Notes to Accounts of Tirupati Fibres & Industries Ltd.

Mar 31, 2013

1. Corporate Information

TIRUPATI FIBRES AND INDUSTRIES LIMITED (the Company) is a Public Company domiciled in India and incorporated under the provision of the Companies Act, 1956. The Company is engaged in TEXTILE & MORE SPECIFICALY SYNTHETIC YARN.

2. Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the companies Act 1956. The Financial statements have been prepared on an accrual basis. The accounting policies adopted in the preparation of financial statements are considered with those of previous year, except for the change in accounting policy explained below.

3.Dues to Micro and Small enterprises

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 small suppliers under the provision of the "Micro Small medium enterprises development (MSMED) Act, 2006" as at March 31, 2013 could not be bifurcated and interest due, if any, under the provisions of said act to such suppliers is also not ascertainable.

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Mar 31, 2011

(i) The company had been declared sick on 08.08.2000 by the Board of Industrial and Financial Reconstruction in terms of section 3 (1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985. Net worth of the company had been completely eroded and the company is presently facing acute liquidity problem. No revival scheme has been commonly agreed by all secured creditors including banks. The BIFR in its meeting held on 19th July, 2002 had given finding that the Board was of the prima- facie opinion that it would be just, equitable and in public interest if the company be wound up. Accordingly, it directed to issue show cause notice to all concerned parties and also gave last opportunity to the Company/Promoter to submit a fully tied up proposal consented by secured creditors. Subsequently BIFR in its meeting held on 29th October, 2002 heard the submission of all the con- corned, considered the material on record, and came to the conclusion that any acceptable revival scheme has not been formulated and accordingly the Bench confirmed its earlier 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 has gone into appeal before the Appellate Authority for industrial and financial reconstruction (AAIFR) challenging aforesaid order of BIFR and the after vide letter dated 01.02.2007 remanded back to BIFR. which is pending for decision.

(ii) Contingent liabilities not provided for in respect of:

As At 31.03.2011 As At 31.03.2010

(Rs. In Lacs) (Rs in Lacs)

Levy of excise duty being contested by the 32.95 32.95 Company

(iii) Writ petition filed by the company before the Hon'ble High Court of Calcutta, regarding company's view that excise duty on Yarn manufactured from non-cellulose synthetic waste should be charged at lower rate of excise duty as applicable in viscose staple. The hon'ble High Court has accepted the writ and directed the Excise Department to return bank guarantee, bond and payment made by the company in this regard, the bank guarantee and bond have been returned by department, however, amount deposited under protest being Rs.32, 94,982/- is still pending for refund and same has been shown "advances recoverable" under the head "Current Assets, Loans and Advances".

However the department filed appeal before Double Bench against the order of single bench on the ground of territorial jurisdiction which has been accepted by the Hon' able High court and Hon'able High court set aside the order earlier passed by single bench of Calcutta high court and dismissed the appeal filed by the company. The company has filed fresh writ before the Asset. Commissioner (Applet) Central Excise Jaipur which was decided against the company. Company filed petition before CEGAT New Delhi which is pending.

(iv) Fixed Assets were revalued as on 31st March, 1992 and resultant net increase in the value of assets as at 31st March, 1992 Rs.11,46,98,166/-(gross Rs.18,10,62,135/-less accumulated depreciation Rs.6,63,63,969/-) was transferred to revaluation reserve.

(v) (a) Depreciation on fixed assets for the year has been calculated in accordance with policy 1(ii).

(b) Depreciation for the current year includes additional charges of Rs.18,93,735./- on account of revaluation of assets and the equivalent amount has been transferred from revaluation reserve to Profit and Loss Account.

(Vi) (a) No provisions of Income Tax has been made in accounts in view of loss, various statutory relief's, deductions and carried forward losses available under the Income Tax Act, 1961.

(b) In view of heavy losses, there is no reasonable certainty that there will be sufficient future taxable income against which deferred tax assets can be realized and accordingly deferred tax assets are not recognized and carried forward, and no deferred tax is recognized on the same.

(Vii) 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 small suppliers under the provision 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.

(Viii) Balances of Sundry Creditors, Sundry Debtors and Loans and Advances made are subject to confirmation and reconciliation. The difference noticed during the course of reconciliation and after ascertaining the final figure, the requisite adjustments are carried over in the accounts.

(ix) In the opinion of the management, the current assets and advances are approximately of the value stated, if realized in the ordinary course of business, unless otherwise stated. The provision for all the liabilities as shown are adequate and not in excess of the amount reasonably necessary.

(x) The company is engaged in only one segment namely "TEXTILE & MORE SPECIFICALY SYN- THETIC YARN". Thus the segment revenue, segment result, total carrying amount of segment assets, total amount of segment liabilities, total cost incurred to acquire segment assets, the total amount of expense incurred for depreciation and amortization during the year are all as reflected in the financial statement for the year ended 31st March, 2011, and as on that date. As there is no Export turnover, there is no reportable geographical Segment.

(xi) The company has not sought actuarial valuation of gratuity and leave encashment benefit on retirement as on 31.03.2011 and according liability for the same as required by accounting standard on accounting of retirement benefit in the financial statement of employers (AS15) issued by the institute of chartered accountants of India could not be provided for and financial effect, of the same on profit could not be ascertained.

(xii) "Related Party Disclosure" as required by Accounting Standard (AS.) -18 issued by the Institute of Chartered Accountants of India is as follows :

(xiii) Previous year figures have been regrouped/ rearranged wherever considered necessary to make it comparable with the current year.

(xiv) Additional information pursuant to the provision of paragraph 3,4C & 4D of part II of Schedule VI to the Companies Act, 1956

(a) Licensed and installed capacity (As certified by the Management)

(b)Additional Information as required under Part IV of Schedule VI to the Companies Act, 1956.

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Mar 31, 2009

(i) The company had been declared sick on 08.08.2000 by the Board of Industrial and Financial Recon- struction in terms of section 3 (1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985. Net worth of the company had been completely eroded and the company is presently facing acute liquidity problem. No revival scheme has been commonly agreed by all secured creditors including banks. The BIFR in its meeting held on 19th July, 2002 had given finding that the Board was of the prima-facie opinion that it would be just, equitable and in public interest if the company be wound up. Accordingly, it directed to issue show cause notice to all concerned parties and also gave last opportu- nity to the Company/Promoter to submit a fully tied up proposal consented by secured creditors. Subse- quently BIFR in its meeting held on 29th October, 2002 heard the submission of all the concerned, considered the material on record, and came to the conclusion that any acceptable revival scheme has not been formulated and accordingly the Bench confirmed its earlier 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 has gone into appeal before the Appellate Authority for industrial and financial reconstruction (AAIFR) challenging aforesaid order of BIFR and theAAIFR vide letter dated 01.02.2007 remanded back to BIFR. which is pending for decision

(ii) Contingent liabilities not provided for in respect of:

As At 31.03.2009 As At 31.03.2008 (Rs. In Lacs) ( Rs in Lacs)

Levy of excise duty

being contested by the 32.95 32.95 Company



(iii) Writ petition filed by the company before the Honble High Court of Kolkatta, regarding companys view that excise duty on Yarn manufactured from non-cellulose synthetic waste should be charged at lower rate of excise duty as applicable in viscose staple. The honble High Court has accepted the write and directed the Excise Department to return bank guarantee, bond and payment made by the company in this regard, the bank guarantee and bond have been returned by department, however, amount deposited under protest being Rs.32,94,982/- is still pending for refund and same has been shown "advances recoverable" under the head "Current Assets, Loans and Advances".

However the department filed appeal before Double Bench Against the order of single bench on the ground of territorial jurisdiction which has been accepted by the Hon able High court set aside the order earlier passed by single bench of Kolkatta high court and dismissed the appeal filed by the company. The company has filed fresh writ before the Asstt. Commissioner (Applet) Central Excise Jaipur which is pending.

(iv) Fixed Assets were revalued as on 31st March, 1992 and resultant net increase in the value of assets as at 31st March, 1992 Rs.11,46,98,166/- (gross Rs. 18,10,62,135/- less accumulated depreciation Rs.6,63,63,969/-) was transferred to revaluation reserve.

(v) (a) Depreciation on fixed assets for the year has been calculated in accordance with policy 1(ii).

(b) Depreciation for the current year includes additional charges of Rs.18,97,574./- on account of revaluation of assets and the equivalent amount has been transferred from revaluation reserve to Profit and Loss Account.

(Vi) During the year Company has settled dues of Kotak Mahendra Bank Ltd. Under One time settlement " (OTS) and the amount outstanding over and above the settlement amount has been written back.

(Vii) (a) No provisions of Income Tax has been made in accounts in view of loss, various statutory reliefs, deductions and carried forward losses available under the Income Tax Act, 1961.

(b) In view of heavy losses, there is no reasonable certainty that there will be sufficient future taxable income against which deferred tax assets can be realized and accordingly deferred tax assets are not recognized and carried forward, and no deferred tax is recognized on the same.

(Viii) The Company has sought details from suppliers as regards their status as micro, small and me- dium enterprises in absence of such information, the amount due to micro and small suppliers under the provision 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 suppli- ers is also not ascertainable.

(ix) Balances of Sundry Creditors, Sundry Debtors and Loans and Advances made are subject to con- firmation and reconciliation. The difference noticed during the course of reconcili ation and after ascertaining the final figure, the requisite adjustments are carried over in the accounts.

(x) in the opinion of the management, the current assets and advances are approximately of the value stated, if realized in the ordinary course of business, unless otherwise stated. The provision for all the liabilities as shown are adequate and not in excess of the amount reasonably necessary.

(xi)The company has leased out its entire fixed assets

(xii) The company is engaged in only one segment namely "SYNTHETIC YARN" Thus the segment revenue, segment result, total carrying amount of segment assets, total amount of segment liabilities, total cost incurred to acquire segment assets, the total amount of expense incurred or depreciation and amortization during the year are all as reflected in the financial statement for the year ended 31 st March, 2009, and as on that date, as there is no Export turnover, there is no reportable geographical Segment.

(xiii) The company has not sought actuarial valuation of gratuity and leave encashment benefit on retire- ment as on 31.03.2009 and accordingly liability for the same as required by accounting standard on accounting of retirement benefit in the financial statement of employers (AS15) issued by the Institute of chartered accountants of India could not be provided for and financial effect of the same on profit could not be ascertained.

(xiv) "Related Party Disclosure" as required by Accounting Standard (A.S.) -18 issued by the Institute of Chartered Accountants of India is as follows :

(i) Names of related parties and description of relationship:

M/s. Marudhar yarns Pvt. Ltd.

Mr. Haresh S. Jain (Director)

Mr. Nimesh S. Jain (Director)

a) Key Management Personnel Mr. Haresh S. Jain (Director)

Mr. Nimesh S. Jain (Director)

Mr. Piyush R. Vora (Director)

b) Enterprises in which key

Personnel and their Nil relatives have influence

c) Relative of key management Nil Personnel

(xv) Previous year figures have been regrouped/ rerranged wherever considered necessary to make it comparable with the current year. (xix) Additional information pursuant to the provision of paragraph 3 & 4 of part II of Schedule VI to the Companies Act,1956

(b) Quantitative information in respect of goods manufacutred, despatched and Stock: The entire fixed assets of the company have been leased out and there is no production, sales of finished goods, purchase and stock during the year.

(c) Value of Imports on CIF Basis :

Current Year Nil Previous Year Nil

(d) Expenditure in foreign Currency:

Current Year Nil Previous Year Nil

(e) Value of Raw Materials, components and spare parts consumed.

The entire fixed assets of the company have been leased out and there is no purchases, consumption and stock of raw materials.