Uniworth Textiles Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

1. Report on The Financial Statements

We have audited the accompanying financial statements of UNIWORTH TEXTILES LTD, which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit & 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 dated 13th 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 are free from material misstatement, whether due to fraud or error.

3. Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Attention is invited to the following:

(a) Pending Decision of the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provision) Act, 1985 the accounts have been prepared on Going Concern assumption. In the event of adverse Decision, the financial statements may require necessary adjustment if the company ceases to be a Going Concern. Further more, the company has received an intimation from secured lenders that financial assistance together with all security interest in respect thereof and its rights in respect thereof have been absolutely assigned by the said lender to Asset Reconstruction Company Ltd a company formed under the Companies Act, 1956 and registered with Reserve Bank of India as a Securitization and Reconstruction Company pursuant to the necessary provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

(b) Footnote to Note No.23 regarding interest provision on borrowing from some of the institutions and banks made in the accounts under simple interest method at the prevailing/estimated rates applicable on such loans in absence of relevant documents/confirmations, the impact of which cannot be ascertained as well as the note therein regarding the matter of dispute between the Company and the Bankers/Creditors in connection with charging of interest payment and payment of principal.

(c) Note No.4 (Footnote), Note No.7(iii) and Note No.16(i) regarding non-receipt of confirmations in respect of borrowings from financial institutions / banks and also debit balances in certain Current Accounts with banks due to restructuring being in progress, book balances thereof have been relied upon.

(d) Note No.7 (ii) regarding application filed against the Company before Debts Recovery Tribunal for recovery of the dues by certain banks.

(e) Note No.15 (iii) regarding non provision of certain debts.

(f) Note No. 17 (iv) regarding advance of Rs. 539 lacs due from a party, in respect of which we are unable to form any opinion as to the nature and purpose of making such advance as also recoverability of the same.

(g) Note No. 17 (v) regarding non-provision for advance of Rs. 211.70 lacs paid to an Overseas Consultant due to reasons stated therein.

(h) Note No.12 (i) regarding investment amounting to Rs.14.05 Lacs in and Note No. 16 (iii) regarding advance amounting to Rs. 33.90 lacs due from the Companies which have become Sick and referred to BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985. In absence of rehabilitation scheme of these companies we are unable to comment on the amount of provision, if any, which may be required.

(i) Note No.6 (Footnote) regarding estimated amount of Rs.1674.44 Lacs having been provided during the year 2002-03 as sales claims and commission relating to earlier years from overseas customers of the company which is pending for final settlement. The necessary adjustment for such claims and commission will be made after final settlement and obtaining necessary approval from concerned regulatory authorities in absence of which we are unable to express our opinion on such adjustments.

Impact of our observations in the aforesaid paragraphs (a) to (i) above on the results for the year and on the year end net assets is not ascertainable.

5. Opinion

Subject to our remarks in paragraph 4 above, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read with other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India:-

a. In the case of the Balance Sheet of the State of affairs of the Company as at 31st March, 2014, and

b. In the case of the Statement of Profit & Loss of the Loss 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.

6. Report on Other Legal and Regulatory Requirements

i) As required by the Companies (Auditor''s Report) Order 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the company.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by the law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.

d) In our opinion the Balance Sheet, Statement of Profit & Loss 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 read with the General Circular dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013, except in the case of Leave Encashment which is provided on accrual basis instead of actuarial basis as prescribed by Companies (Accounting Standard) Rules, 2006.

e) On the basis of written representations received from the Directors as on 31st March, 2014 and taken on records by the Board of Directors, we report that none of Directors are disqualified as on 31st March, 2014 from being appointed as Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

Annexure referred to in the Auditors'' Report to the members of UNIWORTH TEXTILES LTD on the Accounts for the year ended 31st March, 2014.

I. (a) The Company has maintained proper records showing full particular including quantitative

details and situation of fixed assets.

(b) As stated by the Management, the Fixed Assets have been physically verified during the year/ at the year-end by the Company. The physical verification so conducted did not reveal any discrepancies

(c) Substantial part of the Fixed Assets has not been disposed of during the year.

II. (a) The inventory has been physically verified during the year by the Management

(b) 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) On the basis of our examination of the records of inventory, we are of opinion that the company is maintaining proper records of Inventory.The discrepancies noticed on verification between physical stocks and the book records were not material.

III. (a) The Company has not granted any loan, secured or unsecured during the year to company,firms or other parties covered in the Register maintained under section 301 of Companies Act. (b) The company has not taken any loan, secured or unsecured during the year from company, firms or other parties covered in the Register maintained under section 301 of the Companies Act.

In respect of (a) & (b) above, we have relied upon entries recorded in the register maintained under section 301 of the Act.

Accordingly clauses 4 (III) (a) to 4 (III) (g) of the Order are not applicable.

IV. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls, nor have there been any continuing failure on the part of the Company to rectify any major weakness.

V. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the there are no transactions that need to be entered in the register maintained under section 301 of the Companies Act,1956. Accordingly clause 4 (v) (b) of the Order is not applicable.

VI. The Company has not accepted deposits from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 during the year.

VII. The present internal audit system of the company is commensurate with the size of the company and nature of the business.

VIII. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prime facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

IX. (a) According to the records of the company, the company is regular in depositing with appropriate

authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Cess and any other statutory dues where applicable.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, Service Tax, sales tax, customs and excise duties were outstanding as at 31st March, 2014 for a period of more than six months from the date, they become payable.

(c) According to the records of the company, the following statutory dues have not been deposited on account of dispute:

(i) Excise duty payable amounting to Rs.13676.37 lacs (including interest & penalty) under Central Excise Act & Customs Valuation Act have not been deposited with appropriate authorities as these are disputed by the company and lying in appeal with CEGAT Mumbai/ Calcutta/New Delhi. Against the above, a deposit of Rs.0.79 Lacs has been made pursuant to the order of Excise Authorities, pending resolution of the appeal.

(ii) Amount payable amounting to Rs.37.03 Lacs in respect of Interest on Entry Tax though provided has not been deposited with appropriate authorities as these are disputed by the company and lying in appeal with Commercial Tax Officer, Raipur. Against the above, Rs.7.45 Lacs have been deposited.

(iii) Income Tax amounting to Rs.15.31 Lacs under Income Tax Act, 1962 as these are disputed and are lying in appeal with I.T Appellate Authorities. However, an amount of Rs.13.50 Lacs has been paid under protest.

X. The accumulated losses of the company are more than its net worth. The company has incurred cash losses during the current financial year covered by our audit and in the immediately preceding financial year.

XI. The Company has defaulted in repayment of dues to the Financial Institutions or banks. The Company has issued zero coupon debentures in an earlier year and the same has not become due for repayment.

XII. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, Debentures and other security.

XIII. The Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/ Society

XIV. The Company is not in the business of dealing or trading in shares. Based on our examination of records and evaluation of the related internal control, we are of the opinion that proper records have been maintained of transaction and contracts in respect of shares, securities, debentures and other investments and timely entries have been made therein. We also report that the company has held shares, securities, debentures and other securities in its own name.

XV. The Company has given guarantee for loans taken by Other Company from banks or Financial Institutions and the related term and conditions are not prejudicial to the interests of the company.

XVI. Based on information and explanation given to us by the Management, term Loans were applied for the purpose of which the loans were obtained.

XVII. On the basis of our overall examination of the Balance Sheet, the fund raised on short term basis has not been used for long term investment and vice - versa.

XVIII. During the year under audit, the company has not made a preferential allotment of the shares to parties or company covered in the register maintained under section 301 of the Companies Act, 1956.

XIX. The Company has not issued any debenture during the year.

XX. The Company has not made any Public issue during the year.

XXI. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit. For S.S. KOTHARI & CO. Chartered Accountants Firm Registration No. 302034E A.Datta Place : Kolkata Partner Date : 29th May, 2014 Membership No. 5634

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Mar 31, 2013

1. REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of UNIWORTH TEXTILES LTD, which comprise the Balance Sheet as at 31st March''2013 and the Statement of Profit & 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. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. ATTENTION IS INVITED TO THE FOLLOWING:

(a) Pending Decision of the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provision) Act, 1985 the accounts have been prepared on Going Concern assumption. In the event of adverse Decision, the financial statements may require necessary adjustment if the company ceases to be a Going Concern. The company has received an intimation from secured lenders that financial assistance together with all security interest in respect thereof and its rights in respect thereof have been absolutely assigned by the said lender to Asset Reconstruction Company Ltd a company formed under the Companies Act, 1956 and registered with Reserve Bank of India as a Securitization and Reconstruction Company pursuant to the necessary provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

(b) Footnote to Note No.21 regarding interest provision on borrowing from some of the institutions and banks made in the accounts under simple interest method at the prevailing/estimated rates applicable on such loans in absence of relevant documents/confirmations, the impact of which cannot be ascertained.

(c) Note No.4 (Footnote), Note No.7(iii) and Note No.15(i) regarding non-receipt of confirmations in respect of borrowings from financial institutions / banks and also debit balances in certain Current Accounts with banks due to restructuring being in progress, book balances thereof have been relied upon.

(d) Note No.7 (ii) regarding application filed against the Company before Debts Recovery Tribunal for recovery of the dues by certain banks.

(e) Note No.11 (i) regarding investment and Advances amounting to Rs.14.05 Lacs in the Companies which have become Sick and referred to BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985. In absence of rehabilitation scheme of these companies we are unable to comment on the amount of provision, if any, which may be required.

(f) Note No.14 (iii) & (iv) regarding non provision of certain debts.

(g) Note No.6 (Footnote) regarding estimated amount of Rs.1674.45 Lacs having been provided during the year 2002-03 as sales claims and commission relating to earlier years from overseas customers of the company which is pending for final settlement. The necessary adjustment for such claims and commission will be made after final settlement and obtaining necessary approval from concerned regulatory authorities in absence of which we are unable to express our opinion on such adjustments.

Impact of our observations in the aforesaid paragraphs (a) to (g) above on the results for the year and on the year end net assets is not ascertainable.

5. OPINION

Subject to our remarks in paragraph 4 above,in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read with other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India:-

a. In the case of the Balance Sheet of the State of affairs of the Company as at 31st March, 2013, and

b. In the case of the Statement of Profit & Loss of the Loss 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.

6. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

i) As required by the Companies (Auditor''s Report) Order 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the company.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by the law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.

d) In our opinion the Balance Sheet, Statement of Profit & Loss 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 in the case of Leave Encashment which is provided on accrual basis instead of actuarial basis as prescribed by Companies (Accounting Standard) Rules, 2006.

e) On the basis of written representations received from the Directors as on 31st March 2013 and taken on record by the Board of Directors, we report that none of Directors are disqualified as on 31st March 2013 from being appointed as Directors in terms of section 274(1) (g) of the Companies Act, 1956

Annexure referred to in the Auditor''s Report to the members of UNIWORTH TEXTILES LTD on the Accounts for the year ended 31st March, 2013

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

(b) As stated by the Management, the Fixed Assets have been physically verified during the year/ at the year-end by the Company. The physical verification so conducted did not reveal any discrepancies.

(c) Substantial part of the Fixed Assets has not been disposed of during the year.

II. (a) The inventory has been physically verified during the year by the Management.

(b) 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) On the basis of our examination of the records of inventory, we are of opinion that the company is maintaining proper records of Inventory. The discrepancies noticed on verification between physical stocks and the book records were not material.

III. (a) The Company has not granted any loan, secured or unsecured during the year to company, firms or other parties covered in the Register maintained under section 301 of Companies Act.

(b) The company has not taken any loan, secured or unsecured during the year from company, firms or other parties covered in the Register maintained under section 301 of the Companies Act

In respect of (a) & (b) above, we have relied upon entries recorded in the register maintained under section 301 of the Act.

Accordingly clauses 4 (III) (a) to 4 (III) (g) of the Order are not applicable.

IV. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls, nor have there been any continuing failure on the part of the Company to rectify any major weakness.

V. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the there are no transactions that need to be entered in the register maintained under section 301 of the Companies Act,1956. Accordingly clause 4 (v) (b) of the Order is not applicable.

VI. The Company has not accepted deposits from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 during the year.

VII. The present internal audit system of the company is commensurate with the size of the company and nature of the business.

VIII. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prime facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

IX. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Cess and any other statutory dues where applicable.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, Service Tax, sales tax, customs and excise duties were outstanding as at 31st March, 2013 for a period of more than six months from the date, they become payable.

(c) According to the records of the company, the following statutory dues have not been deposited on account of dispute:

(i) Excise duty payable amounting to Rs.13701.59 lacs (including interest & penalty) under Central Excise Act & Customs Valuation Act have not been deposited with appropriate authorities as these are disputed by the company and lying in appeal with CEGAT Mumbai/ Calcutta/New Delhi. Against the above, a deposit of Rs.0.79 Lacs has been made pursuant to the order of Excise Authorities, pending resolution of the appeal.

(ii) Amount payable amounting to Rs.37.03 Lacs in respect of Interest on Entry Tax though provided has not been deposited with appropriate authorities as these are disputed by the company and lying in appeal with Commercial Tax Officer, Raipur. Against the above, Rs.7.45 Lacs have been deposited.

(iii) Income Tax amounting to Rs.15.31 Lacs under Income Tax Act, 1962 as these are disputed and are lying in appeal with I.T. Appellate Authorities. However, an amount of Rs.13.50 Lacs has been paid under protest.

X. The accumulated losses of the company are more than its net worth. The company has incurred cash losses during the current financial year covered by our audit and in the immediately preceding financial year.

XI. The Company has defaulted in repayment of dues to the Financial Institutions or banks. The Company has issued zero coupon debentures in an earlier year and the same has not become due for repayment.

XII. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, Debentures and other security.

XIII. The Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society

XIV. The Company is not in the business of dealing or trading in shares. Based on our examination of records and evaluation of the related internal control, we are of the opinion that proper records have been maintained of transaction and contracts in respect of shares, securities, debentures and other investments and timely entries have been made therein. We also report that the company has held shares, securities, debentures and other securities in its own name.

XV. The Company has given guarantee for loans taken by other Company from banks or Financial Institutions and the related term and conditions are not prejudicial to the interests of the company.

XVI. Based on information and explanation given to us by the Management, term Loans were applied for the purpose of which the loans were obtained.

XVII. On the basis of our overall examination of the Balance Sheet, the fund raised on short term basis has not been used for long term investment and vice - versa.

XVIII. During the year under audit, the company has not made a preferential allotment of the shares to parties or company covered in the register maintained under section 301 of the Companies Act, 1956.

XIX. The Company has not issued any debenture during the year.

XX. The Company has not made any Public issue during the year.

XXI. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For S.S. KOTHARI & CO.

Chartered Accountants Firm Registration No. 302034E

A. Datta Place : Kolkata Partner Date : 30th May, 2013 Membership No. 5634

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Mar 31, 2010

We have audited the attached Balance Sheet of UNIWORTH TEXTILES LTD. as at 31st March, 2010 and also Profit & 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 opinion on these financial statements based on our audit.

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 misstatements. An audit includes examining, on test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides the reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the company.

Attention is invited to the following :

(a) Pending Decision of the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provision) Act, 1985 the accounts have been prepared on Going Concern assumption. In the event of adverse Decision, the financial statements may require necessary adjustment if the company ceases to be a Going Concern. Further more, the company has received an intimation from secured lenders that financial assistance together with all security interest in respect thereof and its rights in respect thereof have been absolutely assigned by the said lender to Asset Reconstruction Company Ltd a company formed under the Companies Act, 1956 and registered with Reserve Bank of India as a Securitisation and Reconstruction Company pursuant to the necessary provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

(b) Note No.B-8 in Schedule 21 regarding interest provision on borrowing from some of the institutions and bank has been made in the accounts under simple interest method at the prevailing/estimated rates applicable on such loans in absence of relevant documents confirmations, the impact of which cannot be ascertained.

(c) Note No. B-3 in Schedule 21 regarding application filed against the Company before Debts Recovery Tribunal for recovery of the dues by certain banks.

(d) Note No. B-4 in Schedule 21 regarding investment amounting to Rs. 14.05 Lakhs and Sundry Debtors/ Loans & Advances amounting to Rs. 210.58 Lakhs receivable from the Companies which have become Sick and referred to. BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985. In absence of rehabilitation scheme of these companies we are unable to comment on the amount of provision, if any, which may be required.

(e) Note No.B-12 (a) regarding non provision of certain debts.

(f) Note No.13 in schedule 21 regarding estimated amount of Rs.1674.44 Lacs having been provided during the year 2002-03 as sales claims and commission relating to earlier years from overseas customers of the company which is pending for final settlement. The necessary adjustment for such claims and commission will be made after final settlement and obtaining necessary approval from concerned regulatory authorities in absence of which we are unable to express our opinion on such adjustments.

Impact of our observations in the aforesaid paragraphs (a) to (f) above on the results for the year and on the year end, net assets is not ascertainable.

Further to our comments referred to above we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. In our opinion, proper books of account as required by the law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet and Profit & Loss account dealt with by this report are in agreement with the books of accounts.

d. In our opinion the Balance Sheet and Profit & Loss account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except in the case of Leave Encashment which is provided on accrual basis instead of actuarial basis as prescribed by Companies (Accounting Standard) Rules, 2006.

e. On the basis of written representations received from the Directors as on 31st March 2010 and taken on record by the Board of Directors, we report that none of Directors are disqualified as on 31st March 2010 from being appointed as Directors in terms of section 274(1) (g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanation given to us, the said accounts subject to our comments in (a) to (g) of para 4 above, read with other notes thereon, the information required by the Companies Act, 1956 in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India :

(i) In the case of the Balance Sheet of the State of affairs of the Company as at 31 st March, 2010, and

(ii) In the case of the Profit & Loss Account of the Loss for the year ended on that date

(iii) In the case of cash flow statement of the cash flows for the year ended on that date.

Annexure referred to in the Auditors Report to the members of UNIWORTH TEXTILES LTD. on the Accounts for the year ended 31st March, 2010

I. (a) The Company has maintained proper records showing full particular including quantitative

details and situation of fixed assets.

(b) The physical verification of the Fixed Assets, as stated by the Management, has been conducted by the Management, during the year/at the end of year. The physical verification so conducted did not reveal any discrepancies.

(c) Substantial part of the Fixed Assets has not been disposed of during the year so as to affect the going concern basis.

II. (a) The inventory has been physically verified during the year by the Management except Garment & Fabric stock worth Rs. 158.29 Lacs lying with third party.

(b) 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) On the basis of our examination of the records of inventory, we are of opinion that the company is maintaining proper records of Inventory. The discrepancies noticed on verification between physical stocks and the book records were not material.

ill. (a) The Company has not granted any loan, secured or unsecured during the year to company, firms or other parties covered in the Register maintained under section 301 of companies Act.

(b) The company has not taken any loan , secured or unsecured during the year from company, firms or other parties covered in the Register maintained under section 301 of the Companies Act

In respect of (a) &(b) above, we have relied upon entries recorded in the register maintained under section 301 of the Act. Accordingly clauses 4 (III) (a) to 4 (III) (g) of the Order are not applicable.

IV. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls, nor have there been any continuing failure on the part of the Company to rectify any major weakness.

V. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the there are no transactions that need to be entered in the register maintained under section 301 of the Companies Act,1956. Accordingly clause 4 (v) (b) of the Order is not applicable.

VI. The Company has not accepted deposits from the public within the meaning of section 58A and 58AA of the companies Act, 1956 during the year.

VII. The present internal audit systeinof the company is commensurate with the size of the company and nature of the business.

VIII. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prime facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

IX. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Cess and any other statutory dues where applicable.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, Service Tax, sales tax, customs and excise duties were outstanding as at 31st March, 2010 for a period of more than six months from the date, they become payable.

(c) According to the records of the company, the following statutory dues have not been deposited on account of dispute :

(i) Excise duty payable amounting to Rs. 13702.38 lacs (including interest & penalty) under Central Excise Act & Customs Valuation Act have not been deposited with appropriate authorities as these are disputed by the company and lying in appeal with CEGAT Mumbai/ Calcutta/New Delhi. Against the above, a deposit of Rs.0.79 Lacs has been made pursuant to the order of Excise Authorities, pending resolution of the appeal.

(ii) Amount payable amounting to Rs.38.13 Lacs in respect of Interest on Entry Tax though provided has not been deposited with appropriate authorities as these are disputed by the company and lying in appeal with Commercial Tax Officer, Raipur. Against the above, Rs.8.56 Lacs have been deposited.

(iii) Income Tax amounting to Rs.15.31 Lacs under Income Tax Act, 1962 as these are disputed and are lying in appeal with IT. Appellate Authorities. However, an amount of Rs. 13.50 Lacs has been paid under protest.

X. The accumulated losses of the company are more than its networth. The company has incurred cash losses during the current financial year covered by our audit and in the immediately preceding financial year.

XI. The Company has defaulted in repayment of dues to the Financial Institutions or banks. The Company has issued zero coupon debentures in an earlier year and the same has not become due for repayment.

XII. The Company has not granted any ioans and advances on the basis of security by way of pledge of shares, Debentures and other security.

XIII. The company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society.

XIV. The company is not in the business of dealing or trading in shares. Based on our examination of records and evaluation of the related internal control, we are of the opinion that proper records have been maintained of transaction and contracts in respect of shares, securities, debentures and other investments and timely entries have been made therein. We also report that the company has held shares, securities, debentures and other securities in its own name.

XV. The Company has given guarantee for loans taken by other Company from banks or Financial Institutions and the related term and conditions are not prejudicial to the interests of the company.

XVI. Based on information and explanation given to us by the Management, term Loans were applied for the purpose of which the loans were obtained.

XVII. On the basis of our overall examination of the Balance Sheet, the fund raised on short term basis have not been used for long term investment and vice - versa.

XVIII.During the year under audit, the company has not made any preferential allotment of the shares to parties or company covered in the register maintained under section 301 of the Companies Act, 1956.

XIX. The Company has not issued any debenture during the year.

XX. The Company has not made any Public issue during the year.

XXI. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For S.S. KOTHARI & CO.

Chartered Accountants

Firm Registration No. 302034E

A.Datta Place : Kolkata Partner

Date : 25th August, 2010 Membership No. 5634