1. We have audited the attached Balance Sheet of TTG Industries Ltd as
at March 31, 2009 and the related Profit and Loss Account and Cash Flow
statement for the year ended on that date annexed thereto, which we
have signed under reference to this report.These financial statements
are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our
2. We conducted our audit in accordance with accounting 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
3. As required by the Companies(Auditors Report) Order, 2003 as
amended by The Companies (Auditors Report) (Amendment) Order, 2004
issued by the Government of India in terms of Section 227(4A) of the
Companies Act, 1956 of India (the Act) and on the basis of such checks
of the books and records of the company as we considered appropriate
and according to the information and according to the information and
explanations given to us, we give in the annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
On the basis of the audit described, we report the following :
a) It was informed to us that the Board of Industrial and Financial
Reconstruction (BIFR) has declared the company as a sick industrial
company in terms of Section 3 (1) (o) of Sick industrial Company
(Special Provision) Act 1985, in the hearing held on 17th August, 2005.
b. It was further informed to us that based on the above order read in
conjunction with the Techno- economic and Viability report prepared by
M/s.lTCOT Consultancies & Services Ltd., where it has held that the
company is technically and financially viable. The company therefore
has adopted the applicable Accounting Standards (AS 1) as applicable to
a Going Concern.
3.1. Certain balances with Banks and Sundry Creditors, Sundry Debtors,
Loans and Advances and Unsecured Loans are subject to confirmation and
3.2. As stated in Note 17 Schedule O Annexed to the Balance Sheet, no
provision has been made in the books for any interest or other charges
that may be payable on the outstanding balances of Secured Loans, Hire
Purchase Contracts and other Unsecured Loans. We are informed that the
company is unable to quantify the amount in view of BIFR declaring the
company to be sick. In our opinion, the loss is , to that extent,
3.3. Included under the head Sundry Debtors Rs.60.85 Lakhs (Previous
year Rs.69.76 lakhs) and Loans and Advances (Rs. 1606.81 lakhs
(Previous year Rs. 1574.13 lakhs) which have been considered good and
recoverable in accounts but which in our opinion a portion of them, is
doubtful of recovery. However, certain Bad debts have been written off
during the year. In our opinion, both the above accounts have been
overstated and consequently, the Loss for the year is understated.
3.4. Fixed Assets include Hydraulic Braking systems and Rotor Blades
for Wind Energy Generators (Cost- Rs.105.4 lakhs WDV - Rs.72.90 lakhs
as on March 31, 2009) which are held by respective suppliers for
Maintenance purposes. As these assets have been under maintenance since
1999-2000 we are of the opinion they are no longer fit for use are to
be scrapped. Assets for the year are therefore over stated by Rs.72.90
lakhs (Written down value) and the losses for the year correspondingly
3.5. Assets in the nature of Wind Energy Generations(WEGs Cost
Rs.806.48 lakhs, WDV-Rs.374.95 lakhs as on March 31, 2009) located at
the Wind Farm of the company at Kethanur have been dismantled and
removed from the site for maintenance purposes is to be confirmed.
3.6. As stated in Note 21 under Schedule O to the Balance Sheet,
Fixed Assets include an item of Plant and Machinery (WEG Mould cost
Rs.178.10 lakhs, WDV -Rs.76.04 lakhs as on March 31,2009) held under
contract of hire purchases, the liability in respect of which was taken
over by a third party in partial settlement of dues to the Company. The
hire purchase vendor has taken possession of the asset in partial
settlement of outstandings. However pending receipt of details final
settlement of accounts on disposal, the asset continues to be carried
in books and no adjustment has been made in the account of the said
4. On the basis of the audit referred to above and further to comments
in the Annexure referred subject to our observations contained in
paragraph 3.1 to 3.6 above we report.
4.1. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
4.2. 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 the
books produced to us;
4.3. The Balance Sheet , Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
4.4. In our opinion, the said Balance Sheet, Profit and Loss Account
and Cash Flow Statement read with the Notes thereon comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
4.5. The Directors of the company have submitted written declarations,
which have been taken on record by the Board of Directors of the
company, that they were not, as on March 31,2009 isqualified from being
appointed as a director of this company by virtue of their being
directors in a public company which has defaulted in terms of Section
274(1) (g) of the Companies Act, 1956;
4.6. In our opinion and to the best of the information and according
to explanations given to us the said accounts give the information
required by the Companies Act 1956,1 the manner so required.
4.7. In view of the observation contained in paragraphs 3.1 to 3.6
above and the inadequacy of records and details, we are unable to
express our opinion on whether the said accounts read with the Notes
thereon, gives 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 affairs of the
company as at March 31, 2009.
b. In the case of the Profit and Loss Account, of the loss for the
year ended on that date, and,
c. In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
UNDER SECTION 227 (4) (A) OF THE COMPANIES ACT, 1956 TO THE MEMBERS
OFTTG INDUSTRIES LIMITED
1. In respect of Fixed Assets.
a. Fixed assets of the company have been physically verified by the
management during the year and there is a regular programmed of
verification which in our opinion is reasonable having regard to the
size of the company and nature of its assets. No material discrepancy
has been noticed on such verification.
b. The company has not sold /disposed off any significant portion of
the fixed assets during the year.
2. In respect of Inventories.
a. As explained to us, stocks stores and spare parts have been
physically verified by the management at reasonable intervals.
b. In our opinion and according to information and explanations given
to us, the procedure for physical verification of inventory appears to
be reasonable and adequate in relation to the size of the company and
nature of its business.
c. In our opinion and according to information and explanations given
to us the company has maintained proper records of its inventory. The
discrepancies notices on physical verification between physical stock
and book stock were not material.
d. According to the information and explanations available the company
has not taken any loans secured or unsecured to/from companies firms,
or parties listed in the register maintained under section 301 of the
Companies act 1956.
3. In our opinion and according to information and explanations given
to us during the course of audit, there are adequate internal control
procedure commensurate with the size of the company and nature of its
business for purchase of inventory, fixed assets and with regard to
sale of goods.
4. In respect of transactions to be entered in the Register maintained
in pursuant of section 301 of the Companies Act 1956.
a. According to information and explanations given us, there were no
Transaction during the year that needed to be entered into the
b) In our opinion and according to information and explanations given
to us there are no transactions made in pursuance of contracts or
arrangements entered in the register under section 301 of the Companies
Act, 1956 and exceeding the value of Rs. Five Lakhs in respect of any
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
5. The company has not accepted any Fixed Deposit during the year.
6. The company has no internal audit systems commensurate with the
size of the company and nature of its business.
7. In our opinion the company is not required to maintain cost records
as prescribed by the Central Government under section 209(1) (d) of the
Companies Act 1956.
8. Statutory and Other Dues.
8.1.The company has deposited RF and ESI dues but is in arrears with
regard to Income Tax deducted at source, Sales tax and other statutory
dues as per the following details
Name of Nature of Amount Period
statute dues in lakhs year ended
IT Act TDS from contract 8.11 2003-04
CST Disputed 24.19 Prior to
Act 3.30 2003-2004&
Name of Due date Date of
IT Act 31.03.04 Nil
CST -- Nil
Service Tax Act 31-03.04 Nil
9. In our opinion and according to information and explanations given
to us the accumulated losses of the company are more than fifty percent
of its net worth.The company has incurred cash losses during the year
covered by our audit and as well, in the immediate preceding financial
10. According to information and Explanations given to us by the
Management we are of the opinion that the company has defaulted in
repayment of dues to banks /institutions/ Hire purchase finance which
is continuing since the immediate preceding previous year. However
during the year the company has started making payment to Banks,
Institutions and Hire purchase Financiers.
In respect of cash credit loans.
Central Bank of India Rs.294.29 lakhs :
In respect of term loans
Central Bank of India Rs.912 lakhs
In respect of Term Loans from Institutions
Hire Purchase Finance and Others Rs.115.59 lakhs.
Letter of Credit and Bank Guarantee Rs.691.16 lakhs.
Interest accrued on the above loans unpaid as on 31.03.09 stands at
11. According to the information and explanation to us and based on
our examination of documents and records we are of the opinion that no
loans and advances have been given on the basis of security by way of
pledge of shares debentures or securities.
12. The company is not a chit fund or nidhi/ mutual benefit fund
society. Therefore the provisions of clause 4 (xiii) of the Companies
(Auditors Report) Order 2003 are not applicable to the company.
13. The company is not dealing in or trading in shares, securities
debentures and other investments. Accordingly the provision of
clause(xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the company.
14. The company has not availed any term loan funds during the year.
15. According to the information and explanations given to us and an
overall examination. Of the balance sheet of the company we report that
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 expect permanent working capital.
16. The company has not made preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
17. The company has not issued any debentures and hence no securities
for the same were provided for by the company.
18. The company has not raised any money by public issued during the
19. According to information and explanations given to us, no fraud on
or by the company was noticed or reported during the course of audit.
Place :Chennai G.PARTHASARTHY
Date : 30.6.09 Chartered Accountant