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 selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error. In preparingthe Ind AS 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.

The RP and the management of the Company are also responsible for overseeing theCompany’s financial reporting process.

8 Auditor’s Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing (‘SA’) will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Ind AS financial statements. Ouraudit process in accordance with the SAs is narrated in Annexure A to this report.

9 Other Matters

The comparative financial information of the Company for the year ended March 312018included in these Ind AS financial statements are based on the previously issuedstatutory financial statements audited by the Erstwhile Auditors for the year ended March31 2018 whose report dated November21 2018 expressed disclaimer of opinion on those IndAS financial statements as described in paragraph 2.2 above.

10 Report on Other Legal and Regulatory Requirements

10.1 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 B a statement on the matters specified inparagraphs 3 and 4 of the Order.

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

a. We have sought and obtained except for the items noted in basis for qualifiedopinion in paragraph 2 above all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.

b. In our opinion except as noted in basis for qualified opinion in paragraph 2 aboveproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books.

c. Except for the impact of items noted in basis for qualified opinion in paragraph 2above the Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flows Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of accounts.

d. Except for matters mentioned in basis for qualified opinion in paragraph 2 above inour opinion the Ind AS financial statements comply with the applicable Indian AccountingStandards notified under Section 133 of the Act read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015.

e. The matters described in the basis for qualified opinion in paragraph 2 above mayin our opinion have an adverse effect on the functioning of the Company.

f. As per the information and explanations provided and in our opinion the soledirector on the Board of the Company is covered by the disqualification in terms ofprovisions of section 164(2) of the Act.

g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure C.

h. The provisions of Section 197(16) of the Act have been complied with by the Company.

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

(i) Except for impact of matters mentioned in basis for qualified opinion in paragraph2 above the Company has disclosed the impact of pending litigations on the financialsposition in its Ind AS financial statements. Refer Note 36(A) to the Ind AS financialstatements.

(ii) The Company needs to strengthen necessary process to assess the materialforeseeable losses on its long-term contracts in nature of providing long term services toits clients though necessary provisioning was made in course of our audit. The Companydoes nothave any derivative contracts. ReferNote 36(B) to the Ind AS financial statements.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Khimji Kunverji & Co LLP

(Formerly Khimji Kunverji & Co - FRN: 105146W)

Chartered Accountants

Hasmukh B. Dedhia

Partner (F - 033494)

ICAI UDIN: 19033494AAAAMC1072

Place: Mumbai

Date: November 29 2019

Annexure A to the Independent Auditor’s Report on the Ind AS Financial Statementsof Ricoh India Limited for the year ended March 312019 (‘the main report’) asreferred to in para 8 thereof:

As part of our audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error to design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 reasonablenessof accounting estimates and related disclosures made by management.

• Take into consideration the applicable reporting framework relevant provisionsof the Act and the Rules made there under.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

• 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. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 determinethose matters that were of most significance in the audit of the Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our Auditor’s Report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Annexure B to the Independent Auditor’s Report on the Ind AS Financial Statementsof Ricoh India Limited for the year ended March 312019 (‘the main report’) asreferred to in para 10.1 thereof:

(i) (a) According to information and explanation given to us the Company has generallymaintained proper records showing full particulars including quantitative details andsituation of its fixed assets.

(b) According to the information and explanations given to us though the management ofthe Company does not have a regular program of physical verification of its fixed assetsit verifies the material items of fixed assets over a period. The fixed assets except formachines given on lease and machines kept as backup at customer locations were verifiedby the management during the year. In our opinion physical verification is reasonablehaving regard to the size of the Company and the nature of its fixed assets. As informedto us discrepancies noticed which were not material on such verification have beenproperly dealt with in the books of account. In respect of machines given on lease asinformed to us are verified based on the system of monthly billing and physical countingof the output of such machines and/or machines in field report.

(c) We have been provided with the notarized/ certified copies of the title deeds inrespect of the immovable properties which are observed to be in the name of the Companyand some of them are held in the name of Gestetner India Limited and Indian DuplicatorCompany Limited which as informed got merged into the Company in the earlier years.

(ii) The inventories except goods-in-transit and stocks lying with third parties havebeen physically verified by the management during the year and also subsequent to the yearend. The Company performed roll back procedures to arrive at derived quantities ofinventories as at the year end. In our opinion the frequency of such verification isreasonable and adequate in relation to the size of the Company and the nature of itsbusiness. As informed to us material discrepancies noted on such verification / roll backprocedures between the physical stocks and the book records have been adjusted in thebooks of account. The inventories lying with third parties are verified based on theinstallation reports / delivery documents available with the Company.

(iii) According to the information and explanation given to us the Company has notgranted any loans secured or unsecured during the year under report to Companies FirmsLimited Liability Partnership or other parties covered in the register maintained underSection 189 of the Companies Act 2013 (‘the Act’). Accordingly paragraph3(iii) of the Order is not applicable.

(iv) Except for the effects of the matters contained in the basis of Qualified Opinionin paragraph 2 of our main report according to the information and explanation given tous the Company has not given any loans or made any investments or provided anyguarantee or security as specified under Section 185 and 186 of the Act.

(v) According to the information and explanations given to us and in our opinion theCompany has not accepted any deposits from the public during the year and consequentlythere are no reportable items under the directives issued by Reserve Bank of India theprovisions of sections 73 to 76 of the Act and rules framed there under.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under Section 148(1) of the CompaniesAct 2013 for any of any activities / services rendered by the company. Accordinglyparagraph 3(vi) of the Order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company in respect of amounts deducted/ accrued inthe books of account the Company has generally been regular in depositing undisputedstatutory dues with appropriate authorities including Provident Fund Employees’State Insurance Scheme Income-Tax Sales Tax Value Added Tax Service Tax Duty ofCustoms Goods and Service Tax and other material statutory dues.

(b) According to the information and explanations given to us no amounts payable inrespect of undisputed statutory dues including Provident Fund Employees’ StateInsurance Scheme Income-Tax Goods and Services Tax Sales Tax Service Tax Duty ofCustoms Value Added Tax Cess and other material statutory dues were in arrears as atMarch 312019 for a period of more than six months from the date they became payableexcept as mentioned below-

Name of the Statute Nature of the Dues Amount (INR Lakhs) Period to Which the Amount relates Due Date Date of Payment
The Karnataka Tax on Professions Trades Callings and Employment Act 1976 Profession Tax 2.04 August 17- Sept 18 Various Dates November 6 2019
The Assam Professions Trades Callings and Employments Taxation Act1947 Profession Tax 0.37 April 17- Sept 2018 Various Dates July 2 2019
The Orissa State Tax Tax on Profession Trades Callings and Employments Act2000 Profession Tax 0.21 April 17- Sept 2018 Various Dates November 6 2019
The West Bengal State Tax on Professions Trades Callings and Employments Act 1979 Profession Tax 0.81 April 17- Sept 2018 Various Dates November 6 2019
Tax on Professions Trades Callings and Employments Act1991 Profession Tax 0.20 April 17- Sept 2018 Various Dates November 6 2019
Kerala Municipal Act 1994 Profession Tax 0.54 April 17- Sept 2018 Various Dates November 6 2019
The Central Goods & Services Tax 2017 Goods & Service Tax 5.44 July 2017 August 25 2017 October 20 2018
Income Tax Act 1961 Tax Deducted at Source 0.24 May 2017 June 7 2017 Not Paid till date
Income Tax Act 1961 Tax Deducted at Source 0.08 July 2017 August 7 2017 Not Paid till date

(c) According to the information and explanations given to us there are dues of IncomeTax Sales Tax Service Tax and Goods and Service Tax which have not been deposited withthe appropriate authorities on account of dispute are as under.

Name of the Statute Nature of Dues Amount demanded (INR Lakhs) Amount paid under protest (INR Lakhs) Period to which it relates Forum where the dispute is pending
Income-tax Act 1961 Income-tax 242 Assessment Years: 1999-00 2006-07 2009-10 High court
Income-tax Act 1961 Income-tax 362 Assessment Years: 2005-06 2007-08 Income Tax Appellate Tribunal
Income-tax Act 1961 Income-tax 593 90 Assessment Years: 2002- 03 2003- 04 2005- 06 2006- 07 2007- 08 2008- 09 2011-12 2012- 13 2013- 14 2014- 15 2015- 16 CIT (Appeals)
Finance Act 1994 Service tax 89 9 Dec 2004 to Sept 2006; Financial Year: 2007- 08 and 2008- 09 CESTAT
Finance Act 1994 Service tax 154 113 Oct 2003 to March 2004 Oct 2010 to March 2012 Oct 2013 to June 2017 CIT (Appeals)
Sales tax Act Sales tax 7176 148 Various years between Financial Years 1984-85 to 2012-13 Appellate Tribunals of various states
Sales tax Act Sales tax 44118 1263 Various Years Between Financial Years 1981-82 to 2014-15 CIT (Appeals)
SGST Act 2017 GST 590 - Financial Year 17-18 CIT (Appeals)

(viii) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the Company has defaulted in repayment of dueson unsecured redeemable non-convertible debenture being interest thereon for HYEMar-2018 HYE Sept-2018 and HYE Mar-2019 aggregating to INR 2127 Lakhs. The Company didnot have any outstanding dues to Government during the year or as at March 31 2019.

(ix) According to the information and explanation given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year.

(x) In addition to the subsisting impacts if any of suspected fraudulent occurrencesmentioned in para 2.1 of our main report according to the information and explanationsgiven to us incidents of frauds and falsifications involving employees of outsourcedservice provider

engaged by the CoC and an another such service provider aggregating to appx INR 521Lakhs were reported during the year under report. As informed to us out of the saidamount in case of an incident involving sum of INR 400 Lakhs were detected beforehand andaverted from any falsification. For the other incidents of sum involving INR 121 Lakhsamounts are informed to have been recovered from the outsourced service providers. Thenecessary legal actions have been initiated against the alleged persons involved in thesaid incidents.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company it has paid / provided for managerialremuneration in accordance with the provisions of section 197 read with Schedule V to theAct.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) The Company does not have an appropriate composition of its Board of directorsand does not have an Audit Committee. As a result it is noncompliant with provisions ofSection 177 of the Act. According to the information and explanations given to us andbased on our examination of the records of the Company the transaction with relatedparties except for impacts of the matters described in para 2.6 of our main report areobserved to be in compliance with Section 188 of the Act read with provisions ofInsolvency and Bankruptcy Code 2016 pertaining to ratification of Related partytransactions by CoC where applicable and the details of such related party transactionshave been disclosed in the Ind AS Financial Statements as required by applicable IndianAccounting Standard.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment / private placement of shares or fully or partlyconvertible debentures during the year. Accordingly paragraph 3 (xiv) of the order is notapplicable.

(xv) Except for the impact of Para 2 of our main report if any according to theinformation and explanations given to us and based on our examination of the records ofthe Company it has not entered into any non-cash transactions with directors or personsconnected with them.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Khimji Kunverji & Co LLP

(Formerly Khimji Kunverji & Co - FRN: 105146W)

Chartered Accountants

Hasmukh B. Dedhia

Partner (F- 033494)

ICAI UDIN: 19033494AAAAMC1072

Place: Mumbai

Date: November 29 2019

Annexure C to the Independent Auditor’s Report on the Ind AS Financial Statementsof Ricoh India Limited for the year ended March 312019 (‘the Main Report’) asreferred to in para 10.2(g) thereof:

Qualified Opinion

We have audited the internal financial controls over financial reporting of Ricoh IndiaLimited ("the Company") as at March 312019 in conjunction with our audit of theInd AS financial statements of the Company for the year ended on that date.

According to the information and explanation given to us and based on our audit andalso as described in Paragraph 2 of the Main Report giving details of Basis for QualifiedOpinion material weakness pertaining to IT application and general controlsmaker-checker over recording and reconciling the manual entries and those relating toexistence of contract work-in-progress; revenue from leases including ascertainingaccurate bifurcation / nature of lease; reconciliation of consumables and spares consumedwith related sales; accounts receivables including periodic reconciliations withcustomers age wise analysis; classification of costs relating to items of purchase oftraded goods including costs incurred towards warranty and certain contract expenses;assessment of warranty obligations and liquidated damages provisioning; recording ofnumerous manual entries were identified.

A ‘material weakness’ is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company’s annual or interim Ind ASfinancial statements will not be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weakness describedabove on the objectives of the control criteria the Company’s internal financialcontrols system over financial reporting and design thereof needs to be enhanced to makeit comprehensive and commensurate to the size of the Company and nature of its businessbased on verification of process controls matrixes made available to us for the financialyear under report after the end of the said year and considering the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India ("ICAI") We have considered the materialweakness identified and reported above in determining the nature timing and extent ofaudit test applied in our audit of the Ind AS financial statements of the Company and thequalified opinion has affected our opinion on the Ind AS financial statements and we havea qualified opinion on the Ind AS financial statements.

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 ICAI. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany’s policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

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 issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.

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 controlssystem over financial reporting.

Meaning of Internal Controls over Financial Reporting:

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal financial controlover financial reporting includes those policies and procedures that:

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

(b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS 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; and

(c) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial controls

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.

For Khimji Kunverji & Co LLP

(Formerly Khimji Kunverji & Co - FRN: 105146W)

Chartered Accountants

Hasmukh B. Dedhia

Partner (F- 033494)

ICAI UDIN: 19033494AAAAMC1072

Place: Mumbai

Date: November 29 2019

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