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Auditor Report of Relaxo Footwears Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of RELAXO FOOTWEARS LIMITED ("the Company"), which comprise the Balance Sheet as at 3151 March, 2016, the Statement of Profit and Loss and the 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

The Company''s 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows 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 Rule 7 of the Companies (Accounts) Rules, 2014 ("the Rules"). 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 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. 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 the 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at 31st March, 2016 and its profit and its cash flows forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure ''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) 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) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as on 31st March, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure ''B'' and

(g) 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) 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 financial statements -Refer Note 28 to the Financial Statements;

ii. The Company did not have any long term contracts including any derivative contracts for which there were any material foreseeable losses; and

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

(Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which its fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the company.

(ii) The inventories, except goods in transit, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. In respect of inventories lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) The Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 189 of the Act. Consequently, requirement of clauses (iii (a), (iii (b) and (iii

(c) of paragraph 3 of the order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Act. In respect of investments made by the company, the provisions of Section 186 of the Act have been complied with.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any Deposits from the public within the meaning of Section 73 to 76 of the Act and the Rules framed there under.

(vi) In our opinion and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, in respect of manufacture of its products by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following disputed statutory dues aggregating to Rs.85.59 lacs, that have not been deposited on account of matters pending before appropriate authorities, are as under:-

(Rs. in lacs)

S. No. Name of the Statute Nature of dues Amount Period to which the Forum where dispute is Remarks amount relates pending

1. Haryana General Sales Purchase Tax 19.92 2001-02 Jt. Excise & Taxation Tax Act, 1973 Commissioner

14.73 2002-03 Jt. Excise & Taxation Commissioner

2. Delhi Value Added Tax, Input Tax 3.45 2005-06 Appellate 2005 Tribunal, Delhi

3. Income Tax Act, 1961 Regular Demand 15.51 2009-10 Income Tax Appellate Tribunal

4. Central Excise Act, 1944 Interest, Fine, 31.98 2015-16 Commissioner, Penalty Central Excise

Total 85.59

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions or banks during the year. The company did not have any outstanding loans and borrowings from the government and debenture holders during the year.

(ix) The company has not raised any money by way of initial public offer, further public offer (including debt instruments) during the year. In our opinion the term loans have been applied for the purpose for which those were raised.

(x) According to the information and explanations given to us, no material fraud by the Company or on the company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on our examination of records, 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. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

(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 section 177 and section 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(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.

(xv) According to the information and explanations given to us, the Company has not entered into non-cash transaction within the meaning of section 192 of the Act, with directors or persons connected with them. Accordingly, paragraph 3 (xv) of the Order is not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.



For Gupta & Dua

Chartered Accountants Firm''s Registration No.003849N





CA. Mukesh Dua

Partner

Delhi, 14th May, 2016 Membership No.085323


Mar 31, 2015

We have audited the accompanying financial statements of RELAXO FOOTWEARS LIMITED (''the Company''), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the 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

The Company''s 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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows 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 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 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. 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 the 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at 31st March, 2015, and its profit and its 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, 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) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

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

(d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(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) 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 financial statements-Refer Note 29 to the financial statements;

ii. the Company did not have any long term contracts including any derivative contracts for which there were any material foreseeable losses;

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.

(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 reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

(iii) The Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 189 of the Act. Consequently, requirement of clauses (iii) (a) and (iii) (b) of paragraph 3 of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any Deposits from the public within the meaning of Section 73 and section 76 of the Companies Act, 2013.

(vi) In our opinion and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013, in respect of manufacture of its products.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund,employees state insurance fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues were in arrears as at 31st March 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following disputed statutory dues aggregating to Rs. 4575.96 lacs, that have not been deposited on account of matters pending before appropriate authorities, are as under:-

(Rs. in lacs)

S.No. Name of the Statute Nature of dues and period to which amount relates

1. Haryana General Purchase Tax 2001-02 Sales Tax Act, 1973 2002-03

2. Delhi Value Added Tax, Input Tax 2005-06 2005

3. Rajasthan Tax on Entry Tax From 2007-08 Entry of Goods Into To 2014-15 Local Area Act, 1999 Interest on Tax Demanded

4. Entry Of Goods Into Haryana Local Area Development Local Area Act, 2008* Tax/Entry Tax From 2006-07 To 2014-15 Interest On Tax Demanded

5. Income Tax Act,1961 Regular demand 2009-10 Tax Deducted at Source From 2008-09 To 2011-12 From 2013-14 To 2015-16

S. Name of the Statute Forum where dispute is pending Amount No.

1. Haryana General Jt. Excise & Taxation Commissioner 19.92 Sales Tax Act, 1973 Jt. Excise & Taxation Commissioner 14.73

2. Delhi Value Added Tax, Appellate Tribunal, Delhi 3.45 2005

3. Rajasthan Tax on Supreme Court of India 11.10 Entry of Goods Into Local Area Act, 1999 2.83

4. Entry Of Goods Into Supreme Court of India Local Area Act, 2008* 3044.17

1431.49

5. Income Tax Act,1961 Income tax Appellate Tribunal 15.51

Commissioner of Income Tax (Appeals) 29.17 Commissioner of Income Tax (Appeals) 3.59

Total 4575.96

*The matter has been decided in favour of the Company, although the department has preferred appeal at higher levels.

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions or banks during the year.

(x) In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) To the best of our knowledge and according to information and explanations provided to us, in our opinion, the term loans obtained by the company were, prima facie, applied by the company for the purpose for which they were obtained, other than temporary deployment pending application.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Gupta & Dua Chartered Accountants Firm Registration No.003849N

Mukesh Dua Partner New Delhi, 9th May, 2015 Membership No.085323


Mar 31, 2014

We have audited the accompanying financial statements of RELAXO FOOTWEARS LIMITED (''the Company''), which comprise the Balance Sheet as at 31st March, 2014, and 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 flows 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 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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 entity''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 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 suffcient 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 aforesaid 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 31st March, 2014;

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, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure hereto, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(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, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notifed under the Companies Act, 1956 read with the General Circular 15/2013 dated 13thSeptember 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT (Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date)

1) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verifed by the management in phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies have been noticed on such verifcation.

c) In our opinion, the company has not disposed off any substantial/ major part of its fixed assets during the year and the going concern status of the company is not affected.

2) In respect of its inventories:

a) As explained to us, inventories were physically verifed by the management at reasonable intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, no material discrepancies were noticed on physical verifcation of inventories as compared to the book records.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 ('' the Act''):

a) The company has not granted any loan to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, paragraphs 4(iii) (a) to 4(iii) (d) of the Order are not applicable.

b) The Company has taken unsecured loan from one party. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs. 1113.57 lacs and the year- end balance amounted to Rs. 1113.57 lacs.

c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions, are not prima facie prejudicial to the interest of the company.

d) The Company is regular in paying the principal amount as stipulated and has been regular in payment of interest in respect of loans referred to in (b) above.

4) In our opinion and 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, for the purchase of inventory and fixed assets and for

the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control.

5) In respect of contracts or arrangements that need to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956:

a) To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements, as the case may be, that need to be entered into the register have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, as the case may be, exceeding the value of Rs. five lacks in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and as per information available with the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 58 A and Section 58AA of the Companies Act, 1956.

7) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of manufacture of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) In respect of statutory dues :- a) According to the information and explanations given to us

and on the basis of our examination of the records of the company, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, Investor Education and Protection Fund and other material statutory dues have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

b) According to information and explanations given to us, the following disputed statutory dues aggregating to Rs. 3614.17 lacs, that have not been deposited on account of matters pending before appropriate authorities, are as under :-

S.No. Name of the Statute Nature of dues and period to which amount relates

1. Haryana General Sales Purchase Tax 2001-02 Tax Act, 1973 2002-03

2. Delhi Value Added Tax, Input Tax 2005-06 2005

3. Rajasthan Tax on Entry Entry Tax From 2007-08 of Goods Into LocalArea To 2013-14 Act, 1999 Interest on Tax Demanded

4. Entry of Goods Into Local Area Development Tax/Entry Local AreaAct,2008* Tax From 2006-07 To 2013-14 Interest On Tax Demanded

5. Income Tax Act,1961 Regular demand 2009-10 2010-11 TDS From 2008-09 To 2011-12 From 2013-14 To 2014-15

S.No. Name of the Statute Forum where dispute is pending Amount

1. Haryana General Sales Jt. Excise & Taxation Commissioner 19.92 Tax Act, 1973 Jt. Excise & Taxation Commissioner 14.73

Delhi Value Added Tax,2005 Appellate Tribunal, Delhi 3.45

3. Rajasthan Tax on Entry High court, Jodhpur of Goods Into LocalArea 8.58 Act, 1999 3.56

4. Entry of Goods Into Supreme court of India Local AreaAct,2008* 2354.33 1170.33

5. Income Tax Act,1961 Income tax Appellate Tribunal 15.51

Commissioner of Income Tax (Appeals) 2.33

Commissioner of Income Tax (Appeals) 9.10

Commissioner of Income Tax (Appeals) 12.33

3614.17

*The matter has been decided in favour of the Company, although the department has preferred appeal at higher levels.

10) The Company has no accumulated losses at the end of financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on the audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to any financial institution and banks.

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 others securities.

13) In our opinion, the company is not a chit fund / a nidhi / mutual benefit fund / society. Therefore, clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

14) The company is not dealing or trading in shares, securities, debentures and other investments; therefore requirement of maintenance of proper records of such transaction and contracts does not arise.

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

16) In our opinion the term loans have been utilized for the purposes for which the same were raised.

17) According to the cash fow statement and other records examined by us and according to the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18) During the year, the Company 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.

19) The company has not issued debentures and therefore the question of securities or charge to be created in respect of debenture does not arise.

20) The Company has not raised any money by way of public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

For Gupta & Dua

Chartered Accountants (Registration No. 003849N)

CA Mukesh Dua

Partner Delhi, 10th May, 2014 M.No.:085323


Mar 31, 2013

We have audited the accompanying financial statements of RELAXO FOOTWEARS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and 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 is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows 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"). This responsibility includes the design, implementation and maintenance of internal control 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. 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 said financial statements, read together with the significant accounting policies and additional notes thereon given in NOTE 27, give the information required by the act, in the manner so required and present 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, 2013;

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, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure hereto, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(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, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

1) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verified by the management in phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies have been noticed on such verification.

c) In our opinion, the company has not disposed off any substantial / major part of its fixed assets during the year and the going concern status of the company is not affected.

2) In respect of its inventories :

a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.

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 reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 :

a) The Company has taken unsecured loan from a party. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs. 972.60 lacs and the year end balance is Rs. 972.60 lacs.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions, are not prima facie prejudicial to the interest of the company.

c) The Company is regular in paying the principal amounts as stipulated and have been regular in payment of interest in respect of loans referred to in (a) above.

d) There is no overdue amount of loans taken as referred to in (a) above.

e) The company has not granted any loan, to companies, firms or other parties covered in the register maintained under section 301 of the Company Act, 1956.

4) In our opinion and 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, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control.

5) In respect of contracts or arrangements that need to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956:

a) To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements, as the case may be, that need to be entered into the register have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, as the case may be, exceeding the value of Rs. five lacs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and as per information available with the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 58 A and Section 58AA of the Companies Act, 1956.

7) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of manufacture of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) In respect of statutory dues :- a) According to the information and explanations given to us and on the basis of our examination of the records of the company, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, Investor Education and Protection Fund and other material statutory dues have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2013 for a period of more than six months from the date they became payable.

b) According to information and explanations given to us, the following disputed statutory dues aggregating Rs.1931.69 lacs that have not been deposited on account of matters pending before appropriate authorities are as under :-

S. No. Name of the Statute Nature of dues and period to which amount relates

1. Haryana General Sales Purchase Tax 2001-02 Tax Act, 1973 2002-03

2. Delhi Value Added Tax, 2005 Input Tax 2005-06

3. U.P. Sales Tax Act, 1940 Sales Tax 2006-07

4. Rajasthan Entry Tax Entry Tax From 2007-08

To 2012 -13

5. Haryana Local Area Dev. Entry Tax From 2006-07 Tax and Entry tax* To 2012-13

6 Income Tax Act,1961 Regular demand : 2009-10

2010-11 TDS: From 2007-08

To 2011-12

Total

NAME Forum where dispute is pending Amount (Rs. in lacs)

Haryana General Sales Jt. Excise & Taxation Commissioner 19.92

Jt. Excise & Taxation Commissioner 14.73

Haryana General Sales Appellate Tribunal, Delhi 3.45

Haryana General Sales Deputy Commissioner of Commercial 0.72 Tax, Ghaziabad, UP

High court , Jodhpur 7.32

Haryana General Sales Supreme court of India 1861.31

Income tax Appellate Tribunal & 15.51 Assessing Officer

Commissioner of Income Tax (Appeals) 2.33

Commissioner of Income Tax (Appeals) 6.40 1931.69

*The matter has been decided in favour of the Company, although the department has preferred appeal at higher levels.

10) The Company has no accumulated losses at the end of financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on the audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to any financial institution and banks.

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 others securities.

13) In our opinion, the company is not a chit fund / a nidhi / mutual benefit fund / society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order 2003 (as amended) is not applicable to the Company.

14) The company is not dealing or trading in shares, securities, debentures and other investments; therefore requirement of maintenance of proper records of such transaction and contracts does not arise.

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

16) In our opinion the term loans have been utilized for the purposes for which the same was raised.

17) According to the cash flow statement and other records examined by us and according to the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18) During the year, the Company 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.

19) The company has not issued debentures and therefore the question of securities or charge to be created in respect of debenture does not arise.

20) The Company has not raised any money by way of public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

For GUPTA & DUA

Chartered Accountants

(Registration No. 003849N)

CA. MUKESH DUA

Place: Delhi Partner

Date :May 11, 2013 M.No. : 085323


Mar 31, 2012

We have audited the attached Balance Sheet of RELAXO FOOTWEARS LIMITED as at 31st March, 2012, the statement of Profit and Loss and the Cash Flow Statement for the period 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 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 purposes of our audit;

b) In our opinion, proper books of account, as required by law, have been kept by the Company, so far as it appears from our examination of such 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, statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956 ;

e) On the basis of the written representations received from the Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 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 financial statements, read together with the significant accounting policies and notes thereon given in Note 27 give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view, in conformity with the accounting principles generally accepted in India ;

i) in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

ii) in so far as it relates to the statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

iii) in so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT OF RELAXO FOOTWEARS LIMITED FOR THE PERIOD ENDED 31ST MARCH, 2012 (REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE)

1) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verified by the Management at all locations at reasonable intervals. No material discrepancies between book records and the physical inventories have been noticed on such verification.

c) In our opinion, the company has not disposed off any substantial / major part of its fixed assets during the year and the going concern status of the company is not affected.

2) In respect of its inventories :

a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.

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 reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 :

a) The Company has taken unsecured loan from a party. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs.901.60 lacs and the year end balance is Rs.901.60 lacs.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions, are not prima facie prejudicial to the interest of the company.

c) The Company is regular in paying the principal amounts as stipulated and have been regular in payment of interest in respect of loans referred to in (a) above.

d) There is no overdue amount of loans taken as referred to in (a) above.

e) The company has not granted any loan, to companies, firms or other parties covered in the register maintained under section 301 of the Company Act, 1956.

4) In our opinion and 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, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control.

5) In respect of contracts or arrangements that need to be entered in the register maintained in pursuance of section 301 ofthe Companies Act, 1956:

a) To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements, as the case may be, that need to be entered into the register have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, as the case may be, exceeding the value of Rs. five lacs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and as per information available with the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 58 A and Section 58AA of the Companies Act, 1956.

7) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

8) On the basis of the information and explanation provided to us, we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 in respect of products of the company covered under the rules under said section have been maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) In respect of statutory dues :-

a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than six months from the date of becoming payable

b) The disputed statutory dues aggregating Rs.1509.35 lacs that have not been deposited on account of matters pending before appropriate authorities are as under :-

S. Name of the Statute Name of the Dues Forum where dispute is pending Amount No. (Rs. in lacs)

1. Haryana General Sales Purchase Tax A.Y 2001-02 Jt. Excise & Taxation Commissioner 19.92 Tax Act, 1973 2002-03 Jt. Excise & Taxation Commissioner 14.73

2. Punjab Value Added VAT A.Y. 2008-09 Deputy Excise & Taxation Commissioner 2.19 Tax, 2005

3. Delhi Value Added Tax, Input Tax A.Y 2005-06 Appellate Tribunal, Delhi 3.45 2005

4. U.P Sales Tax, Act Sales Tax A.Y 2006-07 Asstt. Commissioner of Commercial Tax, 0.72 Ghaziabad, UP

5. Rajasthan Entry Tax Entry Tax A.Y. 2007-08 High Court, Jodhpur 1.76

2008-09 High Court, Jodhpur 1.81

2009-10 High Court, Jodhpur 0.24

2010-11 High Court, Jodhpur 1.05

2011-12 High Court, Jodhpur 1.41

6. Haryana local area dev. Entry Tax A.Y. 2006-07 Supreme Court of India 17.79 Tax and entry tax 2007-08 Supreme Court of India 173.02

2008-09 Supreme Court of India 208.85

2009-10 Supreme Court of India 295.78

2010-11 Supreme Court of India 307.54

2011-12 Supreme Court of India 427.42

7. Income Tax Act,1961 Regular Assessment A.Y 2009-10 Commissioner of Income Tax (Appeals) 15.51

A.Y 2010-11 Commissioner of Income Tax (Appeals) 1.80

TDS A.Y. 2007-08 Commissioner of Income Tax (Appeals) 0.14

2008-09 Commissioner of Income Tax (Appeals) 4.64

2009-10 Commissioner of Income Tax (Appeals) 2.29

2010-11 Commissioner of Income Tax (Appeals) 0.61

2011-12 Commissioner of Income Tax (Appeals) 1.53

8. The Employees State 2011-12 District Court , Rohtak 5.15 Insurance Corporation Act,1948

Total 1509.35

10) The Company has no accumulated losses at the end of financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on the audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to any financial institution and banks.

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 others securities.

13) In our opinion, the company is not a chit fund / a nidhi / mutual benefit fund / society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order 2003 (as amended) is not applicable to the Company.

14) The company is not dealing or trading in shares, securities, debentures and other investments; therefore requirement of maintenance of proper records of such transaction and contracts does not arise.

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

16) In our opinion the term loan has been utilized for the purposes for which the same was raised.

17) According to the cash flow statement and other records examined by us and according to the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18) During the year, the Company 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.

19) The company has not issued debentures and therefore the question of securities or charge to be created in respect of debenture does not arise.

20) The Company has not raised any money by way of public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

FOR GUPTA & DUA

Chartered Accountants

(Registration No. 003849N)

Place : Delhi C.A MUKESH DUA

Dated : May 12, 2012 Partner

M.NO. 085323


Mar 31, 2011

We have audited the attached Balance Sheet of RELAXO FOOTWEARS LIMITED as at 31st March, 2011, the Profit and Loss account and the Cash Flow Statement for the period 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors' Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 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 purposes of our audit ;

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

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

e) On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 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 financial statements, read together with the significant accounting policies and notes thereon given in schedule 15 give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view, in conformity with the accounting principles generally accepted in India ;

i) in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 ;

ii) in so far as it relates to the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii) in so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT OF RELAXO FOOTWEARS LIMITED FOR THE PERIOD ENDED 31ST MARCH, 2011 (REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE)

1) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verified by the Management at all locations at reasonable intervals. No material discrepancies between book records and the physical inventories have been noticed on such verification.

c) In our opinion, the Company has not disposed off any substantial/major part of its fixed assets during the year and the going concern status of the Company is not affected.

2) In respect of its inventories :

a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.

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 reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

3) In respect of loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 :

a) The Company has taken unsecured loan from a party. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs. 765.13 lacs and the year end balance is Rs. 765.13 lacs.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions, are not prima facie prejudicial to the interest of the Company.

c) The Company is regular in paying the principal amounts as stipulated and have been regular in payment of interest in respect of loans referred to in (a) above.

d) There is no overdue amount of loans taken as referred to in (a) above.

e) The Company has not granted any loan, to companies, firms or other parties covered in the register maintained under section 301 of the Company Act, 1956.

4) In our opinion and 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, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control.

5) In respect of contracts or arrangements that need to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956:

a) To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements, as the case may be, that need to be entered into the register have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements, as the case may be, exceeding the value of Rs. five lacs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and as per information available with the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 58 A and Section 58AA of the Companies Act, 1956.

7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8) On the basis of the information and explanation provided to us, we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 in respect of products of the Company covered under the rules under said section have been maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) In respect of statutory dues :-a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and

Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable.

b) Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

c) The disputed statutory dues aggregating Rs.1094.08 lacs that have not been deposited on account of matters pending before appropriate authorities are as under :-

S. Name of the Statute Name of the Dues Forum where Amount

No. dispute is pending (Rs. in lacs)

1. Haryana General Sales Purchase Tax A.Y. 2001-02 Jt. Excise & Taxation Commissioner 19.92

Tax Act, 1973 2002-03 Jt. Excise & Taxation Commissioner 14.73

2. Punjab Value Added VAT A.Y. 2008-09 Deputy Excise & Taxation 2.19 Tax, 2005 Commissioner

3. Delhi Value Added Input Tax A.Y. 2005-06 Appellate Tribunal, Delhi 3.45 Tax, 2005

4. U.P. Sales Tax, Act Sales Tax A.Y. 2006-07 Asstt. Commissioner of Commercial 0.72 Tax, Ghaziabad, UP

5. Rajasthan Entry Tax Entry Tax A.Y. 2007-08 High Court, Jaipur 1.76

2008-09 High Court, Jaipur 1.81

2009-10 High Court, Jaipur 0.24

2010-11 High Court, Jaipur 2.10

6. Haryana local area Entry Tax A.Y. 2006-07 Supreme Court of India 17.79 dev. Tax and entry tax 2007-08 Supreme Court of India 173.02

2008-09 Supreme Court of India 208.85

2009-10 Supreme Court of India 295.78

2010-11 Supreme Court of India 307.54

7. Income Tax Act,1961 Regular Assessment Commissioner of Income Tax (Appeals) 2.49 A.Y. 2008-09

TDS A.Y. 2008-09 Commissioner of Income Tax (Appeals) 17.97

2009-10 Commissioner of Income Tax (Appeals) 23.72

Total 1094.08

10) The Company has no accumulated losses at the end of financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on the audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to any financial institution and banks.

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 others securities.

13) In our opinion, the Company is not a chit fund / a nidhi / mutual benefit fund / society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order 2003 (as amended) is not applicable to the Company.

14) The Company is not dealing or trading in shares, securities, debentures and other investments; therefore requirement of maintenance of proper records of such transaction and contracts does not arise.

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

16) In our opinion the term loan has been utilized for the purposes for which the same was raised.

17) According to the cash flow statement and other records examined by us and according to the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18) During the year, the Company 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.

19) The Company has not issued debentures and therefore the question of securities or charge to be created in respect of debenture does not arise.

20) The Company has not raised any money by way of public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

FOR GUPTA & DUA

Chartered Accountants

(Registration No. 003849N)

Place: New Delhi C.A. MUKESH DUA

Dated: May 26, 2011 Partner

M.No. 085323












Mar 31, 2010

We have audited the attached Balance Sheet of RELAXO FOOTWEARS LIMITED as at 31st March, 2010 and also the Profit and Loss account for the year ended on that date annexed thereto and Cash Flow Statement for the period ended on that date. 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.

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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, We enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 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 purposes of our audit ;

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

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

e) On the basis of the written representations received from the Directors as on 31st 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 a Director in terms of clause (g) of sub-section (I) 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 significant accounting policies and other notes thereon and forming part of the accounts given in schedule 15 give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view, in conformity with the accounting principles generally accepted in India ;

i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii) In so far as it relates to the Profit and Loss Account of the profit of the Company for the year ended on

that date; and

iii) In so far as it relates to the Cash Flow Statement of the cash flow of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT OF RELAXO FOOTWEARS LIMITED FOR THE PERIOD ENDED 31ST MARCH, 2010 (REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE)

1) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verified by the Management at all locations at reasonable intervals. No material discrepancies between book records and the physical inventories have been noticed on such verification.

c) In our opinion, the Company has not disposed off any substantial / major part of fixed assets during the year and going concern status of the Company is not affected.

2) In respect of its inventories :

a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

3) In respect of loans, secured or unsecured, granted or taken by the Company, to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 :

a) The Company has taken unsecured loan from a party. In respect of said loan, the maximum amount outstanding at any time during the year is Rs.553.67 lacs and the year end balance is Rs.525.30 lacs.

b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions are not prima facie, prejudicial to the interest of the Company.

c) The Company has not granted any loan, to a Company, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

d) The Company is regular in paying the principal amounts as stipulated and have been regular in payment of interest in respect of loans referred to in a above.

e) There is no overdue amount of loans taken as referred to in (a) above.

4) In our opinion and 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, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control.

5) In respect of contracts or arrangements that need to be entered in the register maintained charged in pursuance of section 301 of the Companies Act, 1956:

a) To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements that need to be entered into the register have been so entered.

b) According to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rs. five lacs have been entered into during the year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit within the meaning of Section 58 A and Section 58AA of the Companies Act, 1956.

7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8) On the basis of records produced we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under section 209 (1) of the Companies Act, 1956 in respect of products of the Company covered under the rules under said section have been maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) In respect of statutory dues :- a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor

Educational Protection Fund, and Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

b) The disputed statutory dues aggregating to Rs.48.33 lacs, that have not been deposited on account of matters pending before appropriate authorities are as under :

S. No. Name of the Statute Name of the Dues Forum where dispute Amount

is pending (Rs. in lacs)

1 Haryana General Purchase Tax for Jt. Excise & Taxation 19.92 Sales Tax Act, 1973 the A.Y. Commissioner

2001-02 Jt. Excise & Taxation 14.73

2002-03 Commissioner

2 Punjab Value Added VAT Deputy Excise & 2.19 Tax Act , 2005 2008-09 Taxation Commissioner

3 Delhi Value Added Input Tax Appellate Tribunal, 3.45 Tax Act , 2005 2005-06 Delhi

4 U.P. Sales Tax Act Sales Tax Asstt. Commissioner 0.72

2006-07 of Commercial Tax,

Ghaziabad, UP

5 Rajasthan Entry Tax Entry T ax 2007-08 High Court, Jaipur 2.51

Entry Tax 2008-09 High Court , Jaipur 4.81

Total 48.33

10) The Company has no accumulated losses at the end of financial year and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on the audit procedures and on the basis of information and explanation given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to any financial institution and banks.

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.

13) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clause 4 (xiii) of the Companies (Auditors Report) Order 2003 (as amended) is not applicable to the Company.

14) The Company is not dealing or trading in share, securities, debentures and other investments; therefore requirement of maintenance of proper records of such transaction and contracts does not arise.

15) According to information and explanation given to us the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16) In our opinion the term loan has been utilized for the purposes for which the same was raised.

17) According to the cash flow statement and other records examined by us and according to the information and explanations given to us, on an overall basis, funds raised on short term basis have been used during the year for long term investment.

18) During the year, the Company 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.

19) The Company has not issued debentures and therefore the question of securities or charge to be created in respect of debenture does not arise.

20) The Company has not raised any money by way of public issue during the year.

21) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

For GUPTA & JHUNJHUNWALA

Chartered Accountants (Registration No. 003849N)

CA. MUKESH DUA

Partner M.No. 085323 Place : Delhi

Dated : May 29, 2010



 
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