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
 audit.
 
 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
 our opinion.
 
 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
 reconciliation.
 
 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,
 understated.
 
 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
 understated.
 
 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
 third party.
 
 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
 audit;
 
 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
 account;
 
 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
 register.
 
 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
                                                    2006-07
 
 Service Tax 
 Act                                 3.30          2003-2004&
                                                   2006-2007
 
 
 
 Name of             Due date     Date of
 Statue                           payment
 
 IT Act              31.03.04       Nil
 
 CST                    --          Nil
 
 Service Tax Act     31-03.04       Nil  
                     31.03.07
 
 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
 year.
 
 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
 Rs.1860.74 lakhs.
 
 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
 year.
 
 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