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Uniworth International Ltd.

BSE: 514282 Sector: Others
NSE: UNIWORTINT ISIN Code: INE760D01015
BSE 05:30 | 01 Jan Uniworth International Ltd
NSE 05:30 | 01 Jan Uniworth International Ltd

Uniworth International Ltd. (UNIWORTINT) - Auditors Report

Company auditors report

TO THE MEMBERS OF

UNIWORTH INTERNATIONAL LIMITED

Report on the Standalone Financial Statements Qualified

Opinion

We have audited the standalone financial statements of UNIWORTH INTERNATIONALLIMITED ("the Company") which comprise the balance sheet as at 31st March2020 and the statement of Profit and Loss (statement of changes in equity) and thestatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and loss (changes in equity)andits cash flows for the year ended on that date.

Basis for Qualified Opinion

a) Note No. 4(i) (ii) (iii) & (iv) regarding Overdue Export Bills amounting toRs. 3010.57 lacs outstanding for long which in our opinion are Doubtful of recoveryagainst which no provision has been made in the Financial Statement.

b) Note No.7 regarding Settlement Account and Claim receivable amounting to Rs. 227.73lacs due from various banks outstanding for long which in our opinion are Doubtful ofrecovery against which no provision has been made in the Financial Statements.

c) Note No.8 regarding Miscellaneous Advance Rs.43.36 lacs due from certain partiesoutstanding for long which in our opinion are Doubtful of recovery against which noprovision has been made in the Financial Statements.

d) Note No.2 regarding investment which includes of Rs 5.12 Lacs in a company whichhave become Sick. No provision has been considered necessary by management at this stage.

e) Non-provision of Items indicated in (a) (b)(c) and (d) above constitute adeparture from the Indian Accounting Standards referred to in Section 133 of the Act.Without considering Item Nos. (b) above whose impact on the Company's Statement of Profitand Loss is presently ascertainable had the provisions indicated in Item Nos. (c) to (e)been made

(i) The Loss for the year would have increased by Rs. 3286.78 lacs

(ii) Investment would have been decreased by Rs 5.12 Lacs

(iii) Trade Receivable would have decreased by Rs.3010.57 lacs

(iv) Other Financial Assets would have decreased by Rs.227.73 lacs

(v) Other Current Assets would have decreased by Rs. 43.36 lacs

(vi) The Retained Earnings / (-) Loss would have been higher by (-) Rs. 3286.78 lacs.

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon in addition to the matter described in the Basis forQualified Opinion section; we have determined the matters described below to be the keyaudit matters to be communicated in our report.

1. Following Notes to the Financial Statements describe the uncertainty related to theoutcome of the lawsuits /other legal matters indicated therein:

a) Note No. 4(v) regarding foreign exchange gain amounting Rs.2647.29 Lacs arising outof export bills have not been considered in accounts due to uncertainty in realization.

b) Note No.22 regarding presentation of the accounts on the basis applicable to"Going Concern" although the Company's net worth has been fully eroded due toaccumulated losses including the loss for the year for the reason as stated in the note.In the event the Going Concern assumption is vitiated; the financial statements mayrequire necessary adjustment.

c) Note No. 12(iv) regarding non receipt of confirmation in respect of Bank borrowingsdue to restructuring in progress book balances have been relied upon.

d) Note No. 11 regarding estimated amount of Rs. 804.00 Lacs being provided during thefinancial year 2002-03 as Sales claims & commissions relating to earlier years fromoverseas customers of the company which is pending for final settlement. The necessaryadjustments for such claims & commission will be made after final settlement andobtaining necessary approval from the concerned regulatory authorities in absence ofwhich we are unable to express our opinion on such adjustment.

2. As indicated in the financial statements the Company has accumulated losses and itsnet worth has been fully eroded the Company has incurred net loss during the current andprevious years and the Company's current liabilities exceeded its current assets as atthe Balance Sheet date. These conditions along with other matters set forth in Notes toFinancial Statements indicate the existence of a material uncertainty that may castsignificant doubt about the Company's ability to continue as a going concern. Howeverthese Financial Statements of the Company have been prepared on a going concern basis dueto reasons stated in Note No.22.

3. Note No. 26 regarding Covid-19 has caused significant disruptions to business acrossIndia. The management has considered the possible effects if any that may impact thecarrying amounts of receivables and Intangibles (including Goodwill). In making theassumptions and estimates relating to the uncertainties as at the Balance Sheet date inrelation to recoverable amounts the management has considered subsequent events internaland external information and evaluated economic conditions prevailing at the date ofapproval of these financial results. The management expects no impairment to the carryingamounts of these assets. The Management will continue to closely monitor any changes tofuture economic condition and assess its impact on the operations.

Our opinion is modified in respect of the above matter.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

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

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtained reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand of issue and auditor's report that includes our opinion. Reasonable assurance is ahigh label of assurance but is no a guarantee that an audit conducted in accordance withSAs with always detect a material misstatement when it exist. Misstatement can arise fromfraud or error and the considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain 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 proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

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

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

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

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

Report on Other Legal and Regulatory Requirements

i) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Sub-section (11) of Section 143 of the Actwe enclose in the Annexure - A a statement on the matters specified in the saidOrder to the extent applicable to the Company.

ii) As required by Section 143(3) of the Act based on our audit we report that

a) We have sought and except for the matters described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

b) Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement Cash Flows dealt with by thisReport are in agreement with the books of account;

d) Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid Standalone Financial Statements complywith the Indian Accounting Standards specified under Section 133 of the Act.;

e) The matters described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company;

f) On the basis of written representations received from the Directors as on 31stMarch 2020 taken on record by the Board of Directors none of the Director isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act.

g) With respect to the adequacy of the Internal Financial Controls over FinancialReporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure - B.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

i) With respect to the other matters to be included in the Auditor's Report inaccordance with amended Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition wherever ascertainable.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there was any material foreseeable loss.

ANNEXURE - A TO THE AUDITORS REPORT

The Annexure referred to in our report to the members of UNIWORTH INTERNATIONAL LIMITEDfor the year ended 31st March 2020.

We report that:

(i) (a) Whether the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets; (i) (a) There are no fixed assets lying with Company. Hence Clause is not applicable to the Company.
(b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so whether the same have been properly dealt with in the books of account; (b) There are no fixed assets lying with Company. Hence Clause is not applicable to the Company.
(c) Whether the title deeds of immovable properties are held in the name of the company. If not provide the details thereof; (c) There are no fixed assets lying with Company. Hence Clause is not applicable to the Company
(ii) Whether physical verification of inventory has been conducted at reasonable intervals by the management; (ii) There is no inventory lying with Company. Hence Clause is not applicable to the Company.
(iii) Whether the company has granted any loans secured or unsecured to companies firms Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act 2013. If so (iii) The Company has not granted any loan secured or unsecured during the year to any company firm or other party covered in the register maintained under section 189 of the Companies Act 2013.
In this regard we have relied upon the entries recorded in the register maintained under section 189 of the Act.
(a) whether the terms and conditions of the grant of such loans are not prejudicial to the company's interest;
(b) whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular;
(c) if the amount is overdue state the total amount overdue for more than ninety days and whether reasonable steps have been taken by the company for recovery of the principal and interest;
(iv) In respect of loans investments guarantees and security whether provisions of section 185 and 186 of the Companies Act 2013 have been complied with. If not provide the details thereof. (iv) In our opinion and according to the information and explanations given to us the company has complied with the provisions of Sections 185 and 186 of the Act with regard to loans and investments made.
(v) In case the company has accepted deposits whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under where applicable have been complied with? If not the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law (v) The Company has not accepted any deposit from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Companies Act 2013.
Tribunal or Reserve Bank of India or any court or any other tribunal whether the same has been complied with or not?
(vi) Where maintenance of cost records has been specified by the Central Government under subsection (1) of section 148 of the Companies Act whether such accounts and records have been made and maintained. (vi) The Company is not required to maintain proper cost records as prescribed by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Companies Act 2013.
(vii) (a) Whether the company is regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales-tax service tax duty of customs duty of excise value added taxcess and any other statutory dues to the appropriate authorities and if not the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable shall be indicated; (vii) (a) According to the records of the Company this Clause is not applicable to the Company.
(b) Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute) (b) According to the records of the Company this Clause is not applicable to the Company
(viii) Whether the company has defaulted in repayment of loans or borrowing to a financial institution bank Government or dues to debenture holders? If yes the period and the amount of default to be reported (in case of defaults to banks financial institutions and Government lender wise details to be provided). (viii) Certain Banks and Financial Institution have taken legal recourse for recovery of their dues from the company.
(ix) Whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not the details together with delays or default and subsequent rectification if any as may be applicable be reported; (ix) The Company did not raise any money by way of initial public offer of further public offer (including debt instruments) during the year. According to the information and explanations given to us the Term Loan raised during the year had been applied for the purposes for which the same was raised.
(x) Whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes the nature and the amount involved is to be indicated. (x) Based upon the audit procedure performed and the information and explanation given by the Company we report that no fraud on or by the Company has been noticed or reported during the year that causes the financial statements materially misstated.
(xi) Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not state the amount involved and steps taken by the company for securing refund of the same; xi) According to the records of the Company this Clause is not applicable to the Company
(xii) Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules 2014 to meet out the liability; (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) Whether all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the applicable accounting standards; xiii) According to the records of the Company this Clause is not applicable to the Company
(xiv) Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so as to whether the requirement of section 42 of the Companies Act 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not provide the details in respect of the amount involved and nature of non-compliance (xiv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year
(xv) Whether the company has entered into any noncash transactions with directors or persons connected with him and if so whether the provisions of section 192 of Companies Act 2013 have been complied with; (xv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not entered into noncash transactions with directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable
(xvi) Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and if so whether the registration has been obtained. (xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

ANNEXURE-B TO THE AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of UNIWORTHINTERNATIONAL LIMITED ("the Company") as of 31st March 2020 in conjunction withour audit of the Standalone Financial Statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Khandelwal Ray & Co
Chartered Accountants
FR. No-302035E
CA. S. Khandelwal
Place: Kolkata Partner
Date: 28th July 2020 Membership No. 054451

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