1.  We have audited the attached balance sheet of brandhouse retails
 limited (''the Company'') as at March 31, 2011 and also the Profit and
 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.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in india. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. an audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. an audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  as required by the Companies (auditor''s report) order, 2003, 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 and on the basis of such
 checks of the books and records of the company as we considered
 appropriate and according to the information and explanations given to
 us, we give in the annexure a statement on the matters specified in
 paragraphs 4 and 5 of the said order.
 
 4.  further to our comments in the paragraph 3 above, we report that:
 
 i. 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;
 
 ii. 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;
 
 iii. The balance sheet, Profit and loss account and the Cash flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 iv. in our opinion, the balance sheet, the Profit and loss account and
 the Cash flow statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies act, 1956.
 
 v. on the basis of the written representations received from the
 directors, as on March 31, 2011, and taken on record by the board of
 directors, we report that none of the directors is disqualified as on
 March 31, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies act, 1956.
 
 vi. 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, subject
 to note no. 7 of schedule 16 (ii) relating to pending confirmations and
 reconciliations of balances of loans & advances and consequential
 adjustments, if any, 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, 2011;
 
 b) in the case of the Profit and loss account, of the profit of the
 Company for the year ended on that date; and
 
 c) in the case of Cash flow statement, of the cash flows of the Company
 for the year ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 
 [referred to in paragraph 3 of the auditors'' report of even date to the
 members of brandhouse retails limited on the financial statements for
 the year ended 31.3.2011]
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) all the fixed assets have not been physically verified by the
 management during the year, but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. as informed, no
 material discrepancies were noticed on such verification.
 
 (c) in our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 (ii) (a) as explained to us, the management has physically verified the
 inventory at all the showrooms as per a phased program, in which, all
 the showrooms are covered at least once in a year. in our opinion, the
 frequency of such verification is reasonable. .
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) on the basis of our examination of records of Company, we are of
 the opinion that the Company is maintaining proper records of
 inventory. The discrepancies noticed on verification between physical
 stocks and book stocks were not material and same have been properly
 dealt with in the books of accounts.
 
 (iii) (a) as informed, the Company has not granted any loans, secured
 or unsecured to companies, firms or other parties covered in the
 register maintained under section 301 of the Companies act, 1956 and
 hence, clauses (iii)(b), (iii) (c) and (iii)(d) of paragraph 4 of the
 Companies (auditor''s report) order, 2003, as amended by the Companies
 (auditor''s report) (amendment) order, 2004, are not applicable to the
 Company.
 
 (b) as informed, the Company has not taken any loans, secured or
 unsecured from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies act, 1956 and
 hence clauses (iii)(f) and (iii)(g) of paragraph 4 of the Companies
 (auditor''s report) order, 2003, as amended by the Companies (auditor''s
 report) (amendment) order, 2004, are not applicable to the Company.
 
 (iv) in our opinion and according to the information and explanations
 provided to us, there exists an adequate internal control system
 commensurate with the size of the Company and nature of its business
 with regards to purchase of inventories, fixed assets and sale of goods
 and services. during the course of our audit, we have not observed nor
 have been informed of any continuing failure to correct major
 weaknesses in internal control systems of the Company.
 
 (v) (a) according to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies act, 1956 that need to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) in our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of rupees five lacs have been entered into
 during the financial year at prices which are reasonable having regard
 to the prevailing market prices at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of sections 58a and 58aa of the Companies act, 1956 and the
 rules framed there under.
 
 (vii) in our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) The Central Government of india has not prescribed the
 maintenance of cost records under clause (d) of sub-section (1) of
 section 209 of the act for any of the products dealt with by the
 Company.
 
 (ix) (a) undisputed statutory dues including provident fund, investor
 education and Protection fund, or employees'' state insurance,
 sales-tax, Wealth tax, service tax, Customs duty, excise duty, Cess
 etc. have generally been regularly deposited with the appropriate
 authorities.
 
 further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441 a of the Companies act,1956,
 we are not in a position to comment upon the regularity or otherwise of
 the Company in depositing the same.
 
 (b) according to the information and explanations given to us,
 undisputed dues in respect of advance income-tax amounting to rs.
 298.76 lacs (excluding interest) for f.Y. 2010-11 was outstanding, as
 at the year end for a period of more than six months from the date they
 became payable.
 
 (c) according to the information and explanations given to us, there
 are no dues of income tax, sales-tax, Wealth tax, service tax, Customs
 duty, excise duty and Cess which have not been deposited on account of
 any dispute except for the following:
 
 Name of the    Nature of dues  Amount (Rs.) Period to which 
                                                  the        Forum at
                                                             which appeal
 statute                                     amount relates  is pending
 
 sales Tax, UP  sales Tax         4.10 lacs   f.Y. 2007-08   deputy 
                                                            Commissioner
 sales Tax, 
 Mumbai         sales Tax        12.80 lacs   f.Y 2004-05   deputy 
                                                            Commissioner
 
 (x) The Company has neither accumulated losses as at March 31, 2011 nor
 has it incurred any cash losses during the financial year covered by
 our audit and in the immediately preceding financial year.
 
 (xi) in our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 (xii) as explained to us, the Company has not granted any loans or
 advances on the basis of security by way of pledge of shares,
 debentures or any other securities.
 
 (xiii) in our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Companies (auditor''s report) order, 2003 as amended by
 the Companies (auditor''s report) (amendment) order, 2004 are not
 applicable to the Company.
 
 (xiv) The Company has not dealt with or traded in shares, securities or
 debentures. in respect of investments made by it, the Company has
 maintained proper records and all the investments are held by the
 Company in its own name.
 
 (xv) in our opinion and 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 during the year.
 
 (xvi) during the year under review, the Company has not obtained any
 Term loans.
 
 (xvii) according to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 (xviii) during the year, the Company 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.
 
 (xix) according to the information and explanations given to us, the
 Company had issued debentures in earlier years for which security has
 been created.
 
 (xx) The Company has not raised any money by issue of any
 shares/securities to public during the year under review.
 
 (xxi) during the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in india and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 For Malpani & Associates          For Haribhakti & Co.
 
 Chartered accountants             Chartered accountants
 
 firm registration no. 120438 W    firm registration no. 103523 W
 
 shyam Malpani                     Rakesh Rathi
 
 Proprietor                        Partner
 
 Membership no: f-034171           Membership no. f- 045228
 
 Place : Mumbai
 
 dated : 30th May, 2011