Auditor Report of Phoenix International Ltd.

Mar 31, 2024

We have audited the standalone Ind AS financial statements of Phoenix International Limited ("the company"), which comprise the Balance Sheet as at 31 March, 2024, the standalone Statement of Profit and Loss including Other Comprehensive Income, standalone statement of changes in equity, the standalone Statement of Cash Flow for the year then ended, and notes to the standalone financial statement including a summary of significant accounting policies and other explanatory information.(Hereinafter referred to as “the Standalone Financial Statements”).

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 Companies Act, 2013 (“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 March 31, 2024, the profit including other comprehensive income, changes in equity and its cash flows for the year ended.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified U/s. 143(10) of the Companies Act, 2013. Our responsibilities under those standards are further described in the auditor''s responsibilities for the Audit of the Standalone 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence, we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone 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 Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key Audit Matters	How our audit addressed the key audit matters
Assessing impairment of Investments and loans in subsidiary and associate entities (as described in note 40 to the standalone Ind AS financial statements)
The Company has significant investments and loans in its subsidiaries, joint ventures and associates. As at 31 March 2024, the carrying values of Company''s investments and loans in its subsidiaries and associate entities amounts to Rs. 13182.62 lakhs. The company has no impairment provision against its investment and loans Management reviews regularly whether there are any indicators of impairment by reference to the requirements under Ind AS 36 “Impairment of Assets”. For investments and loans where impairment indicators exist, significant judgements are required to determine the key assumptions used in the valuation model and methodology, such as revenue growth, discount rates, etc. Considering, the impairment assessment involves significant assumptions and judgement, the same has been considered as key audit matter.	Our procedures in assessing the management''s judgement for the impairment assessment included, among others, the following: • Assessed the Company''s valuation methodology applied in determining the recoverable amount of the investments and loans. • Obtained and read the valuation report used by the management for determining the fair value (''recoverable amount'') of its investments and loans given; • Obtained and reviewed the management assessment w.r.t. impairment. Also assessed the disclosures made in this regard in note 40 of the standalone Ind AS financial statements; • Considered the independence, competence and objectivity of the management specialist involved in determination of valuation; • Tested the fair value of the investment and loans as mentioned in the valuation report to the carrying value in books; • Made inquiries with management to understand key drivers of the cash flow forecasts, discount rates, etc.; • Involved experts to review the assumptions used by the management specialists; • We reviewed the disclosures made in the standalone Ind AS financial statements regarding such investments and loans.
Related party transactions (as described in note 33 to the standalone Ind AS financial statements)
The Company has undertaken transactions with its related parties in the ordinary course of business at arm''s length. These include making new or additional investments in its subsidiaries; lending loans to related parties; sales and purchases to and from related parties, etc. as disclosed in note 33 to the standalone Ind AS financial statements. We identified the accuracy and completeness of the related party transactions and its disclosure as set out in respective notes to the standalone Ind AS financial statements as a	Our procedures/ testing included the following: • Obtained and read the Company''s policies, processes and procedures in respect of identifying related parties, obtaining approval, recording and disclosure of related party transactions; • Read minutes of shareholders'' meetings, board meetings and minutes of meetings of those charged with governance in connection with Company''s assessment of related party

key audit matter due to the significance of transactions with related parties and regulatory compliances thereon, during the year ended 31 March 2024.

transactions being in the ordinary course of business at arm''s length; • Tested, related party transactions with the underlying contracts, confirmation letters and other supporting documents; • Agreed the related party information disclosed in the standalone Ind AS financial statements with the underlying supporting documents, on a sample basis

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexure to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon. Our opinion on the Standalone Financial Statements do not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone 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 standalone Financial Statements

The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified u/s 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

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.

The 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 standalone 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 the standalone 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 standalone 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 controls 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 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 cause 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 standalone 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone 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 standalone 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 the Companies (Auditor''s Report) Order, 2020 (“the Order” or “the CARO”) issued by the Central Government in terms of Section 143(11) of the Act, we give in ‘Annexure A'' a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Sec. 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Standalone 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 u/s. 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of the written representations received from the directors as on 31^st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2023 from being appointed as a director in terms of Sec. 164(2) of the Act;

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

g. 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, 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 litigation which has impact on its financial position in its financial statements;

ii. The Company has no material foreseeable losses on long-term contracts including derivative contracts-to the financial statements, hence no provision has been made ;

iii. There has been no amount to be transferred, to the Investor Education and Protection Fund by the Company.

iv. a. The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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 (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b. The management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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, whether, 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; and

c. Based on audit procedures which we 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 (a) and (b) contain any material mis-statement.

v. The Company has neither declared nor paid any dividend during the year.

vi. Based on our examination, the company, has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility except in respect of maintenance of property, plant and equipment''s records wherein the accounting software did not have audit trail feature enabled throughout the year. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

Place: New Delhi For P M P K & Co.

Date: 30.05.2024 Chartered Accountants

FRN- 019681N

per Pravesh Kumar Sharma

Partner

M. No: 093350

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Mar 31, 2018

Report on Standalone Financial Statement

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

Management’s Responsibility for the Standalone 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, 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 financial statements 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.

That Board of Directors are also responsible for overseeing the company''s financial reporting process.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone 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 standalone 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 standalone financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 March 31, 2018;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order’) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks of the books and records of the company as we considered appropriate and according to information and explanations given to us, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) we have 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 aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, as applicable;

(e) on the basis of written representations received from the Directors as on March 31, 2018 under section 164(2) of the Companies Act, 2013, and 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 provisions of section 164(2) of the Companies Act, 2013; with respect to the adequacy of internal financial controls over financial reporting and operating effectiveness of such controls, refer to our separate report in “Annexure B”, which is based on auditor''s report of the company. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of the company;

(f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us;

(i) the Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to Note no34 to the financial statement;

(ii) the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses;

(iii) there has been no amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE- A, REFERRED TO IN PARAGRAPH ‘1’UNDER THE HEADING “REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF OUR AUDIT REPORT OF EVEN DATETO THE MEMBERS OF PHOENIX INTERNATIONAL LIMITED

1. (a) According to the information and explanations given to us, the company is maintaining proper records of fixed assets, including the quantitative details and its situations.

(b) Physical verification of fixed assets has been made by the management during the year and no material discrepancies were noticed on such verification.

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

2. The management has conducted physical verification of inventory at reasonable interval during the period and no material discrepancies were noticed on physical verification.

3. The Company has not granted any loans, secured or unsecured to Companies, Firm, Limited Liability Partnership or parties covered in register maintained u/s 189 of Companies Act, 2013.

4. According to the information and explanations given to us, the company has complied with the provision of section 185& 186 of Companies Act, 2013, with respect to loans & investment made.

5. According to the information and explanations given to us, the company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of section 73 to 76 or any other provisions of the Companies Act and the rules framed there under, hence clause v of paragraph 3 of the Companies (Auditor''s Report) Order, 2016 is not applicable.

6. According to the information and explanations given to us, maintenance of cost records have not been specified by the Central Government under sub- section (1) of Section 148 of Companies Act,2013, hence clause vi of paragraph 3 of the Companies (Auditor''s Report) Order,2016 is not applicable.

7. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues as applicable to the company.

According to the information and explanations given to us, undisputed statutory dues including amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Excise Duty, Value Added Tax, Cess and any other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slightly delay in few cases, as at 31.03.2018 for a period of more than six months from the date they become payable.

(b) As per information and explanation provided to us the following are the contingent liabilities against which the appeal is pending to the various authorities:

Particulars	Authorities	Amounts
1. Service Tax	CESTAT	92,24,464/-
2. Central Excise (2016)	Commissioner Appeal Central Excise	27,34,452/-

8. According to the information and explanations give to us, the company has taken Term Loan from Oriental Bank of Commerce but there is no default in repayment of principal and interest during the year.

9. According to the information and explanations given to us, the company has obtained a Term Loan from Oriental Bank of Commerce during the year under audit and which is applied for the purpose for which those are raised.

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

11. According to information and explanations given to us and on the basis of records maintained by the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provision of section 197 read with schedule V to the Companies Act 2013.

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

13. According to information or explanations given to us, transactions with related party are in compliance with sections 177 & 188 of the Companies Act,2013 and details of which have been disclosed in the financial statements.

14. According to information and explanations given to us and based on our examinations of the records maintained by the Company, the Company has not made any preferential allotment/ private placement of share or fully or partly convertible debentures during the year. Hence clause 3 (xiv) is not applicable on the Company.

15. According to information and explanations given to us, the Company has not entered into non-cash transaction with directors or persons connected with him. Accordingly, paragraph 3 (xv) is not applicable on the Company.

16. According to information and explanations given to us, the Company is not required to be registered under section 45-IA of Reserve Bank of India Act, 1934, Hence clause 3 (xvi) is not applicable on the Company.

Annexure - B to the Auditors’ Report

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 Phoenix International Limited (“the Company”) as of 31 March 2018 in conjunction with our audit of the standalone 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 (‘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 records, 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 (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(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 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 judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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, 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 2018, 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

Place: New Delhi For Pradip Bhardwaj & Co.

Date: 30.05.2018 Chartered Accountants

Firm Registration No.: 013697C

(Pradip Bhardwaj)

Partner

M.No.500219

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Mar 31, 2015

We have audited the accompanying financial statements of Phoenix International Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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 fl ows of the Company in accordance with 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 the 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 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 sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 March 31, 2015;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act and on the basis of such checks of the books and records of the company as we considered appropriate and according to information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

1. As required by section 143(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, Profit and Loss Account and Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 8/2014 dated 4thApril, 2014issued by the Ministry of Corporate Affairs ;

(e) on the basis of written representations received from the directors as on March 31, 2015 under section 164(2) of the Companies Act,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of provisions of section 164(2) of the Companies Act,2013.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors), 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 as referred to Note no. 28

(ii) the company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

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

ANNEXURE REFERRED TO IN PARAGRAPH '1'UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR AUDIT REPORT OF EVEN DATE TO THE MEMBERS OF PHOENIX

INTERNATIONAL LIMITED

1. (a) According to the information and explanations given to us, company is maintaining proper records of fixed assets.

(b) Physical verification of fixed assets has been made by the management during the year and no material discrepancies were noticed on such verification.

2. (a) The management has conducted physical verification of inventory at reasonable interval during the period.

(b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. As per information and explanations provided to us, the company has not granted any loans, secured and unsecured to companies, firms or other parties covered in the register maintained under section 189 of Companies Act,2013,Clause iii of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

4. According to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for Purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control procedures.

5. According to the information and explanations given to us, the company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of section 73 to 76 or any other provisions of the Companies Act and the rules framed there under, hence clause v of paragraph 3 of the Companies (Auditor's Report) Order,2015 is not applicable.

6. According to the information and explanations given to us, maintenance of cost records have not been specified by the Central Government under sub- section (1) of Section 148 of Companies Act,2015, hence clause vi of paragraph 3 of the Companies (Auditor's Report) Order,2015 is not applicable.

7. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues as applicable to the company except income tax (TDS of Rs 4392). 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, wealth tax, service tax, customs duty, excise duty, Value added tax, cess and any other statutory dues were outstanding, as at 31.03.2015 for a period of more than six months from the date they become payable.

(b) As per information and explanation provided to us, the following are the contingent liabilities against which the appeal is pending to the various authorities

Particulars Authorities Amounts

1.Sales Tax Commissioner Appeal 2,91,515

2.Wealth Tax Commissioner Appeal 8,45,144

3.Service Tax CESSTAT 1,32,24,465

4.Service Tax (12-13) Commissioner Appeal 37,08,000

5.Employee Provident Fund EPF Appellate Tribunal, New Delhi 18,63,744

(c) As per information and explanations given to us, there is no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act and rules made there under, hence clause vii(c ) of paragraph 3 of the Companies( Auditor's Report)Order,2015 is not applicable.

8. The Company has no accumulated losses at the end of financial year and. The company has not incurred any cash losses during the current financial year and also immediately preceding financial year. Clause viii of paragraph 3 of the Companies (Auditor's Report) Order,2015 is not applicable.

9. According to the information and explanations give to us, the company has taken loan from bank but there is no default in repayment of principal and interest during the year.

10. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Clause x of paragraph 3 of the companies (Auditor's Report) Order, 2015 are not applicable to the company.

11. According to the information and explanations given to us, no term loans were obtained during the year under audit. Hence the provision of Clause (xi) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

12. During the course of our examination of the books and records of the company in accordance with generally accepted accounting practices, no fraud on or by the company has been noticed or reported during the year covered by our audit.

16. According to the information and explanations given to us, the company has not availed any fresh term loan. Accordingly, the provision of 4(xvi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us, no funds raised on short term basis have been used for long term investment and vice-versa. Accordingly, the provision of 4 (xvii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

18. According to the information and explanations given to us, the company has not made a preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debenture. Accordingly, the provision of 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

20. During the year covered by our report the Company has not raised any money by public issue. Accordingly, the provision of 4 (xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

21. During the course of our examination of the books and records of the company, no fraud on or by the company has been noticed or reported during the year covered by our audit.

For M/s Pradip Bharadwaj & Co,

Chartered Accountants

Firm Regd. No. 013697C

Pradip Bhardwaj

Partner

M.No. 500219

Place : New Delhi

Date : 26.05.2015

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Mar 31, 2014

We have audited the accompanying Consolidated Financial Statements of Phoenix International Limited (''the Company'') and its subsidiaries, which comprise the Consolidated Balance Sheet as at 31st March 2014, the Consolidated Profi t and Loss account and Consolidated Cash Flows Statement for the year then ended and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated fi nancial statements that give a true and fair view of the consolidated fi nancial position, consolidated fi nancial performance and consolidated cash fl ows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Company Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated fi nancial 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 consolidated fi nancial 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 consolidated fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and presentation of the consolidated fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but no t 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 consolidated fi nancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the consolidated fi nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the consolidated balance sheet, of the state of affairs of the Company as at 31st March 2014;

(i) in the case of the consolidated profit and loss account, of the profi t for the year ended on that date; and

(ii) in the case of the consolidated cash flow statement, of the cash fl ows for the year ended on that date.

We did not audit the financial statements of the subsidiaries, whose fi nancial statements refl ect Total Assets (net) of Rs. 8939.34 Lacs as at March 31, 2014, Total Revenues of Rs. Nil at the year ended on that date, as considered in the consolidated fi nancial statements. These fi nancial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the reports of the other auditors.

In respect of its fixed assets:

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information. However, the records need to be updated with regard to the situation of fixed assets and suffi cient description to make identification of fixed assets possible.

(b). As explained to us, the company has physically verifi ed certain assets, in accordance with phased program of verification, which in our opinion is reasonable, having regards to the size of the company. The discrepancies noticed at the time of such verification were properly dealt with in these books of accounts.

(c). The Fixed Assets disposed off during the period, in our opinion, do not constitute a substantial parts of fixed assets of company and such disposal has, in our opinion, not affect the going concern status of the company.

2. (a) According to the information and explanation given to us, the inventories have been physically verified by the management at the end of accounting year.

(b) In our opinion, the frequency and procedure of physical verifi cation is reasonable in relation to the size of company and nature of its business.

(c). According to the information and explanation given to us, the Company has maintained proper records of inventory and no material discrepancies have been noticed on physical verifi cation of inventory as compared to the book records.

3. (a) The company during the year has not granted and / or taken any loans, secured or Unsecured, to companies, fi rm or other parties covered in the register maintained under section 301 of the companies Act, 1956 except an interest free loan of Rs. 4840.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was Rs. 4840.00 lacs and the year-end balance of loan granted to subsidiary company was Rs. 4840.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the other terms and conditions of above loan granted by the company are not prima facie, prejudicial to the interest of the company.

(c) The term and condition of above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to its subsidiary company.

(e) The company has not taken any interest free unsecured loans during the year from parties covered in the register maintain under section 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs. The maximum amount involved during the year was Rs. 87.00 lacs and the year-end balance of the interest free unsecured loans was Rs. Nil.

(f) The above stated unsecured loans taken by company are interest free. In our opinion, the term and condition of the same are prima facie, not prejudicial to the interest of the company.

(g) The term of repayment of interest free unsecured loans obtained have not been stipulated in writing.

4. According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control procedures.

5. (a) According to the information and explanations given to us, particulars of contract 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) Excluding certain transactions purchase / sale of goods and material of special nature,for which alternate quotations / source of supply was not available and on the basis of technical evaluation in respect of the quality of items and because of special type of work involved, the transactions entered in to pursuant to such contracts and arrangements, in our opinion and according to the information and explanation given to us , have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. According to the information and explanations given to us, the company has not accepted any deposits from the public to which the provision of section 58A and 58AA of the companies Act, and the companies (Acceptance of deposits) Rules, 1975 apply.

7. In our opinion and according to the information and explanations given to us, the company has an effective internal audit system commensurate with size and nature of its business.

8. The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under section 209 (1) (d) of the Companies Act, 1956 for any of the products of the company. However, we have not made detailed examination of such records with a view to determine whether they are accurate and complete. However Cost Compliance report for the year ended 31st March 2014 has not been provided.

9. (a) According to the records of the company, the company is generally regular in deposit the appropriate authorities undisputed statutory dues including Provident Fund,Investor Education and Protection Fund,Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Excise duty, Custom Duty and other material statutory due as applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of income-tax, sales-tax, wealth tax, excise duty, and cess were outstanding as at 31st March 2014, for a period for more than six month from the date they become payable

(c). According to the information and explanations given to us, the disputed statutory dues, which have not been deposited with appropri- ate authorities on account of any dispute, are as under:-

Nature of the Period to which Amount involved Forum where dispute is dues relates rs pending

1. Sales Tax 1994-95 291,515 Hbn''ble Allahabad High Court, Allahabad

2. Wealth Tax (i) 2002-03 465,431 Income Tax Appellate

(ii) 2003-04 379,713 Tribunal, New Delhi

3 EPF, DLIF 03/2011 to 1863744 Asst. P.F. Commissioner, 12/2012 Chennai.

4 Service Tax (i) 2007-08 3090000 CESTAT, New Delhi.

(ii) 2008-09 3954465

(iii) 2009-10 3090000

(iv) 2010-11 3090000

10. The Company does not have accumulated losses at the end of fi nancial year and also not incurred any cash losses during the current financial year (1.4.2013 to 31.3.2014) and also immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company during the year has not defaulted in repayment of dues to a fi nancial institution, bank, or debenture holder.

12. According to the information and explanations given to us, the company has not granted any loans and advance on the basis of security by way of pledge of shares debenture and other securities.

13. The company is not chit fund, a nidhi or a mutual benefi t fund / society. Accordingly, the provision of clause 4(xiii) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

14. The company is not dealing in or trading in shares, securities debentures and other investment. Accordingly, the provision of 4 (xiv) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

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

16. According to the information and explanations given to us, the company has not availed any fresh term loan. Accordingly, the provision of 4(xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us, no funds raised on short term basis have been used for long term investment and vice-versa. Accordingly, the provision of 4 (xvii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

18. According to the information and explanations given to us, the company has not made a preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debenture. Accordingly, the provision of 4 (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

20. During the year covered by our report the Company has not raised any money by public issue. Accordingly, the provision of 4 (xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

21. During the course of our examination of the books and records of the company, no fraud on or by the company has been noticed or reported during the year covered by our audit.

For Pradip Bhardwaj & Co. Chartered Accountants FRN: 013697C

Date: 26.05.2014 per Pradip Bhardwaj Place: New Delhi Partner M.No. 500219

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Mar 31, 2013

We have audited the attached Balance Sheet of PHOENIX INTERNATIONAL LIMITED as at 31 March, 2013, 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 company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our Audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An Audit includes examining, on the test basis, evidences supporting the amount 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 statements presentation. We believe that our Audit provides a reasonable basis for our opinion

2. Companies (Auditor''s Report)(Amended)order,2004 issued by Central Government of India in terms of Sub Section (4A) of Section 227 of Companies Act, 1956 is applicable and report on CARO is annexed.

3 Further subject to our comments in the Annexure referred to in paragraph 2 above or elsewhere given, we report that subject to Notes No.28

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, the Company has kept books of accounts as required by law, so far, as appears from our examination of those books.

c) The Balance Sheet dealt with in this report is in agreement with the books of accounts.

d) In our opinion the Balance Sheet dealt with in this report complies with the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies act 1956.

e) On the basis of written representation received from the Directors as on 31 st March 2013 and taken on record by the Board of Directors we report that none of the directors is disqualified as on 31st 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.

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 & fair view in conformity with the accounting principles generally accepted in India:

i. in case of the Balance Sheet, the statement of affairs of the Company as at 31stMarch, 2013;

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

iii. in the case of the Cash Flow Statement, the cash flows of the company for the year ended on that date. In respect of its fixed assets:

1. (a) The Company has maintained proper records showing M! particulars, including quantitative details and situation of fixed assets on the basis of available information. However, the reccas need to be updated with regard to the situation of fixed assets and sufficient description to make identification of fixed assets possible

(b). As explained to us, the company has physically verified certain assets, in accordance with phased program of verification, which in our opinion is reasonable, having regards to the size of the company. The discrepancies noticed at the time of such verification were properly dealt with In these books of accounts.

(c). The Fixed Assets disposed off during the period, in our opinion, do not constitute a substantial parts of fixed assets of company and such disposal has, in our opinion, not affect the going concern status of the company.

2. (a) According to the information and explanation given to us, the inventories have been physically verified by the management at the end of accounting year.

(b) In our opinion, the frequency and procedure of physical verification is reasonable in relation to the size of company and nature of its business.

(c). According to the information and explanation given to us, the Company has maintained proper records of inventory and no material discrepancies have been noticed on physical verification of inventory as compared to the book records.

3. (a) The company during the year has not granted and / or taken any loans, secured or Unsecured, to companies, firm or other parties covered in the register maintained under section 301 of the companies Act, 1956 except an interest free loan of Rs.4840.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was 4840.00 lacs and the year-end balance of loan granted to subsidiary company was Rs 4840.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the other terms and conditions of above loan granted by the company are not prima facie, prejudicial to the interest of the company.

(c) The term and condition of above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to its subsidiary company.

(e) The company has not taken any interest free unsecured loans during the year from parties covered in the register maintain under section 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs. The maximum amount involved during the year was Rs.87,00 lacs and the year-end balance of the interest free unsecured loans was Rs. Nil.

(f) The above stated unsecured loans taken by company are interest free. In our opinion, the term and condition of the same are prima facie, not prejudicial to the interest of the company.

(g) The term of repayment of interest free unsecured loans obtained have not been stipulated in writing.

4. According to the information and explanations given to us. there are adequate internal control procedures commensurate with the size of the company and the nature of its business During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control procedures.

5. (a) According to the information and explanations given to us. particulars of contract 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) Excluding certain transactions purchase / sale of goods and material of special nature.for which alternate quotations / source of supply was not available and on the basis of technical evaluation in respect of the quality of items and because of special type of work involved, the transactions entered in to pursuant to such contracts and arrangements, in our opinion and according to the information and explanation given to us , have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. According to the information and explanations given to us, the company has not accepted any deposits from the public to which the provision of section 58A and 58AA of the companies Act, and the companies (Acceptance of deposits) Rules, 1975 apply.

7. In our opinion and according to the information and explanations given to us, the company has an effective internal audit system commensurate with size and nature of its business.

8. The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under section 209 (1) (d) of the Companies Act, 1956 for any of the products of the company. However, we have not made detailed examination of such records with a view to determine whether they are accurate and complete. However Cost Compliance report for the year ended 31st March 2013 has not been provided.

9. According to the records of the company, the company is generally regular in deposit the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance , Income Tax, Sales Tax, Wealth Tax, Excise duty.CustomDuty and other material statutory due as applicable to it.

According to the information and explanations given to us, no undisputed amount payable in respect of income-tax, sales-tax, wealth tax, excise duty, and cess were outstanding as at 31 stMarch 2013, for a period for more than six month from the date they become payable

10. The Company does not have accumulated losses at the end of financial year and also not incurred any cash losses during the current financial year (1.4.2012 to 31.3.2013) and also immediately preceding financial year.

11. In our opinion and according to the Information and explanations given to us. the company during the year has not defaulted in repayment of dues to a financial institution, bank, or debenture holder.

12. According to the information and explanations given to us, the company has not granted any loans and advance on the basis of security by way of pledge of shares debenture and other securities.

13. The company is not chit fund, a nidhi or a mutual benefit fund / society. Accordingly, the provision of clause 4(xiii) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

14. The company is not dealing in or trading in shares, securities debentures and other investment. Accordingly, the provision of 4 (xiv) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

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

16. According to the information and explanations given to us. the company has not availed any fresh term loan. Accordingly, the provision of 4(xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us, no funds raised on short term basis have been used for long term investment and vice-versa. Accordingly, the provision of 4 (xvii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

18. According to the information and explanations given to us, the company has not made a preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debenture. Accordingly, the provision of 4 (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

20. During the year covered by our report the Company has not raised any money by public issue. Accordingly, the provision of 4 (xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

21. During the course of our examination of the books and records of the company, no fraud on or by the company has been noticed or reported during the year covered by our audit.

For M/s Pradip Bharadwaj & Co,

Chartered Accountants

FirmRegd. No. 013697C

Pradip Bhardwaj

Partner

M.No. 500219 Place : Noida

Date : 29.08.2013

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Mar 31, 2012

We have audited the attached Balance Sheet of PHOENIX INTERNATIONAL LIMITED as at 31st March, 2012, the Profit & Loss Account 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.

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.

1. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's 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 give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments in the Annexure referred to in paragraph '1 ’ 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 purpose of our audit;

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

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

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

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

(f) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the Notes thereon, 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:- - in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

- in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date ; and

- in the case of the Cash Flow Statement of the cash flows of the company for year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH ‘1’ OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PHOENIX international LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH’ 2012

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

ever, the records need to be updated with regard to situation of fixed assets and sufficient .description to make identification of fixed assets possible.

(b) As explained to us, the fixed assets have been physically verified by the management at the end of the accounting year. As explained to us, no material discrepancies were noticed on comparison of physical quantities with those as per fixed assets register. In our opin- ion, the program of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its fixed assets.

(c) The Company during the year has not disposed off any substantial / major part of its fixed assets.

2. (a) As explained to us, the inventories have been physically verified by the management at the end of the accounting year. In our opinion,the frequency of physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of its busi- ness.

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies have been noticed on physical verification of inventory as compared to the book records.

3. (a) According to the Information -and explanations to us, the Company during the year has not granted any loans, secured or unsecured,

to companies, firms or others parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free loan of Rs. 340.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was Rs. 340.00 lacs and the year end balance of loan granted to subsidiary company was Rs. 340.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the terms and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the Company.

(c) The terms and conditions of the above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to subsidiary company.

(e) The Company has taken an interest free unsecured loans of Rs. 87.00 lacs from parties covered in the register maintained under Sec- tion 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs. The maximum amount involved during the year was Rs. 87.00 lacs and the year-end balance of the interest free unsecured loans were Rs. 87.00 lacs.

(f) The above stated unsecured loans taken by the company are interest free. In our opinion, the terms and conditions of the same are prima facie, not prejudicial to the interest of the Company.

(g) The terms of repayment of interest free unsecured loans obtained have not been stipulated in writing and as explained to us, the said unsecured loans are repayable on demand.

4. !n our opinion and according to the information and explanations given to us, there are adequate internal control system commensu- rate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to us, 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) Excluding certain transactions of purchase/sale of goods and material of special nature for which alternate quotations/source of sup- ply was not available and on the basis of technical evaluation in respect of the quality of the items and because of the special type of work involved, the transactions entered into pursuant to such contracts and arrangements, in our opinion and according to the informa- tion and explanations given to us, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the provisions of Section 58A and 58AAof the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

7. According to the information and explanations given to us, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

8. The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company. However, we have not made detailed examina- tion of such records with a view to determine whether they are accurate and complete.

9. (a) According to the records of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed

statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other material statutory dues as applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, customs duty, excise duty and cess were outstanding as at 31st March' 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the disputed statutory dues, which have not been deposited with appropri- ate authorities on account of any dispute, are as under: -

10. The Company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company during the year has not defaulted in repay- ment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

13. According to the information and explanations given to u§, the Company is not a Chit Fund or a Nidhi or a Mutual Benefit Fund I Soci- ety. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) order, 2003 are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not trading in shares, securities, debentures & other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company

15. In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interest of the Company.

16. To the best of our information & according to explanations given to us, the Company has applied its terms loan for the purposes for which the said term loan was obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term invest- ment and vice versa.

18. The Company during the year has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise. Accordingly, the provisions of clause 4 (xviii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

19. The Company during the year has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

20. The Company during the year has not raised any money by way of public issues. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

21. During the course of our examination of the books and records of the Company,, no fraud on or by the Company has been noticed or reported during the year covered by our audit.

For M/s Pradip Bharadwaj & Co,

Chartered Accountants Firm Regd. No. 013697C

Pradip Bhardwaj Prop.

M.No. 500219

Place : Noida

Date : 27.08.2012

---

Mar 31, 2010

We have audited the attached Balance Sheet of PHOENIX INTERNATIONAL LIMITED as at 31st March, 2010, the Profit & Loss Account and the 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.

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.

1. As required by the Companies (Auditors Report) Order, 2003 as 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 give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments in the Annexure referred to in paragraph 1 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 purpose of our audit;

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

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

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

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

(f) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the Notes thereon, 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:-

- in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

- in the case of the Profits Loss Account, of the profit of the Company for the year ended on that date; and

- in the case of the Cash Flow Statement of the cash flows of the company for year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH V OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PHOENIX international LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2010

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. How ever, the records need to be updated with regard to situation of fixed assets and sufficient description to make identification of fixed assets possible.

(b) As explained to us, the fixed assets have been physically verified by the management at the end of the accounting year. As explained to us, no material discrepancies were noticed on comparison of physical quantities with those as per fixed assets register. In our opinion, the program of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its fixed as- sets.

(c) The Company during the year has not disposed off any-substantial / major part of its fixed assets,

2. (a) As explained to us, the inventories have been physically verified by the management at the end of the accounting year. In our opinion, the frequency of physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of Its busi- ness.

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies have been noticed on physical verification of inventory as compared to the book records.

3. (a) According to the Information -and explanations to us, the Company during the year has not granted any loans, secured or unsecured, to companies, firms or others parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free loan of Rs. 340.00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was Rs. 340.00 lacs and the year end balance of loan granted to subsidiary company was Rs. 340.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, in our opinion, the terms and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the Company.

(c) The terms and conditions of the above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to subsidiary company.

(e) The Company has taken an interest free unsecured loans of Rs. 87.00 lacs from parties covered in the register maintained under Sec- tion 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 87.00 lacs, the maximum amount involved during the year was Rs. 87.00 lacs and the year-end balance of the interest free unsecured loans were Rs. 87.00 lacs.

(f) The above stated unsecured loans taken by the company are interest free. In our opinion, the terms and conditions of the same are prima facie, not prejudicial to the interest of the Company.

(g) The terms of repayment of interest free unsecured loans obtained have not been stipulated in writing and as explained to us, the said unsecured oans are repayable on demand.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensu- rate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

5 (a) According to the information and explanations given to us, 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) Excluding certain transactions of purchase/sale of goods and material of special nature for which alternate quotations/source of supply was not available and on the basis of technical evaluation in respect of the quality of the items and because of the special type of work involved, the transactions entered into pursuant to such contracts and arrangements, in our opinion and according to the information and explanations given lo us, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time

6 According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

7. According to the information and explanations given to us, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

8 The Company has maintained Cost Accounting records as prescribed for Footwear and its components by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company. However, we have not made detailed examina- tion of such records with a view to determine whether they are accurate and complete.

9. (a) According to the records of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other material statutory dues as applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, customs duty, excise duty and cess were outstanding as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the disputed statutory dues, which have not been deposited with appropriate authorities on account of any dispute, are as under: -

Nature of the dues Period to which relates Amount involved Rs. Forum where dispute is pending

1. Sales Tax 1994-95 291,515 Honble Allahabad High Court, Allahabad

2. Wealth Tax (i) 2002-03 465,431 Income Tax Appellate (ii)2003-04 379,713 Tribunal, New Delhi

10. The Company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company during the year has not defaulted in repay- ment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

13. According to the information and explanations given to us, the Company is not a Chit Fund or a Nidhi or a Mutual Benefit Fund / Society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not trading in shares, securities, debentures & other invest- ments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Com- pany

15. In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interest of the Company.

16. To the best of our information & according to explanations given to us, the Company has applied its terms loan for the purposes for which the said term loan was obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term invest- ment and vice versa.

18. The Company during the year has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise. Accordingly, the provisions of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

19. The Company during the year has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

20. The Company during the year has not raised any money by way of public issues. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

21. During the course of our examination of the books and records of the Company,, no fraud on or by the Company has been noticed or reported during the year covered by our audit.

For RKM & Associates

Chartered Accountants

Place: New Delhi (Rakesh Mathur)

Date: 31.08.2010 Prop.

---

Mar 31, 2009

We have audited the attached Balance Sheet of PHOENIX INDUSTRIES LIMITED as at 31st March, 2009, the Profit & Loss Account and the 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.

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.

1. As required by the Companies (Auditors Report) Order, 2003 as 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 give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments in the Annexure referred to in paragraph 1 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 purpose of our audit;

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

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

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

(e) on the basis of the written representations received from the Directors of the Company as on 318 March, 2009 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2009 from being appointed as Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the Notes thereon, 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:-

in the case of the Balance Sheet, of the state of affairs of the Company as at 31" March, 2009; and in the case of the Profit & Loss Account, of the loss of the Company for the year ended on that date; and in the case of the Cash Flow Statement of the cash flows of the company for year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PHOENIX INTERNATIONAL LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2009

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. However, the records need to be updated with regard to situation of fixed assets and sufficient description to make identification of fixed assets possible.

(b) As explained to us, the fixed assets have been physically verified by the management at the end of the accounting year. As • explained to us, no material discrepancies were noticed on comparison of physical quantities with those as per fixed assets register. In our opinion, the program of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its fixed assets.

(c) The Company during the year has not disposed off any substantial / major part of its fixed assets.

2. (a) As explained to us, the inventories have been physically verified by the management at the end of the accounting year. In our opinion, the frequency of physical verification is reasonable.

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

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies have been noticed on physical verification of inventory as compared to the book records.

3. (a) According to the Information -and explanations to us, the Company during the year has not granted any loans, secured or unsecured, to companies, firms or others parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free loan of Rs. 330,00 lacs granted to its subsidiary company Phoenix Industries Ltd. The maximum amount involved during the year was Rs. 330.00 lacs and the year end balance of loan granted to subsidiary company was Rs. 330.00 lacs.

(b) The company has not charged any interest on above loan granted to its subsidiary company. Other than the above, In our opinion, the terms and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the Company.

(c) The terms and conditions of the above loan granted to subsidiary company have not been stipulated in writing.

(d) According to the information and explanations given to us, there is no overdue amount of loan granted to subsidiary company.

(e) The Company has taken an interest free unsecured loans of Rs. 625.39 lacs from two companies I parties covered in the register maintained under Section 301 of the Companies Act, 1956. The opening balance of the unsecured loans taken was Rs. 625.39 lacs. The maximum amount involved during the year was Rs. 625.39 lacs and the year-end balance of the interest free unsecured loans were Rs. 87.00 lacs.

(f) The above stated unsecured loans taken by the company are Interest free. In our opinion, the terms and conditions of the same are prima facie, not prejudicial to the interest of the Company.

(g) The terms of repayment of interest free unsecured loans obtained have not been stipulated in writing and as explained to us, the said unsecured loans are repayable on demand.

4. In our opinion and according to the Information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to us, 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) Excluding certain transactions of purchase/sale of goods and material of special nature for which alternate quotations/source of supply was not available and on the basis of technical evaluation in respect of the quality of the items and because of the special type of work Involved, the transactions entered into pursuant to such contracts and arrangements, in our opinion and according to the information and explanations given to us, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. According to the Information and explanations given to us, the Company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

7. According to the information and explanations given to us, the Company has an nternal audit system commensurate with the size of the Company and the nature of its business.

8. The Company has maintained Cost Accounting records as prescribed for Footwear and Its components by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company. However, we have not made detailed examination of such records with a view to determine whether they are accurate and complete.

9. (a) According to the record3 of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales-tax, wealth tax, customs duty, excise-duty, cess and other material statutory dues as applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth- tax, sales tax, customs duty, excise duty and cess were outstanding as at 31" March2008 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the disputed statutory dues, which have not been deposited with appropriate authorities on account of any dispute, are as under: -

Nature of the dues Period to Amount involved Forum where which relates Rs. dispute is pending

1. Sales Tax 1994-95 291,515 Hbnble Allahabad High Court, Allahabad

2. Wealth Tax (i) 2002-03 465,431 Income Tax Appellate (ii) 2003-04 379,713 Tribunal, New Delhi

10. The Company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company during the year has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

13. According to the information and explanations given to us, the Company is not a Chit Fund or a Nidhi or a Mutual Benefit Fund / Society. Accordingly, the provisions of clause 4 (xiii) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not trading in shares, securities, debentures & other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report).Order, 2003 are not applicable to the Company

15. In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interest of the Company.

16. To the best of our information & according to explanations given to us, the Company has applied its terms loan for the purposes for which the said term loan was obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term investment and vice versa.

18. The Company during the year has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise. Accordingly, the provisions of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

19. The Company during the year has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

20. The Company during the year has not raised any money by way of public issues. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

21. During the course of our examination of the books and records of the Company,, no fraud on or by the Company has been noticed or reported during the year covered by our audit.

For RKM & Associates Chartered Accountants

Place: New Delhi (Rakesh Mathur)

Date: 30.07.2009 Prop.