Auditor Report of Tirupati Fibres & Industries Ltd.

Mar 31, 2013

We have audited the accompanying financial statements of TIRUPATI FIBRES AND INDUSTRIES LIMITED ("the Company"), which comprise the Baiance Sheet as at March 31. 2013 and the Statement of Profit and Loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management 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"). 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.

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 misstateme''nt.

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. 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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 March 31,2013;

b) in the case of the Profit and Loss Account, 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.

Report on 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 specified in paragraphs 4 and 5 of the Order.

2. 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 law have been kept by the Company so far as appears from our examination of those books

c) The Balance Sheet, Statement of Profit and Loss and cash flow statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit 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 disqualified 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.

The Annexure referred to in our Report of even date to the members of Tirupati Fibres And Industries Limited on the accounts of the company for the year ended 31st March, 2013

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. In respect of its fixed assets

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. In respect of its Inventories

(a) As explained to us, the Inventories has been physically verified during the year by the management. 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 explanation given to us, the Company has maintained proper records of its Inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) In our opinion and according to the information and explanation given to us the rate of interest and other terms and conditions on which the loan have been granted are not prima facie prejudicial to the interest of the company.

(b) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest. The parties had repaid principal and interest amounts wherever stipulated.

(c) There is no overdue amount of loan granted to companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) The Company has taken not taken any loan from related parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. In respect of Transaction

(a) According to the information and explanations provided by the management, we are of the opinion that the particular of contract or arrangement 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 contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding rupees five lakhs each have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

8. As informed to us the Central Govt, has not prescribed the maintenance of cost records by The Company under Section 209 (1) (d) of the Companies Act, 1956.

9. In respect of statutory dues

(a) According to the records of the company, 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 to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were outstanding statutory dues as on 31sr of March, 2013 for a period of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating Rs 13,17,764 that have not been deposited on account of disputed matters pending before appropriate authority are as under.

Name of Statute Nature of due Aount of arrear as Amount o/s as on 31.03.2012 on 31/03/2013 for a period of more than 6 month from the date they become payable

PROVIDENT FUND ACT INTREST PAYABLE nil 876358

INCOME TAX ACT TDS 317764 104264

CESS T.C.CESS 1000000 1000000

10. The Company has accumulated losses at the end of the financial year which pertains to earlier financial years and it has not incurred cash losses in the current financial year.

11 .According to the information and explationation given to us, the company has not defaulted in repayment of dues to financial institution, banks or debentures holders as at balance sheet date.

12. According to the 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 and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. 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 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. In our opinion and according to the information and explanations given to us, the term loan taken have been applied for the purposes for which they have been raised.

17. 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 no funds raised on short - term basis have been used for long-term investment.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under sec.301of the Act.

19. The company did not have any outstanding debenture during the year.

20. The Company has not raised any money by Public Issue during the year.

21 According to the information and explanations given to us, based upon the audit procedures performed and representations made by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our Audit.

For Sanjay N. Shah & Co.

Chartered Accountants

FRN-.124897W

Date: 18th May, 2013 CA. Sanjay Shah, Proprietor

Place: Mumbai Membership No.116251

---

Mar 31, 2011

(1) We have audited the attached Balance Sheet of TIRUPATI FIBRES & INDUSTRIES LTD. as at 31st March, 2011 and also the Profit & Loss Account for the period 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 misstatements. An audit includes examining, on 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 the 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 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 -1, a statement on the matters specified in paragraphs 4 & 5 of the said order.

{4} Our observation on the statement of accounts referred to above, are given in Annexure - II to this report.

{5} Further to our comments on the Annexure 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 accounts as required by law have been kept by the company so far as appears from our examination of the books of account,

(c) The Balance Sheet dealt with by this report are in agreement with the books of account,

(d) In our opinion the Balance sheet of the company comply with the Accounting Standards as referred in sub section (3C) of section 211 of the Companies Act, 1956, to the extent applicable,

(e) As per information and explanations given to us none of the directors of the company are disqualified from being appointed as a director under 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 explanations given to us, the said accounts. read together with Significant Accounting Policies and Notes forming part of 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,

(i) In case of Balance Sheet, of the state of affairs of the company as at 31st March 2011.

(ii) In case of Profit and Loss Account, of the "PROFIT" of the company for the year ended on that date. ;

(iii) In case of Cash Flow Statement of the cash flow for the year ended on that date.

ANNEXUREI: TO THE AUDITORS' REPORT

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

(b) As informed to us, the assets have been physically verified by the management during the year, there is a regular programmed of verification 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.

(c) No disposal of fixed assets of the Company has taken place during the year.

2. (a) As explained to us, the inventories has been physically verified during the year by the management. 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 explanation given to us, the Company has maintained proper records of its Inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. In our opinion and according the information and explanation given to us. the Company has not granted or taken loan secured or unsecured to or from the Companies, Firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, the Company has adequate internal control procedure commensurate with the size of the company and nature of its Business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for sale of goods. We have not come across any major weakness in internal control.

5. a) In our opinion and according to the information and explanations given to us, the transaction that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956, have been so entered. b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding rupees five lakhs each have been made at price, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted/invited any deposits falling within the preview of Section 58A/58AA of the Companies Act, 1956 and rules framed there under.

7. In our opinion, the Company has Internal Audit System commensurate with the size and nature of its Business.

8. As informed to us the Central Govt, has not prescribed the maintenance of cost records by the Company under Section 209 (1) (d) of the Companies Act, 1956.

9} a) According to the records of the Company, income tax, provident fund, Cess and other statutory dues applicable to it. The extent of arrears of such out standing statutory dues As at last day of financial year is as under.

Name of Statute Nature of Due Amount of arrear as Amount o/s as on 31.03.2011 on 31.03.2011 for a period of more than 6 month from the date they became payable.

Provident Fund Act Interest Payable 8,76,358 8,76,358

Income Tax Act TDS 86,881 49,957

Cess T.C. Cess 19,33,350 19,33,350

However detail of disputed dues of Income Tax, if any, have not been made available to us so we are unable to furnish the information about the same.

Particulars Amount {Rs.} Year to which it Pertain Forum at which dispute is pending

Excise Duty 32,94,982.00 1983 CEGAT

b) According to the information and explanation given to us, there are no dues of Income Tax, Customs duty, Wealth Tax, Excise duty and Cess which have not deposited on Account of any dispute.

10. The accumulated losses of the company at the end of the financial year are exceeding the net worth of the company and net worth of the company is highly negative.

11. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to financial institutions, Banks or debenture holders. The period and amount of default as on 31.3.2011 as per information and expiation given to us is as under.

Name of the financial Institution Nature of dues Period to which amount relates amounts RIICO PRINCIPAL UP TO 31.3.2011 18,39,128

12. In our opinion and according to the information and explanations given to us, the Company has not granted any loan$ and advance on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not chit fund or a nidhi / Mutual benefit fund / Society Therefore, the provisions of cause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

14. In our opinion, the Company is not dealing in our trading in Shares, Securities, Debentures and other | investments. Accordingly, the provision of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given guarantees for loans taken by others from Bank or financial institutions.

16. In our opinion and according to the information and explanations given to us, no term loan has been obtained by the company during the year.

17. 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 no funds raised on short - term basis have been used for long- term investment. No long-term funds have been used to finance short-term assets except permanent working Capital.

18. The Company has not made any preferential allotment of shares during the year to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, the price at which such shares have been issued is not prejudicial to the interest of the company

19. The Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

20. The Company has not made any Public Issue during the year and therefore the question of disclosing the end use of money does not arise.

21. According to the information and explanations given to us, based upon the audit procedures performed . and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our Audit.

ANNEXURE- II

REFERRED TO IN PARA OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF TIRUPATI FIBRES & INDUSTRIES LTD. FOR THE YEAR ENDED 31st MARCH, 2011.

(1) We draw attention to Note No. 2 (i) in schedule 12 forming part of the financial statements. The Company had been declared sick by The Board for Industrial & Financial Reconstruction (BIFR) on 08.08.2000.

BIFR vide its order dated 19th July, 2002 had directed to all concerned parties to show cause as to why the Company should not to be wound up in terms of provisions U/s 20 (1) of The Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Simultaneously, Company/Promoters were also given last opportunity to submit a fully tied-up proposal consented by secured creditors.

BIFR in its meeting held on the 29th October, 2002 heard the submission of all the concerned, considered the material on record and came to conclusion that it had not been possible to formulate any acceptable revival scheme and accordingly the Bench confirmed its earlier prima-facie opinion formed on 19.07.2002 to wind- up the company and directed that this opinion be forwarded to concerned High Court for further necessary action according to law. The company filed appeal before Appellate Authority against the order of BIFR and the AAIFR remanded back the case to BIFR.

It is Further stated that as on 31st March, 2011

a) The net worth of the company continues to be highly negative,

b) The company's total liabilities exceed its total assets by Rs. 1,150.20 lacs

c) The Company leased out whole of its fixed assets for part of the year.

In View of aforesaid facts various disclosures, including of its assets and liabilities realizable in the normal course of business, are the subject matter of valuation and opinion and consequent adjustments in the value of assets and liabilities and its effect on loss.

(2) The current liabilities and provisions of Rs.1000.99 as on 31.3.2011 include Rs466.35 Lacs advance from customers. We are unable to comment about the nature of advances and consequently its treatment/disclosure in accounts, as no documentary evidence was made available to us for our verification. Since the company has ceased manufacturing operation, it is not clear as to how pending orders will be serviced to settle these advances, which are old and carried forward from previous year.

(3) The company is regular defaulter in depositing undisputed statutory dues with the concerned authorities and unpaid dues under various statues as on 31.3.2011 were of Rs.28.60 Lacs. The Company had leased out all its fixed assets. Under the agreement, it is the liability of the lessee to pay all statutory dues relating to employees of the company and we have been informed by the management that the same has been deposited by the lessee. The Company may incur further liabilities on account of interest/penalty/damages due to non- timely payment of dues in earlier years. The amount is not ascertainable.

(4) We draw attention to the following Notes in schedule 12 forming part of the financial statement.

(i) No provision has been made against demand of Rs.32.95 Lacs toward excise duty for which writ filed before CEGAT-New Delhi is pending, {Para 2 (iii)).

(ii) No provision of liability for gratuity and leave encashment benefits on retirement on accrual basis as on 31.03.2011 has been made (as required by AS- 15) {Para 2 (xii)} .The Quantification of aggregation effect of the same on current year's profit, accumulated loss, reserve and surplus and net assets could not be determined in the absence of actuarial valuation or other estimates of liability in this regard { Para 2 (xii)}.

(iii) The Company has sought details from suppliers as regards their status as micro, small and medium enterprises. In absence of such information, the amount due to micro and suppliers under the provisions of the " Micro, Small. Medium enterprises development (MSMED) act 2006" as at March 31,2011 could not be bifurcated and interest due, if any, under the provisions of said act to such suppliers is also not ascertainable. {Para 2 ( ii)] .The quantification of aggregate effect of the same on current year's profit, reserve and surplus and net assets could not be determined in absence of complete details.

(iv) Balance of Sundry Creditors, Loans & Advances are subject to confirmation and reconciliations, {Para 2(viii)).

FOR SANJAY N. SHAH & CO

CHARTERED ACCOUNTANTS

FRN. No.: 124897W

CA SANJAY N. SHAH

Date: 01.09.2011

Place: Mumbai Proprietor

(M. No. 116251)

---

Mar 31, 2009

{1} We have audited the attached Balance Sheet of THE TIRUPATI FIBERS & INDUSTRIES LTD. as at 31st March, 2009 and also the Profit & Loss Account and 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 as 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 misstatements. An audit includes examining, on 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 the 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 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 -1, a statement on the matters specified in paragraphs 4 & 5 of the said order.

{4} Our observation on the statement of accounts referred to above, are given in Annexure - II to this report.

{5} Further to our comments referred to in Para 3 above and subject to our comments in Para 4 above, with consequences aggregate effect on the profit, reserves and surplus and net assets, the quantification of which could not be determined, we report as follows :-

(i) 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,

(ii) In our opinion, proper books of accounts 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 Accounts and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

Profit and Loss Accounts 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,

(v) On the basis of written representation received from the directors as on 31 st March, 2009 and taken on record by the board of directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in term 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 statement of accounts read together with the Significant Accounting Policies and Notes on Accounts as referred in Sehedule-11 thereto give the information required by the companies Act, 1956, in the manner so required. Howevere inview of our observation in Annexure - II of this report specifically para 1 regarding preparation of financial statements on going concern basis which, in our opinion is in appropriate, we are unable to state whether the account present a true and fair view in conformity with the accounting principles generally accepted in India.

Annexure -1

REFERRED TO IN PARA-1 OF OUR REPORT OF EVEN DATE OF M/s TIRUPATI FIBERS AND INDUSTRIES LIMITED {FOR THE YEAR 2008-2009}

i) a) The company has generally maintained proper records showing full particulars including quantitative many years and also not in good condition.

b) No physical verfication of fixed assets has been carred out during the year, so we are unable to comment on the discrepancies, if any.

c) The company has not disposed off substantial part of fixed assets during the year.

ii) a) Not applicable in view of observation (ii) (a) above.

b) Not applicable in view of obseration (ii) (a) above.

iii) a) The company has not granted any loans secured or unsecured to the companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

b)Not applicable, in view of observation at (iii) (a) above.

c) Not applicable, in view of observation at (iii) (a) above.

d) Not applicable, in view of observation at (iii) (a) above.

e) The Company has not taken any loan, secured or unsecured from the companies, firms or other parties covered in the register maintained u/s 301 of the Act.

f) In view of para {iii} (e) above provisions of clauses {iii} (f) and {iii} (g) of the said order are not applicable.

iv} In our opinion and according to the information and explanations given to us, the entire fixed assets of the company have been leased out and there has been no purchase of fixed assets . There is adequate internal control system commensurate with the size of the company and the nature of its business for purchase of inventory and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

v} a) According to the information and explanations given to us contracts that need to be entered in to a register in pursuance of section 301 of the Companies Act, 1956 have been entered.

b) According to the information and explanations given to us these contracts have been made at prices which are reasonable having regard to the prevailing market prices at relevant time.

vi} In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of the Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

vii} As per the information and explanation given to us the internal audit for the year is in progress.

viii} As explained to us cost records are not required to be maintained by the company pursuant to section 209 (1) (d) of the Companies Act, 1956.

income tax, provident fund, cess and other statutory dues applicable to it. The extent of arrear of such outstanding statutory dues as at last day of financial year is as under.

Name of Statute Nature of Due Amount of arrear o/s as Amount o/s as on 31.03.2009 on 31.03.2009 for a period of more than 6 month from the date they became payable.

Provident Fund Act Interest Payable 12,20,155 12,20,155

Income Tax Act TDS 57,779 48,457

Cess T.C. Cess 19,33,350 19,33,350



b) According to the information and explanation given to us, following are the disputed dues of Excise duty out standing as at 31st March 2009. However, details of disputed dues of Income Tax, if any, have not been made available to us, so we are unable to furnish the information about the same.

Particulars Amount {Rs.} Year to which it Pertain Forum at which dispute is pending

Excise Duty 32,94,982.00 1983 Astt. Commissioner (Applet) Central Excise, Jaipur.

x} The accumulated losses of the company at the end of financial year are exceeding the net worth of the company and net worth of the company is highly negative.

xi} The Company has defaulted in repayment of dues {both principal and interest} to Financial Institutions during the year. The period and amount of default, as on 31.3.2009 as per information and explanation given to us is as under.

Name of Financial Nature of Dues Period to which amount Amount (Rs.) Institution relates

IFCI Interest 11.06.1999 to 31.03.2008 10,2443,052

Funded Interest 09.08.1985 to 31.03.2009 90,97,013

Principal 15.05.1985 to 31.03.2009 122,00,501

RIICO Principal 22.04.1998 to 31.03.2009 18,39,128

xii} As per 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) As per the information and explanation given to us the provisions of any special statute applicable to a chit fund do not apply to the company. The company is also not a nidhi/mutual benefit fund/ society.

xiv} As per the information and explanation given to us, The Company is not dealing in or trading in shares, securities debenture and other investments.

xv} As per the information and explanation given to us the company has not given any guarantee for loans taken by others from banks or other financial institutions.

xvi} According to the information and explanation given to us, no term loan has been obtained by the company during the year.

xvii} According to the information and explanation given to us and on an overall examination of the balance sheet and cash flow statement of the company, we report as at 31st March 2009,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 during the year.

xix} The company has not issued any debenture during the year.

xx} The company has not raised any money by way of public issue during the year.

xxi} According to the information and explanation given to us no fraud on or by the company has been noticed or reported during the year.

ANNEXURE- II

REFERRED TO IN PARA 4 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF TIRUPATI FIBERS & INDUSTRIES LTD. FOR THE YEAR ENDED 31st MARCH, 2009.

(1) We draw attention to Note No. 2 (i) in schedule 11 forming part of the financial statements. The Company had been declared sick by The Board for Industrial & Financial Reconstruction (BIFR) on 08.08.2000.

BIFR vide its order dated 19th July, 2002 had directed to all concerned parties to show cause as to why the Company should not to be wound up in terms of provisions U/s 20 (1) of The Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Simultaneously, Company/Promoters were also given last opportunity to submit a fully tied-up proposal consented by secured creditors.

BIFR in its meeting held on the 29th October, 2002 heard the submission of all the concerned, considered the material on record and came to conclusion that it had not been possible to formulate any acceptable revival scheme and accordingly the Bench confirmed its earlier primafacie opinion formed on 19.07.2002 to wind-up the company and directed that this opinion be forwarded to concerned High Court for further necessary action according to law. The company filed appeal before Appellate Authority against the order of BIFR and the AAIFR remanded back the case to BIFR.

It is Further stated that as on 31 st March, 2009:

a) The net worth of the company continues to be highly negative,

b) The companys total liabilities exceed its total assets by Rs. 1,220.65 Lacs.

c) The Company leased out whole of its fixed assets.

Various disclosures, including of its assets and liabilities as realizable in the normal course of busi- ness, are the subject matter of valuation and opinion and consequent adjustments in the value of assets and liabilities and its effect on loss.

(2) The current liabilities and provisions of Rs.559.16 Lacs as on 31.3.2009 include Rs.467.58 Lacs advance from customers. We are unable to comment about the nature of advances and consequently its treatment/disclo- sure in accounts, as no documentary evidence were made available to us for our verification. Since the company has ceased manufacturing operation, it is not clear as to how pending orders will be serviced to settle these advances, which are old and carried forward from previous year.

(3) The company is regular defaulter in depositing undisputed statutory dues with the concerned authorities and unpaid dues under various statues as on 31.3.2009 were of Rs.32.11 Lacs. The Company had leased out all its fixed assets. Under the agreement, it is the liability of the lessee to pay all statutory dues relating to employees of the company and we have been informed by the management that the same has been deposited by the lessee, The Company may incur further liabilities on account of interest/penalty/damages due to non- timely payment of dues in earlier years. The amount is not ascertainable.

(4) We draw attention to the following Notes in schedule 11 forming part of the financial statement.

(i) No provision has been made in respect of excise duty demands aggregating to Rs. 19.05 Lacs in repect of which the appeals have been decided against the company and against demand of Rs.32.95 Lacs toward excise duty for which writ filed before Astt. Commissioner ( Applet) Central Excise Jaiput is pending, {para 2 (Hi)}.

(ii) No provision of liability for gratuity and leave encashment benefits on retirement on accrual basis as on 31.03.2009 has been made (as required by AS- 15) {para 2 (xiv)}.

The Quantification of aggregation effect of the same on current years profit, accumulated loss, reserve and regard { para 2 (xiv)}.

(iii) The Company has sought details from suppliers as regards their status as micro, small and medium enter- prises. In absence of such information, the amount due to micro and suppliers under the provisions of the " Micro, Small, Medium enterprises development (MSMED) act 2006" as at March 31,2009 could not be bifurcated and interest due, if any, under the provisions of said act to such suppliers is also not ascertainable. {Para 2 (viii)}.The quantification of aggregate effect of the same on current years profit, reserve and surplus and net assets could not be determined in absence of complete details.

(iv) Balance of sundry Debtors, Sundry Creditors, Loans & Advances and Security Deposits are subject to confirmation and reconciliations, {para 2 (ix)}.

(v) Balances of I.F.C.I and RIICO.( For term loan and Interest free sales tax loan) are subject to reconciliation and confirmation

FOR MAHESH KUAMR JAIN & CO CHARTERED ACCOUNTANTS

(Mahesh Jain)

Place: Mumbai Proprietor

Date: 20.11.2009 (M.No 047473)