Auditor Report of Bombay Swadeshi Stores Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of BOMBAY SWADESHI STORES LIMITED which comprises of Balance Sheet as at 31st March, 2015 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. 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.

5. We conducted our audit 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 financial statements are free from material misstatement.

6. 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 financial control relevant to the Company's preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements. -

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

Opinion

8. 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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of state of affairs of the Company as at March 31, 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of matter

9. We draw attention to Notes 13.2 regarding Trade receivables aggregating to Rs.5,376,992/- considered good and recoverable by the Company.

Our opinion is not qualified/modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of Section (11) of section 143 of the Act (hereinafter referred to as the "Order") and on 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 the paragraph 3 and 4 of the Order, to the extent applicable.

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

a) We have sought 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended).

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

f) With respect to the other matters included in the Auditor's Report and to the best of our information and according to the explanations given to us :

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There were no amounts which required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT

AUDITORS' REPORT

i a The records of Fixed assets maintained by the company have not been properly up dated.

b The Fixed Assets have not been physically verified by the management during the year.

ii a The merchandises (Finished Goods) have been physically verified during the year by the management. On account of the nature of the trade being retail business dealing in hundreds of small items, in our opinion the frequency of the verification is reasonable.

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

c The Company has not maintained proper book records of its merchandises, and as such it is not possible for us to ascertain whether there was any material discrepancies noticed on physical verification as compared to book records.

iii a The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, provisions of sub-clause (b) are not applicable.

iv. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in these internal controls.

v In our opinion and according to the information and explanation given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 73 and 76 of the Act or any other relevant provisions of the Companies Act and rules framed there under where applicable have been complied with.

vi The provisions of clause 4 (vi) of the Companies (Auditors Report) Order 2015 are not applicable to the Company.

vii a According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of Provident Fund, Employee's State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, value added tax, cess and any other statutory dues with appropriate authorities.

According to the information and explanations given to us , no undisputed amounts payable in respect Provident Fund, , Employee's State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, value added tax, cess and any other statutory dues were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

b According to the information and explanations given to us, there were no dues in respect of Income tax, wealth tax, sales tax, service tax, duty of custom and value added tax which have not been deposited on account of any dispute.

c According to the information and explanation given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provision of the Companies Act, 1956( I of 1956) and rules made there under has been transferred to such fund within time.

viii The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

ix According to information and explanation given to us, the Company has not defaulted in repayment of dues to the financial institution or banks. The Company has not issued any debentures.

x According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xi According to information and explanation given to us, the term loans availed have been applied for the purpose for which they were raised.

xii According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

For M. D. PANDYA & ASSOCIATES Chartered Accountants Reg. No. 107325W

A. D. PANDYA Partner Membership No.:033930

Mumbai, Dated : 30th May, 2015

---

Mar 31, 2014

We have audited the accompanying financial statements of BOMBAY SWADESHI STORES LIMITED which comprises of Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date 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 flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with General Circular15/2013 dated 13*'' September 2013 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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. Auditors'' 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. 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

I n 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 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:-

(i) in the case cf the Balance Sheet of the state of affairs of the Company as at 31 si March. 2014;

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

(iii) in the case of the Cash Flow Statement of the cash flows for the year.

Emphasis of matter

We draw attention to Notes 11.2, 13.2 & 15.3 regarding Debtors and Loans and Advances aggregating to Rs.6,937,990/-/- (Previous year Rs. 6,937,990/-) considered good and recoverable by the Company. Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003, (the Order) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter to referred to as ''the Act ) we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. As required by section 227(3) of the Act, 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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

(iv.) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with General Circular15/2013 dated 13"'' September 2013 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(v.) On the basis of written representations received from the directors, as on 31st March, 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

REFERRED TO IN PARAGRAPH 3 OF OUR AUDITOR REPORT OF EVEN DATE

a The records of Fixed assets maintained by the company have not been properly up dated.

b The Fixed Assets have not been physically verified by the management during the year.

c The Company has not disposed off substantial part of fixed assets during the year.

ii a The merchandise (Finished Goods) have been physically verified during the year by the management. On account of the nature of the trade being retail business dealing in hundreds of small items, in our opinion the frequency of the verification is reasonable.

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

ii c The Company has not maintained proper book records of its merchandise, and as such it is not possible for us to ascertain whether there are any material discrepancies noticed on physical verification as compared to book records.

iii a 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. Accordingly, sub- clause (b), (c) and (d) are not applicable.

iii b The Company had taken loans, including fixed deposits from four parties listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 752,977/- (Previous year Rs. 780,513/-) and the year end balance of loans taken from such parties was Rs. 752,977/- (Previous year Rs. 500,000/-).

iii c In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans are taken from parties listed in the register maintained under section 301 of the Companies Act, 1956, are prima- facie not prejudicial to the interest of the Company.

iii d The Company is regular in repaying the principal amount and has been regular in payment of interest where applicable.

iv. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in these internal controls.

v a In our opinion and according to the information and explanation given to us, the transactions that need to be entered into the register in pursuant of section 301 of the Act have been so entered.

v b In our opinion and according to the information and explanation given to us, such transactions exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at relevant time.

vi In our opinion and according to the information and explanation given to us, the Company has complied with the provision of Section 58A and 58AA of the Act and the Company (Acceptance of Deposits) Rules 1975 with regard to the deposit accepted from the public.

vii We are informed that in view of the internal control procedures commensurate with the size of the Company and the nature of its business, which in our opinion is adequate, the Company had no separate internal audit system.

viii The provisions of clause 4 (viii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

ix a The Company is generally regular in depositing the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Sales-tax, Wealth tax, Custom Duty, Excise Duty, cess and other material statutory dues.

ix b According to the information and explanation given to us, no undisputed amount payable in respect of Income Tax , sales tax, wealth tax, service tax, customs duty and excise duty were in arrears as at 31st March, 2014 for a period of more than six months from the date become payable.

ix c According to the information and explanations given to us, there were no dues in respect of wealth tax, sales tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute.

x The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi According to information and explanation given to us, the Company has not defaulted in repayment of dues to the financial institution or banks. The Company has not issued any debentures.

xii According to information and explanation 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.

xiii The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xiv According to information and explanation given to us, the Company has not dealing or trading in shares, securities, debentures and other investments, therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xv According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi According to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

xvii According to information and explanation given to us, and on 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 The Company has not made preferential allotment of shares to parties and companies covered in register maintained under Section 301 of the Act.

xix The Company has not issued any debentures during the year.

xx The Company has not raised any money through a public issue during the year.

xxi According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For M D PANDYA & ASSOCIATES

Chartered Accountants Reg no ; 107325W

A. D. PANDYA

Partner

Membership No.:033930

Mumbai, 30th May, 2014

---

Mar 31, 2013

We have audited the accompanying financial statements of BOMBAY SWADESHI STORES LIMITED which comprises of Balance Sheet as at 31st March, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date 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 flows 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"). This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' 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 Corroany''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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.

In our opinion and to the best of our information and according to the explanations given to us, the financial statements subject to

Reference is invited to the following note 11.2, 13.2 & 15.3 regarding Trade Receivables and Loans and Advances aggregating to 6,937,990/- (Previous year 8,890,221/-) considered good and recoverable by the Company 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:-

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2013;

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

(iii) in the case of the Cash Flow Statement of the cash flows for the year.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003, (the Order) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter to referred to as ''the Act'') we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. As required by section 227(3) of the Act, 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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

(iv.) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement 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, 2013, and taken on record by the Eoard 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;

(vi.) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

REFERRED TO IN PARAGRAPH 3 OF OUR AUDITOR REPORT OF EVEN DATE

i a The records of Fixed assets maintained by the company have not been properly up dated.

i b The Fixed Assets have not been physically verified by the management during the year.

i c The Company has not disposed off substantial part of fixed assets during the year.

ii a Physical verification of stock-in-trade (Finished Goods) has been carried out during the year by the Management. On account of the nature of the trade being retail business dealing in hundreds of small items, in our opinion the frequency of the verification is reasonable.

ii b In our opinion and according to the information and explanations given to us, the procedure for physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

ii c As the Company does not maintain any book records of its stock-in-trade, it is not possible to ascertain whether there are any discrepancies between physical stock and book records.

iii a 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. Accordingly, sub- clause (b), (c) and (d) are not applicable.

iii b The Company had taken loans, including fixed deposits from four parties listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was T.780,513/- (Previous year 904,187/-) and the year end balance of loans taken from such parties was 500,000/- (Previous year Rs. 784,445/-).

iii c In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans are taken from parties listed in the register maintained under section 301 of the Companies Act, 1956, are prima- facie not prejudicial to the interest of the Company.

iii d The Company is regular in repaying the principal amount and has been regular in payment of interest where applicable.

iv. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in these internal controls.

v a In our opinion and according to the information and explanation given to us, the transactions that need to be entered into the register in pursuant of section 301 of the Act have been so entered.

v b In our opinion and according to the information and explanation given to us, such transactions exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at relevant time.

vi In our opinion and according to the information and explanation given to us, the Company has complied with the provision of Section 58A and 58AA of the Act and the Company (Acceptance of Deposits) Rules 1975 with regard to the deposit accepted from the public.

vii We are informed that in view of the internal control procedures commensurate with the size of the Company and the nature of its business, which in our opinion is adequate, the Company had no separate internal audit system.

viii The provisions of clause 4 (viii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

ix a The Company is generally regular in depositing the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Sales-tax, Wealth tax, Custom Duty, Excise Duty, cess and other material statutory dues.

ix b According to the information and explanation given to us, no undisputed amount payable in respect of Income Tax , sales tax, wealth tax, service tax, customs duty and excise duty were in arrears as at 31st March, 2013 for a period of more than six months from the date become payable.

ix c According to the information and explanations given to us, there were no dues in respect of wealth tax, sales tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute.

x The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi According to information and explanation given to us, the Company has not defaulted in repayment of dues to the financial institution or banks. The Company has not issued any debentures.

xii According to information and explanation 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.

xiii The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xiv According to information and explanation given to us, the Company has not dealing or trading in shares, securities, debentures and other investments, therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xv According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi According to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

xvii According to information and explanation given to us, and on 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 The Company has not made preferential allotment of shares to parties and companies covered in register maintained under Section 301 of the Act.

xix The Company has not issued any debentures during the year.

xx The Company has not raised any money through a public issue during the year.

xxi According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For M D PANDYA & ASSOCIATES

Chartered Accountants

Regno; 107325W

A. D. PANDYA

Partner

Membership No.:033930

Mumbai, 31st May, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of BOMBAY SWADESHI STORES LIMITED as at 31st March, 2012 and also the Statement of Profit and Loss for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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 (Auditors' Report) Order, 2003, (the Order) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter to referred to as 'the Act') we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. 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, Profit and Loss Account and Cash Flow Statement dealt with by the report are in agreement with the books of account;

(iv.) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement 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, 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 a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi.) Reference is invited to the following note 12.2 & 14.3 regarding Debtors and Loans and Advances aggregating to Rs. 8,890,221/ - (Previous year Rs. 7,715,565/-) considered good and recoverable by the Company.

(vii.)ln our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the other 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:-

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2012;

(ii) in the case of the Statement of Profit and Loss Account of the profit for the year ended 31st March, 2012;

and

(iii) in the case of the Cash Flow Statement of the cash flows for the year ended 31 st March, 2012.

REFERRED TO IN PARAGRAPH 3 OF OUR AUDITOR REPORT OF EVEN DATE

i a The records of Fixed assets maintained by the company have not been properly up dated.

i b The Fixed Assets have not been physically verified by the management during the year.

i c The Company has not disposed off substantial part of fixed assets during the year.

ii a Physical verification of stock-in-trade (Finished Goods) has been carried out during the year by the Management. On account of the nature of the trade being retail business dealing in hundreds of small items, in our opinion the frequency of the verification is reasonable.

ii b In our opinion and according to the information and explanations given to us, the procedure for physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

ii c As the Company does not maintain any book records of its stock-in-trade, it is not possible to ascertain whether there are any discrepancies between physical stock and book records.

iii a 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. Accordingly, sub- clause (b), (c) and (d) are not applicable.

iii b The Company had taken loans, including fixed deposits from four parties listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 904,187/ - (Previous year Rs. 902,350/-) and the year end balance of loans taken from such parties was Rs. 784,445/ - (Previous year Rs. 736,842/-)

iii c In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans are taken from parties listed in the register maintained under section 301 of the Companies Act, 1956, are prima- facie not prejudicial to the interest of the Company.

iii d The Company is regular in repaying the principal amount and has been regular in payment of interest where applicable.

iv. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in these internal controls.

v a In our opinion and according to the information and explanation given to us, the transactions that need to be entered into the register in pursuant of section 301 of the Act have been so entered.

v b In our opinion and according to the information and explanation given to us, such transactions exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at relevant time.

vi In our opinion and according to the information and explanation given to us, the Company has complied with the provision of Section 58A and 58AA of the Act and the Company (Acceptance of Deposits) Rules 1975 with regard to the deposit accepted from the public.

vii We are informed that in view of the internal control procedures commensurate with the size of the Company and the nature of its business, which in our opinion is adequate, the Company had no separate internal audit system.

viii The provisions of clause 4 (viii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

ix a The Company is generally regular in depositing the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Sales-tax, Wealth tax, Custom Duty, Excise Duty, cess and other material statutory dues.

ix b According to the information and explanation given to us, no undisputed amount payable in respect of Income Tax , sales tax, wealth tax, service tax, customs duty and excise duty were in arrears as at 31st March, 2012 for a period of more than six months from the date become payable.

ix c According to the information and explanations given to us, there were no dues in respect of wealth tax, sales tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute.

x The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi According to information and explanation given to us, the Company has not defaulted in repayment of dues to the financial institution or banks. The Company has not issued any debentures.

xii According to information and explanation 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.

xiii The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xiv According to information and explanation given to us, the Company has not dealing or trading in shares, securities, debentures and other investments, therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xv According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi According to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

xvii According to information and explanation given to us, and on 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 The Company has not made preferential allotment of shares to parties and companies covered in register maintained under Section 301 of the Act.

xix The Company has not issued any debentures during the year.

xx The Company has not raised any money through a public issue during the year.

xxi According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For M D PANDYA & ASSOCIATES

Chartered Accountants Reg no; 107325W

A. D. PANDYA

Partner Membership No.:033930

Mumbai, 14th August, 2012

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of BOMBAY SWADESHI STORES LIMITED as at 31st March, 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

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 (Auditors Report) Order, 2003, (the Order) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter to referred to as the Act) we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. 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, Profit and Loss Account and Cash Flow Statement dealt with by the report are in agreement with the books of account;

(iv.) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement 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, 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 a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi.) Reference is invited to the following note 6 A & B regarding Debtors and Loans and Advances aggregating to Rs.55,78,799/- (Previous year Rs. 54,21,294/-) considered good and recoverable by the Company.

(vii.)ln our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to :-

Note No. 13 regarding non furnishing of quantitative information and read together with the other 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:-

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2010;

(ii) in the case of the Profit and Loss Account of the profit for the year ended 31st March, 2010; and

(iii) in the case of the Cash Flow Statement of the cash flows for the year ended 31st March, 2010.

REFERRED TO IN PARAGRAPH 3 OF OUR AUDITOR REPORT OF EVEN DATE

a The records of Fixed assets maintained by the company have not been properly updated.

b The Fixed Assets have not been physically verified by the management during the year.

c During the year the Company had to close its Bangalore store due to termination of the lease of its premises. As a result the Company had to dispose of substantial part of its assets at Bangalore. However this has not affected the going concern status of the Company.

ii a Physical verification of stock-in-trade (Finished Goods) has been carried out during the year by the Management. On account of the nature of the trade being retail business dealing in hundreds of small items, in our opinion the frequency of the verification is reasonable.

ii b In our opinion and according to the information and explanations given to us, the procedure for physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

ii c As the Company does not maintain any book records of its stock-in-trade, it is not possible to ascertain whether there are any discrepancies between physical stock and book records.

iii a 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. Accordingly, sub- clause (b), (c) and (d) are not applicable.

iii b The Company had taken loans, including fixed deposits from four parties listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 10,97,413/- (Previous year Rs. 53,61,581/-) and the year end balance of loans taken from such parties was Rs.6,50,311/- (Previous year Rs. 23,47,618/-).

iii c In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans are taken from parties listed in the register maintained under section 301 of the Companies Act, 1956, are prima- facie not prejudicial to the interest of the Company.

iii d The Company is regular in repaying the principal amount and has been regular in payment of interest.

iv. In our opinion and according to the information and ex- planation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inven- tory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in these internal controls.

v d In our opinion and according to the information and explanation given to us, the transactions that need to be entered into the register in pursuant of section 301 of the Act have been so entered.

v e In our opinion and according to the information and explanation given to us, such transactions exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at relevant time.

vi In our opinion and according to the information and ex- planation given to us, the Company has complied with the provision of Section 58A and 58AA of the Act and the Company (Acceptance of Deposits) Rules 1975 with regard to the deposit accepted from the public.

vii We are informed that in view of the internal control pro- cedures commensurate with the size of the Company and the nature of its business, which in our opinion is adequate, the Company had no separate internal audit system.

viii The provisions of clause 4 (viii) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

ix a The Company is generally regular in depositing the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales-tax, Wealth tax, Custom Duty, Excise Duty, cess and other material statutory dues.

ix b According to the information and explanation given to us, no undisputed amount payable in respect of Income Tax , sales tax, wealth tax, service tax, customs duty and excise duty were in arrears as at 31st March, 2010 for a period of more than six months from the date become payable.

ix c According to the information and explanations given to us, there were no dues in respect of income tax wealth tax, sales tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute.

x The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current or in the immediately preceding financial year.

xi According to information and explanation given to us, the Company has not defaulted in repayment of dues to the financial institution or banks. The Company has not issued any debentures.

xii According to information and explanation given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, de- bentures and other securities.

xiii The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) order 2003 are not ap- plicable to the Company.

xiv According to information and explanation given to us, the Company is not dealing or trading in shares, secu- rities, debentures and other investments, therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) order 2003 are not applicable to the Company.

xv According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi According to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

xvii According to information and explanation given to us, and on 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 The Company has not made preferential allotment of shares to parties and companies covered in register maintained under Section 301 of the Companies Act, 1956.

xix The Company has not issued any debentures during the year.

xx The Company has not raised any money through a pub- lic issue during the year.

xxi According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For M D PANDYA & ASSOCIATES

Chartered Accountants

Regno: 107325W

A. D. PANDYA

Partner

Mumbai, 26th August, 2010 Membership No.:033930