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
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,
(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
2. Financial Year
2008-09 56.59 Lacs Under Labour Act Labour Court,
& 2009-10 Karkardooma Court,
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,
Trade & Taxes
6. Financial Year
2008-09 173.92 Lacs Demand under
section CIT (A), Delhi
Income Tax Act,
(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
(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
(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
Date : 12th August, 2011 (CA. SURESH K GUPTA)
Place : New Delhi PARTNER
M. No. 080050