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Auditor Report of Future Retail Ltd.

Mar 31, 2015

We have audited the accompanying Standalone financial statements of FUTURE RETAIL 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 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 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 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on 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. 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.

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 of the financial statements that give a 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 the 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 the Company's Directors, 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 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 the state of affairs of the Company as at March 31,2015, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in term of sub-section (11) of section 143 of the Act, we give in Annexure 1, a statement on the matters specified in paragraph 3 and 4 of the order.

2. As required by section 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 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, Statement of Profit and Loss and Cash Flow statement comply with the Accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on March 31, 2015, 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 section 164(2) of the Act.

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 - Refer Note 33 to the financial statements;

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

iii. There has been no delay in transferring amount, required to be transferred, to the Investor Education and Protection fund by the Company.

Annexure to the Independent Auditors' Report (Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

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

(b) some of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

ii. (a) As explained to us, management has conducted physical verification of inventory at regular intervals during the year.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii. The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the companies Act 2013 the Act. Therefore, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. The Company has not accepted any deposits from the public.

vi. To the best of our knowledge and as explained, the Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Companies Act for the products of the company.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales- tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employee's state insurance, income-tax, sales-tax, service tax, wealth tax, customs duty, excise duty, cess and other material statutory dues were outstanding as at March 31,2015, for a period of more than six months from the date they became payable.

(c) Details of dues of stamp duty, Income Tax and sales Tax which have not been deposited as at March 31,2015 on account of dispute are given below:

Period to Forum Name Amount of the Nature of which the where the dues
Chief The Indian FY : 2008- Controlling stamp Act, Stamp Duty 8.91 Revenue 1899 09 Authority, Ghaziabad, U.P

AY :2004- 05; 2007-08; Commissioner The Income 2008-09; of Income Tax Act, Income Tax 184.69 2009-10; Tax (Appeal); 1961 2010-11; Income Tax 2011-12; Appellate 2012-13 Tribunal

Additional Central Commissioner Central Sales Tax FY: 2007-08, grade 2, Sales Tax and Local 2008-09; Kanpur; Act and Sales Tax 6.06 2009-10, Directorate of Local sales (including 2010-11; Commercial Tax Act Value Added 2012-13 Taxes; Dy. Tax) Commissioner of sales Tax

(d) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of Companies Act 1956, and rules made thereunder.

viii. The Company does not have accumulated losses at the end of the financial year. The company has not incurred any cash losses in the current year and in the immediately preceding financial year.

ix. Based on our audit procedures and as per the information and explanations given by management, we are of the opinion that the Company has not defaulted in repayment of dues to bank and debenture holders. The Company has no dues payable to Financial Institutions.

x. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

xi. In our opinion and according to the explanations given to us, term loans obtained have been applied for the purpose for which they were obtained.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company was noticed or reported during the year, although there were some instances of fraud on the Company noticed by the Management, the amounts whereof were not material in the context of the size of the Company and the nature of its business and the amounts were adequately provided for.

For NGS & Co. LLP

Chartered Accountants Firm Registration No. 119850W

Ashok A. Trivedi

Mumbai Partner

May 25, 2015 Membership No. 042472




Mar 31, 2014

We have audited the accompanying financial statements of FUTURE RETAIL LIMITED (Formerly known as Pantaloons Retail (india) limited) ("The Company"), which comprise the Balance sheet as at March 31, 2014, the statement of Profit and loss and the cash Flow statement for the period 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 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") read with the general circular 15/2013 dated september 13, 2013 of 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.

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 judgement, 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 company''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, 2014;

b) In the case of the statement of Profit and loss, of the profit for the period ended on that date; and

c) In the case of the cash Flow statement, of the cash flows for the period ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the companies (auditor''s Report) order,2003 ("the order"), as amended, issued by the central government of india in terms of sub-section (4a) of section 227 of the act, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the order.

2. As required by section 227(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 the cash Flow statement dealt with by this Report are in agreement with the books of account ;

d) In our opinion, the Balance sheet, statement of Profit and loss, and the cash Flow statement comply with the accounting standards referred to in sub-section (3c) of section 211 of the companies act, 1956 read with the general circular 15/2013 dated september 13, 2013 of the Ministry of corporate affairs in respect of section 133 of the companies act, 2013;

e) On the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section(1) of section 274 of the companies act, 1956.

Annexure to the Independent Auditors'' Report

(Referred to in Paragraph 1 under ''Report on other legal and Regulatory Requirements section in our report of even date'')

i. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verified during the period by the Management in accordance with a regular programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. according to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the period, in our opinion, do not constitute a substantial part of the fixed assets of the company.

ii. (a) As explained to us, management has conducted physical verification of inventory at regular intervals during the period.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management were reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii. The company has not granted/taken any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the act. therefore, the provisions of clause 4(iii) of the order are not applicable to the company.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

v. (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. The company has not accepted any deposits from the public.

vii. In our opinion, the internal audit functions carried out during the period by firms of chartered accountants appointed by the management have been commensurate with the size of the company and the nature of its business.

viii. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules prescribed by the central government for the maintenance of cost records under clause (d) of sub section (1) of section 209 of the companies act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

ix. (a) Undisputed statutory dues including Provident Fund, investor education and Protection Fund, employees'' state insurance, income-tax, sales-tax, Wealth-tax, service-tax, custom Duty, excise Duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases.

(b) No undisputed amounts payable in respect of Provident Fund, investor education and Protection Fund, employee''s state insurance, income-tax, sales-tax, service tax, Wealth tax, customs Duty, excise Duty, cess and other material statutory dues applicable to the company were in arrears as at March 31, 2014 for a period of more than six months from the date they became payable.

(c) Details of statutory dues which have not been deposited as at March 31, 2014 on account of dispute are given below.

Name of Nature Amount Period Forum where the Statute of the (Rs. In to which dispute is dues Crores) the pending amount relates

The Indian Stamp 8.92 Fy : Chief Controlling

Stamp act, Duty 2008-09 Revenue

1899 Authority,

Ghaziabad, U.P

The Income Income 0.05 FY : Commissioner Tax Act, Tax 2004-05 of income tax 1965 (Appeal)

The Income Income 3.37 FY : Commissioner Tax Act, Tax 2007-08 of income tax 1965 (Appeal)

The Income Income 0.42 FY : Income tax Tax Act, Tax 2008-09 Appellate 1965 Tribunal

Name of Nature Amount Period Forum where the Statute of the (Rs. In to which dispute is dues Crores) the pending amount relates

The Income Income 1.66 FY : Income Tax Tax Act, Tax 2009-10 Appellate 1965 Tribunal

The Income Income 4.78 FY : Income Tax Tax Act, Tax 2010-11 Appellate 1965 Tribunal

The Income Income 28.54 FY : Income Tax

Tax Act, Tax 2011-12 Appellate 1965 Tribunal

The Income Income 0.21 FY : Commissioner Tax Act, Tax 2011-12 of Income Tax 1965 (Appeal)

UP - Trade VAT 0.07 Fy: 2007- Additional

Tax Act 08 Commissioner Grade 2, Kanpur

UP – Vat Act VAT 0.09 FY: 2007- Additional 08 Commissioner Grade 2, Kanpur

UP-Vat Act VAT 0.10 FY: 2008- Additional 09 Commissioner Grade 2, Kanpur

UP - Vat Act Vat 0.30 FY: 2012- Additional 13 Commissioner Grade 2, Kanpur

UP-Vat Act Vat 0.09 FY: 2009- Additional 10 Commissioner Grade 2, Kanpur

CST Act CST 1.06 FY: 2006- Appellate 1956 07 Authority-DC

CST Act CST 0.55 FY: 2007- APPELLATE 1956 08 Authority-DC

VAT Act VAT 0.19 FY: 2009- Directorate of 10 Commercial Taxes

CST Act CST 0.15 FY: 2009- Dy. 1956 10 Commissioner of Sales tax

x. The company does not have accumulated losses at the end of the financial period. the company has not incurred any cash losses in the current period and in the immediately preceding financial period.

xi. Based on our audit procedures and as per the information and explanations given by management, we are of the opinion that the company has not defaulted in repayment of dues to bank, financial institutions and debenture holders.

xii. 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.

xiii. In our opinion, and according to the information and explanations given to us, the company is not a chit fund or nidhi or Mutual Benefit Fund or society.

xiv. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

xv. The company has given guarantee for loans taken by others from banks. according to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

xvi. In our opinion and according to the explanations given to us, term loans obtained have been applied for the purpose for which they were obtained. in case of term loans taken over under the scheme of arrangement described under note 37 to the financial statements and outstanding during the period, as explained to us, the merged company had utilised the said loans in the earlier periods.

xvii. In our opinion and according to the information and explanations given to us and on overall examination of the Balance sheet and cash Flow statement of the company, we report that funds raised on short-term basis have, prima facie, not been used during the period for long term investment.

xviii. The company has not made any preferential allotments of shares to parties 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 has created security in respect of debentures issued during the financial period covered by our audit report.

xx. The company has not raised any money from public issues during the period.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the company was noticed or reported during the period, although there were some instances of fraud on the company noticed by the Management, the amounts whereof were not material in the context of the size of the company and the nature of its business and the amounts were adequately provided for.

For NGS & Co. LLP

Chartered accountants

Firm Registration no. 119850W

Ganesh Toshniwal

Mumbai Partner

May 30, 2014 Membership no. 046669


Dec 31, 2012

1. We have audited the attached Balance Sheet of PANTALOON RETAIL (INDIA) LIMITED ("the Company") as at December 31, 2012 the Statement of Profit and Loss and the Cash Flow Statement for the period from July 01, 2011 to December 31, 2012 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) ("CARO"), 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.

4. Further to our comments in the Annexure referred to in 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 purposes 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in compliance 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 December 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 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. 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 December 31, 2012;

b) in the case of the Statement of Profit and Loss, of the profit for the period from July 01, 2011 to December 31, 2012; and

c) in the case of Cash Flow Statement, of the cash flows for the period from July 01, 2011 to December 31, 2012.

Annexure to the Auditors'' Report

(Referred to in paragraph 3 of our report of even date)

Re: Pantaloon Retail (India) Limited (''the Company'')

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

(b) The fixed assets were physically verified during the period by the management in accordance with a regular program of verification which, in our opinion, provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the period, in our opinion, do not constitute a substantial part of the fixed assets of the company.

ii. (a) As explained to us, the inventories were physically verified during period by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on physical verification were not material having regard to the size of the operations of the Company.

iii. According to the information and explanations given to us, the Company has not given or taken any loan secured or unsecured to or from Companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii) of CARO are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to 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 major weaknesses in such internal control system.

v. a. To the best of our knowledge and belief and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, that were needed to be entered in the Register maintained under the said section have been so entered. b. To the best of our knowledge and belief and according to the information and explanations given to us, the transactions made in pursuance of these contracts or arrangements referred to in v(a) above and exceeding the value of Rs Five lacs with any party during the period have been made at prices which are reasonable having regards to prevailing market prices at the relevant time.

vi. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the period. Therefore provisions of clause 4(vi) of CARO are not applicable to the Company.

vii. In our opinion, the internal audit functions carried out during the period by firms of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

viii. To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act, in respect of Company''s products. Therefore provision of clause 4(viii) of CARO are not applicable to the Company.

ix. (a) According to the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Custom Duty, Excise Duty, cess and other material statutory dues applicable to it with the appropriate authority.

(b) No undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty and cess and other material statutory dues applicable to the Company were in arrears as at December 31, 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Sales Tax and Stamp duty which have not been deposited as at December 31, 2012 on account of disputes are given below.

Period to which the Forum where Amount Name the of the Nature of amount the dispute is (Rs. In Statue Dues relates pending Crores)

Commissioner Income Income AY of Income Tax 0.05 Tax Act Tax 2004-05 (Appeals)

AY 2007-08 Tribunal 3.37

AY Commissioner 2008-09 of Income Tax 0.69 (Appeals)

2007-08 (9 Month Sales Sales Tax April Add.Comm. Tax Act 2007 Grade 2, Kanpur 0.05 to Dec 2007)

2008-09 Add.Comm. 0.08 Grade 2, Kanpur

2012-13 Add.Comm. 0.13 Grade 2, Kanpur

2012-13 Add.Comm. 0.07 Grade 2, Kanpur

2012-13 Add.Comm. 0.07 Grade 2, Kanpur

2006-07 Appellate 0.32 Authority-DC

Directorate of 2009-10 Commercial 0.19 Taxes

2009-10 Dy. Commissioner 0.15 of Sales Tax

The Indian Stamp High Court, Stamp 1.81 Act, Duty Allahabad 1899

Chief Controlling Revenue 1.55 Authority, Ghaziabad, U.P

High Court, 0.26 Allahabad Total 8.79

x. The Company does not have accumulated losses. The Company has not incurred cash losses in the financial period covered by our audit report and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of clause 4(xiii) of CARO are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore provisions of clause 4(xiv) of CARO are not applicable to the Company.

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 bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii. In our opinion and according to information and explanations given to us and an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been used during the period for long term investment.

xviii. According to the information and explanations given to us, during the period covered by our audit, the Company has not made any preferential allotments of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. Therefore provisions of clause 4(xviii) of CARO are not applicable to the Company.

xix. According to the information and explanations given to us, the Company has created security in respect of debentures issued during the financial period covered by our audit report.

xx. During the period covered by our report, the Company has not raised any money by way of public issue. Therefore provisions of clause 4(xx) of CARO are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company was noticed or reported during the period, although there were some instances of fraud on the Company noticed by the Management, the amounts whereof were not material in the context of the size of the Company and the nature of its business and the amounts were adequately provided for.

For NGS & Co. LLP

Chartered Accountants

Firm Registration no. 119850W

Navin T. Gupta

Mumbai Partner

February 25, 2013 Membership No. 40334


Jun 30, 2010

1. We have audited the attached Balance Sheet of Pantaloon Retail (India) Limited as at June 30, 2010 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 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 (as amended), 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.

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 purposes 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 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 dealt with by this report comply with the accounting standards referred to in subsection (3C) of section 211 of the Companies Act, 1956, read with note B(3) of schedule 19 related to the accounting of the effect of the composite scheme of Amalgamation and Arrangements, which has been done in accordance with the terms of the scheme as approved by the High Court;

v. On the basis of the written representations received from the directors, as on June 30, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on June 30, 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. In our opinion and to the best of our information and according to the explanations given to us the said accounts read together with significant accounting policies and other notes to accounts of Schedule 19 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 June 30, 2010;

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

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

Annexure to the Auditors Report Re: Pantaloon Retail (India) Limited (the Company) With reference to the Annexure referred to in Paragraph 3 of the report of the Auditors to the members of the company for the year ended June 30,2010, we report that:

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

(b) The Company has physically verified certain assets during the period in accordance with a program of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Pursuant to the composite scheme of Amalgamation and Arrangement the scheme involving the company, Future Mall Management Limited (FMML) and Future Merchandising Limited (FML), the company has transferred the fixed assets pertaining to the value retail business and mall management business to FMML and FML respectively. In our opinion and according to the information and explanations given to us, the aforesaid transfer does not affect going concern assumption.

ii. (a) The Company has conducted physical verification of inventory at regular intervals during the year.

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

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material having regard to the size of the operations of the company.

iii. The Company has not granted or taken any loan secured/unsecured to/from Companies, firms or parties covered in the register maintained under section 301 oftheCompaniesAct, 1956. Accordingly, clause (iii) of Paragraph 4 of the Companies (Auditors Report) Order, 2003 (as amended) is not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and 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, no major weakness has been noticed in the internal control system in respect of these areas. Further, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

v. In respectof particularsof contractsorarrangements and transactions entered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

a. To the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements that needed to be entered into the register have been so entered.

b. According to the information and explanations given to us, the transactions made in pursuance of these contracts or arrangements referred to in 5(a) above and exceeding the value of Rs.five lakhs with any party during the year have been made at prices which are reasonable having regards to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from public. To the best of our knowledge and according to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court orTribunal.

vii. In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

viii. To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act, in respect of Companys products. Accordingly the provision of clause 4(viii) of paragraph 4 of the Companies (Auditors Report) Order 2003 (as amended) is not applicable to the Company.

ix. (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed statutory dues as above were outstanding as at June 30, 2010 for a period of more than 6 months from the date, they became payable. Further since the Central Government of India has till date not prescribed the amount of cess payable under Section 441A of the Companies Act, 1956, there is no statutory due payable under Section 441A of the Act.

(b) According to the information and explanation given to us, the dues of Sales Tax, IncomeTax, Customs Duty, Wealth Tax, Excise Duty, Cess, Service Tax and other statutory dues which have not been deposited on account of any dispute and the forum where the dispute is pending are as under:

Name of the Nature of Amount Period Statute the dues (in Crores>

The Indian Stamp Duty 1.81 -- Stamp Act,1899

The Indian Stamp Duty 1.55 -- Stamp Act,1899

The Indian Stamp Duty 0.51 -- Stamp Act,1899

The Indian Stamp Duty 0.92 -- Stamp Act,1899

URTrade SalesTax 0.02 -- Tax Act Demand

Karnataka SalesTax 0.27 A.Y. VAT Demand 2006-07



Name of the Statue Forum

The Indian Stamp Act,1899 District Collector of Stamps, Gau- tam-budhnagar, UP.

The Indian Stamp Act,1899 Upper Collector, Ghaziabad, U.R

The Indian Stamp Act,1899 Collector of Stamp, Kanpur, U.P.

The Indian Stamp Act,1899 Assistant District Magistrate (Finance & Revenue), Allahabad

URTrade Tax Act Additional Commissioner of Commercial Tax.

Karnataka VAT Joint commission of commercial taxes, Karnataka

x. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

xii. According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence the question of maintenance of adequate records for this purpose does not arise.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of Paragraph 4 of the Companies (Auditors Report) Order 2003(as amended) are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003(as amended) are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has given guarantees on behalf of subsidiaries and joint ventures for loans taken from banks, the terms and conditions whereof in our opinion are not prima- facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us, the term loans obtained during the year have prima facie been applied for the purpose for which they were taken.

xvii. According to information and explanations 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. According to the information and explanations given to us, the Company has made preferential allotments of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956 and the price at which shares have been issued is not prejudicial to the interests of the Company.

xix. During the year covered by our audit report, the Company has created security or charge in respect of debentures issued.

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

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company was noticed or reported during the year, although there were some instances of fraud on the Company noticed by the Management, the amounts whereof were not material in the context of the size of the Company and the nature of its business and the amounts were adequately provided for.

For NGS & Co.

Chartered Accountants Firm Registration No.119850W

Navin T. Gupta

Place : Mumbai Partner

Date : August 28, 2010 Membership No.: 40334

 
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