Auditor Report of Timex Group India Ltd.

Mar 31, 2022

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Timex Group India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the financial statements”).

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 Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions ofthe Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.

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

• The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Director’s Report and Report on Corporate Governance report, but does not include the financial statements and our auditor’s report thereon.

• Our opinion on the financial statements does not cover the

other information and we do not express any form of assurance conclusion thereon

• In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

• If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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 Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Financial Statements

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

economic decisions of users taken on the basis of these financial statements.

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

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

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

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

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

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our

audit 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 including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account.

d. In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended,

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h. 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, as amended 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 26(a) of the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses- Refer note 26(e) of the financial statements;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company - Refer note 26(f) to the financial statements;

iv. (a) The Management has represented that, to

the best of it’s knowledge and belief, as disclosed in the note 34 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities.

(b) The Management has represented, that, to the best of it’s knowledge and belief, as disclosed in the note 34 to the financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the

understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement

v. The company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

2. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells LLP

Chartered Accountants (Firm’s Registration No. 117366W/W-100018)

Sd/-

Rajesh Kumar Agarwal

(Partner)

Place: Delhi (Membership No. 105546)

Date: May 26, 2022 (UDIN: 22105546AJQFTU8197)

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Mar 31, 2018

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Timex Group India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

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 Ind AS 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 Ind AS financial statements based on our audit.

In conducting 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 and the Order issued under section 143(11) of the Act.

We conducted our audit of the Ind AS financial statements 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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS 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 Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,the aforesaid Ind AS 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2017 dated May 25, 2017 expressed an unmodified opinion and report for the year ended March 31, 2016 dated May 26, 2016 expressed a qualified opinion due to excess managerial remuneration paid (refer note 37 to the accompanying financial statements) on those financial statements, and have been restated to comply with Ind AS Adjustments made to the previously issued said financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS have been audited by us.

Our opinion on the Ind AS financial statements is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 A”.Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

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, as amended, 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 Ind AS financial statements - Refer Note 27 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. - Refer Note 27(e) to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company- Refer Note 27(f) to the financial statements.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

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

We have audited the internal financial controls over financial reporting of Timex Group India Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design,implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the“Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ANNEXURE - B TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section 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 programme of verification of fixed assets to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us the Company does not have any immovable properties of freehold or leasehold land and building disclosed as property, plant and equipment and hence reporting under clause (i) (c) of the CARO 2016 (“the Order”) is not applicable.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals other than for stock lying with third parties and goods in transit for which confirmations have been obtained and subsequent receipts have been verified in most of the cases. The discrepancies noted on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanation given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (“the Act”).

(iv) According to the information and explanations given to us, the Company has not granted any loans, made investments or provided guarantees and hence reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year in the terms of the provision of section 73 to 76 or any other relevant provision of the Act. Accordingly, para 3 (v) of the Order is not applicable.

(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Act. Accordingly, para 3 (vi) of the Order is not applicable.

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

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax, Value Added Tax, Works Contract Tax, Cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax, Value Added Tax, Works Contract Tax, Cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, other than the amounts reported below, there are no dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Goods and Service Tax which have not been deposited by the Company with the appropriate authorities on account of any dispute.

(Rs. Lakhs)

Name of the Statute	Nature of the dues	Forum where dispute	Period	Amount*
Sales Tax	State Sales Tax	Upto Commissioner (Appeals)	1992 2014	672
Laws	Central Sales Tax	Upto Commissioner (Appeals)	1994 2017	161

*amount paid as per demand orders including interest and penalty wherever quantified in the Order

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company did not have any outstanding dues to any financial institution, government or debenture holders during the year.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided 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) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding or persons connected with them and hence provisions of section 192 of the Act are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Manjula Banerji

Partner

Noida, May 24, 2018 (Membership No.: 086423)

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Mar 31, 2017

To the Members of Timex Group India Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Timex Group India Limited (‘‘the Company’’), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the 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 17 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 of assets of the Company and for preventing and detect 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 there under.

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 auditors 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 evaluate: 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 conform with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2017. its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to note 2 (b) of the financial statements, wherein it is explained that the Company has significant accumulated losses which have resulted in substantial erosion of the net worth of the Company as at 31 March 2017. The ability of the Company to continue as a going concern is dependent on improvement of the Company’s future operations and continued financial support from the ultimate holding Company. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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 accounts 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) the going concern matter described in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) on the basis of the written represented from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 154(2) of the Act;

(g) 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

(h) with respect to the other matters to be included in the Auditors Report in accordance with Rule 1 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 39 to the financial statements;

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

(iii) there were no amounts which were required to be transferred to the Investor Education and Protection Fund 1 the Company; and

(iv) the Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management -Refer Note 45 to the financial statements.

The Annexure referred to in our Independent Auditors Report of even date to the members of the Company on the financial statements for the year ended 31 March 2017, we report that:

(i) (a) The Company has maintained) operate 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 all fixed assets are verified in a phased manner over a period of three years. According to this programme, the Company has verified all fixed assets at the factory, corporate office and regional offices during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. As informed to us, the discrepancies noticed on such verification were not material and have been properly adjusted in the books of account.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deed of the immovable property is held in the name of the Company.

(ii) The inventory, except goods-in-transit, has been physically verified by the management as at the year end. In our opinion, the frequency of such verification is reasonable. As informed to us, the discrepancies noticed on verification between the physical stock and book records were not material and have been properly adjusted in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, para 3(iii) of the order is not applicable.

(iv) According to the information and explanations given to us, the Company has not given any loans, or made any investments, or provided any guarantee, or security as specified under section 185 and 186 of the Companies Act, 2013. Accordingly, paragraph 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly, para 3(v) of the Order is not applicable.

(vi) 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 for any of the activities carried out by the Company. Accordingly, para 3(vi) of the Order is not applicable.

(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, income-tax, sales-tax, duty of customs, duty of excise, service tax, value added tax, cess and other statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except in respect of deposit of value added tax and service tax where there have been slight delays in few cases.

According to the information) explanations given to us, no undisputed amounts payable in respect of undisputed statutory dues including provident fund, employees )state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, other than the amounts reported below, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax which have not been deposited by the Company with the appropriate authorities on account of any dispute.

Name of the Statute	Nature of the dues	Amount Disputed (Rs. lakhs)	Amounts paid under protest (Rs. lakhs)	Period to which the amount relates (Financial year)	Forum where dispute is pending
Central Excise Act, 1944	Excise duty	6	5	1992-93 and 1996-97	Deputy Commissioner, Central Excise
Central Sales Ta Act, 1956	Sales Tax	59	-	1994-95	Deputy Commissioner, Commercial tax
The Kerala Sale Tax Act, 1963	sales Tax	1	-	1995-96	Assistant Commissioned Sales Tax

Tamil Nadu General Sales Te Act, 959	Sales Tax	8		1992-93 to 1993-94	Commercial taxation officer
Andhra Pradesh Sales Tax Act, 957	Sales Tax	1		1995-96	Commercial taxation officer
Karnataka Sales Tax Act, 957	Cess	1	-	1995-96	Deputy Commissioner, Commercial taxes
T amil Nadu General Sales Te Act, 959	Sales Tax x	9	7	2002-03	Honourable High Court of, Chennai
Customs Act, 962	Customs duty	8	8	1995-96	Commissioner, Customs (Appeals)
The Kerala Valu Added T ax Rules 2005	;Sales Tax	1	1	2009-10	Assistant Commissioner Commercial tax
The Madhya Pradesh Value Added Tax Act, 2002	Sales Tax	7	1	2009-10	Commercial taxation officer
Central Sales Ta Act, 956	Sales Tax	10	2	2011-12	Deputy Commissioner-Commercial tax
Gujarat Value Added Tax Act, 2aB	Sales Tax	13		2011-12	Deputy Commissioner-Commercial tax
Central Sales Ta Act, 956	Sales Tax	3	2	2011-12	Deputy Commissioner-Commercial tax
Income Tax Act, 961 *	Income Tax	610	-	2001-02	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	786	-	2002-03	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	397	-	2003-04	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	329	-	2004-05	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	338	-	2005-06	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	75	-	2006-07	Commissioner of Income T ax, (Appeals)
Income Tax Act, 961 *	Income Tax	2,000	-	2007-08	Commissioner of Income T ax, (Appeals)
Income Tax Act, 961 *	Income Tax	2,686	-	2008-09	Commissioner of Income T ax, (Appeals)

Income Tax Act, 961 *	Income Tax	2,084	-	2009-10	Commissioner of Income Tax, (Appeals)
Income Tax Act, 961 *	Income Tax	2,828	-	2010-11	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	1315	-	2011-12	Dispute Resolution Pan;
Income Tax Act, 961 *	Income Tax	1432	-	2012-13	Commissioner of Income Tax, (Appeals)

“Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

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

(ix) The Company did not raise an money by way of initial public offer or further public offer (including debt instruments) under loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, there has been no fraud by the Company or any fraud on the Company by its officers or employees noticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the managerial remuneration has been provided and paid by the Company in accordance with the provisions of section 97 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion and according the information and explanations given to us, the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, transactions with the related parties are in compliance with Section 77 and 88 of the Act where applicable and the details of such transactions have been disclosed in the financial Statements as required by the applicable accounting standards

(xiv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has made private placement of preference shares during the year and complied with the provisions of section 42 of the Companies Act, 2GtAs explained to us by the management, the amount raised has been used for the purposes for which the funds were raised.

(xv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them Accordingly, paragraph 3(xv) of the Order is not applicable

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

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

We have audited the internal financial controls over financial reporting of Timex Group India Limited ("the Company”) as of 31 March 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountant India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting record and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (t Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section1 43(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company^ assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of an evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India.

For B S R & Co. LLP

Chartered Accountants

Firm Registration No.: 101248W/W-100022

Rajiv Goyal

Place : Gurgaon Partner

Date : 25 May 2017 Membership No.: 094549

---

Mar 31, 2016

INDEPENDENT AUDITOR’S REPORT

To the Members of Timex Group India Limited Report on the Financial Statements

We have audited the accompanying financial statements of Timex Group India Limited (‘‘the Company’’), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the 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 34(5) of the Companies Act, 203 (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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of assets of the Company and for preventing and detecting frauds a 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 a 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 there under.

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 auditors 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 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 qualified audit opinion on the financial statements.

Basis for Qualified Opinion

Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 202 was in excess of the amount approved by the Central Government. The Company’s application for approval of such excess remuneration was rejected by the Central Government vide its letter dated 26 July 2012. The Company had requested the Central Government to re-consider the same and an application had been made in this regard by the Company vide its letter dated 30 August 202. In response, the Company received direction from Central Government to recover the excess remuneration of Rs. 7.09 lal paid during the year ended 31 March 2012. Subsequently, the Company filed an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f. 31 January 203. The Central Government vide its letter dated 18 November 2014, rejected the application filed for waiver of excess remuneration paid. The Company is taking necessary steps for recovery of this amount from the erstwhile Managing Director.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair v view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company astailcB2016, its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to note 2 (b) of the financial statements, wherein it is explained that the Company has significant accumulated losses which have resulted in complete erosion of the net worth of the Company as at 31 March 20B. The ability of the Company to continue as a going concern is dependent on improvement of the Company’s future operations and continued financial support from Timex Group B.V, a fellow subsidiary. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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, to the extent applicable.

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) the going concern matter described in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) on the basis of the written representations received from the directors as on 31March 20B taken on record by the Boa of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;

(g) 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

(h) with respect to the other matters to be included in the Auditors Report in accordance with Rule 1 of the Companies (Audit and Auditors) Rules, 204, 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 39 to the financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any mater foreseeable losses;

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditor’s Report of even date to the members of the Company on the financial statements for the year ended 31 March 206:

(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 all fixed assets are verified in a phased manner over a period of three years. According to this programme, the Company has verified all fixed assets at the factory, corporate office and regional offices during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets.

The discrepancies noticed on such verification were not material and have been properly adjusted in the books of account.

(c) According to the information and explanations given to us and on the basis of our examination of the records o the Company, the title deed of the immovable property is held in the name of the Company.

(ii) The inventory, except goods-in-transit, has been physically verified by the managements at the year end. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stock and book records were not material and have been properly adjusted in the books of account

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 89 of the Companies Act, 20®. Accordingly, para 3(iii) of the order is not applicable.

(iv) According to the information and explanations given to us, the Company has not given any loans, or made any investments, or provided any guarantee, or security as specified under section 185 and 186 of the Companies Act,

203. Accordingly, paragraph 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly, para 3(v) of the Order is not applicable.

(vi) According to the information and explanations given to us the Central Government has not prescribed the maintenance of cost records under section 48(1) of the Companies Act, 203 for any of the activities carried out by the Company. Accordingly, para 3(vi) of the Order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the record of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory due including provident fund, employees ’state insurance, income-tax, sales-tax, duty of customs, duty of excise, value added tax, cess and other statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except in respect of deposit of employees ’state insurance and value added tax where there have been slight delays in few cases. In respect of dues relating to service tax, there ha-been serious delays in few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of undisputed statutory dues including provident fund, employees ’state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues were in arrears Maath10B for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, other than the amounts reported below, there are n dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax which have not been deposited by the Company with the appropriate authorities on account of any dispute.

Name of the Statute	Nature of the dues	Amount Disputed (Rs. lakhs)	Amounts paid under protest (Rs. lakhs)	Period to which the amount relates (Financial year)	Forum where dispute is pending
Central Excise Act, 944	Excise duty	6	5	992-93 and 99697	Deputy Commissioner, Central Excise
Central Sales Tax Act, 956	Sales Tax	59	-	994-95	Deputy Commissioner, Commercial tax

The Kerala Sales Tax Act, B63	Sales Tax	1		995-96	Assistant Commissioner, Sales Tax
T amil Nadu General Sales Tax Act, 959	Sales Tax	8		992-93 to P93-94	Commercial taxation officer
Andhra Pradesh Sales Tax Act, 957	Sales Tax	1		995-96	Commercial taxation officer
Karnataka Sales Tax Act, B57	Cess	1		995-96	Deputy Commissioner, Commercial taxes
T amil Nadu General Sales Tax Act, 959	Sales Tax	9	7	2002-03	Honourable High Court of, Chennai
Customs Act,962	Customs duty	8	8	995-96	Commissioner, Customs (Appeals)
The Kerala Value Added Tax Rules, 2005	Sales Tax	1	1	2009-0	Assistant Commissioner, Commercial tax
The Madhya Pradesh Value Added T ax Act, 2002	Sales Tax	7	1	2009-0	Commercial taxation officer
The UP Sales tax Act,B48	Sales Tax	84	42	2001	Commercial tax Tribunal
The UP Sales Tax Act 948	Sales Tax	00	33	2012	Deputy Commissioner
Income Tax Act, 961 *	Income Tax	60	-	200102	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	786	-	2002-03	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	397	-	2003 -04	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	329	-	2004-05	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	338	-	2005-06	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	75	-	2006-07	Commissioner of Income Tax, (Appeals)
Income Tax Act, 961 *	Income Tax	2,000	-	2007-08	Commissioner of Income Tax, (Appeals)

Income Tax Act, 961 *	Income Tax	2,686	-	2008-09	Commissioner of Income Tax, (Appeals)
Income Tax Act, 961 *	Income Tax	2,084	-	2009-0	Commissioner of Income Tax, (Appeals)
Income Tax Act, 961 *	Income Tax	2,828		201-1	Income tax Appellate Tribunal
Income Tax Act, 961 *	Income Tax	10.35		2012	Dispute Resolution Panel

*Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

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

(ix) The Company did not raise any money by way of initial public offer or further public offer (including deb instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, there has been no fraud by the Company or any fraud o the Company by its officers or employees noticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis of our examination of the records o the Company, the managerial remuneration has been provided and paid by the Company in accordance with 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.

(xiii) According to the information and explanations given to us and on the basis of our examination of the records o the Company, transactions with the related parties are in compliance with Section F7 and 88 of the Act where applicable and the details of such transactions have been disclosed in the financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of its shares or fully or par convertible debentures during the year.

(xv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

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

We have audited the internal financial controls over financial reporting of Timex Group India Limited (“the Company”) as of 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (IC These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the tin preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidan Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 43(0) of the Companies Act, 20®, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on t auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of a evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India.

For B S R & Co. LLP

Chartered Accountants

Firm Registration Number: DE48W/W-1ME2

Rajiv Goyal

Place : Gurgaon Partner

Date : 26 May 2016 Membership No.: 094549

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Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Timex Group India Limited (''the Company''), which comprise the Balance Sheet as at 31 March 2015,the Statement of Profit and Loss,the Cash Flow Statement for the year ended, and a summary of the 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. 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 standalone 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 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 qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 2012 was in excess of the amount approved by the Central Government. The Company''s application for approval of such excess remuneration was rejected by the Central Government vide its letter dated 26 July 2012. The Company had requested the Central Government to re-consider the same and an application had been made in this regard by the Company vide its letter dated 30 August 2012.

In response, the Company received direction from Central Government to recover the excess remuneration of Rs. 7.09 lakhs paid during the year ended 31 March 2012. Subsequently, the Company filed an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f. 31 January 2013. The Central Government vide its letter dated 18 November 2014, has rejected the application filed for waiver of excess remuneration paid. The Company is in the process of taking necessary steps for recovery of this amount from the erstwhile Managing Director.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone 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 31March 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to note 2 (b) of the financial statements, wherein it is explained that the Company has significant accumulated losses which have resulted in complete erosion of the net worth of the Company as at 31 March 2015. The ability of the Company to continue as a going concern is dependent on improvement of the Company''s future operations and continued financial support from the holding and ultimate holding company. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

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 paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) we have sought and obtained all the information and explanations which to the 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) the matter described in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) on the basis of the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; 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 38 to the financial statements;

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

iii. The Company did not have any dues on account of Investor Education and Protection Fund.

Annexure to the Independent Auditor''s report

The Annexure referred to in our Independent Auditor''s Report to the members of the Company on the standalone financial statements for the year ended 31 March 2015, we report that:

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

(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. According to this programme, during the year, the Company has verified all fixed assets at the factory location. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(ii) (a) According to the information and explanations given to us, the inventories have been physically verified by the management as at the year end. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures for the 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) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account

(iii) According to the information and explanation given to us, 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 Companies Act, 2013.

(iv) In our opinion, and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company''s specialised requirements and similarly certain goods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system.

(v) The Company has not accepted any deposits from the public during the year.

(vi) 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 148(1) of the Companies Act, 2013 in respect 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 ensure whether they are adequate or complete.

(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, Income tax, Sales tax, Service tax, duty of Customs, duty of Excise, Value added tax, Cess and other material statutory dues, as applicable, have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us,the Company did not have any dues on account of Wealth tax.

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, Service tax, duty of Customs, duty of Excise, Value added tax, Cess and other material statutory dues, as applicable, were in arrears as at 31 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, there are no dues in respect of Service tax which have not been deposited with the appropriate authorities on account of any dispute.According to the information and explanations given to us, the following dues of Income tax, Sales tax, duty of Customs, duty of Excise, Cess and Value Added Tax which have not been deposited by the Company on account of disputes:

Name of the Nature of the Amount Amounts paid Statute dues Disputed under protest (Rs. lakhs) (Rs. lakhs)

Central Excise duty 43 7 Excise (Cenvat Act, 1944 credit) Penalty 43

Central Excise duty 6 5 Excise Act, 1944

Central Sales Tax 59 - Sales Tax Act, 1956

The Kerala Sales Tax 1 - Sales Tax Act, Tax 1963

Tamil Nadu Sales Tax 8 - General Sales Tax Act, 1959

Andhra Sales Tax 1 - Pradesh Sales Tax Act, 1957

Karnataka Cess 1 - Sales Tax Act, 1957

Tamil Nadu Sales Tax 9 7 General Sales Tax Act, 1959

Customs Customs duty 8 8 Act,1962

The Kerala Sales Tax 1 1 Value Added Tax Rules, 2005

The MP Value Sales Tax 7 1 Added Tax

The UP VAT Sales Tax 84 42 Act 2008

Central Sales Tax 12 - Sales Tax Act, 1956

The UP Sales Tax 100 - Sales Tax Act 1948

Income Income Tax 610 - Tax Act, 1961 *

Income Income Tax 786 - Tax Act, 1961 *

Income Income Tax 397 - Tax Act, 1961 */**

Name of the Period to Forum where dispute is Statute which the pending amount relates (Financial year)

Central 1995-96to CESTAT, New Delhi Excise 1998-99 Act, 1944

Central 1992-93and Deputy Commissioner, Central Excise 1996-97 Excise Act, 1944

Central 1994-95 Deputy Commissioner- Sales Commercial tax Tax Act, 1956

The Kerala 1995-96 Assistant Commissioner-Sales Sales Tax Act, Tax 1963

Tamil Nadu 1992-93to Commercial taxation officer General 1993- 94 Sales Tax Act, 1959

Andhra 1995-96 Commercial taxation officer Pradesh Sales Tax Act, 1957

Karnataka 1995-96 Deputy Commissioner- Sales Tax Commercial taxes Act, 1957

Tamil Nadu 2002-03 High Court, Chennai General Sales Tax Act, 1959

Customs 1995-96 Commissioner, Customs Act,1962 (Appeals)

The Kerala 2009-10 Assistant Commissioner Value Added Tax Rules, 2005

The MP Value 2009-10 M.P VAT Authority Added Tax

The UP VAT 2010-11 Additional Commissioner Act 2008 (Appeals)

Central 2010-11 Assistant Commissioner- Sales Commercial tax Tax Act, 1956

The UP 2011-12 Deputy Commissioner Sales Tax Act 1948

Income 2001-02 Income tax Appellate Tax Tribunal Act, 1961 *

Income 2002-03 Income tax Appellate Tribunal Tax Act, 1961 *

Income 2003-04 Income tax Appellate Tribunal Tax Act, 1961 */**

Name of the Nature of the Amount Amounts paid Statute dues Disputed under protest (Rs. lakhs) (Rs. lakhs)

Income Income Tax 329 - Tax Act, 1961 *

Income Income Tax 338 - Tax Act, 1961 *

Income Income Tax 75 - Tax Act, 1961 *

Income Income Tax 2,000 - Tax Act, 1961 *

Income Income Tax 2,689 - Tax Act, 1961 *

Income Income Tax 2,084 - Tax Act, 1961 */**

Income Income Tax 2,434 - Tax Act, 1961 */**

Name of the Period to Forum where dispute is Statute which the pending amount relates (Financial year)

Income 2004-05 Income tax Appellate Tax Tribunal Act, 1961 *

Income 2005-06 Income tax Appellate Tribunal Tax Act, 1961 *

Income 2006-07 Commissioner of Income Tax, Tax (Appeals) Act, 1961 *

Income 2007-08 Commissioner of Income Tax, Tax (Appeals) Act, 1961 *

Income 2008-09 Commissioner of Income Tax, Tax (Appeals) Act, 1961 *

Income 2009-10 Commissioner of Income Tax, Tax (Appeals) Act, 1961 */**

Income 2010-11 Dispute Resolution Panal Tax Act, 1961 */**

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

** Total addition of Rs. 397 lakhs made to the total income of the Company for the financial year 2003-04, out of which Commissioner of Income Tax, (Appeals) has passed an order dated 23 March 2012 allowing a partial relief in favour of the Company and has directed the Assessing Officer (AO) / Transfer Pricing Order (TPO) to make necessary adjustments. As informed to us, the Company has not received the amended tax order from the AO/TPO after incorporation of the above changes. Further, during the current year, the tax department has filed an appeal in Income tax Appellate Tribunal against the order of Commissioner of Income Tax, (Appeals). The proceedings are in progress.

(c) The Company did not have any dues on account of Investor Education and Protection Fund.

(viii) The Company''s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to its bankers during the year. The Company did not have any debentures or dues to any financial institution during the year.

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

(xi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

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

For B S R & Co. LLP Chartered Accountants ICAI Firm Registration No.: 101248W/W-100022

Jiten Chopra Place : Gurgaon Partner Date : 21 May 2015 Membership No.: 092894

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Mar 31, 2014

We have audited the accompanying financial statements of Timex Group India Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2014, 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"). 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, 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 suffcient and appropriate to provide a basis for our qualifed audit opinion.

Basis for Qualifed Opinion

Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 2012 was in excess of the amount approved by the Central Government. The Company s application for approval of such excess remuneration was rejected by the Central Government vide its letter dated 26 July2012. The Company had requested the Central Government to re-consider the same and an application had been made in this regard by the Company vide its letter dated 30 August 2012.

The Company has received a direction to recover the excess remuneration of Rs. 7.09 lakhs paid during the year ended 31 March 2012. The Company has not recovered such excess remuneration paid till date and is in the process of fling an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f. 31 January 2013.

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualifed Opinion paragraph, 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 31 March 2014;

(b) in the case of the Statement of profit and Loss, of the loss 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.

Emphasis of Matter

Attention is invited to note 2 (b) of the financial statements, wherein it is explained that the Company has significant accumulated losses which have resulted in complete erosion of the net worth of the Company as at 31 March 2014. The ability of the Company to continue as a going concern is dependent on improvement of the Company''s future operations and continued financial support from the holding and ultimate holding company. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. Our opinion is not qualifed in respect of this matter.

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 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 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualifed as on 31 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 referred to in our report to the members of Timex Group India Limited on the accounts of the Company for the year ended 31 March 2014

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

(b) As explained to us, the Company has a regular programme of physical verifcation of its fixed assets by which all fixed assets are verifed in a phased manner over a period of three years. According to this programme, the Company has verifed all its assets over a period of three years. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verifcation. For assets lying with third parties at the year-end, written confirmations have been obtained.

(c) In our opinion, and according to information and explanations given to us, fixed assets disposed off during the year are not substantial and therefore, do not affect the going concern assumption.

(ii) (a) According to the information and explanations given to us, the inventories have been physically verifed by the management during the year. In our opinion, the frequency of such verifcation is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures for the 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) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on physical verifcation of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (b) to (g) of the Order are not applicable. (iv) In our opinion, and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company''s specialised requirements and similarly certain goods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system. (v) (a) In our opinion and according to the information and explanations given to us, the 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) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh are for the specialized requirements of the Company/buyers for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear to be reasonable.

(vi) The Company has not accepted any deposits from public.

(vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) 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 the products covered 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 ensure whether they are adequate or complete.

(ix) (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, Income tax, Sales tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund and other material statutory dues, as applicable, have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the provisions of Wealth tax are not applicable to the Company.

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, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund and other material statutory dues, as applicable, were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues in respect of Service tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax, Customs duty and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of the Amounts Amounts paid Statute dues (Rs. lakhs) under protest (Rs. lakhs)

Central Excise Act, Excise duty 43 7 1944 (Cenvat credit) Penalty 43

Central Excise Act, Excise duty 16 - 1944 Penalty 1

Central Excise Act, Excise duty 6 5 1944

Central Sales Tax Act, Sales Tax 59 - 1956

The Kerala Sales Tax Sales Tax 1 - Act, 1963

Tamil Nadu General Sales Tax 8 - Sales Tax Act, 1959

Andhra Pradesh Sales Sales Tax 1 - Tax Act, 1957

Karnataka Sales Tax Cess 1 - Act, 1957

Tamil Nadu General Sales Tax 9 9 Sales Tax Act, 1959

Customs Act,1962 Customs duty 8 8

The Kerala Value Added Sales Tax 1 1 Tax Rules, 2005

The MP Value Added Tax Sales Tax 7 1

The Kerala Value Added Sales Tax 20 - Tax Rules, 2005

Central Sales Tax Act, Sales Tax 12 - 1956

Income Tax Act, 1961 * Income Tax 610 -

Income Tax Act, 1961 * Income Tax 786 -

Income Tax Act, Income Tax 397 - 1961*/**

Name of the Statute Period to which the Forum where dispute is amount relates pending (Financial year)

Central Excise Act, 1944 1995-96 to CESTAT, New Delhi 1998-99

Central Excise Act, 1944 1999-2000 to Supreme Court 2000-01

Central Excise Act, 1944 1992-93 and Deputy Commissioner, 1996-97 Central Excise

Central Sales Tax Act, 1956 1994-95 Deputy Commissioner - Commercial tax

The Kerala Sales Tax Act, 1963 1995-96 Assistant Commissioner - Sales Tax

Tamil Nadu General Sales Tax Act, 1959 1992-93 to Commercial taxation 1993-94 officer

Andhra Pradesh Sales Tax Act, 1957 1995-96 Commercial taxation officer

Karnataka Sales Tax Act, 1957 1995-96 Deputy Commissioner - Commercial taxes

Tamil Nadu General Sales Tax Act, 1959 2002-03 High Court, Chennai

Customs Act,1962 1995-96 Commissioner, Customs (Appeals)

The Kerala Value Added Tax Rules, 2005 2009-10 Assistant Commissioner, Ernakulam

The MP Value Added Tax 2009-10 M.P VAT Authority

The Kerala Value Added Tax Rules, 2005 2010-11 Kerala VAT Authority

Central Sales Tax Act, 1956 2010-11 Assistant Commissioner - Commercial taxes

Income Tax Act, 1961 * 2001-02 Income tax Appellate Tribunal

Income Tax Act, 1961 * 2002-03 Income tax Appellate Tribunal

Income Tax Act, 1961*/** 2003-04 Income tax Appellate Tribunal



Name of the Nature of the Amounts Amounts paid Statute dues (Rs. lakhs) under protest (Rs. lakhs)

Income Tax Act, 1961 * Income Tax 329 -

Income Tax Act, 1961 * Income Tax 341 -

Income Tax Act, 1961 * Income Tax 75 -

Income Tax Act, 1961 * Income Tax 2,000 -

Income Tax Act, 1961 * Income Tax 2,686 -

Income Tax Act, 1961 * Income Tax 2,086 -

Name of the Statute Period to which the Forum where dispute is amount relates pending (Financial year)

Income Tax Act, 1961 * 2004-05 Income tax Appellate Tribunal

Income Tax Act, 1961 * 2005-06 Income tax Appellate Tribunal

Income Tax Act, 1961 * 2006-07 Commissioner of Income Tax, (Appeals)

Income Tax Act, 1961 * 2007-08 Commissioner of Income Tax, (Appeals )

Income Tax Act, 1961 * 2008-09 Commissioner of Income Tax, (Appeals )

Income Tax Act, 1961 * 2009-10 Commissioner of Income Tax, (Appeals )

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

** Total addition of Rs. 397 lakhs made to the total income of the Company for the financial year 2003-04, out of which Commissioner of Income Tax, (Appeals) has passed an order dated 23 March 2012 allowing a partial relief in favour of the Company and has directed the Assessing officer (AO) / Transfer Pricing Order (TPO) to make necessary adjustments. As informed to us, the Company has not received the amended tax order from the AO/TPO after incorporation of the above changes. Further, during the current year, the tax department has fled an appeal in Income tax Appellate Tribunal against the order of Commissioner of Income Tax, (Appeals). The proceedings are under process.

(x) The Company s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to its bankers during the year. The Company did not have any debentures or dues to any financial institution during the year.

(xii) 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.

(xiii) According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that funds raised on short term basis amounting to Rs. 1,902 lakhs have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

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

For B S R & Co. LLP

Chartered Accountants Firm Registration No.: 101248W

Jiten Chopra

Place: Gurgaon Partner

Date : 29 May 2014 Membership No.: 092894

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Timex Group India Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2013, the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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 fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.

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

Basis for Qualifed Opinion

Managerial remuneration of Rs 7.46 lakhs provided by the Company in the previous year was in excess of the amount approved by the Central Government for which the application of the Company to the Central Government was rejected vide its letter dated 26 July 2012. The Company has requested the Central Government to re-consider the same and an application has been made in this regard by the Company vide its letter dated 30 August 2012. Pending approval from the Central Government in this regard, the impact thereof on the loss of the Company for the current year, to the extent of amount of excess remuneration that may be disallowed by the Central Government, if any, is presently unascertainable. We had also qualifed our previous year audit report for the above matter.

Further, the Company had applied to the Central Government seeking approval of managerial remuneration for the period 29 April 2012 till 28 April 2013 vide its application dated 7 September 2012. The remuneration paid is in excess of the limits specifed in the Companies Act, 1956. The managerial person of the Company in respect whom the approval was sought has since resigned with effect from 31 January 2013. Pending approval from the Central Government, the impact of the excess remuneration paid, if any, on the loss of the Company for the current year is presently unascertainable.

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualifed Opinion paragraph, the fnancial 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 31 March 2013;

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

(c) in the case of the Cash Flow Statement, of the cash fows 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 a statement on the matters specifed 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 Proft 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 Proft 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 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on 31 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.

Annexure referred to in our report to the members of Timex Group India Limited on the accounts of the Company for the year ended 31 March 2013

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

(b) As explained to us, the Company has a regular programme of physical verifcation of its fxed assets by which all fxed assets are verifed in a phased manner over a period of three years. According to this programme, the Company has verifed all its assets over a period of three years. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verifcation. For assets lying with third parties at the year-end, written confrmations have been obtained.

(c) In our opinion, and according to information and explanations given to us, fxed assets disposed off during the year are not substantial and therefore, do not affect the going concern assumption.

(ii) (a) According to the information and explanations given to us, the inventories, except goods-in-transit have been physically verifed by the management during the year. In our opinion, the frequency of such verifcation is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures for the 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) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on physical verifcation of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (b) to (g) of the Order are not applicable. (iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fxed assets are for the Company''s specialised requirements and similarly certain goods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fxed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system. (v) (a) In our opinion and according to the information and explanations given to us, the 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) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh are for the specialized requirements of the Company/buyers for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear to be reasonable. (vi) The Company has not accepted any deposits from public. (vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate

with the size and nature of its business. (viii) 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 the products covered

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 ensure whether they are adequate or complete. (ix) (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, Income tax, Sales tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund and other material statutory dues, as applicable, have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the provisions of Wealth tax are not applicable to the Company. 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, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund and other material statutory dues, as applicable, were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues in respect of Service tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax, Customs duty and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of the Amounts Amounts paid Statute dues (Rs. lakhs) under protest (Rs. lakhs)

Central Excise Excise duty 43 7 Act, 1944 (Cenvat credit) Penalty 43

Central Excise Excise duty 16 - Act, 1944 Penalty 1

Central Excise Excise duty 6 5 Act, 1944

Central Sales Sales Tax 59 - Tax Act, 1956

The Kerala Sales Tax 1 - Sales Tax Act, 1963

Tamil Nadu Sales Tax 8 - General Sales Tax Act, 1959

Andhra Pradesh Sales Tax 1 - Sales Tax Act, 1957

Karnataka Sales Cess 1 - Tax Act, 1957

Tamil Nadu Sales Tax 9 9 General Sales Tax Act, 1959

Customs Customs duty 8 8 Act,1962

The Kerala Sales Tax 1 1 Value Added Tax Rules, 2005

The MP Value Sales Tax 7 1 Added Tax

The Kerala Sales Tax 20 - Value Added Tax Rules, 2005

Income Tax Act, Income Tax 610 - 1961 *

Income Tax Act, Income Tax 786 - 1961 *

Income Tax Act, Income Tax 397 - 1961 */**

Name Period to which Forum where dispute is the amount relates pending (Financial year)

Central Excise 1995-96 to CESTAT, New Delhi 1998-99

Central Excise 1999-2000 to 2000-01 Supreme Court

Central Excise 1992-93 and 1996-97 Deputy Commissioner, Central Excise

Central Excise 1994-95 Deputy Commissioner Commercial tax

Central Excise 1995-96 Assistant Commissioner Sales Tax

Andhra Pradesh 1992-93 to 1993-94 Commercial taxation of- fcer

Andhra Pradesh 1995-96 Commercial taxation of- fcer

Andhra Pradesh 1995-96 Deputy Commissioner – Commercial taxes

Andhra Pradesh 2002-03 High Court, Chennai

Andhra Pradesh 1995-96 Commissioner, Customs (Appeals) 2009-10 Assistant

Income Tax Act, 2009-10 M.P VAT Authority

Income Tax Act, 2010-11 Kerala VAT Authority

Income Tax Act, 2001-02 Income tax Appellate

Income Tax Act, Tribunal 2002-03 Income tax Appellate

Income Tax Act, Tribunal 2003-04 Income tax Appellate

Income Tax Act, Tribunal

Name of the Nature of the Amounts Amounts paid Statute dues (Rs. lakhs) under protest (Rs. lakhs)

Income Tax Act, Income Tax 329 - 1961 *

Income Tax Act, Income Tax 341 - 1961 * Income Tax Act, Income Tax 75 - 1961 *

Income Tax Act, Income Tax 2,000 - 1961 *

Income Tax Act, Income Tax 2,686 - 1961 *

Name Period to which Forum where dispute is the amount relates pending (Financial year)

Income Tax Act, 2004-05 Income tax Appellate Tri- bunal

Income Tax Act, 2005-06 Income tax Appellate Tri- bunal

Income Tax Act, 2006-07 Commissioner of Income Tax, (Appeals)

Income Tax Act, 2007-08 Commissioner of Income Tax, (Appeals )

Income Tax Act, 2008-09 Commissioner of Income Tax, (Appeals )

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

** Total addition of Rs. 397 lakhs made to the total income of the Company for the fnancial year 2003-04, out of which Commissioner of Income Tax, (Appeals) has passed an order dated 23 March 2012 allowing a partial relief in favour of the Company and has directed the Assessing Offcer (AO) / Transfer Pricing Order (TPO) to make necessary adjustments. As informed to us, the Company has not received the amended tax order from the AO/TPO after incorporation of the above changes. Further, during the current year, the tax department has fled an appeal in Income tax Appellate Tribunal against the order of Commissioner of Income Tax, (Appeals). The proceedings are under process.

(x) The Company''s accumulated losses do not exceed ffty percent of its net worth. However, the Company has incurred cash losses during the fnancial year. The Company has not incurred cash losses in the immediately preceding fnancial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to its bankers during the year. The Company did not have any debentures or dues to any fnancial institution during the year.

(xii) 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.

(xiii) According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual beneft fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or fnancial institutions.

(xvi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/frms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

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

For B S R & Co.

Chartered Accountants

Firm Registration No.: 101248W

Vikram Advani

Place: Gurgaon Partner

Date: 30 May 2013 Membership No.: 091765

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Timex Group India Limited (‘the Company') as at 31 March 2012, the Statement of Profit and Loss and the 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.

2. 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.

3. 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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

(e) on the basis of written representations received from the directors as on 31 March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) Managerial remuneration of Rs 7.46 lakhs provided by the Company in the current year is in excess of the limits specified in the relevant provisions of the Companies Act,1956 and the amount approved by the Central Government. Further, we are informed that as required by the relevant provisions of the Act, the Company is taking necessary steps to seek approval from the Central Government for such excess remuneration. Pending approval from the Central Government in this regard, the impact thereof on the profit of the Company for the current year, to the extent of amount of excess remuneration that may be disallowed by the Central Government, if any, is presently unascertainable;

(g) subject to our comments in paragraph (f) above, the impact of which in absence of Central Government decision is not ascertainable, 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 and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2012;

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

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

Annexure referred to in para 3 of the Auditors' report to the members of Timex Group India Limited on the financial statements for the year ended 31 March 2012

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

(b) As explained to us, the Company has a regular programmer of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. According to this programmer, the Company has verified certain fixed assets at its factory at Baddi and its corporate office during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification. For assets lying with third parties at the year-end, written confirmations have been obtained.

(c) In our opinion, and according to information and explanations given to us, fixed assets disposed off during the year are not substantial and therefore, do not affect the going concern assumption.

(ii) (a) According to the information and explanations given to us, the inventories, except goods-in-transit and stocks lying with third parties, have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) In our opinion and according to the information and explanations given to us, the procedures for the 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) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As confirmed to us, the discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b) to (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company's specialized requirements and similarly certain goods and services sold are for the specialized requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the 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) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh are for the specialized requirements of the Company/buyers for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear to be reasonable.

(vi) The Company has not accepted any deposits from public during the year.

(vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) 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 the products covered 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 ensure whether they are adequate or complete.

(ix) (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, Income tax, Sales tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund and other material statutory dues, as applicable, have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the provisions of Wealth tax are not applicable to the Company.

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, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund and other material statutory dues, as applicable, were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues in respect of Service tax and Wealth tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax, Customs duty and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of Amounts Amounts paid Period to Forum where Statute the dues (Rs. lakhs) under protest which the dispute is pending (Rs. lakhs) amount relates (Financial year)

Central Excise Excise duty 43 7 1995-96 to CESTAT, New Delhi Act, 1944 (Cenvat credit) 1998-99 Penalty 43 Central Excise Excise duty 16 - 1999-2000to Supreme Court Act, 1944 Penalty 1 2000-01 Central Excise Excise duty 6 5 1992-93 and Deputy Commi ssioner, Act, 1944 1996-97 Central Excise Central Sales Sales Tax 59 - 1994-95 Deputy Commi ssioner - Tax Act, 1956 Commercial tax The Kerala Sales Sales Tax 1 - 1995-96 Assistant Commi ssioner - Tax Act, 1963 Sales Tax Tamil Nadu General Sales Tax 8 - 1992-93 to Commercial Sales Tax Act, 1959 1993-94 taxation officer Andhra Pradesh Sales Tax 1 - 1995-96 Commercial Sales Tax Act, 1957 taxation officer Karnataka Sales Cess 1 - 1995-96 Deputy Commi ssioner - Tax Act, 1957 Commercial taxes Tamil Nadu General Sales Tax 9 9 2002-03 High Court, Chennai Sales Tax Act, 1959 Customs Act,1962 Customs duty 8 8 1995-96 Commi ssioner, Customs (Appeals) Income Tax Act, 1961 * Income Tax 610 - 2001-02 Income tax Appellate Tribunal Income Tax Act, 1961 * Income Tax 658 - 2002-03 Income tax Appellate Tribunal Income Tax Act, Income Tax 397 - 2003-04 Income tax 1961 */ ** Appellate Tribunal Income Tax Act, 1961 * Income Tax 329 - 2004-05 Commi ssioner of Income Tax, (Appeals) Income Tax Act, 1961 * Income Tax 341 - 2005-06 Commi ssioner of Income Tax, (Appeals) Income Tax Act, 1961 * Income Tax 75 - 2006-07 Commi ssioner of Income Tax, (Appeals) Income Tax Act, 1961 * Income Tax 2,000 - 2007-08 Commi ssioner of Income Tax, (Appeals )

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

** Total addition of Rs. 397 lakhs made to the total income of the Company for the financial year 2003-04, out of which Commissioner of Income Tax, (Appeals) has passed an order dated 23 March 2012 allowing a partial relief in favour of the Company and has directed the Assessing Officer (AO) / Transfer Pricing Order (TPO) to make necessary adjustments. As informed to us, the Company has not received the amended tax order from the AO/TPO after incorporation of the above changes. Further, we have been informed that subsequent to the year end, neither the Company nor the tax department have preferred an appeal in Income tax Appellate Tribunal against the order of Commissioner of Income Tax, (Appeals).

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

(xi) The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year.

(xii) 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.

(xiii) According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

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

For B S R & Co.

Chartered Accountants

Firm Registration No.: 101248W

Rakesh Dewan

Place: Gurgaon Partner

Date: 31 May, 2012 Membership No.: 092212

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Timex Group India Limited ('the Company') as at 31 March 2011, the Profit and Loss Account and the Cash Flow Statement of the Company 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.

2. 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.

3. 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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 appears from our examination of those books;

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

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

(e) on the basis of written representations received from the directors as on 31 March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 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, except in respect of one of the directors of the Company, who has since expired, no such representation as on 31 March 2011 has been made available to us in respect of such director. In the absence of such written representation, we are unable to comment whether such director was disqualified from being appointed as director under 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 and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2011;

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

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

Annexure referred to in para 3 of the Auditors' report to the members of Timex Group India Limited on the financial statements for the year ended 31 March 2011

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

(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. According to this programme, the Company has verified certain fixed assets at its factory at Baddi and its corporate office during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification. For assets lying with third parties at the year-end, written confirmations have been obtained.

(c) In our opinion, and according to information and explanations given to us, the fixed assets disposed off during the year are not substantial and therefore, do not affect the going concern assumption.

(ii) (a) According to the information and explanations given to us, the inventories, except goods-in-transit and stocks lying with third parties, have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) In our opinion and according to the information and explanations given to us, the procedures for the 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) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As confirmed to us, the discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b) to (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company's specialised requirements and similarly certain goods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the 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) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh are for the specialized requirements of the Company/buyers for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appears to be reasonable.

(vi) The Company has not accepted any deposits from public during the year.

(vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) 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 the products covered 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 ensure whether they are adequate or complete.

(ix) (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, Income tax, Sales-tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund, Wealth tax and other material statutory dues, as applicable, have generally 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, Income tax, Sales tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund, Wealth tax and other material statutory dues, as applicable, were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable.

There were no dues on account of cess under section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

(b) According to the information and explanations given to us, there are no dues in respect of Income-tax, Service tax and Wealth tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Sales tax, Custom duty and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of Amounts Amounts paid Period to Forum where Statute the dues (Rs. thousand) under protest which the dispute (Rs. Thousand)amount relates is pending

Central Excise Act, 1944 Excise duty 4,253 700 1995-96 to CESTAT, (Cenvat credit) 1998-99 New Delhi Penalty 4,253

Central Excise Act, 1944 Excise duty 1,630 - 1999-2000to Supreme Court Penalty 50 2000-01

Central Excise Act, 1944 Excise duty 632 550 1992-93 and Deputy Commissioner, 1996-97 Central Excise

Central Sales Tax Sales Tax 5,898 - 1994-95 Deputy Commissioner Act, 1956 Commercial tax

The Kerala Sales Sales Tax 84 - 1995-96 Assistant Commissioner Tax Act, 1963 - Sales Tax

Tamil Nadu General Sales Sales Tax 818 - 1992-93 to Commercial Tax Act, 1959 1993-94 taxation officer

Andhra Pradesh Sales Sales Tax 44 - 1995-96 Commercial Tax Act, 1957 taxation officer

Karnataka Sales Tax Cess 69 - 1995-96 Deputy Commissioner Act, 1957 Commercial taxes

Tamil Nadu General Sales Sales Tax 941 941 2002-03 High Court, Chennai Tax Act, 1959

Customs Act, 1962 Custom duty 779 779 1995-96 Commissioner, Customs(Appeals)

In respect of cess, refer to our comment in para (ix) (a).

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

(xi) The Company did not have any outstanding due to any financial institution, banks or debenture holders during the year.

(xii) 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.

(xiii) According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

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

ForBSR&Co.

Chartered Accountants Registration No: 101248W

Rakesh Dewan

Place: New Delhi Partner

Date: 26 May 2011 Membership No.: 092212

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Timex Group India Limited (the Company) as at 31 March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company 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.

2. 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.

3. As required by the Companies (Auditors Report) Order, 2003 (the Order) 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 a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 appears from our examination of those books;

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

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

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

(f) managerial remuneration of Rs. 1,019 thousands paid by the Company is in excess of the amount approved by the Central Government. The application of the Company to the Central Government for the necessary approval in this regard is pending. In the absence of Central Government approval, we are unable to comment on the impact of this payment on the profit for the year and on the reserves and surplus as at the end of the year. (Refer to note 7 of Schedule 17)

(g) subject to our comments in para (f) above, 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 and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010; (ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Annexure referred to in para 3 of the Auditors report to the members of Timex Group India Limited on the financial statements for the year ended 31 March 2010

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

(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. According to this programme, the Company has verified a portion of its fixed assets during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(c) In our opinion, and according to information and explanations given to us, the fixed assets disposed off during the year are not substantial and therefore, do not affect the going concern assumption.

(ii) (a) According to the information and explanations given to us, the inventories, except goods-in-transit and stocks lying with third parties, have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) In our opinion and according to the information and explanations given to us, the procedures for the 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) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As confirmed to us, the discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paras 4(iii)(b) to (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Companys specialised requirements and similarly certain goods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the 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) In our opinion, and according to the information and explanations given to us and having regard to the explanation in para (iv) above, the transactions made in pursuance of contracts and arrangements referred to in para v(a) above and exceeding the value of Rs 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from public during the year.

(vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business. *

(viii) 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 the products covered 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 ensure whether they are adequate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the recordsof the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund, Wealth tax and other material statutory dues have generally 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, Income tax, Sales tax, Service tax, Customs duty, Excise duty, Investor Education and Protection Fund, Wealth tax and other material statutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date they became payable.

There were no dues on account of cess under section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

(b) According to the information and explanations given to us, there are no dues in respect of Income-tax, Service tax, Wealth tax and Customs duty which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Sales tax and Excise duty have not been deposited by the Company on account of disputes:

Name of the Nature of Amounts Amounts paid Period to Forum where Statute the dues (Rs. under protest which the dispute Thousand) (Rs.Thousand) amount relate is pending

Central Excise duty 4,253 700 1995-96 to CESTAT, Act, 1944 (Cenvat Credit) 1998-99 New Delhi Penalty 4,253

Central Excise Excise 1,630 - 1999-2000 to Supreme Court Act, 1944 duty 2000-01 Penalty 50

Central Excise Excise duty 632 550 1992-93 and Deputy Commiss- ioner, Act, 1944 1996-97 Central Excise

Central Sales Sales Tax 5,898 - 1994-95 Deputy Comm- issioner Tax-Act, 1956 Commercial tax

The Kerala Sales Sales Tax 84 - 1995-96 Assistant Commissioner

Tax Act, 1963 -Sales Tax

Tamil Nadu Sales Tax 818 - 1992-93 to Commercial General Sales 1993-94 taxation officer Tax Act, 1959

Andhra Pradesh Sales Tax 44 - 1995-96 Commercial taxation Sales Tax officer Act, 1957

Karnataka Sales Cess 69 - 1995-96 Deputy Commiss- ioner- Tax Act, 1957 Commercial taxes Tamil Nadu Sales Tax 941 941 2002-03 High Court, Chennai General Sales Tax Act, 1959

In respect of cess, refer to our comment in para (ix) (a).

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

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institutions or debenture holders during the year.

(xii) 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.

(xiii) According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, In relation to a sales transaction for the year ended 31 March 2009, the Company has during the year noticed misappropriation of Rs. 625 thousand by an ex-employee. The Company has taken appropriate action and has recovered the amount from the ex-employee. (Refer to note 27 of schedule 17). Based on the audit procedures performed and according to the information and explanations given* to us, no other fraud on or by the Company has been noticed or reported during the year

ForBSR&Co.

Chartered Accountants Registration No: 101248W

Kaushal Kishore

Partner

Membership No.: 090075

Place: New Delhi Date: 27 May 2010