Relaxo Footwears Ltd.
|BSE: 530517||Sector: Others|
|NSE: RELAXO||ISIN Code: INE131B01039|
|BSE 11:21 | 28 Sep||1155.85||
|NSE 11:09 | 28 Sep||1159.80||
|Mkt Cap.(Rs cr)||28,711|
|Mkt Cap.(Rs cr)||28711.31|
Relaxo Footwears Ltd. (RELAXO) - Auditors Report
Company auditors report
TO THE MEMBERS OF
RELAXO FOOTWEARS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of RelaxoFootwears Limited ("the Company") which comprise the Balance Sheet as at March31 2021 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as the "financialstatements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 and its profit totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 ("ICAI") together with the ethical requirements that are relevant to ouraudit of the financial statements under the provisions of the Act and the rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
Description of Key Audit Matters:
Information Other than the Financial Statements and Auditors'Report thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the financial statements and ourauditors' report thereon. Our opinion on the financial statements does not cover theother information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the financial statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare 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 mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance cash flows and changes in equity of the Company in accordance with theaccounting 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 forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditors' Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thefinancial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 mattersspecified 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 explanationswhich 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 havebeen 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 OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under section 133 of the Act.
(e) On the basis of written representations received from the directorsas at March 31 2021 and taken on record by the Board of Directors none of the directorsis disqualified as at March 31 2021 from being appointed as a director in terms ofsection 164 (2) of the Act.
(g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act. (Rs.) With respect tothe other matters to be included in the Auditors' Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements
ii. The Company did not have any long-term contracts including anyderivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
Annexure "A" to the Independent Auditors' Report
(Referred to in ParagrapRs. 1 under the heading "Report on otherlegal and regulatory requirements" of our report of even date)
1) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us fixedassets have been physically verified by the management in a phased periodical manner whichin our opinion is reasonable having regard to the size of the Company and nature of itsassets. No material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the Company the titledeeds of immovable properties are held in the name of the Company except for the followingwhich are not held in the name of the Company:
2) In respect of its inventories:
(a) The management has physically verified the inventories atreasonable intervals during the year. In our opinion the frequency of verification isreasonable.
(b) The discrepancies noticed on verification between the physicalstocks and the book records were not material and such discrepancies have been properlydealt with in the books of accounts.
3) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Act
4) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans or provided any guarantees or securityto the parties cover under section 185 of the Act. In respect of investments made by theCompany the provisions of section 186 of the Act have been complied with.
5) In our opinion and according to the information and explanationsgiven to us the Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2021 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.
6) In our opinion and according to the information and explanationsgiven to us the maintenance of cost records has not been specified by the CentralGovernment under section 148(1) of the Act for the business activities carried out by theCompany. Therefore reporting under clause 3(vi) of the order is not applicable to theCompany.
7) (a) According to the information and explanations given to us theCompany has generally been regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax GSTCustom Duty Cess and other material statutory dues applicable to it. According to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at March 31 2021 for a period of more than six monthsfrom the date they become payable.
(b) According to the information and explanations given to us thefollowing disputed statutory dues aggregating to RS. 6.80 Crore that have not beendeposited on account of matters pending before appropriate authorities are as under: -
(Rs. in Crore)
(*) The above demands are majorly on account of Dividend DistributionTax (DDT) credit not given by Income Tax Department while issuing intimations undersection 143(1) of the Income Tax Act 1961. Company has disputed the same demands asCompany has already deposited the DDT on time and has also submitted the proof for paymentof same to the Income Tax Department for deleting the said demands.
8) Based on the information and explanations given to us we are of theopinion that the Company has not defaulted in repayment of loans and borrowings to banks.The Company did not have any outstanding loans and borrowings from government anddebenture holders during the year.
9) The company has not raised any money by way of initial public offerfurther public offer (including debt instruments) during the year. In our opinion theterm loans have been applied for the purpose for which they were obtained.
10) In our opinion and according to the information and explanationsgiven to us no fraud on or by the Company by its officers or employees has been noticedor reported during the year.
11) In our opinion the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Act.
12) In our opinion the Company is not a Nidhi Company. Therefore theprovisions of clause 3(xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and the details havebeen disclosed in the financial statements as required by the applicable Indianaccounting standards.
14) The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year thereforereporting under clause 3(xiv) of the Order are not applicable.
15) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company we report that the Companyhas not entered into any non- cash transaction with directors or persons connected withhim therefore reporting under clause 3(xv) of the Order are not applicable. 16) In ouropinion the Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure "B" to the Independent Auditors' Report
(Referred to in ParagrapRs. 2(f) under the heading "Report onother legal and regulatory requirements" of our report of even date)
Report on the Internal Financial Controls under clause (i) of subsection 3 of section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Relaxo Footwears Limited ("the Company") as of March 31 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate 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 aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.