UNIROLL LEATHER INDIA LIMITED ANNUAL REPORT 2009-2010 AUDITORS' REPORT TO THE MEMBERS OF UNIROLL LEATHER INDIA LIMITED We have audited the attached Balance Sheet of Uniroll Leather India Limited as at 31st March, 2010 and also the Profit & Loss Account annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. 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. 2. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. Further to our comments in the Annexure referred to paragraph 2 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 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 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 account. 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 Accounting Standard 15 regarding retirement benefits of employees. e) On the basis of information and explanations given to us and on the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on 31 st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Accounting Policies and Notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India: (i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; (ii) In the case of 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. For Mohan & Company Chartered Accountants (ICAI Regn. No. 000787C) Place: Lucknow S. K. Mohan Dated: 3rd July, 2010 Partner (Membership No. 008853) ANNEXURE TO THE AUDITOR'S REPORT OF UNIROLL LEATHER INDIA LIMITED (Referred to in paragraph 2 of our Report of even date) i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. (b) As informed, the fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and nature of its fixed assets. No discrepancies were noticed on such verification. (c) According to the information and explanations given to us, the Company has not disposed off a major part of its fixed assets during the year, thereby affecting the going concern status of the company. ii) As the company has no inventory, the provision of Clause 4 (ii) of the Companies (Auditor's Report) Order, 2003, regarding physical verification of inventory are not applicable to the company (iii) (a) According to 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 Act. (b) According to information and explanations given to us, the Company has taken unsecured loans from four companies, firms or other parties covered in the Register maintained under section 301 of the Act. The maximum amount involved during the year was Rs. 323.63 lacs and the year end balance of loans taken from said parties was Rs. 323.63 lacs. (c) As informed, the unsecured loans taken from companies/ parties were free of interest. In our opinion, the other terms and conditions on which loans have been taken from companies/other parties listed in the register maintained under section 301 of the Act are not, prima facie, prejudicial to the interest of the company. (d) According to information and explanations given to us, as the loans taken by the company were payable on demand, the same were paid as and when demanded and no amount of loan was overdue. (iv) In our opinion and according to information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and also for the sale of goods and services. During the course of audit, we have not observed any major weaknesses in internal control system. (v) According to information and explanations given to us, the company has not made any transaction/arrangement that needs to the entered into a register pursuance of section 301 of the Act. (vi) As informed, the Company has not accepted any deposits from the public during the year. (vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) As informed, the maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956. (ix) a) As per records, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities and as informed no undisputed amounts were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable, b) According to information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute. (x) In our opinion and according to information and explanations given to us, the accumulated losses of the company at the end for the financial year are more than fifty percent of its net worth and it has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. (xi) In our opinion and according to information and explanations given to us, as the company has not taken any loans from financial institution or bank, therefore, the provisions of clause 4 (xi) of the Companies (Auditor's Report) Order, 2003 regarding default in repayment of dues are not applicable to the company. (xii) According to information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities. (xiii) The provisions of any special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the company. (xiv) In our opinion and according to 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 are not applicable to the company. (xv) According to the information and explanations given to us, the company has not given any guarantee for the loans taken by others from bank or financial institution. (xvi) According to information and explanations given to us, the company has not obtained any term loan during the year and there were no term loans outstanding at the beginning of the year. (xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment. (xviii) According to 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. (xix) According to the information and explanations given to us, as the company has not issued any debentures, therefore, the question of creation of security or charge in respect of debentures issued is not applicable. (xx) The Company has not raised any money by way of public issue 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 audit. For Mohan & Company Chartered Accountants (ICAI Regn. No. 000787C) Place : Lucknow S. K. Mohan Dated : 3rd July, 2010 Partner (Membership No. 008853)