Auditor Report of V2 Retail Ltd.

Mar 31, 2023

V2 Retail Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of V2 RetailLimited ("the Company"), which comprise the Balance sheet as at March 31, 2023, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report the aforesaid standalone financial statements give the information required by The Companies Act, 2013 ("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, 2023, its loss including other comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

As described in Note 47 to the accompanying standalone financial statement, the Company has performed physical verification of property, plant and equipment during the year ended March 31, 2023 in accordance with the phased program of conducting such verification over a period of 3 years. However, the Company is in process of performing related reconciliation of such physical verification with the underlying fixed asset register maintained by the Company. Pending completion of the said reconciliation, we are unable to comment on any adjustment that may be required to the carrying value of such Property, Plant and Equipment as at March 31, 2023. Our opinion on the standalone financial statements for year ended March 31, 2023 is qualified in respect of this matter.

We conducted our audit in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Companies Act, 2013, as amended ("the Act"). Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Financial Statement'' section of our report. We are independent of the Company

in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour qualified opinion on the standalone financial statements.

Emphasis of Matter

We draw attention toNote 16 to the accompanying standalone financialstatement, theCompany restructured its business in the financial year 2010-11 resulting in creation of Capital Reserve amounting to Rs. 60,523.24 lakhs. The aforementioned reserve has been reconciled to amount recognized in the books of accounts except for Rs. 365.36 lakhs which the Company is in the process of reconciling. Our opinion is not qualified in respect of this matter.

We draw attention to Note 44 of the accompanying standalone financial statement, which describes that an advance amounting to Rs. 1,557.65 lacs outstanding since April 2019, has been considered good basis management''s assessment of extension of the underlying contract with Bennett, Coleman and Co. Limited (''BCCL'') till July 07, 2023. The management is confident of the utilization of such advance against future advertisement services to be provided by BCCL within the extended period of the contract and hence, has considered the aforesaid balance as fully recoverable as on date. Our opinion is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

S.N.	Key Audit Matter	Auditor''s Response
1.	Existence and valuation of Inventories: Refer note 1(v)(k) for significant accounting policy and note 9 and 37 for the financial statement disclosure. At the end of each reporting period, management of the Company assesses whether there is adequate provision for inventory losses on account of lower net realizable value and obsolete inventory. The management applies judgement in determining appropriate provisions for inventory losses which include: a) Applying specific identification process to ascertain slow moving and obsolete inventory. b) Assessing the net realizable value of such slow moving and obsolete inventory. In addition to the above, the management adopts a cyclical count for physical verification of inventory which is a complex exercise owing to the nature of the inventory and the multiple locations covered in such cyclical counts. Considering the aforesaid complexities involved in cyclical physical verification of inventory which required us to undertake alternate audit techniques as described in this key audit matter, and significant management judgements and estimates required with respect to allowance for inventory loss, existence and valuation of inventory was determined to be a key audit matter for the current year audit.	How our audit addressed the key audit matter: Our audit included, but was not limited to, the followingaudit procedures over inventory existence andvaluation: • Understood the management process for cyclical physical counts, identification of slow moving, nonmovingor obsolete inventories and determiningnet realisable value, and evaluated whether suchprocesses are consistently followed. • Evaluated design and tested the operatingeffectiveness of controls implemented aroundabove mentioned processes throughout the year. Cyclical physical counts and physical count performed subsequent to year end: • Inspected management''s inventory count recordsand observed physical inventory verification forlocations selected based on materiality and riskconsiderations. • Performed independent test counts to corroboratethe management count for the locations selectedas above performed roll-back procedures byverification of movement between the year-enddate and sample test count date with the supportingdocuments which included purchase invoice, salesinvoice, dispatch register, gate inward/outwardregister, etc. to substantiate the existence ofinventory as at the reporting date; Slow-moving/obsolete inventory provisions: • Tested the adjustment made in the books of accounts basis the results of the physical counts performed by the management. Slow-moving/obsolete inventory provisions: • Tested inventory ageing obtained through system reports, where applicable. • Obtained from management the list of slow and nonmoving inventories identified as at March 31, 2023 and their corresponding expected sales in future periods. • Tested the computation for allowance for slow moving, non-moving and obsolete inventories by performing an independent age-wise analysis of the inventory line items. • Tested the net realizable value of traded goodsinventory on a sample basis to recent selling prices. • Compared and assessed the actual utilization/sales to the previous estimates done by the management in prior periods to determine the efficacy of the process of estimation by the management. Obtained written representations from management on the completeness and adequacy of inventory allowance as at the year end.

S.N.	Key Audit Matter	Auditor''s Response
2.	Accounting of Leases Under Ind AS 116-	How our audit addressed the key audit matter:
	(Leases) : Leases Refer note 1(v)(h) for significant accounting policy and note 46 for the financial statement disclosure relating to accounting for leases in accordance with Ind AS 116, Leases (''Ind AS 116''). The Company has recognised the Right of Use asset (ROU) and corresponding lease liability amounting to Rs 30,029.30 lakhs and Rs 36,400.42 lakhs as at March 31, 2023, respectively. Owing to the volume of the lease contracts, and the estimates involved, we have considered this matter to be a key audit matter in our audit.	Our audit included, but was not limited to, the following audit procedures: • • Understood the management process for identification of leasing arrangements for accounting of leases by applying the practical expedient. • Evaluated design and tested the operating effectiveness of controls implemented around above mentioned process throughout the year. • Reviewed the overall impact analysis prepared by the Company including completeness of lease contracts and application of practical expedients. • Tested the accuracy of the revised lease agreements entered for a sample of leases through the inspection of lease documentation. • Verified the accuracy of the underlying lease data used to calculate the lease liability, by agreeing are presentative sample of leases to original contracts or other supporting information.
		• Evaluated the appropriateness and adequacy of disclosures made in the financial statements with respect to Lease liability, Right of Use Assets and application of practical expedient, in conformity with the Ind AS 116 (Leases).
		Obtained written representations from management on the completeness of lease data and application of practical expedient.

Other Information

The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon. The annual report is expected to be made available to us after the date of this auditor''s report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work

we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the applicable laws and regulations.

Responsibilities of Management 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 StandaloneFinancial statements that give a true and fair view of the financial position, financial performance including other comprehensive income,cash flows and statement of changes in equity of the Company in

accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section133 of the Act. 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 Standalone Financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalonefinancial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We

also:

• Identify and assess the risks of material misstatement

of the standalonefinancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,

as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statementsmay be influenced. We consider quantitative materiality and qualitative factors in planning the scope of our audit work and in evaluating the results of our work and to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and

to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A"a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

A. We have sought and except for the matters described in the Basis of Qualified Opinion section, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

B. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters described in the Basis of Qualified Opinion section;

C. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Change in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

D. Except for the matters described in the Basis of Qualified Opinion section, in our opinion, the aforesaid standalonefinancial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act;

E. Qualification on financial statement has no adverse effect on the functioning of the Company;

F. On the basis of the written representations received from the directors as on March 31, 2023 taken

on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;

G. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in Basis for Qualified Opinion section;

H. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

I. 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, as amended in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations on its financial position in its standalonefinancial statements - Refer Note 35 to the standalonefinancial statements;

b. The Company did not have any material foreseeable losses in long-term contracts including derivative contracts;

c. The Company did not have any amount which required to be transferred to the Investor Education and Protection Fund.

i. The management has represented that, to the best of it''s knowledge and belief, as disclosed in the Note 50 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) during the year by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediaries shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

ii. The management has represented, that, to the best of it''s knowledge and belief, as disclosed in the Note 52 to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), during the year with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the

Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

iii. Based on such audit procedures, we have considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under subclause (d)(i) and (d)(ii) contain any material misstatement

e. The Company has not declared any dividend during the year therefore reporting regarding compliance of section 123 of the Companies Act, 2013 is not applicable.

f. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

J. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

Other Matter

The audit of financial statement for the year ended March 31, 2022 included in these standalone financial statements are carried out by the previous auditor, whose report issued on May 30, 2022 expressed qualified opinion on those financial statements.

For Singhi & Co.

Chartered Accountants Firm Reg. No. 302049E

Bimal Kumar Sipani

Partner

Place: Noida (Delhi-NCR) Membership No. 088926 Date: May 25, 2023 UDIN:23088926BGXBBI4117

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Mar 31, 2018

Report on the Financial Statements

1. We have audited the accompanying financial statements of V2 Retail Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of the 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 stated 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 state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Act. 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

3. Our responsibility is to express an opinion on these 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 these financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 controls 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. An audit also includes evaluating the appropriateness of the 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.

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

Basis for Qualified Opinion

8. As stated in Note 17 (a) to the financial statements, the Company’s other equity as at 31 March 2018 includes an amount of RS.365.36 lakhs in the nature of capital reserve arising out of business restructuring carried out in earlier years, for which the Company’s management has not been able to provide necessary reconciliation and information. In the absence of sufficient appropriate audit evidence, we are unable to comment upon the appropriateness and classification of the aforesaid balance, and the consequential impact, if any, on the financial statements.

9. As stated in Note 38 (C) & (D) to the financial statements, the Company’s contingent liabilities as at 31 March 2018 include an amount of RS.2,542.65 lakhs relating to litigations pending with various authorities, for which the Company’s management has not been able to provide necessary details and information. In the absence of sufficient appropriate audit evidence, we are unable to comment upon the appropriateness and classification of the aforesaid amounts including management’s evaluation of likely outcome of such litigations in accordance with Ind AS 37, “Provisions, Contingent Liabilities and Contingent Assets” and the consequential impact, if any, on the financial statements.

Qualified Opinion

10. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the aforesaid 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 including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

11. The comparative financial information for the year ended 31 March 2017 and the transition date opening balance sheet as at 1 April 2016 prepared in accordance with Ind AS included in these financial statements, are based on the previously issued statutory financial statements for the year ended 31 March 2017 and 31 March 2016 respectively, prepared in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) which were audited by the predecessor auditor whose reports dated 30 May 2017 and 27 May 2016 respectively expressed a qualified opinion on the financial statements for the year ended 31 March 2017 and a qualified opinion on the financial statements for the year ended 31 March 2016, and have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

12. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

13. Further to our comments in Annexure I, as required by Section 143(3) of the Act, we report that:

a) except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit,

b) except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books,

c) the financial statements dealt with by this report are in agreement with the books of account,

d) except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid financial statements comply with Ind AS specified under Section 133 of the Act;

e) the matters described in paragraph 8 and 9 under the Basis for Qualified Opinion paragraph, in our opinion, may have an adverse effect on the functioning of the Company;

f) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;

g) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date and our report dated 30 May 2018 as per Annexure II expressed a qualified opinion;

h) 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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in Note 38 to the financial statements, has disclosed the impact of pending litigations on its financial position;

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

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

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016 which are not relevant to these financial statements. Hence, reporting under this clause is not applicable.

Annexures to the Independent Auditor’s Report of even date to the members of V2 Retail Limited, on the Finanical Statements for the year ended 31st March, 2018

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) The Company does not hold any immovable property (which are included under the head ‘Property, plant and equipment’). Accordingly, the provisions of clause 3(i)(c) of the order are not applicable.

(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit. Material discrepancies noticed on such verification have been properly dealt with in the books of account.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable

(iv) In our opinion, the Company has complied with the provisions of Section 186 in respect of loans. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of investments, guarantees and security.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Company’s products. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Statement of Disputed Dues

Name of the statute	Nature of dues	Amount (Rs.)	Amount paid under Protest (Rs.)	Period to which the amount relates	Forum where dispute is pending
Finance Act, 1994	Service tax	30,208,391	7,500,000	2006-07 to 2010-11	Commissioner of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	5,155,233	Nil	2006-07	Assistant Commissioner of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	10,000,000	Nil	2007-08	Appellate Authority of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	17,353,962	Nil	2007-08	Joint Commissioner (Appeals) of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	1,525,511	Nil	2007-08	Assistant Commissioner of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	6,810,980	Nil	2007-08	Deputy Commissioner of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	8,387,111	Nil	2007-08	Deputy Commissioner of Service Tax
Rajasthan Value Added Tax Act, 2003	Sales tax	50,000	Nil	2009-10	Assistant Commissioner of Service Tax
The Uttar Pradesh Value Added Tax Act, 2008	Sales tax	203,000	Nil	2009-10	Assistant Commissioner of Service Tax
West Bengal Value Added Tax Act, 2003	Sales tax	225,000,000	Nil	2009-10	Deputy Commissioner of Service Tax
The Assam Value Added Tax Act, 2003	Sales tax	720,420	Nil	2009-10	Deputy Commissioner (Appeals)

(viii) The Company has no loans or borrowings payable to a financial institution or a bank or government and no dues payable to debenture-holders during the year. Accordingly, the provisions of clause 3(viii) of the Order are not applicable.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.

(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid/provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii)In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.

(xiv) During the year, the Company has made preferential allotment of shares. In respect of the same, in our opinion, the Company has complied with the requirement of Section 42 of the Act and the Rules framed thereunder. Further, in our opinion, the amounts so raised were applied for the purposes for which these securities were issued, though idle funds which were not required for immediate utilisation have been invested in liquid investments, payable on demand. During the year, the Company did not make preferential allotment/private placement of fully/ partly convertible debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

(xvi)The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

1. In conjunction with our audit of the financial statements of V2 Retail Limited (“the Company”) as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (“IFCoFR”) of the Company as at that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note’) issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Company’s business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI’) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A Company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified opinion

8. According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the operating effectiveness of the Company’s IFCoFR as at 31 March 2018:

a) The Company’s internal financial controls over retention of adequate information towards reconciliation of capital reserve in accordance with accounting principles generally accepted in India were not operating effectively, which could result in a potential material misstatement in Other equity in the Company’s financial statements for the year ended 31 March 2018.

b) The Company’s internal financial controls over retention of adequate information towards estimating provisions and contingent liabilities with respect to outstanding litigations were not operating effectively, which could result in an inappropriate assessment of the accuracy and completeness of provisions and contingent liabilities, which is not in accordance with Indian Accounting Standard 37 - Provisions, Contingent Liabilities and Contingent Assets.

9. A ‘material weakness’ is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

10. In our opinion, the Company has, in all material aspects, adequate internal financial controls over financial reporting as at 31 March 2018, based on the IFCoFR criteria established by the Company considering the essential components of internal financial controls stated in the Guidance Note issued by the ICAI, and except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the Company’s internal financial controls over financial reporting were operating effectively as at 31 March 2018.

11. We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company as at and for the year ended 31 March 2018, and these material weaknesses have affected our opinion on the financial statements of the Company and we have issued a qualified opinion on the financial statements.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm’s Registration No.: 001076N/N500013

Sumit Mahajan

Place: New Delhi Partner

Date: 30 May 2018 Membership No.: 504822

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Mar 31, 2017

Independent Auditor’s Report

To

The Members of V2 Retail Limited

1. Report on the Financial Statements

We have audited the accompanying financial statements of V2 Retail Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (“Financial Statements”).

2. Management’s Responsibility for the 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 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.

3. 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 there under. 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 the 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 a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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 qualified audit opinion on the financial statements.

4. Basis for Qualified Opinion

(a) Attention is invited to note 4 of the financial statements, included in capital reserve amounting to Rs. 6,052,324,263 is Rs. 4,294,224,263 arising out of transfer of asset and liabilities to the acquiring companies in earlier years for which necessary reconciliations/ information to the tune of Rs. 37,224,324 is not available with the company. Accordingly in absence of the same, we are unable to comment on the appropriateness of capital reserve including consequential impact, if any, arising out of the same on these financial statements.

(b) Attention is invited to note 14 of the financial statements, the Company has recognized Rs.

2.427.318.103 as deferred tax assets at the year-end for which it does not have reasonable/virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized in accordance with the principles of Accounting Standard 22 “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India .Had the Company not recognized such deferred tax asset, impact on the Statement of Profit and Loss would have been decrease in profit during the year by Rs. 2.427.318.103 and decrease in Reserves and Surplus by Rs. 2,427,318,103.

(c) Attention is invited to note 37 of these financial statements, the Company has disclosed contingent liabilities on account of appeals with various statutory authorities at different levels amounting to Rs.455,699,334 for which necessary information is not available with the Company to reliably ascertain estimated amount of such liabilities and consequential impact thereof on these financial statements in accordance with Accounting Standard-29-Trovisions, Contingent Liabilities and Contingent Assets’ issued by the Institute of Chartered Accountants of India. Hence, we are unable to comment on the same.

5. Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in“the Basis for Qualified Opinidh paragraph above, the aforesaid 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 31 March 2017, its Profit and its cash flows for the year ended on that date.

6. Emphasis of Matter

We draw attention to note 4 of these financial statements, wherein the Company has accumulated losses amounting to Rs. 4,774,597,405 at the year end, which raises concern regarding going concern status of the Company. However, during the year, the company has earned profit after tax of RS 72,552,495 and having regard to cost rationalization measures adopted by the Company, these financial statements have been prepared on a going concern basis and that no adjustments are required to the carrying value of assets and liabilities at the year end.

Our opinion is not qualified in respect of this matter.

7. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section 143(3) of the Act, we report that except for the possible effects the matters described in Para 4(a), (b) and (c):

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) i n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) t he Balance Sheet, the Statement of Profit and Loss and the C ash 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 except to the instances mentioned in Para 4 (a), (b) and (c) above;

(e) o n the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164(2) of the Act;

(f) with respect to the adequacy of the internal financial control over financial reporting of the

Company and operating effectiveness of such controls, refer to our separate report in “Annexure

B”;

(g) 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, as amended, 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 37 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Company has provided requisite disclosure in the financial statements as regards its holding and dealings in Specified Bank Notes as defined in the notification S. O. 3407 (E) dated 8^th November, 2016 of the Ministry of Finance, during the period from 8* November, 2016 to 30* December, 2016. Based on the audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management.

Annexure A to the Independent Auditors’ Report

Referred to in Paragraph under the Heading of “Report on Other Legal and Regulatory Requirements” of our Report of even date

(i) (a) As per information and explanation given to us, the Company has maintained proper records showing full particulars, including situation of fixed assets except quantitative details.

(b) The Company has a program of verification of its fixed assets to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its fixed assets. Pursuant to the program, certain fixed assets have been verified by the management during the year. As informed to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deed of the immovable property is held in the name of the Company.

(ii) The management has conducted physical verification of inventories at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, and Limited Liability partnerships or other parties covered in the register required under section 189 of the Companies Act, 2013. Accordingly, paragraph 3(iii) (a), (b) and (c) of the Order is not applicable and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees and securities granted, in respect of which provisions of Sections 185 and 186 of the Companies Act, 2013, are applicable. Accordingly, paragraph 3(iv) of the Order is not applicable.

(v) The Company has not accepted any deposits from the public. Accordingly paragraph 3(v) of the Order is not applicable.

(vi) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Companies Act, 2013 for any of products of the Company. Accordingly paragraph 3(vi) of the Order is not applicable.

M ^(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of Provident fund and employees’ state insurance, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues including Income tax, service tax, sales tax, value added tax and other material statutory dues, as applicable, with the appropriate authorities.

According to the information and explanations given to us, no undisputed dues is respect of provident fund, employees’ state insurance, income tax, service tax, sales tax, value added tax, cess and other statutory dues were outstanding, at the year-end for a period of more than six months from the date they became payable.

(b) Details of Service tax and Sales tax/Value added tax which have not been deposited as on March 31, 2017 on account of disputes are given below :

Name of the Statute	State	Nature of the Dues	Period	Amount (Rs.)	Forum where dispute is pending
Service Tax Laws	Central	Service Tax	2006-07 to 2010-11	30,208,391*	Commissioner of Service Tax
Rajasthan Value Added Tax Act, 2003	Rajasthan	Sales Tax	2006-07	5,155,233	Assistant Commissioner of Sales Tax
Rajasthan Value Added Tax Act, 2003	Rajasthan	Sales Tax	2007-08	10,000,000	Appellate Authority of Sales Tax
Rajasthan Value Added Tax Act, 2003	Rajasthan	Sales Tax	2007-08	17,353,962	Jt. Commissioner (Appeals) of Sales Tax
Rajasthan Value Added Tax Act, 2003	Rajasthan	Sales Tax	2007-08	1,525,511	Assistant Commissioner of Sales Tax
Rajasthan Valu Added Tax Act 2003	Rajasthan	Sales Tax	2009-10	50,000	Assistant Commissioner of Sales Tax
The Uttar Pradesh Value Added Tax Act, 2008	Uttar Pradesh	Sales Tax	2009-10	203,000	Jt. Commissioner (Appeals) of Sales Tax
The Uttar Pradesh Value Added Tax Act, 2008	Uttar Pradesh	Sales Tax	2009-10	2,242,668	Assistant Commissioner of Sales Tax
Rajasthan Value Added Tax Act, 2003	Rajasthan	Sales Tax	2007-08	5,511,558	Deputy Commissioner, Jaipur of Sales Tax
Rajasthan Value Added Tax Act, 2003	Rajasthan	Sales Tax	2008-09	6,793,445	Deputy Commissioner, Jaipur of Sales Tax
West Bengal Value Added Tax Act, 2003	West Bengal	Sales Tax	2008-09	225,000,000	Deputy Commissioner of Sales Tax
The Assam Value Added Tax Act, 2003	Assam	Sales Tax	2010-11	720,420	Deputy Commissioner (Appeals) of Sales Tax
Total				304,764,188

*A sum of Rs. 7,500,000 has been deposited by the Company against this disputed due.

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institution. The Company has not taken any loan or borrowings from the bank and Government. The Company has not issued any debentures as at the Balance Sheet date.

(ix) According to the information and explanations given by the management, the company has neither raised any money by way of initial public offer of further public offer (including debt instruments) and term loans during the year nor did it have any such unutilized money outstanding at the start of the year. Hence, reporting under paragraph 3(ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) Managerial Remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013, wherever applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us, the Company has made preferential allotment of its Equity shares during the year and requirement of the section 42 of the Companies Act 2013 have been complied with and the amount raised have been used for the purpose for which the funds were raised.

(xv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him.

(xvi) The Company is not required to be registered under section 45 -IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable.

Annexure - B to the Independent Auditors’ Report

Referred to in Paragraph (f) under the Heading of “Report on Other Legal and Regulatory Requirements” of our Report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of V2 Retail Limited(“the Company”) as of 31 March 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India.

For AKGVG & Associates

Chartered Accountants

ICAI Firm Registration No.: 018598N

Vishal Singh

Partner

Membership No.: 511451

Place: New Delhi

Date: 30^th May, 2017

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Mar 31, 2015

1. Report on the Standalone Financial Statements

We have audited the accompanying financial statements of V2 Retail Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the 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 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 of 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.

3. 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 there under.

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 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 whether the Company has in place an adequate internal financial controls 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 management, as well as evaluating the overall presentation of the financial statements.

Subject to Para 4(a), (b), (c), (d) and (e) below, 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.

4. Basis for Qualified Opinion

a. Attention is invited to note 4 of these financial statements, included in capital reserve amounting to Rs.6,05,23,24,263/-, is Rs. 4,29,42,24,263/- arising out of transfer of asset and liabilities to the acquiring companies in earlier years for which necessary reconciliations/ information to the tune of Rs 3,72,24,324/- is not available with the company Accordingly in absence of the same, we are unable to comment on the appropriateness of capital reserve including consequential impact, if any, arising out of the same on these financial statements.

b. Attention is invited to note 5 and 10 of the these financial statements, the Company has outstanding short-term borrowings at the year- end due to a lender which include overdue principal and interest for which necessary supporting documents for balance confirmation at the year end and relevant information with relation to rate of interest is not available with the Company In the absence of the same, we are unable to comment on appropriateness of the same.

c. Attention is invited to note 14 of these financial statements, the Company has recognized Rs. 2,62,41,88,029/- as deferred tax assets at the year-end for which it does not have virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized in accordance with the principles of Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India . Had the company not recognized such deferred tax asset, impact on profit and loss account would have been decrease in profit during the year by Rs. 2,62,41,88,029/- and decrease in Reserves and Surplus by Rs. 2,62,41,88,029/-.

d. Attention is invited to note 38 of these financial statements, the Company has disclosed contingent liabilities on account of appeals with various statutory authorities at different levels amounting to Rs.1,69,38,13,117/- for which necessary information is not available with the Company to reliably ascertain estimated amount of such liabilities and consequential impact thereof on these financial statements in accordance with Accounting Standard-29-'Provisions, Contingent Liabilities and Contingent Assets' issued by the Institute of Chartered Accountants of India. Hence, we are unable to comment on the same.

e. Attention is invited to note 18 of these financial statements, the company has year-end inventory of traded goods amounting to Rs. 42,65,95,393/- in its new warehouse at Mubarikpur, Haryana for which no physical verification was performed by us as the company was in process of shifting such goods to this warehouse. Hence, we are unable to comment on such inventory lying at the company's warehouse.

5. Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in para 4(a), (b), (c), (d) and (e), 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 31 March 2015;

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

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

6. Emphasis of Matter

Without qualifying our opinion, we draw attention to note 4 of these financial statements, wherein the Company has accumulated losses amounting to Rs. 5,26,88,36,193/- at the year-end which raises concern regarding going concern status of the Company. However, during the year, the company has earned profit after tax of Rs. 9,75,12,902/- and, having regard to improvement in the business conditions, increase in revenue from operations, cost rationalization measures adopted and opening of new stores by the Company, these financial statements have been prepared on a going concern basis and that no adjustments are required to the carrying value of assets and liabilities at the year- end.

7. Report on Other Legal and Regulatory Requirements

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

ii. As required by section 143 (3) of the Act, we report that except for the possible effects of the matters described in para 4(a), (b), (c), (d) and (e):

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 it appears from our examination of those books;

c. The Balance Sheet, the 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on 31 March 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 38 of 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Auditor's Report to the members of V2 Retail Limited on the financial statements for the year ended 31 March 2015

(i) (a) According to the information and explanation given to us, the Company has maintained proper records showing full particulars, and situation of fixed assets except quantitative details.

(b) All fixed assets were physically verified by the management in the previous year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals except for its new warehouse at Mubarikpur, Haryana having inventory of Rs 42,65,95,393/-, which have not been verified during or at the end of the year.

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

(c) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, 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. Thus, paragraph 3(iii) of the Order is not applicable.

(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 sale of goods and services and for the purchase of fixed assets. However, the internal control system for purchases of inventory is inadequate since the inventory items are entered into incorrect item codes at the time of recording in the system.

(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 prescribed maintenance of cost records under Section 148(1) of the Companies Act, 2013 in respect of Company's products. Therefore provisions of clause 4(viii) of the Order are not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Income-tax, Sales tax, Wealth tax, Service tax, Duty of excise, Duty of customs, Value Added tax, Provident Fund, Employees State Insurance and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities though there have been slight delays in a few cases. As explained to us, the Company did not have any dues on account of Cess. According to the information and explanations given to us, no undisputed amounts payable in respect of Employees State Insurance, Provident Fund, Income-tax, Sales tax, Wealth tax, Service tax, Duty of excise, Duty of customs, Value added tax and other material statutory dues were in arrears as at 31 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, other than the amounts reported below, there are no amounts in respect of Income-tax, Sales tax, Wealth tax, Service tax, Duty of customs and Duty of excise that have not been deposited by the Company with the appropriate authorities on account of any dispute:

Name of the Statute Nature of the Dues Period to which Amount (Rs.) Relates(FY)

Service Service Tax Laws Service Tax 2006-07 To 2010-11 30,208,391

Sales Tax Laws Sales Tax 2006-07 5,155,233

Sales Tax 2007-08 10,000,000

Sales Tax 2007-08 17,353,962

Sales Tax 2007-08 1,525,511

Sales Tax 2008-09 50,000

Sales Tax 2008-09 4,849,098

Sales Tax 2009-10 50,000

Sales Tax 2008-09 1,248,180

Sales Tax 2009-10 203,000

Sales Tax 2009-10 2,242,668

Sales Tax 2007-08 6,810,980

Sales Tax 2008-09 8,387,111

Sales Tax 2006-07 624,180

Sales Tax 2007-08 2,986,774

Sales Tax 2008-09 2,200,000

Sales Tax 2008-09 226,600,000

Sales Tax 2010-11 720,420

Income Tax Income Tax 2010-11 1,188,071,650

Total 1,509,287,158

Name of the Statute Forum where dispute is pending

Service Service Tax Laws Commissioner of Service Tax

Sales Tax Laws Assistant Commissioner of Sales Tax

Appellate Authority of Sales Tax

Jt. Commissioner (Appeals) of Sales Tax

Assistant Commissioner of Sales Tax

Assistant Commissioner of Sales Tax

Assistant Commissioner of Sales Tax

Assistant Commissioner of Sales Tax

Jt. Commissioner (Appeals) of Sales Tax

Jt. Commissioner (Appeals) of Sales Tax

Assistant Commissioner of Sales Tax

Deputy Commissioner, Jaipur of Sales Tax

Deputy Commissioner, Jaipur of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax Deputy Commissioner (Appeals) of Sales Tax

Income Tax CIT (Appeals) of Income Tax

(c) The Company did not have any dues on account of Investor Education and Protection Fund.

(viii) The company has accumulated losses at the end of the financial year which exceed fifty percent of its net worth. Further, company earned cash profit in the current and immediately preceding financial year.

(ix) 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 defaulted in repayment of dues to a financial institution.

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

(xi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit for the year.

For AKGVG & Associates

Chartered Accountants

Firm registration number: 018598N

Sd-

Vimal Kumar Saini

Place: New Delhi Partner

Date: 29th May 2015 Membership no.: 515915

---

Mar 31, 2014

We have audited the accompanying financial statements of V2 Retail Limited. ("the Company"), which comprises the Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. 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 13 September 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 free from material misstatement, whether due to fraud or error.

3. 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, 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 suffcient and appropriate to provide a basis for our audit opinion.

4. Basis for qualified Opinion

a) Attention isinvitedtonote4ofthesefinancialstatements, included in capitalreserveamountingto Rs.6,05,23,24,263/-, isRs. 4,29,42,24,263/- arising out of transfer of asset and liabilities to the acquiring companies in earlier years for which necessary reconciliation/ information to the tune ofRs 3,72,24,324/- is not available with the company. Accordingly in the absence of the same, we are unable to comment on the appropriateness of capital reserve including consequential impact, if any, arising out of the same on these financial statements.

b) Attention is invitedto note 5and 10 ofthese financialstatementsthe Company has outstanding short-term borrowings attheyear-end due to a lender including over due principal and interest for which necessary supporting documents for balance confirmation at the year endand relevant information with relation to rate of interest is not available with the Company. In the absence of the same, we are unable to comment on the same.

c) Attention isinvited to note 14of these financial statementsthe company has recognized Rs.2,71,11,06,418/-as deferred tax assetsat the year-end for which it does not have virtual certainty supported by convincing evidence that suffcient future taxable income will be available against which such deferred tax assets can be realized in accordance with principles of Accounting Standard 22 Accounting for Taxes on Income issued by the Instituteof Chartered Accountants of India Had the company not recognized deferred tax, impacton Profit and loss account would have been increase in loss during the year by Rs. 16,70,481/- and decrease in Reserves and Surplus by Rs. 2,71,11,06,418/-,

d) Attention is invited to note 38 of these financial statements, the Company has disclosed contingent liabilities on account of appeals with various statutory authorities at different levels amounting to Rs. 1,69,57,11,396/- for which necessary information is not available with the Company to reliably ascertain estimated amount of such liabilities and consequential impact there of on these quarterly financial statements in accordance with Accounting Standard-29 issued by the Institute of Chartered Accountants of India. Hence, we are unable to comment on the same.

5. Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in para 3(a), (b), (c) and (d), 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 31 March 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

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

6. Emphasis of Matter

Without qualifying our opinion, we draw attention to note 4 of these financial statements, wherein the Company has accumulated losses amounting to Rs. 5,36,63,49,094/- at the year end and has incurred loss of Rs. 4,50,76,168/- during the year which raises concern regarding going concern status of the Company. However, having regard to improvement in the business conditions, increase in revenue from operations, cost rationalization measures adopted and opening of new stores by the Company, these consolidated financial statements have been prepared on a going concern basis and that no adjustments are required to the carrying value of assets and liabilities.

7. Report on Other Legal and Regulatory Requirements

a) As required by the Companies (Auditor''s Report) Order, 2003 (''Order''), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

b) 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 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement deal with by this report 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 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013, to the extent applicable; and

(v) on the basis of written representations received from the directors of the Company as on 31 March 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March2014, from being appointed as director in terms of clause (g) of sub-section (1) of the Section 274 of the Act.

Annexure to the Independent Auditor''s Report (Referred to in our report of even date)

(i) (a) According to the information and explanation given to us, the Company has maintained proper records showing full particulars, and situation of fixed assets except quantitative details.

(b) As informed to us, the Company has a regular programme of physical verifcation of its fixed assets according to which all fixed assets are verifed every year. In our opinion, this periodicity of physical verifcation is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the Company has physically verifed all fixed assets during theyear. No material discrepancies were noticed on such verifcation.

(ii) (a) The inventories have been physically verifed by the management during theyear. In our opinion, the frequency of such verifcation is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures for the physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) Inouropinion, the Company ismaintaining proper recordsofinventory.As informed to us, thediscrepanciesnoticedon verifcation betweenthe physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, 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, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the company and hence not commented upon.

(b) The Company has taken loans from parties covered in the register maintained under Section 301 of the Companies Act,1956. The maximum amount involved during the year along with closing balance of loan taken from such parties is as follows:

Name of the Party Maximum Amount Outstanding Closing Balance

Mr. Ram Chandra Agarwal 44,072,507 38,772,507

Mrs. Uma Agarwal 1,087,576 1,087,576

Vishal Water World Pvt. Ltd. 100,232,680 100,000,000

V2 Conglomorate Ltd. 56,736,622 778,037

Ricon Commodities Pvt. Ltd. 42,981,078 42,663,874

VRL Infrastructure Ltd. 51,835 51,835

VRL Movers Limited 643,882 643,882

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(d ) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interest has been regular.

(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 sale of goods and services and for the purchase of fixed assets. However, the internal control system for purchases of inventory is inadequate since the inventory items are entered into incorrect item codes at the time of recording in the system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the valueofRs500,000 have beenentered into during the financialyearat prices which are reasonable having regardto the prevailing market prices at the relevant time.

(vi) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(vii) The Company has not accepted any deposits from the public within the meaning of Sec 58A of the Companies Act, 1956 and the Rules framed there under, Therefore the provisions of section 58AA or any other relevant provisions of the act are not applicable to the company.

(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 provisions of clause 4(viii) of the Order are not applicable to the Company.

(ix) (a) Un disputed statutory dues including provident fund, investore ducation and protection fund, employees'' state insurance, income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty cess and other material statutory dues have not generally been regularly deposited with the appropriate authorities though the delays in deposit have not been serious.

(b) According to the information and explanations given to us and the records of the company, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty excise duty cess and other material statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute which , are as follows:

Name of Statue Nature of the Dues Period To which Amount (Rs.) Relates(FY)

Service Tax Laws Service Tax 2006-07 To 2010-11 30,208,391

Sales Tax Laws Sales Tax 2006-07 5,155,233

Sales Tax 2007-08 10,000,000

Sales Tax 2007-08 17,353,962

Sales Tax 2007-08 1,525,511

Sales Tax 2008-09 50,000

Sales Tax 2008-09 4,849,098

Sales Tax 2009-10 50,000

Sales Tax 2008-09 1,248,180

Sales Tax 2009-10 203,000

Sales Tax 2009-10 2,242,668

Sales Tax 2007-08 6,810,980

Sales Tax 2008-09 8,387,111

Sales Tax 2006-07 624,180

Sales Tax 2007-08 2,986,774

Sales Tax 2008-09 2,200,000

Sales Tax 2008-09 226,600,000

Sales Tax 2010-11 720,420

Income Tax Income Tax 2010-11 1,188,071,650

Total 1,509,287,158

Name of Statute Forum where dispute is Pending

Service Tax Laws Commissioner of Service Tax

Sales Tax Laws Assistant Commissioner of Sales Tax

Appellate Authority of Sales Tax

Jt. Commissioner (Appeals) of Sales Tax

Assistant Commissioner of Sales Tax

Assistant Commissioner of Sales Tax

Assistant Commissioner of Sales Tax

Assistant Commissioner of Sales Tax

Jt. Commissioner (Appeals) of Sales Tax

Jt. Commissioner (Appeals) of Sales Tax

Assistant Commissioner of Sales Tax

Deputy Commissioner, Jaipur of Sales Tax

Deputy Commissioner, Jaipur of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner (Appeals) of Sales Tax

Income Tax CIT (Appeals) of Income Tax

(x) The company has accumulated losses at the end of the financial year which exceed fifty percent of its net worth. Further, company incurred cash losses in the current and 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 defaulted in repayment of dues to a financial institution.

(xii) According to the 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) In our opinion and according to the information and explanations given to us, the Company is notachitfundoranidhi/mutual benefitfund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that prima facie no funds raised on short-term basis have been used for long-term investment.

(xviii)The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

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

For AKGVG & Associates Chartered Accountants Firm Registration No. : 018598N

Sd/- Vimal Kumar Saini Place New Delhi Partner Date 30.05.2014 Membership No.: 515915

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of V2 Retail Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with accounting principles generally accepted in India, including 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 fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Basis for Qualifed Opinion

a) Attention is invited to note 4 of fnancial statements explaining the reserves and surplus in the head capital reserve amounting to Rs. 60,523.24/-Lacs., necessary supporting documents and relevant information is not available with the Company and provided to us, so In the absence of the same, we are unable to comment on the appropriateness of the same including consequential impact, if any, arising out of the same on these fnancial statements. This was also the subject matter of qualifcation by us in previous year as well.

b) Attention is invited to note 4 of fnancial statements explaining the reserves and surplus, company has accumulated losses more than 50% of its net worth. However, having regard to improvement in the economic sentiment, rationalization measures adopted by the Company, opening of new stores, these fnancial statements have been prepared on the basis that the company is a going concern and that no adjustments are required to the carrying value of assets and liabilities. The accumulated losses is Rs.5,32,12,72,927/- (Rupees Five hundred Thirty two crores twelve lacs seventy two thousand nine hundred twenty seven only) as at 31st March, 2013 which exceed the net worth of the company.

c) As stated in Note 29 to the fnancial statement, the Company has debited Rs 5,99,80,407/- on account of interest expense in the statement of Proft and Loss , however, necessary supporting documents and relevant information in relation to rate of interest is not available with the Company. In the absence of the same, we are unable to comment whether such charge to the statement of proft and loss is appropriate in accordance with Accounting Standard 16 on "Borrowing Costs" issued by the Institute of Chartered Accountants of India

d) As stated in Note 38 to the fnancial statement, the Company has contingent liability on account of appeal with different authorities at different levels amounting to Rs. 64,13,54,011/- , however, At the moment Company is not able to reliably ascertain estimated amount of such liability so the provision as required in accordance to the Accounting Standard-29 has not been made in books of accounts.

Qualifed opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualifed Opinion paragraph, the fnancial 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, 2013;

(b) in the case of the Statement of Proft and Loss, of the proft forthe year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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 specifed in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(a) except for the matter described in the basis for qualifcation paragraph, 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 Proft and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) Except for the matter described in the Basis for Qualifed Opinion paragraph, in our opinion, the Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 3 under the heading "Report on other legal and regulatory requirements" of our report of even date Re: V2 Retail Limited (the company)

(i) (a) The company has maintained proper records showing full particulars, including situation of fxed Assets except quantitative details.

(i) (b) Fixed assets have not been physically verifed by the management during the year. As explained by the management company has a policy of physical verifcation once in a period of three year, in our opinion, is unreasonable having regard to the size of the company and the nature of its assets.

(ii) (a) The management has conducted physical verifcation of inventory at reasonable intervals during the year.

(ii) (b) The procedures of physical verifcation of inventory 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 is maintaining proper records of inventory. Discrepancies noted on physical verifcation of inventories were not material and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the company and hence not commented upon.

(b) The Company had taken loans, secured or unsecured to companies, frms, or the other parties covered in the register maintained under Section 301 of the Companies Act,1956.

The company has taken reasonable steps for payment of principal and interest when such loan taken is overdue and the amount exceeds Rs.1 lakh.

(iv) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(iv) (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs 500,000 have been entered into during the fnancial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(v) In our opinion and according to the information and explanations given to us, there is inadequate internal control system commensurate with the size of the company and the nature of its business, for the recording of accounting transactions of purchase of inventory and expenses, which need to be strengthen. During the course of our audit, however we observed that management is in process of improvising the Internal Control.

(vi) In our opinion and according to the information and explanations given to us, the company does not have internal audit system commensurate with its size and nature of business.

(vii) The Company has not accepted any deposits from the public within the meaning of Sec 58A of the Companies Act, 1956 and the Rules framed thereunder, Therefore the provisions of section 58AA or any other relevant provisions of the act are not applicable to the company.

(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 provisions of clause 4(viii) of the Order are not applicable to the Company.

(ix) (a) The company is irregular 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, customs duty, excise duty, cess and other material statutory dues applicable to it, however such dues have been paid with interest and penalties as applicable.

(ix) (b) According to the information and explanations given to us and the records of the company, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable.

(ix) (c) According to the records of the company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute which , are as follows:

(x) The company has accumulated losses at the end of the fnancial year which exceed ffty percent of its net worth. Further, company incurred cash losses in the current and immediately preceding fnancial 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 defaulted in repayment of dues to a fnancial institution/ bank.

(xii) According to the information and explanations given to us and based on the documents and records produced before 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, the company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s 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, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or fnancial institutions.

(xvi) Based on the information and explanations given to us by the management, no new term loans have been taken during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that prima facie no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

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

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the fnancial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year. For AKGVG & Associates

Firm registration number: 018598N

Chartered Accountants

per Vimal Kumar Saini

Place Delhi Partner

Date 30th May, 2013 Membership no.: 515915

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/S V2 RETAIL LIMITED ( hereinafter referred to as "the Company"), as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order (CARO), 2003 (As Amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said ,Order to the extent applicable to the Company.

4. We report that:

a) The accumulated losses of Rs. 4,920,718,732 (Rupees four hundred ninety two crores seven lacs eighteen thousand seven hundred thirty two only) as at 31st March, 2011 exceed the net worth of the Company;

b) The company has disposed off substantial part of its fixed assets under the Slump Sale agreement entered into as a part of Corporate Debt Restructuring Scheme.

However the accompanying Financial Statements have been prepared assuming going concern. The company has disposed off substantial portion of its fixed assets under the Slump Sale agreement that raises substantial doubt about the Company's ability to continue as a Going Concern. Management Plans in regard to these matters are also described in Note B-6A to Schedule – 20 to the financial statements. The Financial statements do not include any adjustment that might result from the outcome of this uncertainity.

5. Further to our comments in the paragraph 3 and 4 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, subject to following :

a) Basis of accounting for Capital Reserve amounting to Rs. 6,052,324,263 (Rupees Six hundred five Crores twenty three lacs twenty four thousand two hundred and sixty three) on account of restructuring of business of the company during the year. The Company has trifurcated its Assets and Liabilities as on appointed date between the Acquiring Companies as per the agreement entered into between them and the difference between Assets and Liabilities transferred has been shown as Capital Reserve. (Refer Note Note B-6 to Schedule – 20)

b) Basis of write off of Sundry balances amounting to Rs.22,470,875(Rupees Two crores twenty four lacs seventy thousand eight hundred and seventy five only) included in Other Expenses in Schedule 16.

c) Adequate documentary evidence for Miscellaneous Income of Rs.91,048,666 (Rupees nine crores ten lacs forty eight thousand six hundred sixty six only) which has been recognised as Other Income in the Profit & Loss Account in Schedule 14.

(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 such books of our Company;

(iii) The Balance Sheet and Profit & 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 and the Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except;

a) The company has during the period under review discontinued its operation of Wholesale and Retail Division by way of Slump Sale Refer Note Note B-6 to Schedule – 20. However no disclosure for the same has been provided in Financial Statements as required by Accounting Standard 24 " Discontinuing Operations".

b) Deferred Taxes Assets amounting to Rs. 2,845,904,015 (Rupees two hundred eighty four crore fifty nine lacs four hundred fifteen only) has been recognised in the Balance Sheet though the company has incurred operating losses in the current year and previous years and there exists no convincing evidence as to virtual certainty of future income to recover the deferred tax asset as required by Accounting Standard 22 "Accounting for Taxes on Income".

(v) On the basis of written representations received from the directors, as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to explanations given to us the annexed 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 and

(b) In the case of the Profit & Loss Account, of the Loss of the Company for the year ended on that date.

(c) In the Case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

[As Referred to in paragraph 3 of our report of even date ]

1. a. The Company is in the process of updating the records, showing full particulars, including quantitative details and situation of Fixed assets.

b. The company has a policy for physical verification of its Fixed Assets over a period of three years, which in our opinion is reasonable having regard to the size and nature of its business, however during the period under review no physical verification of Fixed Assets has been done.

c. In our opinion and according to the information and explanations given to us, the Company has disposed off substantial amount of Fixed Assets during the year under the slump sale agreement.

2. a. The inventory has been physically verified during the year by the management and other Chartered Accountants at periodical intervals. In our opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us and on the basis of our examination of records of inventory, the Company is maintaining proper records of inventory and discrepancies are properly recorded in the books of accounts.

3. a. The company has not granted unsecured loans to parties covered in the register maintained under section 301 of the Companies Act, 1956.

b. In our opinion and according to the information provided to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interests of the Company.

c. The parties have repaid the principal amounts as stipulated and have also been regular in the payment of interest to the Company.

d. There is no overdue amount in excess of Rs. 1 lakh in respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

e. The company had in the prior year taken unsecured interest free loan from 3 (three) parties covered in the register maintained under section 301 of Companies Act, 1956. During the year, the Company had taken further interest free unsecured loan from such parties and an amount of Rs. 36,852,881 was written back during the year. The maximum amount involved during the year was Rs. 100,758,467 and the year end balance of loans was Rs. 54,657,315.

f. In our opinion, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

g. In respect of the aforesaid loans, the company is regular in repaying the principal amounts as stipulated and has been regular in payment of interest.

4. In our opinion and according to the information and explanations given to us, the existing internal control procedures are required to be more adequate to commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services.

5. Based on the audit procedures applied by us and according to the information, provided to us by the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 have been entered and the transactions are made at the prices which are reasonable with regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956 and the rules framed there under. Therefore, the provisions of section 58AA or any other relevant provision of the Act are not applicable to the Company.

7. The internal audit procedures in the Company commensurate with the size and nature of its activities being carried on by the Company.

8. To the best of our information and explanations given to us the Central Government has not prescribed for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956.

9. a. According to the information and explanation given to us and the books and records as produced and examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Sales tax, income tax, wealth tax, service tax, custom duty, cess, excise duty, provident fund , employee's state insurance other material statutory dues as applicable with appropriate authorities. As explained to us provisions regarding Investor education & protection fund and excise duty are presently not applicable to the company.

b. According to the information and explanation given to us and the records of the company, undisputed dues in respect of provident fund, investor education and protection fund, employees' state insurance, income tax, wealth tax, service tax, sales tax, custom duty, excise duty, cess and other statutory dues which were outstanding for a period of more than six months at the year end are as follows:

Name of the Statute Nature of the dues Amount (Rs.) Period to which it relates

Sales Tax Laws Sales Tax 14,75,941.00 2006 to 2010

Employee State Insurance Corporation ESI Contribution 6,380.00 -

Profession Tax (Various State Laws) Profession Tax 1,60,804.00 2006 to 2010

(c) Details of dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited as on March 31, 2011 on account of any disputes are given below:

Name of the Statute Nature of the dues Amount (Rs.)

Sales Tax Laws Sales Tax 6,24,180.00

Sales Tax 51,55,233.00

Sales Tax 29,86,774.00

Sales Tax 95,13,100.00

Sales Tax 6,42,966.00

Sales Tax 1,00,00,000.00

Sales Tax 1,73,53,962.00

Sales Tax 15,25,511.00

Sales Tax 50,000.00

Sales Tax 48,49,098.00

Sales Tax 50,000.00

Sales Tax 2,03,000.00

Sales Tax 22,42,668.00

Employees Provident Provident Fund 11,39,29,006.00 Fund & Miscellaneous Provisions Act

Name of the Statute Period to Which Forum where dispute is It Relates(FY) pending

Sales Tax Laws 2006-07 Deputy Commissioner

2006-07 Assistant Commissioner

2007-08 Deputy Commissioner

2007-08 Assistant Commissioner

2007-08 Assessing Officer

2007-08 Appellate Authority

2007-08 Jt. Commissioner (Appeals)

2007-08 Assistant Commissioner

2008-09 Assistant Commissioner

2008-09 Assistant Commissioner

2009-10 Assistant Commissioner

2009-10 Jt. Commissioner (Appeals)

2009-10 Assistant Commissioner

Employees Provident Fund & Miscellaneous Provisions Act Various Years EPF Appellate Tribunal

10. The accumulated losses of the company at the year end are more than fifty percent of its networth. Further, the company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. Based on our procedures and on the basis of information and explanations given by the management, in our opinion the Company has defaulted in repayment of dues to a financial institution and banks during the year but as at the year end there exists no default for such dues since the CDR proposal of the Company has been approved by the CDR cell and accepted by its lenders. Also the company has entered into settlement agreements with its non CDR lenders.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund, nidhi or mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion and according to the information and explanation gives to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations provided to us, the Company has not guaranteed for loans taken by others from banks or financial institutions.

16. As per the explanations and information's provided to us the term loan has been applied for the purpose for which they were taken.

17. On the basis of our examinations of the books of accounts and the explanations and information's provided to us, in our opinion, the funds raised on short term basis have not been used for long term investment

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures and hence clauses 4(xix) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

20. During the year covered by our report the Company has not raised any money by way of public issue.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company nor have we been informed of such cases by the management.

For Surana Singh Rathi And Co.

Chartered Accountants

FRN No.317119E

S.K. Surana

Place : New Delhi Partner

Date : September 04, 2011 Membership No. 053271

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Vishal Retail Limited (the Company) as at March 31, 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 by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. a) We report that

I. The accumulated tosses of Rs. 4,269,001,402 as at March 31, 2010 exceed the net worth of the company;

ii. Certain lenders have filed winding up petition against the company in the high court.

However, the accounts have been drawn on going concern assumption as the company has made a proposal under Corporate Debt Restructuring Scheme to CDR Cell for restructuring of its secured as well as unsecured debts and expects turnaround (Refer Note B-8 of Schedule 20).

b) We draw attention to NoteB-12 of Schedule 20 with regards to inventory of Rs. 2,199,612,291 lying at various stores and warehouses of the Company which is physically verified by other Chartered Accountants and relied upon by us.

5. Further to our comments in the paragraph 3 & 4 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, except that we have not been provided:

a. 6as/s and supporting for write off of inventory amounting to Rs. 3,417,159,919 on account of pilferage, shrinkages, slow- moving, non-moving, obsolete and damaged goods.

b. Adequate documentary evidence for Display Charges included in Other Incomeamounting Rs. 28,602,715 recognised in the Profit & LossAccount

c. Adequate documentary evidence to support write-off of capital work in progress amounting to Rs. 7,869,388 included in prior period expenses;

d. Basis for write-off of sundry balances amounting to Rs. 14,033,201 included in Other expenses in Schedule 16;

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 sub-section (3C) of section 211 of the Companies Act, 1956, except;

a) Accounting Standard 2 "Valuation of Inventories": The cost for valuation of inventories does not include Octroi, mandi tax, entry tax, input VAT, freight inwards and discount received on the purchase. The impact of such deviation from AS 2 is currently unascertainable.

b) Accounting Standard 28 "Impairment of Assets": whereby no assessment for impairment of assets, if any, was carried out during the year by the management;

c) Accounting Standard 22 "Accounting for Taxes on Income": The Company has recognized Deferred Tax Assets amounting to Rs. 2,626,499,840 as at 31 March 2010 even though the Company has incurred operating losses in the current year & in the earlier years and there is no convincing evidence as to virtual certainty of future income;

v. On the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2010 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 give the information required by the Companies Act, 1956, in the manner so required. We further report as under:

a) The balances of unsecured loans amounting Rs. 1,604,587,755 from various banks and financial institutions are subject to confirmation and reconciliation.

b) The balance of Sundry Debtors Rs. 29,157,235 and Sundry Creditors Rs. 1,235,104,887 are subject to confirmation and reconciliation.

Subject to these observations and other observations in paragraphs 4(a), 5(i)(a), 5(i)(b), 5(i)(c), 5(i)(d) & 5(iv)(a),5(iv)(b)and 5(iv)(c) above, the consequential effect of which on relevant assets, liabilities and loss for the year is not quantifiable;

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 31,2010;

b) in the case of the profit and loss account, of the loss 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 AUDITORS REPORT

[Referred to in paragraph 3 of the Auditors Report of even date to the members of Vishal Retail Limited on the financial statements for the year ended 31- March 2010]

(I) (a) The Company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets of the Company have not been physically verified by the management during the year ended March 31, 2010. Hence, discrepancies if any, could not be ascertained.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The inventory has been physically verified by the management and other Chartered Accountants at stores and warehouses during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate, in relation to the size of the Company and the nature of its business, except in relation to identification of slow moving, non moving, obsolete and damaged items of inventory.

(c) The Company is maintaining proper records of inventory and material discrepancies noticed on physical verification were properly adjusted in books of accounts.

(iii) (a) The company had in a prior year granted unsecured loan to two parties covered in the register maintained under section 301 of the Companies Act, 1956. Further during the year the Company granted additional unsecured loan to one of these parties. The maximum amount involved during the year was Rs. 1,970,972 and the year- end balance of loans granted to such parties was Rs. Nil.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(c) The parties have repaid the principal amounts as stipulated and have also been regular in the payment of interest to the Company.

(d) There is no overdue amount in excess of Rs. 1 Lakh in respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had in a prior year taken an unsecured interest free loan from a party covered in the register maintained under section 301 of the Companies Act, 1956. During the year, the Company had taken further interest free unsecured loan from such party. The maximum amount involved during the year was Rs. 19,105,112 and the year-end balance of loans taken from such parties was Rs. 7,196,145.

(f) In our opinion, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company. <

(g) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts as stipulated and has been regular in payment of interest,

(iv) In our opinion and according to the information and explanations given to us, the existing internal control system is not adequate and commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have observed that there is a continuing failure to correct weakness in internal control system of the Company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vij The Company has not accepted any deposits, from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, there is no internal audit system at the Corporate Office and warehouses. In respect of branches, the internal audit system should be further strengthened and scope widened to be commensurate with the size and nature of its business.

(viii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

(ix) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax and customs duty. Further, as explained to us, the provisions of regarding investor education and protection fund and excise duty are presently not applicable to it.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other statutory dues which were outstanding, at the year end for a period of more than six months from the date they became payable are as follows:

Name of the Statute Nature of the dues Amount (Rs.) Period to which it relates

Various Statues of respective states Labour Welfare Fund 208,686 2008-09

Various Statues of respective states Professional Tax 47,448 2006-07

Various Statues of respective states Professional Tax 15,830 2007-08

Various Statues of respective states Professional Tax 55,231 2008-09

Employees State Insurance Corporation Employees State Insurance 192,153 2007-08

Employees State Insurance Corporation Employees State Insurance 194,522 2008-09

Employees Provident Fund Provident Fund 87,580 2009-10

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Statute Nature of the dues Amount (Rs.) Period to Which It Relates (FY)

Excise Duty Act, 1944 Excise Duty 500,000 2007-08

Sales Tax Act (West Bengal) Sales Tax 1,527,586 2002-03

Sales Tax Act (Delhi) Sales Tax 1,149,937 2002-03

Sales Tax Act (Guwahati) Sales Tax 2,009,712 2002-03

Income Tax Act, 1961 Income Tax 3,323,879 2005-06

Income Tax Act, 1961 Income Tax 62,305,573 2006-07

Income Tax Act, 1961 Income Tax 61,536,850 2007-08

Name of the Statute Forum where dispute is pending

Excise Duty Act, 1944 Assistant Commissioner, Central Excise, Agra

Sales Tax Act (West Bengal) Additional Asst. commissioner of Commercial Tax

Sales Tax Act (Delhi) Deputy Commissioner of Sales Tax

Sales Tax Act (Guwahati) Superintendent of Taxes

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

Income Tax Act,1961 Commissioner of Income Tax (Appeals)

(x) The accumulated losses of the Company at the year end are more than fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. The effect of qualifications in our audit report is currently unascertainable and accordingly accumulated losses have not been adjusted for consequential effect resulting from such qualifications.

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to a financial institution, bank and debenture holders. Details of such default is reported as under:

Name of Banker Nature Of Facility Nature Of Dues

State Bank Of India Term Loan Principal Repayment

SLC

HDFC Bank Term Loan Principal Repayment

LIC Mutual Fund . Non Convertible Principal Repayment

Asset Management Debentures Co. Ltd

Name of Banker Amount Of Default Due date Date of rectifying the Default

State Bank Of India 8,400,000.00 01-Apr-09 23-May-09

8,400,000.00 01.-May-09 23-Jun-09

8,400,000.00 01-Jun.-09 29-Jul-09

8,400,000.00 01-Jul-09 29-Sep-09

8,400,000.00 01-Aug-09 30-Oct-009

8,400,000.00 01-Sep-09 30-Oct-09

8,400,000.00 01-Oct-09 31-Dec-09

8,400,000.00 01-Nov-09 30-Jan-10

8,400,000.00 01-Dec-09 30-Jan-10

8,400,000.00 01-Jan-10 10-Jan-10

8,400,000.00 01-Feb-10 31-Jan-10

8,400,000.00 01-Mar-10 04-May-10

45,000,000.00 21-Sep-09 29-Dec-09

HDFC Bank 10,000,000.00 28-Jun-09 15-Sep-09

10,000,000.00 28-Dec-09 Still Continuing

10,000,000.00 28-Mar-10 Still Continuing

1,000,000.00 11-Jul-09 Still Continuing LIC Mutual Fund . Asset Manag ement Co. Ltd 1,000,000.00 31-Aug-09 Still Continuing

17,000,000.00 30-Sep-09 Still Continuing

25,000,000.00 31-Oct-09 Still Continuing

1,000,000.00 30-Nov-09 Still Continuing

1,000,000.00 31-Dec-09 Still Continuing

1,000,000.00 31-Jan-10 Still Continuing

1,000,000.00 28-Feb-10 Still Continuing

1,000,000.00 31-Mar-10 Still Continuing

Name of Banker Nature Of Facility Nature Of Dues

Deutsche Asset Non Convertible Principal Repayment management Debentures (India) pvt. Ltd.

ING Vysya Bank Ltc. Short Term Loan Principal Repayment

UCO Bank Ltd. Short Term Loan Principal Repayment

Barclays Bank PLC WCDL Principal Repayment

HSBC WCDL Principal Repayment

DBS Bill Discounting Principal Amount

DEUTSCHE BANK Bill Discounting Principal Amount

Name of Banker Amount Of Default Due date Date of rectifying the Default

Deutsche Asset manag ement (India) pvt. Ltd. 500,000,000.00 25-Aug-09 Still Continuing

ING Vysya Bank Ltc 600,000,000.00 04-Oct-09 Still Continuing

UCO Bank Ltd. 600,000,000.00 10-Aug-09 Still Continuing

Barclays Bank PLC 400,000,000.00 30-Jun-09 Still Continuing,

HSBC 200,000,000.00 06-Sep-09 Still Continuing

200,000,000.00 07-Sep-09 Still Continuing

100,000,000.00 26-Aug-09 Still Continuing

100,000,000.00 06-Sep-09 Still Continuing

100,000,000.00 25-Sep-09 Still Continuing

DBS 12,002,848.00 19-Nov-09 Still Continuing

10,338,871.00 20-Nov-09 Still Continuing

5,491,195.00 21-Nov-09 Still Continuing

7,068,467.00 23-Nov-09 Still Continuing

12,195,897.00 24-Nov-09 Still Continuing

16,097,106.00 25-Nov-09 Still Continuing

17,342,878.00 26-Nov-09 Still Continuing

8,168,656.00 27-Nov-09 Still Continuing

17,311,142.00 28-Nov-09 Still Continuing

20,314,190.00 30-Nov-09 Still Continuing

8,656,597.00 1-Dec-09 Still Continuing

5,104,997.00 2-Dec-09 Still Continuing

5,072,076.00 5-Dec-09 Still Continuing

6,978,643.00 7-Dec-09 Still Continuing

15,481,656.00 8-Dec-09 Still Continuing

14,690,245.00 9-Dec-09 Still Continuing

7,218,741.00 14-Dec-09 Still Continuing

12,301,904.00 15-Dec-09 Still Continuing

21,140,723.00 16-Dec-09 Still Continuing

5,610,551.00 17-Dec-09 Still Continuing

5,155,489.00 18-Dec-09 Still Continuing

25,864,383.00 29-Dec-09 Still Continuing

5,483,315.00 31-Dec-09 Still Continuing

6,922,929.00 7-Jan-10 Still Continuing

6,778,191.00 13-Jan-10 Still Continuing

11,363,014.00 14-Jan-10 Still Continuing

16,305,994.00 21-Jan-10 Still Continuing 6,888,316.00 27-Jan-10 Still Continuing

6,109,387.00 28-Jan-10 Still Continuing

6,282,998.00 29-Jan-10 Still Continuing

9,953,526.00 3-Feb-10 Still Continuing

8,753,214.00 4-Feb-10 Still Continuing

4,491,994.00 5-Feb-10 Still Continuing

6,402,498.00 6-Feb-10 Still Continuing

7,457,756.00 8-Feb-10 Still Continuing

3,691,204.00 11-Feb-10 Still Continuing

DEUTSCHE BANK 5,113,486.00 13-Jan-10 Still Continuing

2,087,508.00 15-Jan-10 Still Continuing

5,245,309.00 18-Jan-10 Still Continuing

6,665,801.00 22-Jan-10 Still Continuing

11,410,311.00 25-Jan-10 Still Continuing

7,926,882.00 27-Jan-10 Still Continuing

Name of Banker Nature Of Facility Nature Of Dues

SICOM Bill Discounting Principal Amount

State Bank Of India Term Loan Interest Payment

State Bank Of India

State Bank Of India SLC Interest Payment

HSBC TL-I Interest Payment

HSBC TL-II Interest Payment

HSBC WCDL-200000000 Interest Payment

HSBC WCDL-100000000 Interest Payment

LIC Mutual Fund Non Convertible Interest Payment

Asset management Debentures Co. Ltd.

Name of Banker Amount Of Default Due date Date of rectifying the Default

6,746,561.00 28-Jan-10 Still Continuing

18,742,626.00 29-Jan-10 Still Continuing

2,837,203.00 30-Jan-10 Still Continuing

8,929,753.00 1-Feb-10 Still Continuing

8,560,211.00 2-Feb-10 Still Continuing

2,240,225.00 5-Feb-10 Still Continuing

10,298,907.00 8-Feb-10 Still Continuing .

9,629,532.00 10-Feb-10 Still Continuing

SICOM 4,096,793.00 2-Dec-09 Still Continuing

7,169,423.00 9-Dec-09 Still Continuing

8,284,957.00 17-Dec-09 Still Continuing

9,115,663.00 21-Dec-09 Still Continuing

9,832,380.00 25-Dec-09 Still Continuing

5,240,889.00 31-Dec-09 Still Continuing

6,939,782.00 22-Feb-10 Still Continuing

State Bank Of India 3,169,447.00 30-Apr-09 23-Jun-09

3,272,810.00 31-May-09 29-Jul-09

3,074,778.00 30-Jun-09 29-Sep-09

2,909,824.00 31-Jul-09 30-Oct-09

2,794,093.00 31-Aug-09 30-Oct-09

2,723,477.00 30-Sep-09 0-Oct-09

State Bank Of India 2,718,905.00 31-Oct-09 30-Jan-10

2,454,145.00 30-Nov-09 30-Jan-10

2,556,860.00 31-Dec-09 30-Jan-10

2,459,158.00 31-Jan-10 10Feb-10

1,937,818.00 28-Feb-10 31-Mar-10

2,109,699.00 31-Mar-10 03-May-10

State Bank Of India 441,699.00 30-Apr-09 23-Jun-09

698,978.00 31-May-09 10-Jun-09

509,116.00 30-Jun-09 01-Jul-09

509,795.00 31-Jul-09 01-Aug-09

555,103.00 31-Aug-09 30-Oct-09

514,835.00 30-Sep-09 30-Oct-09

537,818.00 31-Oct-09 29-Dec-09

515,082.00 30-NOV-09 29-Dec-09

HSBC 1,566,478.64 31-May-09 01-Jun-09

1,341,297.34 31-Jan-10 01-Feb-10

HSBC 1,447,832.39 25-Oct-09 27-Oct-09

1,447,832.39 25-Dec-09 27-Dec-09

HSBC 13,263,013.70 31-Mar-10 Still Continuing

13,198,630.14 31-Mar-10 Still Continuing

HSBC 7,017,808.22 31-Mar-10 Still Continuing

5,559,178.08 31-Mar-10 Still Continuing

6,052,054.79 31-Mar-10 Still Continuing

LIC Mutual Fund Asset management Co. Ltd. 8,424,657.53 30-Apr-09 30-Jun-09

8,705,479.45 31-May-09 30-Jun-09

8,696,773.97 31-Jul-09 Still Continuing

8,696,773.97 31-Aug-09 Still Continuing

8,416,233.00 30-Sep-09 Still Continuing

8,696,773.97 31-Oct-09 Still Continuing

8,416,233.00 30-Nov-09 Still Continuing

8,696,773.97 31-Dec-09 Still Continuing

8,696,774.00 31-Jan-10 Still Continuing

Name of Banker Nature Of Facility Nature Of Dues Deutsche Asset Non Convertible Interest Payment management Debentures (india) pvt. Ltd.

ING Vysya Bank Ltc. Short Term Loan Interest Payment

UCO Bank Ltd. Short Term Loan Interest Payment

Barclays Bank PLC WCDL Interest Payment

HDFC Bank Cash Credit Interest Payment

HDFC Bank TL-II Interest Payment

Name of Banker Amount Of Default Due date Date of rectifying the Default

Deutsche Asset management (India) pvt.Ltd. 8,135,692.00 28-Feb-10 Still Continuing

8,696,774.00 31-Mar-10 Still Continuing

3,205,479.45 24-Apr-09 21-May-09

4,006,849.00 24-May-09 25-May-09

4,140,410.96 24-Jun-09 25-Jun-09

4,006,849.00 24-Jul-09 27-Oct-09

4,140,410.96 24-Aug-09 Still Continuing .

4,140,410.96 24-Sep-09 Still Continuing

4,006,849.00 24-Oct-09 Still Continuing

4,140,411.00 24-Nov-09 Still Continuing

4,006,849.00 24-Dec-09 Still Continuing

4,140,411.00 24-Jan-10 Still Continuing

4,140,411.00 24-Feb-10 Still Continuing

4,674,658.60 24-Mar-10 Still Continuing

ING Vysya Bank Ltc 4,808,219.00 30-Jun-09 03-Jul-09

4.978.284.56 31-Jul-09 27-Oct-09

5,009,657.63 31-Aug-09 27-Oct-09

4.912.239.57 30-Sep-09 27-Oct-09

4,870,653.40 30-Nov-09 Still Continuing

5,017,970.44 31-Dec-09 Still Continuing

5,051,196.00 31-Jan-10 Still Continuing

4.600.150.60 28-Feb-10 Still Continuing

5,089,289.00 31-Mar-10 Still Continuing

UCO Bank Ltd. 5,838,247.14 31-May-09 01-Jun-09

5,661,268.34 30-Jun-09 02-Jul-09

5,735,446.00 31-Jul-09 Still Continuing

5,564,715.00 31-Aug-09 Still Continuing

6,552,825.00 30-Sep-09 Still Continuing

7,583,017.00 31-Oct-09 Still Continuing

6,737,084.00 30-Nov-09 Still Continuing

7,037,748.00 31-Dec-09 Still Continuing

7,116,444.00 31-Jan-10 Still Continuing

6,499,917.00 28-Feb-10 Still Continuing

7,270,568.00 31-Mar-10 Still Continuing

Barclays Bank PLC 3,908,493.00 30-Apr-09 09-Jun-09

3,991,781.00 31-May-09 25-Jul-09

3,863,013.00 30-Jun-09 Still Continuing

3,991,781.00 31-Jul-09 Still Continuing

3,991,781.00 31-Aug-09 Still Continuing

3,863,013.00 30-Sep-09 Still Continuing 3,991,781.00 31-Oct-09 Still Continuing

3,863,013.00 30-Nov-09 Still Continuing

3,991,781.00 31 -Dec-09 Still Continuing

3,991,781.00 31-Jan-10 Still Continuing

3.605.479.61 28-Feb-10 Still Continuing

3,991,781.00 31-Mar-10 Still Continuing

HDFC Bank 440,257.48 31-Jan-10 Still Continuing

1,368,804.75 28-Feb-10 Still Continuing

1,378,872.17 31-Mar-10 Still Continuing

HDFC Bank 728,767.12 30-Apr-09 04-May-09

584,109.60 30-Jun-09 15-Sep-09

517,808.22 31-Jul-09 15-Sep-09

509,589.00 31-Aug-09 25-Sep-09

2,069,979.70 31-Mar-10 Still Continuing

Name of Banker Nature Of Facility Nature Of Dues

DBS Bill Discounting Interest Payment

DEUTSCHE BANK Bill Discounting Interest Payment

Name of Banker Amount Of Default Due date Date of rectifying the Default

DBS 499.186.94 19-Nov-09 Still Continuing

426,726.28 20-Nov-09 Still Continuing

224.913.33 21-Nov-09 Still Continuing

285,062.56 23-Nov-09 Still Continuing

488.002.95 24-Nov-09 Still Continuing

639,033.06 25-Nov-09 Still Continuing

683,024.30 26-Nov-09 Still Continuing

319,137.08 27-Nov-09 Still Continuing

670,866.04 28-Nov-09 Still Continuing

774,443.71 30-Nov-09 Still Continuing

327,290.52 1-Dec-09 Still Continuing

566,333.93 2-Dec-09 Still Continuing

185.373.96 5-Dec-09 Still Continuing

250.657.56 7-Dec-09 Still Continuing

551.189.37 8-Dec-09 Still Continuing

518,384.54 9-Dec-09 Still Continuing

243.360.57 14-Dec-09 Still Continuing

410.849.89 15-Dec-09 Still Continuing

699,381.45 16-Dec-09 Still Continuing

183,841.62 17-Dec-09 Still Continuing

167,306.21 18-Dec-09 Still Continuing

749,712.80 29-Dec-09 Still Continuing

155,485.78 31-Dec-09 Still Continuing

181.039.34 7-Jan-10 Still Continuing

164.440.77 13-Jan-10 Still Continuing

272,089.71 14-Jan-10 Still Continuing

354,487.84 21-Jan-10 Still Continuing

136.728.35 27-Jan-10 Still Continuing

119,342.27 28-Jan-10 Still Continuing

120,754.06 29-Jan-10 Still Continuing

175.618.38 3-Feb-10 Still Continuing

151,682.41 4-Feb-10 Still Continuing

76,425.43 5-Feb-10 Still Continuing

106,912.95 6-Feb-10 Still Continuing

119.834.90 8-Feb-10 Still Continuing

55,823.14 11-Feb-10 Still Continuing

DEUTSCHE BANK 129,448.25 13-Jan-10 Still Continuing

51,472.80 15-Jan-10 Still Continuing

124.162.93 18-Jan-10 Still Continuing 149,021.74 22-Jan-10 Still Continuing

243.836.78 25-Jan-10 Still Continuing

164,184.19 27-Jan-10 Still Continuing

137.518.94 28-Jan-10 Still Continuing

375,879.51. 29-Jan-10 Still Continuing

Name of Banker Nature Of Facility Nature Of Dues

DEUTSCHE BANK Bill Discounting Interest Payment

SICOM Bill Discounting Interest Payment

Name of Banker Amount Of Default Due date Date of rectifying the Default

DEUTSCHE BANK 55,966.74 30-Jan-10 Still Continuing

170,276.93 1-Feb-10 Still Continuing

160,416.01 2-Feb-10 Still Continuing

39,771.67 5-Feb-10 Still Continuing

172,683.04 8-Feb-10 Still Continuing

155,127.80 10-Feb-10 Still Continuing -

193,671.68 2-Dec-09 Still Continuing

318,990.22 9-Dec-09 Still Continuing

SICOM 342,293.57 17-Dec-09 Still Continuing

362,129.08 21-Dec-09 Still Continuing

374,977.34 25-Dec-09 Still Continuing

187,379.73 31-Dec-09 Still Continuing

102,005.29 22-Feb-10 Still Continuing

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of clause 4(xii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (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, the 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 not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi)ln our opinion, the term loans have been applied forthe purpose for which the loans were raised.

(xvii)According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the Company has used funds raised on short term basis aggregating to Rs. 4,492,265,502 for long term investments.

(xviii)According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. In our opinion, the prices at which shares have been issued is not prejudicial to the interest of the Company.

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

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

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Haribhakti & Co. Chartered Accountants FRNNO.103523W

[Raj Kumar Agarwal]

Place : New Delhi Partner

Date : May 31, 2010 Membership No. 074715