Auditor Report of N B Footwear Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements -

The Company's Board of Directors Is responsible for the matters stated In Section 134(5) of the Companies Act, 2013 ("the Act") with respect To the preparation of these standalone financial statements that give a true and fair view of the financial position and financial performance 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 ensuing 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 jwith Standards On Auditing specified under Section 143(10) of the Act. Those standards reqbire 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.

We conducted our audit in accordance with 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 disclosures in the financial statements. The procedure selected depend on the auditor's judgment including the assessment of rules 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 financial controls system over financial reporting and the operating effectiveness such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Company's Directors as wed 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.

The Company has also been declared sick by the Board for Industrial and Financial Reconstruction (BIFR) on 21/05/2001. The Company is facing severe liquidity problems and continuing losses, as operations have been discontinued for the past ten years.

These facts raise substantial doubts about the Company's ability to continue as a going concern In the foreseeable future. Consequently, adjustments may be required to the recoverability and classification of asset carrying amounts, or classification of liabilities that might be necessary should the Company be unable to continue as a going concern, the impact of which is not ascertained.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 accountingprinciples generally accepted in India, of the state of affairs of the Company as at 31st March 2015 and its loss and the cash flows for the year ended on that date.

Report on other Laoaland Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order, 2015 ("the Order") issued by 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 said order.

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as 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 standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the Directors as on 31st March 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.

f) With respect to 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 does not have any pending litigations which would Impact its financial position;

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

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

ANNEXURE TO THE AUDITORS' REPORT (RefemSCrto in our report of even date)

With reference to the Annexure referred to in paragraph 5(1) of our report to the Natatory Auditors on the accounts for the year ended 31st March 2015, we report that

(i) As per information and explanations furnished to us, the Company does not have fixed assets; hence details are not required to be maintained.

(ii) As per the information and explanations given, the Company does not have Inventories; hence physical verification is not applicable.

(iii) According to the information and explanations given to us by the Management and records produced, the Company has not granted any loans secured/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, 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 sale of goods and services. We have neither come across nor have been informed of any major weakness jn internal control system.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public; hence directives of RBI and provisions of Section 73 to 76, and any other relevaht provisions of the Companies Act, 2013 need not be complied with.

(vi) Since the Company has not carried Out commercial production during the financial year, maintenance of cost records under Section 148(1)(d) of the Companies Act, 2013 does notarise.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the book of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees" State Insurance, Income Tax, Sales Tax, Value Added Tax, Service Tax, Excise Duty, Cess and other statutory dues with the appropriate authorities. There are no undisputed dues payable for a period of more than six months from the date they became payable as bn 31.03.2015.

(b)AcoorcHng to the information and explanation given to us, the following are the particulars of disputed dues as on 31.03.20T5 on account of excise duty and sales tax that have not been deposited with the authorities concerned. :

Name of the Nature of Amount of Period to Forum where Statute dues Demand dispute is which it (Rs.) pending relates

Central Excise Customs Duty 57,429/- 1999-2000 Commissioner Act, 1944 of Central Excise (Appeals)

Sales Tax Law Sales Tax 1,71,533/- 1995-1996 Appellate Assistant Commissioner

(viii) The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. T1H Company has Incurred cash losses during the financial year and in the immediately pneoedlng financial year.

(ix) The Company has not defaulted on any dues to a Financial Institution or Bank and does not have any outstanding debentures.

(x) The Company has net given any guarantee for loans taken by others from bank and financial Institutions. Hence the Reporting on terms and conditions prejudicial to the Company does not arise.

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

(xii) According to the information and explanations given to us, to the best of our knowledge end belief and based on our audit procedures performed, we have net noticed ear has the Company reported any fraud on or by the Company during the year.

For J V RAMANUJAMM & CO - Chartered Accountants FRN . 002947S

(J VEDANTMA RAMANUJAM) Partner Membership No. 022188

Place: Chennai Date : 29th May, 2015

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Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of NB Footwear Limited (the Company) which comprise the Balance Sheet as at 31st March 2014 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Audit 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 risks of material misstatement of financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies Used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

The accumulated losses of the Company have exceeded shareholders funds by Rs 80.33 lakhs. The Company has also been declared sick by the Board for Industrial and Financial Reconstruction (BIFR) on 21/05/2001. The Company is facing severe liquidity problems and continuing losses, as operations have been discontinued for the past ten years.

These facts raise substantial doubts about the Company''s ability to continue as a going concern In the foreseeable future. Consequently, adjustments may be required to the recoverability and classification of asset carrying amounts, or classification of liabilities that might be necessary should the Company be unable to continue as a going concern, the impact of which Is not ascertained.

Opinion

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

(a) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Act, we give in the Annexure 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 purposes of our audit;

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

c) The balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e) In terms of Notification. No. GSR 829(E) dated 21.10.2003 issued by the Department of Company Affairs, Government of India, the provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Company.

f) Since the Central Government has not issued any notification as to the rate at which the Cess is to be paid under Section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure to the Auditors'' Report (Referred to in our report of even date)

As required by the Companies (Auditor''s Report) Order, 2003 (CARO) issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we report

Having regard to the nature of business/activities during the year the following clauses under CARO reporting are not applicable.

Clause 4 (i) regarding fixed assets, since the company has no fixed assets.

Clause 4 (ii) regarding inventories, since the company has no inventories

Clause 4 (iii) regarding granting / availment of loans secured or unsecured to/ from parties listed in the register maintained under Section 301 of the Companies Act, 1956;

Clause 4 (xii) regarding granting of loans.

Clause 4 (xiii) regarding special provisions relating to nidhi/mutual benefit fund/society.

Clause 4 (xiv) regarding dealing/trading in shares.

Clause 4 (xv) regarding issuing of guarantees.

Clause 4 (xviii) regarding allotment of shares.

Clause 4 (xix) regarding issue of debentures.

Clause 4 (xx) regarding issue of shares to public are not applicable.

4(iv) As per the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system.

4(v) Based on the audit procedure applied by us and according to the information and explanation provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been properly entered in the said register.

4(vi) in our opinion and according to the information and explanations given to us, the - Company has not accepted any deposits from the public.

4(vii) During the year, no internal audit has been carried out by the management.

4(viii) Since the Company has not carried out commercial production during the financial year, maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 does not arise.

4(ix)(a) According to the records and as per information and explanation given to us, the Company is generally regular in depositing undisputed statutory dues including GPF, EPF, Sales Tax, Service Tax, Tax deducted on salaries, rent etc. to the appropriate authorities.

According to the information and explanation given to us, no undisputed amounts payable in respect of income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March 2014 for a period of more than six months from the date they became payable.

4(lx)(b) According to the information and explanation given to us, the following are the particulars of disputed dues as on 34/03/2014 on account of excise duty and sales tax that have not been deposited with the authorities concerned.

Name of Nature of dues Amount Period to which Forum where the Demand the amount relates dispute statute in (Rs.) is pending

Central Custom Duty 57,429/- 1999-2000 Commissioner Excise of Central Act, Excise 1944 (Appeals)

Sales Law Sales Tax 1,71,533/- 1995-1996 Appeilate Tax Assistant Commissioner

4(x) The accumulated losses of the Company as at the end of the financial year are more than fifty percent of Its net worth. The Company has Incurred cash losses during the year.

4(xi) Based on our audit procedures and according to the information and explanations given by the Management, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

4(xvi) According to the information and explanations given to us, the term loan availed by the Company were utilised for which the loans were obtained.

4(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, no funds raised on short term basis have, prima facie, been used during the year for long term investment.

4(xix) In our opinion and according to the explanation given to us, no fraud on or by the Company has been noticed or reported during the year, that cause the financial statements to be materially misstated.

For J V RAMANUJAM & CO

Chartered Accountants FRN: 002947S J Vedantha Ramanujam Partner Membership No: 022188

Place : Chennai Date : 30th May 2014

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Mar 31, 2010

1. We have audited the attached balance sheet of NB Footwear Limited as at 31st March, 2010 the profit and loss account and cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 and amended by the Companies (Auditors Report) (Amendment) Order 2004 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, we 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 state 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 such books;

c) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the balance sheet, profit and loss account and 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;

e) On the basis of the written representation received from the Directors of the company as on 31st March 2010 and taken on record by the Board of Directors, were report that none of the director are disqualified as on 31st March, 2010 from being appointed as a director in terms of section 274 (1) (g) of the Companies Act,1956.

(f) The accumulated losses of the Company have exceeded shareholders funds by Rs. 9,09 Crores. The Company has also been declared sick by the Board for Industrial and Financial Reconstruction (BIFR) on21.05.01. The Company is facing severe liquidity problems and continuing losses as operations have been discontinued for the past eight years. These facts raise substantial doubt about the Companys ability to continue as a going concern in the foreseeable future. Consequently, adjustments may be required to the recoverability and classification of recorded asset amounts, or to amounts and classification of liabilities, the impact of which is not ascertained.

(g) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon given the information required by the Companies Act 1956, in the manner so required by the company and consequent to our comments in paragraph (f) above give a true and fair view in conformity with the accounting principles generally accepted in India:

1. in so far as it relates to the Balance Sheet, of the state of affairs of the company as at 31st March, 2010;

2. in so far as it relates to the Profit and Loss Account, of the loss of the Company for the year ended on that date; and,

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

ANNEXURE TO THE AUDITORS REPORT Clauses u/s227 (4A) of the Companies Act(Referred to in Para 3 of our report of even date)

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

4(1 )(b) As explained to us, all the fixed assets have been physically verified by the management during the year with a program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals .According to the information and explanations given to us no material discrepancies were noticed verification.

4(1 )(c) In our opinion, the Company has not disposed off, substantial part of fixed assets,

4(ii) The Company has no inventories.

4(ii)(a) As per the information and explanation given to us, in respect of unsecured loan taken by the Company from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, the Company has taken loan from one party included under Section 301 of the Companies Act, 1956.

(b) As the loan received is interest free, the rate of interest being prejudicial to the interest of the Company will notarise.

(c) There are no terms as to the repayment of principal as it is repayable on demand.

(d) As the principal is payable on demand, the question of overdue does not arise.

4(iv) As per the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness V has been noticed in the internal control system.

4(v) Based on the audit procedure applied by us and according to the information and explanation provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956, have been properly entered in the said register.

4(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public.

4(vii) During the year no internal audit has been carried out by the management.

4(viii) Since the Company has not carried out commercial production during the financial year, maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 does not arise.

4(ix)(a) According to the records and as per the information and explanation given to us the Company is generally regular in depositing undisputed statutory dues including GPF, EPF, Sales Tax, Service Tax, Tax deducted on Salaries, rent etc .to the appropriate authorities.

4(ix)(b)According to the information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and cess were in arrears as at 31st March 2010 for a period of more than six months from the date they become payable. However, the Company has not qualified the Fringe Benefit Tax from the date when it came into vogue.

4(ix)(c)According to the information and explanation given to us, the following are the particulars of disputed dues as on 31.03.2010 on account of excise duty and sales tax that have not been deposited with the authorities concerned

Name of the Nature of Amount of Period to which Forum Where Statute Dues Demand (Rs.) amount relates Dispute is Pending

Central Excise Act 1944 Custom Duty 57,429 1999-2000 Commissioner of Central Excise (Appeals)

Sales Tax Law Sales Tax 1,71,533 1995-1996 Appellate Assistant Commissioner

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

4(xi) Based on our audit procedures and according to the information and explanations given to by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

4(xvi) According to the information and explanations given to us, the term loan availed by the Company were utilized for which the loans were obtained

4(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, no funds raised on short term basis have, prima facie, been used during the year for long term investments.

Reporting on other clauses

Clause 4(xii) regarding granting of loans.

Clause 4(xiii) regarding special provisions relating to nidhi / mutual Benefit fund / society :

Clause 4(xiv) regarding dealing /trading in shares:

Clause 4(xv) regarding issuing of guarantees;

Clause 4(xviii) regarding allotment of shares:

Clause 4(xix) regarding issue of debentures:

Clause 4(xx) regarding issue of shares to public are not applicable

4(xxi) In our opinion and according to the information and explanation given to us, no fraud on of by the Company has been noticed or reported during the year, that cause the financial statements to be materially misstated.



For J V Ramanujam & Co

Chartered Accountants

(J Vendantha Ramanujam)

Partner

Place : Chennai Membership .No. 22188

Date : 31st May 2010

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Mar 31, 2009

We have audited the attached balance sheet of NB Footwear Limited as at 31st March, 2009 and also the profit and loss account and cash flow statement for the year ended on that date both 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

1. We have 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 estimate* made by management, as well as evaluating the overall presentation financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 and amended by the Companies (Auditors Report) (Amendment) Order 2004 issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, were enclose in the Annexure. a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to 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 such books;

c) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the balance sheet, profit and loss account and 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;

e) MrAL.Prasad and Mr.A.S.Chowdri. Directors of the company, have not produced written representations as to which companies they are directors as on 31st March, 2009 In the absence of such representations, we are unable to comment whether Mr.A.LPrasad and Mr.A.S.Chowdri are disqualified from being appointed as a director under section 274 (1) (g) of the Companies Act, 1956. As far as other directors are concerned, on the basis of the written representations received from such directors as on 31st March, 2009 and taken on record by the Board of Directors, we report that none of the remaining directors are disqualified as on 31st March, 2009 from being appointed as a director in terms of section 274 (1) (g) of the Companies Act, 1956.

f) The accumulated losses of the Company have exceeded shareholders funds by Rs. 8.67 Crores. The Company has also been declared sick by the Board for Industrial and Financial Reconstruction (BIFR) on21.05.01. The Company is facing severe liquidity problems and continuing losses as operations have been discontinued for the past eight years. These facts raise substantial doubt about the Companys ability to continue as a going concern in the foreseeable future. Consequently, adjustments may be required to the recoverability and classification of recorded asset amounts, or classification of liabilities, the impact of which is not ascertained.

(g) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon given the information required by the Companies Act 1956. in the manner so required by the company and consequent to our comments in paragraph (0 above give a true and fair view in conformity with the accounting principles generally accepted in India:

1. in so far as it relates to the Balance Sheet, of the state of affairs of the company as at 31st March, 2009.

2. in so far as it relates to the Profit and Loss Account, of the loss of the Company for the year ended on that date; and,

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

Annexure to Auditors Report to the Members of M/s. N B Footwear Limited on the accounts for the year ended 31st March 2009 Referred to in paragraph 3 of our report of even date

1. In respect of its fixed assets

a) The Company is maintaining proper records showing full particulars including quantita- tive details and situation of fixed, assets.

b) As explained to us, all the fixed assets have been physically verified by the management during the year with a program of verifica- tion, which in our opinion provides for physi- cal verfication of all the fixed assets at rea- sonable intervals. According to the informa- tion and explanations given to us no mate- rial discrepancies were noticed verfication.

c) During the year, the Company has not dis- posal off any substantial/major part of fixed assets,

2. The Company has no inventories.

3. (a) As per the information and explanation given to us, in respect of unsecured loan taken by the Company from Companies, firms or other parties covered in the register maintained un- der Section 301 of the Companies Act, 1956, The Company has taken loan from one party included under Section 301 of the Compa- nies Act, 1956. Total outstanding at the year end is Rs. 50,00,000/-

(b) As the loan received is interest free, the rate of interest being prejudicial to the interest of the Company will not arise.

(c) There are no terms as to the repayment of principal as it is repayable on demand.

(d) As the principal is payable on demand, the question of overdue does not arise.

4. (a) In our opinion and according to information and explanations given to us, there are ad- equate internal control procedures commen- surate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the in- ternal control system.

5. Based on the audit procedure applied by us and according to the information and explana- tion provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register main- tained under section 301 of the Companies Act, 1956, have been properly entered in the said register.

6. In our opinion and according to the informa- tion and explanations given to us, the com- pany has not accepted any deposits from the public.

7. During the year no internal audit has been car- ried out by the management.

8. Since the Company has not carried out com- mercial production during the financial year, maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 does not arise.

9(a) According to the records provided to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Ex- cise Duty, Customs Duty, Income Tax, Sales Tax and cess and other statutory dues with the appropriate authorities.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and cess were in arrears as at 31st March 2009 for a period of more than six months from the date they be- come payable, except Fringe Benefit Tax which has not been remitted.

(c) According to the information and explanation given to us, the following are the particulars of disputed dues as on 31.03.2009 on account of excise duty and sales tax that have not been deposited with the concerned authorities.

Name of the Nature of Amount of Period to which Forum Where Statute Dues Demand (Rs.) Amount relates Dispute is Pending

Central Excise Custom 57.429 1999-2000 Commissioner of Act ,1944 Duty Central Excise (Appeals)

Sates Tax Law Sales Tax 1,71,533 1995-1996 Appellate Assistant Commissioner

10. The accumulated losses of the Company as at the end of the year are more than fifty percent of its net worth. The company has incurred cash losses during the year and also in the immediately preceding financial year.

11. Based on our audit procedures and accord- ing to the information and explanations given to by the management, we are of the opinion that the Company has not de- faulted in repayment of dues to financial institutions, banks or debenture holders.

12. Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi/ mutual benefit fund /society and as such this clause of the order is not applicable,

14. The company is not dealing or trading in shares, securities, debentures and other Investments.

15. The Company has not given any guaran- tees for loans taken by others from banks or financial institutions,

16. According to the information and explana- tions given to us, the term loan availed by the company were utilsed for which the loans were obtained.

17. According to the Cash Flow Statement and other records examined by us and the in- formation and explanations given to us, on an overall basis, no funds raised on short term basis have, prima facie, been used during the year for long term investments.

18. During the year, the company has not al- lotted any shares no preferential basis to parties and companies covered in the reg- ister maintained under section 301 of the companies Act 1956.

19. According to the information and explana- tions given to us and the records examined by us, the Company has not issued any debentures, during the year.

20 The company has not raised any monies by way of public issues during the year.

21, Based on the audit procedures adopted by us and information and explanations given to us by the management, no fraud on or by the Company has been noticed or re- ported during the course of our audit.

For J.V.Ramanujam & Co.

Chartered Accountants

(J.Vedantha Ramanujam)

Partner Membership No 22188

Place: Chennai Date: 31st July 2009