TO THE MEMBERS OF RELAXO FOOTWEARS LIMITED
Report on the Financial Statements Opinion
We have audited the accompanying financial statements of Relaxo Footwears Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the 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 explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditors' Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditors' Report thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditors' report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing 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 section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under
section 143(3)(i) of the Companies Act 2013 we are also responsible for expressingour opinion on whether the company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143 (11) 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.
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 bestof 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 theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under section 133 of the Act read with rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of written representations received from the directors as on March312019 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 from being appointed as a director in terms of section164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure 'B'
(g) With respect to the other matters to be included in the Auditors' Report inaccordance 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 explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Note 36 to the financial statements;
ii. The Company did not have any long-term contracts including any derivative contractsfor which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For B R Maheswari & Co LLP
Firm's Registration No. 001035N/N500050
| ||Sudhir Maheshwari |
|Place: Delhi ||Partner |
|Date: May 10 2019 ||Membership No.081075 |
Annexure 'A' to the Independent Auditors' Report
(Referred to in Paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date)
1) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) According to the information and explanations given to us fixed assets have beenphysically verified by the management in a phased periodical manner which in our opinionis reasonable having regard to the size of the Company and nature of its assets. Nomaterial discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except for the following which are not heldin the name of the Company:
|Particulars ||Freehold Land ||Buildings Factory ||Buildings Others |
|Gross Block as at March 312019 (C in Crore) ||129.21 ||18.61 ||4.43 |
|Net Block as at March 312019 (C in Crore) ||129.21 ||17.79 ||4.32 |
2) In respect of its inventories:
(a) The management has physically verified the inventories at reasonable intervalsduring the year. In our opinion the frequency of verification is reasonable.
(b) The discrepancies noticed on verification between the physical stocks and the bookrecords were not material and such discrepancies have been properly dealt with in thebooks of accounts.
3) 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 undersection 189 of the Act.
4) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security to the partiescover under section 185 of the Act. In respect of investments made by the Company theprovisions of section 186 of the Act have been complied with.
5) According to the information and explanations given to us the Company has notaccepted any deposit from the public during the year in terms of the provisions of section73 to 76 of the Act or any other relevant provisions of the Companies Act 2013 and therules made thereunder.
6) In our opinion and according to the information and explanations given to us themaintenance of cost records has not been specified by the Central Government under section148(1) of the Companies Act 2013 for the business activities carried out by the Company.Therefore reporting under clause 3(vi) of the order is not applicable to the Company.
7) (a) According to the information and explanations given to us the
Company has generally been regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund Employees' State Insurance IncomeTax Sales Tax value Added Tax Service Tax Custom Duty Excise Duty Cess and othermaterial statutory dues applicable to it.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at March 312019 for a periodof more than six months from the date they become payable.
(b) According to the information and explanations given to us the following disputedstatutory dues aggregating to C 3.13 Crore that have not been deposited on account ofmatters pending before appropriate authorities are as under: -
|S.No. ||Name of the Statute ||Nature of the Dues ||Amount ||Period to which the amount relates ||Forum where dispute is pending |
|1. ||Haryana General Sales Tax Act ||Purchase Tax ||0.20 ||2001-02 ||Jt. Commissioner |
| ||1973. || ||0.15 ||2002-03 ||Jt. Commissioner |
|2. ||Delhi Value Added Tax Act 2005 ||Input Tax ||0.04 ||2005-06 ||Appellate Tribunal Delhi |
| || || ||0.22 ||2013-14 || |
|3. ||Maharashtra Value Added Tax Act 2002 ||Value Added Tax ||0.01 ||2013-14 ||Dy. Commissioner of Sales Tax. |
|4. ||Karnataka Value Added Tax Act 2003 ||Value Added Tax ||0.01 ||2014-15 ||Jt. Commissioner-Commercial Taxes Bangalore |
|5. ||Rajasthan Tax on Entry of Goods into Local Area Act 1999 ||Entry Tax ||0.05 ||2012-13 ||CTO Sales Tax Bhiwadi Rajasthan |
| || || ||0.17 ||2014-15 ||Jt. Commissioner (Appeal) Alwar Rajasthan |
|6. ||Income Tax Act 1961 ||Income Tax (*) ||2.24(*) ||Assessment Years 2006-07 2008-09 to 2013-142015-16 and 2016-17 ||Assessing Officer |
| || ||TDS ||0.04 ||2008-09 to 2011-12 2013-14 to 2015-16 2017-18 to 2019-20 ||Commissioner (A) ITAT Assessing Officer |
| ||Total || ||3.13 || || |
(*) The above demands are majorly on account of Dividend Distribution Tax (DDT) creditnot given by Income Tax Department while issuing intimations under section 143(1) of theIncome Tax Act 1961. Company has disputed the same demands as Company has alreadydeposited the DDT on time and has also submitted the proof for payment of same to IncomeTax Department for deleting the said demands.
8) Based on the information and explanations given to us we are of the opinion thatthe Company has not defaulted in repayment of loans and borrowings to banks. The Companydid not have any outstanding loans and borrowings from government and debenture holdersduring the year.
9) The company has not raised any money by way of initial public offer further publicoffer (including debt instruments) during the year. In our opinion the term loans havebeen applied for the purpose for which they were obtained.
10) In our opinion and according to the information and explanations given to us nofraud on or by the Company by its officers or employees has been noticed or reportedduring the year.
11) In our opinion the managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act.
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and the details have been disclosed inthe financial statements as required by the applicable Indian accounting standards.
14) The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year therefore reporting underclause 3(xiv) of the Order are not applicable.
15) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has notentered into any non- cash transaction with directors or persons connected with himtherefore reporting under clause 3(xv) of the Order are not applicable.
16) In our opinion the Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.
For B R Maheswari & Co LLP
Chartered Accountants Firm's Registration No. 001035N/N500050
| ||Sudhir Maheshwari |
|Place: Delhi ||Partner |
|Date: May 10 2019 ||Membership No.081075 |
Annexure 'B' to the Independent Auditors' Report
(Referred to in Paragraph 2(f) under the heading "Report on other legal andregulatory requirements" of our report of even date)
Report on the Internal Financial Controls under clause (i) of sub section 3 of section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of RelaxoFootwears Limited ("the Company") as of March 312019 in conjunction with ouraudit 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial 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 internalfinancial 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 designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For B R Maheswari & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No. 001035N/N500050 |
| ||Sudhir Maheshwari |
|Place: Delhi ||Partner |
|Date: May 10 2019 ||Membership No.081075 |