easun reyrolle ltd 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 ("the Company"), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to the financial statements including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally 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 March 31, 2019, and its loss including other comprehensive income, its changes in equity and cash 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 the company towards Long Term / Short Term borrowings, balances with banks, debtors including dues from various electricity boards and creditors for supplies and erections and execution of projects net off adjustments and including debit balances in creditor accounts and credit balances in debtors account, advances, other current assets and current liabilities in respect of which confirmations have not been received. Pending receipt of confirmation of balances and consequent adjustments arising on account of such reconciliations if any, including differences arising on account of netted off balances of certain debtors and creditors, if any and the resultant impact on the financial statements including the operating results is not ascertainable at this stage.

2. Note 45 to the Financial Statements which explains the aspects relating to projects under Turn-Key basis undertaken by the company. There are no confirmations from the customers on the status of the project. However, the management has provided its assertions and estimates in respect of stage of completion, costs to completion including provisions made for supplies to be effected and installation activities to be implemented and on the projections of revenues expected from projects and releasability of work in progress and project receivables, whether confirmed or otherwise. Therefore, owing to the technical nature of such estimates, on the basis of which profits / losses of such turnkey projects have been accounted, we are unable to express our view on the appropriateness of the managements estimates including its assertions and its implications on the operations of the company.

3. Note 46 to the Financial Statements relating to Liquidated Damages recovered by the customers from running bills amounting to Rs.1,224.75 lakhs and encashment of bank

guarantees given by the company amounting to Rs.7,500.89 lakhs (net) shown recoverable from parties in respect of which negotiation with the customers are stated to be in progress and part of these recoverable are sub-judice. In the opinion of the management the levy of liquidity damages and encashment bank guarantees for non-compliances of the contract terms by the customers is completely incorrect and the company envisages no obligation and in the opinion of the company no claim shall be entertainable. Pending the outcome of legal proceedings and negotiations with customers, the eventual impact is not quantifiable and the same is not provided for. In the absence of current status of the ongoing proceedings and the negotiations, we are unable to express our opinion on the appropriateness of the managements assessment in this regard resulting in non-provisioning of the relevant receivables.

4. Note 47 of the Financial Statements relating to companys borrowings from various lenders were classified as NPA (Non-Performing Assets). Consequently, the company made proposals 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 the absence of any sanction from the lenders we are unable to express our opinion on the validity of the reversal of unpaid interest in the earlier years as well as non-provision of interest for the current year is dependent on the final outcome of the settlement proposals filed by the Company. The company has not quantified the impact of such nonprovisioning of interest of debts outstanding.

5. Note 48 of the Financial Statements, the companys inventory amounting to Rs.6,880.56 lakhs mostly comprising slow moving and non-moving inventories (including inventory pertaining to ‘Metering Business amounting to Rs.350.51 lakhs for which the Company is pursuing alternate utilisation) which has not been tested for any potential impact on account of obsolescence. We are therefore unable to express our opinion on the appropriateness of the carrying value stated in the Financial Statements.

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

7. Note 50 to the Financial Statements which explains the Advance to Vendors amounting to 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 or adjustment against dues. However, in the absence of any information to substantiate the stated process we are unable to express our opinion on the appropriateness of the amount stated 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 with appropriate authorities (as required under The Foreign Exchange Management Act, 1999) letters seeking regularisation of various delays in regard to (i) recovery of dues receivable from foreign customers amounting to Rs.590.75 lakhs; (ii) recovery of advances to associate enterprises to the extent of Rs.2928.69 lakhs, financial implications if any arising on account of such non-compliance is unascertainable at this stage.

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

assessment of these pending litigations indicate that there is no provision that is warranted at this stage. However, in the absence of any independent assessment by legal experts on the merits of the ongoing litigations the amount of provision that may be warranted is not quantifiable at this stage.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained 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 uncertainties explained above including (i) current liabilities in excess of current assets with unpaid financial obligations to lenders and dues to statutory authorities and non compliance under various statutes (ii) incurring operating losses continuously, poses significant uncertainty on the ability of the company to continue as going concern, however, pending the outcome of different proposals with lenders and other initiatives such as disposal of non core assets and infusion of additional capital by the promotors and taking into account the product range the company manufactures and their strong underlying demand, the management is confident of arriving at an implementable revival of operations to make the company sustainable in its operations hence the Financial Statements have been prepared on the basis of going concern. We are of the opinion that the appropriateness of assumption of going concern is significantly dependent upon Companys ability to reach an agreement with lenders and raise requisite additional finance and generate cash flows to meet its obligations 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 Customs Bonded 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 Customs Warehouse for more than 3 years and in respect of which impairment if any is not ascertainable at this stage.

2. Note 55 to the Financial Statements, notwithstanding the erosion in the net worth of subsidiaries including overseas subsidiaries, no impairment is considered necessary in view of managements assessment that the investments are of long term strategic in nature and short-term aberrations if any are not considered.

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

warranty conditions and based on the ongoing negotiations the amount of irrecoverability if any is unascertainable hence no provision is contemplated in this regard.

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 most significance 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 financial statements as a whole, and in forming our opinion thereon, except for the matter described in the Basis for Qualified Opinion paragraph and Material Uncertainty Related to Going Concern paragraph, we have determined that there are no other key audit matters to communicate in our Report.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the management discussion and analysis, Boards Report including annexures to Boards Report and Report on Corporate Governance but does not include the standalone financial statements and our auditors report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Other Information is not made available to us at the date of this auditors Report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and the estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design 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 on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by ‘the Companies (Auditors Report) Order 2016 ("the Order") issued by the Central Government of India in terms of Sub section (11) of Section 143 of the Act, we give in the "Annexure A" statement on the matters specified 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 Opinion Paragraph above, we have sought and obtained all the information and explanations which to the 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 Opinion Paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

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

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

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

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

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

i) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Companies Act, 2013, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Companies Act 2013 and is not in excess of the limit laid down under this section.

j) With respect to the other matters to be included Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its StandaloneFinancial Statements.Refer Note 37 to the Standalone Financial Statements and Paragraph 9 of Basis for Qualified Opinion Section;

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

iii. There are no amounts which were required to be transferred, to the Investor Educationand 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 Auditors Report

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

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

(b) As explained to us, fixed assets have been physically verified by the management at regular intervals which however, in our opinion needs to be strengthened further having regard to the size of the company and nature of assets. As informed to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the records examined by us and based on the examination of the conveyance deeds provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, 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 except stock

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

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

(c) On the basis of the records examined by us and relying on the information provided to us, in our opinion, the Company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification as compared to the book record of inventories.

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

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

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

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans given, investments made, guarantees given and securities given.

(v) In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from the public during this year and does not have any unclaimed deposits as at March 31, 2019. Therefore, the provisions of clause (v) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

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

(vii) According to the information and explanation given to us, in respect of statutory dues:

(a) The undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays.

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

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 Act,1956	Central Sales Tax - Hosur	66.80	January 2015 to June 2016	Yet to be remitted
The Central Sales Tax Act,1956	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 of Income tax which is not deposited on account of dispute as on March 31, 2019 is given below:

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 Act,1961	Income Tax	*47.85	2002-03	Tribunal (Appeals)
Income Tax Act,1961	Income Tax	*26.13	2003-04	Tribunal (Appeals)
Income Tax Act,1961	Income Tax	#55.42	2005-06	CIT (Appeals)
Income Tax Act,1961	Income Tax	59.72	2006-07	CIT (Appeals)
Income Tax Act,1961	Income Tax	*306.33	2007-08	CIT (Appeals)
Income Tax Act,1961	Income Tax	@57.59	2008-09	CIT (Appeals)
Income Tax Act,1961	Income Tax	@2012.79	2009-10	CIT (Appeals)
Income Tax Act,1961	Income Tax	@108.86	2010-11	CIT (Appeals)
Income Tax Act,1961	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 Act,1962	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 Act,2002	Value Added Tax	@46.87	2008-09	Deputy Commissioner. of Sales Tax (Appeals)-1, Mumbai
The Central Sales Tax Act,1956	Central Sales Tax	@125.13	2008-09	Deputy Commissioner. of Sales Tax (Appeals)-1, Mumbai
The Maharashtra Value Added Tax Act,2002	Value Added Tax	@42.92	2010-11	Deputy Commissioner Of State Tax, (MUM- VAT-E-810) Nodal Div.-2, Mumbai
The Central Sales Tax Act,1956	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 Act,2002	Value Added Tax	@177.94	2011-12	Sales Tax Officer (C-813), Nodal Div.2, Mumbai-10
The Central Sales Tax Act,1956	Central Sales Tax	@33.69	2011-12	Sales Tax Officer (C-813), Nodal Div.2, Mumbai-10
The Maharashtra Value Added Tax Act,2002	Value Added Tax	@4.90	2012-13	Sales Tax Officer (C-813), Nodal Div.2, Mumbai-10
Chapter V of the Finance Act,1994	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 Act,2001	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 Act,1956	Central Sales Tax	@1.20	2010-11	Appellate Board, M.P Commercial Tax, Bhopal
The Central Sales Tax Act,1956	Central Sales Tax	@5.57	2010-11	Appellate Board, M.P Commercial Tax, Bhopal
The Central Sales Tax Act,1956	Central Sales Tax	@3.79	2009 - 10	- do -
Madhya Pradesh Value Added Tax Act,2001	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 Act,1956	Central Sales Tax	@27.57	2012 - 13	- do -
Madhya Pradesh Value Added Tax Act,2001	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 Act,2001	Value Added Tax	@46.05	2014 - 15	- do -
Entry Tax Act,1976	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 and explanation given to us, the company has not defaulted in repayment of loans or borrowings to a financial institution, bank, government or dues to debenture holders as on reporting date 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 the verification of records and documents, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans during the year 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 the verification of examination of records of the Company carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we 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 our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.

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

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act. Where applicable, the details of such transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provisions of Clause (xiv) of Paragraph 3 of the Order are not applicable.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them covered under section 192 of the Companies Act 2013. Therefore, the provisions of Clause (xv) of Paragraph 3 of the Order are not applicable.

(xvi) According to the information and explanations given to us and based on our examination of the records of the company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Therefore, the provisions of Clause (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 Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Easun Reyrolle Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI).

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Financial Statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the 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 reports issued on internal controls over financial reporting, certain material weakness have been identified as at March 31, 2019 concerning design and implementation of internal control components, 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 internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or internal financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion, except for the possible effects of the material weaknesses described in the Basis for Qualified Opinion Paragraph, in all material respects, maintained adequate internal financial control over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants 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