tirupati fibres & industries ltd share price Auditors report

TIRUPATI FIBRES AND INDUSTRIES LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT To The Members of TIRUPATI FIBRES & INDUSTRIES LTD. {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 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 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. FOR SANJAY N. SHAH & CO, CHARTERED ACCOUNTANTS FRN NO:- 124897W CA SANJAY N. SHAH Date : 01.09.2011 Proprietor Place: Mumbai (M. No. 116251) ANNEXURE I: 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 program 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 Amount o/s as on as on 31.03.2011 31.03.2011 for a period of more than 6 month from the date they became payable. Provident Fund Interest 8,76,358 8,76,358 Act Payable 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 Forum at which dispute it Pertain 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 Nature of dues Period to which amounts Institutio amount relates 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 (Auditors 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 (Auditors 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. FOR SANJAY N. SHAH & CO CHARTERED ACCOUNTANTS FRN. No.: 124897W CA SANJAY N. SHAH Proprietor (M. No. 116251) Place: Mumbai Date : 01.09.2011 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 companys 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 Rs 466.35 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 years 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 (vii)]. 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 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 Proprietor (M. No. 116251) Date : 01.09.2011 Place: Mumbai