We have audited the attached Balance Sheet of CANTABIL RETAIL INDIA
 LIMITED, B-47 1st FLOOR ,LAWRENCE ROAD INDUSTRIAL AREA.DELHI-110035, as
 at 31st March, 2011 and the Profit and Loss Account and also 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 have conducted 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.
 
 As required by the Companies (Auditor''s Report) Order, 2003 issued by
 the Central Government of India in terms of sub-section (4A) of section
 227 of the Companies Act. 1956, we enclose in the Annexure a statement
 on the matters specified in paragraphs 4 and 5 of the said Order.
 
 Further to our comments in the Annexure referred to 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 and Profit and Loss Account, dealt with by this
 report, are in agreement with the books of account ;
 
 (iv) In our opinion, the Balance Sheet and Profit and Loss Account,
 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 written representations received from the
 directors, as on 31st March, 2011, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March 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 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 31st March, 2011 and
 
 (b) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date.
 
 (c) In the case of cash flow statement, of the cash flows of the
 company for the year ended on that date.
 
 ANNEXURE TO AUDITOR''S REPORT Referred to Paragraph 1 of our report of
 even date attached
 
 (i) a) The company is maintaining proper records showing full
 particulars including quantitative details and situation of the assets
 on basis of the information available.
 
 b) According to information and explanation given to us, the fixed
 assets of the company have been physically verified by the management
 at reasonable intervals during the year. No material discrepancies have
 been noticed on such verification.
 
 c) In our opinion and according to the information and explanations
 given to us, there was no substantial disposal of fixed assets by the
 company, which may affect the going concern concept.
 
 (ii) a&b) As explained to us, the inventory has been physically
 verified by the management at reasonable intervals during the year. In
 our opinion, the frequency of such verification is reasonable
 considering size and nature of the business.
 
 c) In our opinion and according to information and explanation given to
 us, the procedures of physical verification of inventory, followed by
 the management, are reasonable and adequate.  No serious discrepancies
 have been noticed in physical verification.
 
 (iii) Company has not granted any loans to companies, firms or other
 parties covered in the register maintained u/s 301 of the Act. However,
 Company has accepted unsecured loans from three persons aggregating Rs
 1,45,51,135/- out of which Rs 67,38,336/- has since been repaid. In our
 opinion, terms of acceptance of loans are not prejudicial to the
 interest of company.
 
 (iv) In our opinion and according to information and explanation given
 to us, there are adequate internal control procedures commensurate with
 the size and nature of the company for purchase of inventory and fixed
 assets and sale of goods.
 
 (v) a) According to the information and explanation given to us, the
 company has entered into transaction pursuance of contract or
 arrangement entered in register maintained under section 301 of the
 Companies Act, 1956.
 
 b) In respect of the transactions made in pursuance of such contracts
 or arrangements and exceeding value Rupees Five Lacs in respect of any
 party during the year, because of the absence of the comparable prices
 and variation in the quality of the goods involved, we are unable to
 comment whether the transactions were made at prevailing market prices
 at the relevant time.
 
 (vi) In our opinion and explanation given to us, the company has not
 accepted any public deposit and the directives issued by the RBI and
 the provisions of 58A and 58AA of the Act and rules framed there under.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with it size and nature of business.
 
 (viii) The maintenance of the cost record have not been prescribed by
 the Central Government under section 209(1)(d) of Companies Act, 1956
 to the company.
 
 (ix) (a) According to the books of accounts examined by us company is
 generally regular in payment of liabilities payable in respect of PF,
 ESI, Income Tax, VAT, Sales Tax, Wealth Tax Custom Duty, Excise Duty,
 Cess and other statutory dues.
 
 (b) Except for cases detailed hereunder, there are no disputed
 liability in respect of PF, ESI, Income Tax, Sales Tax, Wealth Tax
 Custom Duty, Excise Duty, Cess and other statutory dues which are
 outstanding as at 31st March, 2011:- 
 
 S    Period of Demand     Amount     Particulars of 
                                        Demand       Authority where 
 No.                      involved                   appeal is pending
 
 1.  Financial Year       
     2003-04             4.38 Lacs   ESI on Job work 
                                                    Civil Court,Rohini,
                                                    Delhi
 
 2.  Financial Year 
     2008-09            56.59 Lacs  Under Labour Act     Labour  Court,
     & 2009-10                                      Karkardooma Court,
                                                    Delhi
 
 3.  Financial Year 
     2009-10             1.00 Lacs  Under Factory
                                    Act              Civil Court, Delhi
 
 4.  Financial Year
      2005-06           18.48 Lacs  Under Sales Tax
                                    Act/             Appellate Tribunal,
                                    DVAT             Value Added Tax
 
 5.  Financial Year
     2007-08             1.26 Lacs  Under Sales Tax 
                                    Act              Joint Commissioner,
                                                     Department of 
                                                     Trade & Taxes
 
 6.  Financial Year 
     2008-09           173.92 Lacs  Demand under 
                                    section          CIT (A), Delhi
                                    201(1) and
                                    201(1A) of
                                    Income Tax Act, 
                                    1961.
 
 (x) There are no accumulated losses in the case of the company.
 Further, the company has not incurred any cash losses during the
 financial year under report and nor in the immediately preceding
 financial year.
 
 (xi) As per explanation and information provided to us, the company has
 not defaulted in repayment of dues to financial institutions or banks.
 
 (xii) The company has not granted loans and advances on basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xiii) Provisions of clause (xiii) are not applicable to the company.
 
 (xiv) As per information given to us, the company is not dealing or
 trading in shares, securities, debentures and other investments.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the company has given guarantee for loans taken by others
 from banks or financial institutions and terms and conditions whereof
 are not prejudicial to the interest of company.
 
 (xvi) To the best of our knowledge and belief and according to
 information given to us, the term loan availed by the company were
 prima facie applied by company during the year for the purpose for
 which they were obtained.
 
 (xvii) As per information and explanation given to us and overall
 examination of balance sheet of the company, we report that funds
 raised on short term basis have prima facie not being used for long
 term investment and vice versa.
 
 (xviii) As per information and explanation given to us, the company has
 not made any preferential allotment of shares to promoters of the
 company covered in the category of persons mentioned under section 301
 of the Companies Act.
 
 (xix) As per information and explanation given to us, the company has
 not issued any debentures and no security has been created against the
 debentures.
 
 (xx) The company has raised funds by issue of 77,77,778 equity shares
 of face value of Rs. 10/- each at a premium of Rs. 125/- per equity
 share in the IPO during the current financial year. The total amount
 raised by way of said equity issue was Rs. 105,00,00,030/- including
 security premium of Rs. 97,22,22,250/-.
 
 (xxi) As per information and explanation given to us, no fraud has been
 noticed or reported during the year.
 
                                             For SURESH & ASSOCIATES
 
                                                        FRN: 003316N
 
                                               CHARTERED ACCOUNTANTS
 
 Date : 12th August, 2011                        (CA. SURESH K GUPTA)
 
 Place : New Delhi                                           PARTNER
 
                                                       M. No. 080050