Surat Textile - Limited Review for the quarter ended Sep 30, 2007

Surat Textile Mills Ltd has informed that in the limited review report of the Company for the quarter ended September 30, 2007, the Auditors of the Company have made the following observations:

1. The Company has not made provision to recognise diminution in the value of long - term investment in equity shares amounting to Rs 825.57 lacs, which is contrary to AS-13 - Accounting for Investments issued by the Institute of Chartered Accountants of India.

2. The Company has not provided for the deferred tax assets laid down in AS-22 Accounting for taxes on Income issued by the Institute of Chartered Accountants of India as the management is of the opinion that there is a reasonable uncertainty as to the utilisation of deferred tax assets, in part, in the foreseeable future. Hence, the Company following conservatism does not intend to create deferred tax assets for the period.