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Auditor Report of Phoenix International Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Phoenix International Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash fl ows of the Company in accordance with Accounting principles generally accepted in India , including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for the ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) in the case of the Statement of Profit and Loss , of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act and on the basis of such checks of the books and records of the company as we considered appropriate and according to information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

1. As required by section 143(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 8/2014 dated 4thApril, 2014issued by the Ministry of Corporate Affairs ;

(e) on the basis of written representations received from the directors as on March 31, 2015 under section 164(2) of the Companies Act,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of provisions of section 164(2) of the Companies Act,2013.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors), 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 financial statements as referred to Note no. 28

(ii) the company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

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

ANNEXURE REFERRED TO IN PARAGRAPH '1'UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR AUDIT REPORT OF EVEN DATE TO THE MEMBERS OF PHOENIX

INTERNATIONAL LIMITED

1. (a) According to the information and explanations given to us, company is maintaining proper records of fixed assets.

(b) Physical verification of fixed assets has been made by the management during the year and no material discrepancies were noticed on such verification.

2. (a) The management has conducted physical verification of inventory at reasonable interval during the period.

(b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. As per information and explanations provided to us, the company has not granted any loans, secured and unsecured to companies, firms or other parties covered in the register maintained under section 189 of Companies Act,2013,Clause iii of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

4. According to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for Purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control procedures.

5. According to the information and explanations given to us, the company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of section 73 to 76 or any other provisions of the Companies Act and the rules framed there under, hence clause v of paragraph 3 of the Companies (Auditor's Report) Order,2015 is not applicable.

6. According to the information and explanations given to us, maintenance of cost records have not been specified by the Central Government under sub- section (1) of Section 148 of Companies Act,2015, hence clause vi of paragraph 3 of the Companies (Auditor's Report) Order,2015 is not applicable.

7. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues as applicable to the company except income tax (TDS of Rs 4392). According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, Value added tax, cess and any other statutory dues were outstanding, as at 31.03.2015 for a period of more than six months from the date they become payable.

(b) As per information and explanation provided to us, the following are the contingent liabilities against which the appeal is pending to the various authorities

Particulars Authorities Amounts

1.Sales Tax Commissioner Appeal 2,91,515

2.Wealth Tax Commissioner Appeal 8,45,144

3.Service Tax CESSTAT 1,32,24,465

4.Service Tax (12-13) Commissioner Appeal 37,08,000

5.Employee Provident Fund EPF Appellate Tribunal, New Delhi 18,63,744

(c) As per information and explanations given to us, there is no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act and rules made there under, hence clause vii(c ) of paragraph 3 of the Companies( Auditor's Report)Order,2015 is not applicable.

8. The Company has no accumulated losses at the end of financial year and. The company has not incurred any cash losses during the current financial year and also immediately preceding financial year. Clause viii of paragraph 3 of the Companies (Auditor's Report) Order,2015 is not applicable.

9. According to the information and explanations give to us, the company has taken loan from bank but there is no default in repayment of principal and interest during the year.

10. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Clause x of paragraph 3 of the companies (Auditor's Report) Order, 2015 are not applicable to the company.

11. According to the information and explanations given to us, no term loans were obtained during the year under audit. Hence the provision of Clause (xi) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

12. During the course of our examination of the books and records of the company in accordance with generally accepted accounting practices, no fraud on or by the company has been noticed or reported during the year covered by our audit.

16. According to the information and explanations given to us, the company has not availed any fresh term loan. Accordingly, the provision of 4(xvi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us, no funds raised on short term basis have been used for long term investment and vice-versa. Accordingly, the provision of 4 (xvii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

18. According to the information and explanations given to us, the company has not made a preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debenture. Accordingly, the provision of 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

20. During the year covered by our report the Company has not raised any money by public issue. Accordingly, the provision of 4 (xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

21. During the course of our examination of the books and records of the company, no fraud on or by the company has been noticed or reported during the year covered by our audit.

For M/s Pradip Bharadwaj & Co,

Chartered Accountants

Firm Regd. No. 013697C

Pradip Bhardwaj

Partner

M.No. 500219

Place : New Delhi

Date : 26.05.2015


Mar 31, 2014

We have audited the accompanying Consolidated Financial Statements of Phoenix International Limited (''the Company'') and its subsidiaries, which comprise the Consolidated Balance Sheet as at 31st March 2014, the Consolidated Profi t and Loss account and Consolidated Cash Flows Statement for the year then ended and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated fi nancial statements that give a true and fair view of the consolidated fi nancial position, consolidated fi nancial performance and consolidated cash fl ows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Company Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and presentation of the consolidated fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but no t for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the consolidated fi nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the consolidated balance sheet, of the state of affairs of the Company as at 31st March 2014;

(i) in the case of the consolidated profit and loss account, of the profi t for the year ended on that date; and

(ii) in the case of the consolidated cash flow statement, of the cash fl ows for the year ended on that date.

We did not audit the financial statements of the subsidiaries, whose fi nancial statements refl ect Total Assets (net) of Rs. 8939.34 Lacs as at March 31, 2014, Total Revenues of Rs. Nil at the year ended on that date, as considered in the consolidated fi nancial statements. These fi nancial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.

In respect of its fixed assets:

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information. However, the records need to be updated with regard to the situation of fixed assets and suffi cient description to make identification of fixed assets possible.

(b). As explained to us, the company has physically verifi ed certain assets, in accordance with phased program of verification, which in our opinion is reasonable, having regards to the size of the company. The discrepancies noticed at the time of such verification were properly dealt with in these books of accounts.

(c). The Fixed Assets disposed off during the period, in our opinion, do not constitute a substantial parts of fixed assets of company and such disposal has, in our opinion, not affect the going concern status of the company.

2. (a) According to the information and explanation given to us, the inventories have been physically verified by the management at the end of accounting year.

(b) In our opinion, the frequency and procedure of physical verifi cation is reasonable in relation to the size of company and nature of its business.

(c). According to the information and explanation given to us, the Company has maintained proper records of inventory and no material discrepancies have been noticed on physical verifi cation of inventory as compared to the book records.

3. (a) The company during the year has not granted and / or taken any loans, secured or Unsecured, to companies, fi rm or other parties covered in the register maintained under section 301 of the companies Act, 1956 except an interest free loan of Rs. 4840.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was Rs. 4840.00 lacs and the year-end balance of loan granted to subsidiary company was Rs. 4840.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the other terms and conditions of above loan granted by the company are not prima facie, prejudicial to the interest of the company.

(c) The term and condition of above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to its subsidiary company.

(e) The company has not taken any interest free unsecured loans during the year from parties covered in the register maintain under section 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs. The maximum amount involved during the year was Rs. 87.00 lacs and the year-end balance of the interest free unsecured loans was Rs. Nil.

(f) The above stated unsecured loans taken by company are interest free. In our opinion, the term and condition of the same are prima facie, not prejudicial to the interest of the company.

(g) The term of repayment of interest free unsecured loans obtained have not been stipulated in writing.

4. According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control procedures.

5. (a) According to the information and explanations given to us, particulars of contract or arrangements referred to in section 301 of the companies Act 1956 have been entered in the register required to be maintained under that section.

(b) Excluding certain transactions purchase / sale of goods and material of special nature,for which alternate quotations / source of supply was not available and on the basis of technical evaluation in respect of the quality of items and because of special type of work involved, the transactions entered in to pursuant to such contracts and arrangements, in our opinion and according to the information and explanation given to us , have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. According to the information and explanations given to us, the company has not accepted any deposits from the public to which the provision of section 58A and 58AA of the companies Act, and the companies (Acceptance of deposits) Rules, 1975 apply.

7. In our opinion and according to the information and explanations given to us, the company has an effective internal audit system commensurate with size and nature of its business.

8. The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under section 209 (1) (d) of the Companies Act, 1956 for any of the products of the company. However, we have not made detailed examination of such records with a view to determine whether they are accurate and complete. However Cost Compliance report for the year ended 31st March 2014 has not been provided.

9. (a) According to the records of the company, the company is generally regular in deposit the appropriate authorities undisputed statutory dues including Provident Fund,Investor Education and Protection Fund,Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Excise duty, Custom Duty and other material statutory due as applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of income-tax, sales-tax, wealth tax, excise duty, and cess were outstanding as at 31st March 2014, for a period for more than six month from the date they become payable

(c). According to the information and explanations given to us, the disputed statutory dues, which have not been deposited with appropri- ate authorities on account of any dispute, are as under:-

Nature of the Period to which Amount involved Forum where dispute is dues relates rs pending

1. Sales Tax 1994-95 291,515 Hbn''ble Allahabad High Court, Allahabad

2. Wealth Tax (i) 2002-03 465,431 Income Tax Appellate

(ii) 2003-04 379,713 Tribunal, New Delhi

3 EPF, DLIF 03/2011 to 1863744 Asst. P.F. Commissioner, 12/2012 Chennai.

4 Service Tax (i) 2007-08 3090000 CESTAT, New Delhi.

(ii) 2008-09 3954465

(iii) 2009-10 3090000

(iv) 2010-11 3090000

10. The Company does not have accumulated losses at the end of fi nancial year and also not incurred any cash losses during the current financial year (1.4.2013 to 31.3.2014) and also immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company during the year has not defaulted in repayment of dues to a fi nancial institution, bank, or debenture holder.

12. According to the information and explanations given to us, the company has not granted any loans and advance on the basis of security by way of pledge of shares debenture and other securities.

13. The company is not chit fund, a nidhi or a mutual benefi t fund / society. Accordingly, the provision of clause 4(xiii) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

14. The company is not dealing in or trading in shares, securities debentures and other investment. Accordingly, the provision of 4 (xiv) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the company has not availed any fresh term loan. Accordingly, the provision of 4(xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us, no funds raised on short term basis have been used for long term investment and vice-versa. Accordingly, the provision of 4 (xvii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

18. According to the information and explanations given to us, the company has not made a preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debenture. Accordingly, the provision of 4 (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

20. During the year covered by our report the Company has not raised any money by public issue. Accordingly, the provision of 4 (xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

21. During the course of our examination of the books and records of the company, no fraud on or by the company has been noticed or reported during the year covered by our audit.

For Pradip Bhardwaj & Co. Chartered Accountants FRN: 013697C

Date: 26.05.2014 per Pradip Bhardwaj Place: New Delhi Partner M.No. 500219


Mar 31, 2013

We have audited the attached Balance Sheet of PHOENIX INTERNATIONAL LIMITED as at 31 March, 2013, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our Audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An Audit includes examining, on the test basis, evidences supporting the amount and disclosures in the financial statements. An Audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our Audit provides a reasonable basis for our opinion

2. Companies (Auditor''s Report)(Amended)order,2004 issued by Central Government of India in terms of Sub Section (4A) of Section 227 of Companies Act, 1956 is applicable and report on CARO is annexed.

3 Further subject to our comments in the Annexure referred to in paragraph 2 above or elsewhere given, we report that subject to Notes No.28

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our Audit.

b) In our opinion, the Company has kept books of accounts as required by law, so far, as appears from our examination of those books.

c) The Balance Sheet dealt with in this report is in agreement with the books of accounts.

d) In our opinion the Balance Sheet dealt with in this report complies with the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies act 1956.

e) On the basis of written representation received from the Directors as on 31 st March 2013 and taken on record by the Board of Directors we report that none of the directors is disqualified as on 31st March 2013 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true & fair view in conformity with the accounting principles generally accepted in India:

i. in case of the Balance Sheet, the statement of affairs of the Company as at 31stMarch, 2013;

ii. in the case of Profit and Loss Account, the profit for the year ended on that date; and

iii. in the case of the Cash Flow Statement, the cash flows of the company for the year ended on that date. In respect of its fixed assets:

1. (a) The Company has maintained proper records showing M! particulars, including quantitative details and situation of fixed assets on the basis of available information. However, the reccas need to be updated with regard to the situation of fixed assets and sufficient description to make identification of fixed assets possible

(b). As explained to us, the company has physically verified certain assets, in accordance with phased program of verification, which in our opinion is reasonable, having regards to the size of the company. The discrepancies noticed at the time of such verification were properly dealt with In these books of accounts.

(c). The Fixed Assets disposed off during the period, in our opinion, do not constitute a substantial parts of fixed assets of company and such disposal has, in our opinion, not affect the going concern status of the company.

2. (a) According to the information and explanation given to us, the inventories have been physically verified by the management at the end of accounting year.

(b) In our opinion, the frequency and procedure of physical verification is reasonable in relation to the size of company and nature of its business.

(c). According to the information and explanation given to us, the Company has maintained proper records of inventory and no material discrepancies have been noticed on physical verification of inventory as compared to the book records.

3. (a) The company during the year has not granted and / or taken any loans, secured or Unsecured, to companies, firm or other parties covered in the register maintained under section 301 of the companies Act, 1956 except an interest free loan of Rs.4840.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was 4840.00 lacs and the year-end balance of loan granted to subsidiary company was Rs 4840.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the other terms and conditions of above loan granted by the company are not prima facie, prejudicial to the interest of the company.

(c) The term and condition of above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to its subsidiary company.

(e) The company has not taken any interest free unsecured loans during the year from parties covered in the register maintain under section 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs. The maximum amount involved during the year was Rs.87,00 lacs and the year-end balance of the interest free unsecured loans was Rs. Nil.

(f) The above stated unsecured loans taken by company are interest free. In our opinion, the term and condition of the same are prima facie, not prejudicial to the interest of the company.

(g) The term of repayment of interest free unsecured loans obtained have not been stipulated in writing.

4. According to the information and explanations given to us. there are adequate internal control procedures commensurate with the size of the company and the nature of its business During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control procedures.

5. (a) According to the information and explanations given to us. particulars of contract or arrangements referred to in section 301 of the companies Act 1956 have been entered in the register required to be maintained under that section.

(b) Excluding certain transactions purchase / sale of goods and material of special nature.for which alternate quotations / source of supply was not available and on the basis of technical evaluation in respect of the quality of items and because of special type of work involved, the transactions entered in to pursuant to such contracts and arrangements, in our opinion and according to the information and explanation given to us , have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. According to the information and explanations given to us, the company has not accepted any deposits from the public to which the provision of section 58A and 58AA of the companies Act, and the companies (Acceptance of deposits) Rules, 1975 apply.

7. In our opinion and according to the information and explanations given to us, the company has an effective internal audit system commensurate with size and nature of its business.

8. The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under section 209 (1) (d) of the Companies Act, 1956 for any of the products of the company. However, we have not made detailed examination of such records with a view to determine whether they are accurate and complete. However Cost Compliance report for the year ended 31st March 2013 has not been provided.

9. According to the records of the company, the company is generally regular in deposit the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance , Income Tax, Sales Tax, Wealth Tax, Excise duty.CustomDuty and other material statutory due as applicable to it.

According to the information and explanations given to us, no undisputed amount payable in respect of income-tax, sales-tax, wealth tax, excise duty, and cess were outstanding as at 31 stMarch 2013, for a period for more than six month from the date they become payable

10. The Company does not have accumulated losses at the end of financial year and also not incurred any cash losses during the current financial year (1.4.2012 to 31.3.2013) and also immediately preceding financial year.

11. In our opinion and according to the Information and explanations given to us. the company during the year has not defaulted in repayment of dues to a financial institution, bank, or debenture holder.

12. According to the information and explanations given to us, the company has not granted any loans and advance on the basis of security by way of pledge of shares debenture and other securities.

13. The company is not chit fund, a nidhi or a mutual benefit fund / society. Accordingly, the provision of clause 4(xiii) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

14. The company is not dealing in or trading in shares, securities debentures and other investment. Accordingly, the provision of 4 (xiv) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us. the company has not availed any fresh term loan. Accordingly, the provision of 4(xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us, no funds raised on short term basis have been used for long term investment and vice-versa. Accordingly, the provision of 4 (xvii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

18. According to the information and explanations given to us, the company has not made a preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debenture. Accordingly, the provision of 4 (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

20. During the year covered by our report the Company has not raised any money by public issue. Accordingly, the provision of 4 (xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

21. During the course of our examination of the books and records of the company, no fraud on or by the company has been noticed or reported during the year covered by our audit.

For M/s Pradip Bharadwaj & Co,

Chartered Accountants

FirmRegd. No. 013697C

Pradip Bhardwaj

Partner

M.No. 500219 Place : Noida

Date : 29.08.2013


Mar 31, 2010

We have audited the attached Balance Sheet of PHOENIX INTERNATIONAL LIMITED as at 31st March, 2010, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:-

(a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so for as appears from our examination of those books;

(c) the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of ac- count;

(d) in our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) on the basis of the written representations received from the Directors of the Company as on 31 st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the Notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

- in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

- in the case of the Profits Loss Account, of the profit of the Company for the year ended on that date; and

- in the case of the Cash Flow Statement of the cash flows of the company for year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH V OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PHOENIX international LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2010

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. How ever, the records need to be updated with regard to situation of fixed assets and sufficient description to make identification of fixed assets possible.

(b) As explained to us, the fixed assets have been physically verified by the management at the end of the accounting year. As explained to us, no material discrepancies were noticed on comparison of physical quantities with those as per fixed assets register. In our opinion, the program of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its fixed as- sets.

(c) The Company during the year has not disposed off any-substantial / major part of its fixed assets,

2. (a) As explained to us, the inventories have been physically verified by the management at the end of the accounting year. In our opinion, the frequency of physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of Its busi- ness.

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies have been noticed on physical verification of inventory as compared to the book records.

3. (a) According to the Information -and explanations to us, the Company during the year has not granted any loans, secured or unsecured, to companies, firms or others parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free loan of Rs. 340.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was Rs. 340.00 lacs and the year end balance of loan granted to subsidiary company was Rs. 340.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the terms and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the Company.

(c) The terms and conditions of the above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to subsidiary company.

(e) The Company has taken an interest free unsecured loans of Rs. 87.00 lacs from parties covered in the register maintained under Sec- tion 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs, the maximum amount involved during the year was Rs. 87.00 lacs and the year-end balance of the interest free unsecured loans were Rs. 87.00 lacs.

(f) The above stated unsecured loans taken by the company are interest free. In our opinion, the terms and conditions of the same are prima facie, not prejudicial to the interest of the Company.

(g) The terms of repayment of interest free unsecured loans obtained have not been stipulated in writing and as explained to us, the said unsecured oans are repayable on demand.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensu- rate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

5 (a) According to the information and explanations given to us, particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section. (b) Excluding certain transactions of purchase/sale of goods and material of special nature for which alternate quotations/source of supply was not available and on the basis of technical evaluation in respect of the quality of the items and because of the special type of work involved, the transactions entered into pursuant to such contracts and arrangements, in our opinion and according to the information and explanations given lo us, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time

6 According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

7. According to the information and explanations given to us, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

8 The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company. However, we have not made detailed examina- tion of such records with a view to determine whether they are accurate and complete.

9. (a) According to the records of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other material statutory dues as applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, customs duty, excise duty and cess were outstanding as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the disputed statutory dues, which have not been deposited with appropriate authorities on account of any dispute, are as under: -

Nature of the dues Period to which relates Amount involved Rs. Forum where dispute is pending

1. Sales Tax 1994-95 291,515 Honble Allahabad High Court, Allahabad

2. Wealth Tax (i) 2002-03 465,431 Income Tax Appellate (ii)2003-04 379,713 Tribunal, New Delhi

10. The Company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company during the year has not defaulted in repay- ment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

13. According to the information and explanations given to us, the Company is not a Chit Fund or a Nidhi or a Mutual Benefit Fund / Society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not trading in shares, securities, debentures & other invest- ments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Com- pany

15. In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interest of the Company.

16. To the best of our information & according to explanations given to us, the Company has applied its terms loan for the purposes for which the said term loan was obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term invest- ment and vice versa.

18. The Company during the year has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise. Accordingly, the provisions of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

19. The Company during the year has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

20. The Company during the year has not raised any money by way of public issues. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

21. During the course of our examination of the books and records of the Company,, no fraud on or by the Company has been noticed or reported during the year covered by our audit.

For RKM & Associates

Chartered Accountants

Place: New Delhi (Rakesh Mathur)

Date: 31.08.2010 Prop.



 
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