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Auditor Report of Tamilnadu Petroproducts Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of TAMILNADU PETROPRODUCTS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act")with respect to 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 principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on these financial statements.

Emphasis of Matter

We refer to Note no. 39 of the Notes forming part of standalone financial statements regarding the suspension of operations of the Epichlorohydrin plant. Considering the actions proposed to revive the operations of the plant as explained in the said Note, the management has assessed that there would be no impairment to the carrying value of the plant as at the Balance sheet date. We draw attention to the fact that the revenue generation from this plant would depend on the successful execution of the proposed plan for manufacture of the alternative product. This being a technical matter and is subject to uncertainty, we have relied on the estimates and assumptions made by the management in arriving at the recoverable value of the plant.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in paragraph 3 and 4 of the Order.

As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matter described in the Emphasis of Matter paragraph above and continuing cash losses incurred by the Company as reported in clause (viii) in the Annexure to this audit report, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit & Auditors) Rule, 2014, in our opinion and to the best of our information and according to the explanation given to us :

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

ii. The Company did not have material foreseeable losses on long term contracts and there were no derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to under 'Report on Other Legal and Regulatory Requirements' section of our report to the members of Tamilnadu Petroproducts Limited on the accounts for the year ended 31st March 2015)

(i) Having regard to the nature of the Company's business / activities / result, clause (v) of the Order is not applicable to the Company in the current year.

(ii) In respect of Fixed assets :

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

(b) The fixed assets where physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals, According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(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 were 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) In our opinion and according to the information and explanations given to us , the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and sale of inventory and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal control system.

(vi) We have broadly reviewed the cost records maintained by the Company specified by the Central Government under sub-section (1) of Section 48 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income tax, wealth tax, sales tax, service tax, value added tax, duty of customs, duty of excise, cess and other material statutory dues applicable to it with the appropriate authorities and there were no outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) Details of dues of Income Tax , Sales Tax , Service Tax and Excise Duty which have not been deposited as on March 31, 2015 on account of disputes are given below:

Statute Nature of dues Forum where dispute is pending

Various State Sales Tax Tribunal Sales Tax Acts High Court

Central Excise Act Excise duty High Court

Tribunal

Commissioner (Appeals)

Deputy Commissioner

Finance Act Service Tax Tribunal

Commissioner (Appeals)

Income Tax Act Income Tax High Court

Tribunal

CIT (A) Statute Financial Year Amount involved (Rs. in lakhs)

Various State Sales Tax Acts 1993-1994 to 2002-03 1,659

2006-07 58.08

Central Excise Act 1994-2002 13.89

2001-2013 304.54

2002-2007 5.11

1994-1997 10.90

Finance Act 1997-2011 330.98

2005-2006 0.05

Income Tax Act Assessment Year 2000-01 60.16

Assessment year 2001-02 2.29

Assessment Year 2002-03 151.16

Assessment Year 2003-04 75.54

Assessment Year 2009-10 248.08

Assessment Year 2010-11 252.24

Assessment Year 2011-12 391.37

(c) There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year.

(viii) The accumulated losses of the Company at the end of the financial year are less than fifty percent of the networth and the Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues in respect of term loans.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants

(Firm's Registration No. 008072S)

M.K. Anantha narayanan

Place : Chennai Partner

Date : May 19, 2015 (Membership No. 19521)


Mar 31, 2014

We have audited the accompanying fi nancial statements of TAMILNADU PETROPRODUCTS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, the Statement of profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifi cant accounting policies and other explanatory information

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards notifi ed under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient 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 aforesaid fi nancial 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 31st March, 2014;

(b) in the case of the Statement of profit and Loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fl ows of the Company for the year ended on that date.

Emphasis of Matter

We refer to Note no. 42 of the Notes forming part of the fi nancial statements regarding the suspension of operations of the Epichlorohydrinplant. Considering the actions proposed to revive the operations of the plant as explained in the said Note, the management has assessed that there would be no impairment to the carrying value of the plant as at the Balance sheet date. We draw attention to the fact that the revenue generation from this plant would depend on the successful execution of the proposed plan for manufacture of the alternate product. This being a technical matter and is subject to uncertainty, we have relied on the estimates and assumptions made by the management in arriving at the recoverable value of the plant.

Our opinion is not qualifi ed in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specifi ed 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 purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books

(c) The Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account

(d) In our opinion, the Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notifi ed under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

(e) On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualifi ed as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

Annexure to the Independent Auditors'' Report

Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of the Independent auditors'' report to the members of Tamilnadu Petroproducts Limited on the accounts for the year ended March 31, 2014

i) Having regard to the nature of the Company''s business/activities/results during the year, Clauses (vi), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of Paragraph 4 of the Order are not applicable to the Company.

ii) In respect of its fi xed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fi xed assets.

b) The fi xed assets are physically verifi ed by the Management in accordance with a regular programme of verifi cation which, in our opinion, provides for physical verifi cation of all the fi xed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verifi cation.

c) The fi xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fi xed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

iii) In respect of its inventory:

a) As explained to us, the inventories were physically verifi ed during the year by the Management at reasonable intervals.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verifi cation of inventories followed by the Management were 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifi cation.

iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, fi rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fi xed assets and sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

vi) According to the information and explanations given to us and to the best of our knowledge and belief there are no contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

vii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

ix) According to the information and explanations given to us in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

c) Details of dues, if any, of Income tax, Sales Tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Forum where dispute is Statute Nature of dues pending

Various State Sales Tax Tribunal Sales Tax Acts High Court Central Excise Act Excise duty High Court Tribunal Commissioner (Appeals) Deputy Commissioner Finance Act Service tax Tribunal Commissioner (Appeals)

Amount involved net

Period to which the of deposits amount relates (Rs. in Lacs)

1993 - 1994 to 2002-2003 1,659.00 2006 - 2007 58.08 1994 – 2002 13.89 2001 – 2005 206.50 2002 – 2007 5.11 1994 – 1997 10.90 1997 – 2009 311.38 2005 – 2006 0.05

Statute Nature of dues Forum where dispute is pending

Income Tax Act Income tax High court Tribunal



CIT (A)

Amount involved net Period to which the of deposits amount relates (Rs. in Lacs)

Assessment Year 2000-01 60.16 Assessment Year 2001-02 2.29 Assessment Year 2002-03 151.16 Assessment Year 2003-04 75.54 Assessment Year 2010-11 252.24

x) The Company does not have accumulated losses at the end of the fi nancial year. The Company has incurred cash losses during the fi nancial year covered by our audit and in the immediately preceding fi nancial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fi nancial institutions and banks. The Company has not issued any debentures.

xii) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks and fi nancial institutions.

xiii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company for the purposes for which they were obtained.

xiv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long- term investment.

xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells Chartered Accountants (Firm''s Registration No. 008072S)

M.K. Ananthanarayanan Place : Chennai Partner Date : 27th May 2014 (Membership No. 19521)


Mar 31, 2013

1. The accompanying abridged financial statements, which comprise the Abridged Balance Sheet as at 31 st March 2013, the Abridged Statement of Profit and Loss, and Abridged Cash Flow Statement for the year then ended, and related Notes, are derived from the audited financial statements of TAMILNADU PETROPRODUCTS LIMITED (''the Company'') for the year ended 31st March 2013. We expressed an unmodified audit opinion on those financial statements in our report dated 22nd April, 2013.

2. The abridged financial statements do not contain all the disclosures required by the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 (the Act,) applied in the Preparation of the audited financial statements of the Company. Reading the abridged financial statements, therefore, is not a substitute for reading the audited financial statements of the Company.

Management''s Responsibility for the Abridged Financial Statements

3. Management is responsible for the preparation of the abridged financial statements in accordance with Rule 7A of the Companies (Central Government''s) General Rules and forms, 1956 (as amended), based on the audited financial statements of the Company for the year ended March 31, 2013 prepared in accordance with the Accounting Standards referred to in Section 211 (3C) of the Act and accounting principles generally accepted in India.

Auditors'' Responsibility

4. Our responsibility is to express an opinion on the abridged financial statements based on our procedures conducted in accordance with the Standard on Auditing (SA) 810, "Engagements to Report on Summary Financial Statements" issued by the Institute of Chartered Accountants of India.

Opinion

5. In our opinion, the abridged financial statements prepared in accordance with Rule 7A of the Companies (Central Government''s) General Rules and forms, 1956 (as amended), derived from the audited financial statements of the Company for the year ended March 31, 2013 prepared in accordance with Accounting Standards referred to in Section 211 (3C) of the Act and accounting principles generally accepted in India, are a fair summary of those financial statements. For Deloitte Haskins & Sells

Chartered Accountants (Registration No. 008072S)

M.K. Ananthanarayanan

Place : Chennai Partner

Date : 22ndApril 2013 (Membership No. 19521)


Mar 31, 2012

1. We have audited the attached Balance Sheet of Tamilnadu Petroproducts Limited ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the company for the year ended on that date, both 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 the 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 a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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 (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said 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 the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. On the basis of the written representations received from the Directors as on 31st March, 2012 taken on record by the Board of Directors, none of the Directors are disqualified as on 31st March, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

i) Having regard to the nature of the Company's business/activities/result, clauses (v), (vi), (x), (xii) to (xiv) and (xviii) to (xx) of CARO are not applicable.

ii) In respect of its fixed assets:

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

b) The fixed assets are physically verified by the Management in accordance with a programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

iii) In respect of its inventory:

a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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 were 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification

iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

vi) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

vii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

viii) According to the information and explanations given to us in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

c) Details of dues, if any, of Income tax, Sales Tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess which have not been deposited as on March 31, 2012 on account of disputes are given below:

Amount involved Nature of Forum where dispute Period to which the Statute * net of deposits dues is pending amount relates (Rs. in Lacs)

Sales Tribunal 1993 - 1994 to 2002-2003 1,659.00 Various State Sales Tax Acts tax High Court 2006 - 2007 58.08

High Court 1994 - 2002 13.89

Tribunal 2001 - 2005 206.50

Central Excise Act Excise duty Commissioner 2002 - 2007 5.11 (Appeals)

Deputy Commissioner 1994 - 1997 10.90

Tribunal 1997 - 2009 336.38

Finance Act Service tax Commissioner 2005 - 2006 0.05 (Appeals)

Income Tax Act High court Assessment Year 2000-01 60.16 Income tax

Tribunal Assessment Year 2002-03 151.16

ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institutions.

x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

xii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that, prima facie, funds raised on short-term basis have not been used during the year for long- term investment.

xiii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants

(Registration No.008072S)

B.Ramaratnam

Place: Chennai Partner

Date : 26th April 2012 Membership No. 21209


Mar 31, 2010

1. We have audited the attached Balance Sheet of Tamilnadu Petroproducts Limited ("the Company") as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the company for the year ended on that date, both 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 the 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 a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

a. 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;

b. in our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books;

c. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e. the Company has, during the period 1995-2003, invested Rs.2764.50 lacs in SPIC Electric Power Corporation Private Limited and given advances against equity amounting to Rs.33.91 lacs during the financial years 2006 to 2008 for which no provision has been considered necessary by the management for the reasons stated in note 21. In view of the considerable delay in the implementation of the project we are unable to express an opinion on the provision, if any, required in respect of the said investment and advances against equity;

f. as stated in Note 22, assets held by the company amounting to Rs. 2123.63 lacs are expected to be transferred to the proposed overseas project at not less than cost. We are unable to express an opinion on the realisable value of these assets.

g. subject to paragraphs (e) & (f) above, the effect of which could not be determined, in our opinion and to the best of our information and according to the explanations given to us, the said 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 the case of the balance sheet, of the state of affairs of the company as at 31st March 2010;

ii. in the case of the profit and loss account, of the profit for the year ended on that date; and

iii. in the case of the cash flow statement, of the cash flows for the year ended on that date.

5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Section 274(1 )(g) of the Companies Act, 1956.

i. In respect of its fixed assets:

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

b) The fixed assets are physically verified by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

ii. In respect of its inventory:

a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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 were 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification

iii. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

v. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956.

vi. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year to which the provisions of section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under are applicable.

vii. In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

viii. We have broadly reviewed the books of accounts maintained by the Company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of manufacturing of Linear Alkyl Benzene and Caustic Soda and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

ix. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

c. Details of dues, if any, of Income tax, Sales Tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess which have not been deposited as on March 31, 2010 on account of disputes are given below:

Nature of Forum where dispute Statute dues is pending

Various State Sales Tax Acts Sales tax Tribunal

High Court Tribunal Central Excise Act Excise duty Commissioner(Appeals) Deputy Commissioner

Tribunal Finance Act Service tax Commissioner (Appeals)

High court Income Tax Act Income tax Tribunal

Statute Period to which the Amount involved amount relates net of deposits (Rs. in Lacs)

Various State Sales 1993-94 to 2002-2003 1,659.00 Tax Acts

1994-2002 13.89 Central Excise Act 2001-2005 206.50 2002-2008 6.01 1994-1997 10.90

Finance Act 1997-2006 89.64 2005-2006 0.05

Income Tax Act Assessment Year 2000-01 79.05 Assessment Year 2002-03 151.16



x The Company has neither accumulated losses nor has it incurred cash losses in the current financial year or in the immediately preceding financial year.

xi In our opinion and according to the information and explanations given to us,the Company has not defaulted in repayment of dues to banks and financial institutions.

xii The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii The provisions of any special statute applicable to chit fund and nidhi/mutual benefit fund/society are not applicable to the Company.

xiv In our opinion and according to the information and explana -tions given to us,the Company is not dealing or trading in shares, securities,debentures and other investments.

xv In our opinion and according to the information and explanations given to us,the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi In our opinion and according to the information and explanations given to us,the term loans have been applied for the purposes for which they were obtained.

xvii In our opinion and according to the information and explanat -ions given to us and on an overall examination of the Balance Sheet, we report that, prima facie,funds raised on short-term basis have not been used during the year for long-term investment.

xviii According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year.

xix According to the information and explanations given to us,the Company has not issued any debentures during the year.

xx According to the information and explanations given to us,the Company has not raised any money by way of public issues during the year.

xxi To the best our knowledge and according to the information and explanations given to us,no fraud by the Company and no fraud on the Company has been noticed or reported during the year.



Place:Chennai Date:5th May 2010

For Deloitte Hgskins &Sells Chartered Accountants (Registration No.008072S) B.Ramaratnam Partner Membership No.21209









IV FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transactions.

Foreign currency monetary assets and liabilities are translated at exchange rates prevailing on the Balance Sheet date or rate at the time of settlement, as applicable, and gain or loss arising on such translation is adjusted to the profit and loss account. Forward cover premium is recognised over the life of the contract.

V INVESTMENTS

Long term investments are valued at their acquisition cost, less provision for diminution in value, other than temporary.

VI INVENTORIES

Inventories are valued at lower of cost and net realisable value except stores and loose tools, which are valued at cost. The methods of determination of cost of various categories of inventories are as follows:

a. Stores, loose tools and raw materials at moving weighted average rates.

b. Work-in-process and finished goods at full absorption costing method.

VII REVENUE RECOGNITION

Sales is recognised at the point of despatch of materials to customers from plant and stock points.

VIII EMPLOYEE BENEFITS

Short term employee benefits

Short term employee benefits are recognised as an expense at the undiscounted amounts in the Profit and Loss account of the year in which the related services are rendered.

Defined Contribution Plans

a) Superannuation:

This plan covers Wholetime directors and the staff of the Company and is administered by the Life Insurance Corporation of India. Contributions are made monthly at a predetermined rate to the Trust and debited to the Profit and Loss account on an accrual basis.

Defined Benefits Plans

a) Provident Fund:

Contributions are made monthly at a predetermined rate to the Provident Fund Trust managed by the company and debited to the Profit and Loss account on an accrual basis. The interest rate payable by the Trust to the beneficiaries is as notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rates and recognizes such shortfall as an expense.

b) Long term compensated absences:

Liability towards long term compensated absences is accrued based on an actuarial valuation at the balance sheet date based on the projected unit credit method and is not funded.

c) Gratuity:

The Company has an arrangement with the Life Insurance Corporation of India to administer its Gratuity fund. Premium paid / payable is determined based on an actuarial valuation carried out by LIC using the projected unit credit method as on the Balance Sheet date and debited to the Profit & Loss account on accrual basis. Actuarial gain or loss is recognised in the statement of profit or loss as income or expense.

IX TAXES ON INCOME

a. Current tax is the amount of tax payable on the taxable income for the year and determined in accordance with the provisions of the Income Tax Act, 1961.

b. Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

c. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realize such losses. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets.

X Provisions and contingencies

1. A provision is recognized when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions

are not discounted to present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the accounts. Contingent assets are neither recognised nor disclosed in the financial statement.

2. In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 206 A of the Companies Act, 1956.

3. Research and development expenses incurred on revenue account is Rs.34.16 lacs (Previous year Rs.34.13 lacs).

4. The depreciation charge for the year shown in the profit and loss account is after deducting an amount of Rs. 20.11 lacs (previous year Rs.20.11 lacs) representing additional depreciation arising on revaluation of fixed assets withdrawn from revaluation reserve.

21. As at 31st March 2010 the Company has investments of Rs.2764.50 lacs in SPIC Electric Power Corporation (Private) Ltd., (SEPC) for setting up a 525 MW coal based power project (power project) made during the period 1995-2003 and advances against equity of Rs.33.91 lacs made during the period 2006-2008. The Company signed a Memorandum of Understanding (MoU) with Tamilnadu Electricity Board (TNEB) in February 1995 for setting up the power project at Tuticorin, Tamilnadu. As per the Power Purchase Agreement (PPA), TNEB had committed to provide Escrow. However, as there was a delay in allocation of Escrow by TNEB, SEPC filed a Writ Petition in the Honble High Court seeking a direction for allocation of Escrow. The Company is awaiting the outcome of the case.

The Company, SEPC and an investor company executed on 28th May 2009, a Shareholders & Share Subscription Agreement (SSA) broadly underlining the obligations of the Shareholders with regard to the power project. The investor company has agreed to bring in 74% of the equity for the power project. They have been meeting all the expenses of SEPC since August 2007 and have so far contributed a sum of Rs151.45lacs upto 31st March 2010.

Due to non payment of lease rentals, Tuticorin Port Trust (TPT) sought to repossess the land allotted to SEPC for the power project. SEPC approached the Honble High Court of Madras for appointment of an Arbitrator and by orders dated 18th July 2008 a sole arbitrator was appointed to settle the dispute between SEPC and TPT. SEPC also filed an appeal before the Division Bench of the High Court seeking an interim injunction restraining TPT from transferring the land by way of lease or otherwise to any other party. The Division Bench by its order dated 4th September 2008 stated that SEPC is at liberty to approach the arbitrator for seeking appropriate interim measure. Thereafter, the arbitrator in his proceedings dated 13th February 2009 observed that the rights of TPT and SEPC will be subject to the outcome of the arbitration proceedings in so far as the disputed site is concerned.

A joint committee consisting of representative from Central Electricity Authority (CEA)/TNEB/TPT recommended an alternative site for locating the power project. SEPC after making preliminary investigations has found the land suitable. Thereafter the alternate site has been approved by TNEB/TPT/CEA. The arbitration proceedings between SEPC and TPT have therefore been kept in abeyance.

The process of obtaining environmental clearance from Ministry of Environmental and Forests (MoEF) is at an advanced stage. Demarcation under the Coastal Zone Regulation, Contour Survey and Preliminary soil investigations have been completed. The detailed project report with a revised project cost is under consideration. SEPC will pay the arrears of lease rentals on taking possession of the land.

The Ministry of Power, Government of India has clarified by a letter dated 24th February 2010 that the change to an alternate site would not alter the legal enforceability of the already concluded PPA between SEPC and TNEB. SEPC has filed a petition dated 14th April 2010 with Tamilnadu Electricity Regulatory Committee (TNERC) to direct TNEB to act in accordance with the terms and conditions in the concluded PPA.

In view of the substantial progress achieved, the Company is confident that the power project would be implemented.

22 During the year 2004, due to change in global market conditions for Normal Paraffin, the company decided not to proceed with the expansion of Normal paraffin capacity. The equipments and drawings pertaining to this project amounting to Rs.2,123.63 lacs is expected to be transferred at not less than cost to its proposed overseas project at Singapore during 2011.

1) We have audited the attached Consolidated Balance Sheet of Tamilnadu Petroproducts Limited (the Company"), its subsidiaries and jointly controlled entities (the Company, its subsidiaries and jointly controlled entities constitute the "the Group") as at 31 St March, 2010, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. The Consolidated Financial Statements include investments in associates accounted on the equity method in accordance with Accounting Standard 23 (Accounting for Investment in Associates in Consolidated Financial Statements) and the jointly controlled entities accounted in accordance with Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006. These financial statements are the responsibility of the Companys Management and have been prepared on the basis of the separate financial statements and other information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.

2) We conducted our audit in accordance with the 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 a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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) (a) We did not audit the financial statements of

the subsidiaries and joint venture, whose financial statements reflect total assets of Rs. 18,435.32 lacs, as at 31st March 2010, total revenues of Rs.2,098.66 lacs and net cash outflows amounting to Rs. 1,430.49 lacs for the year ended on that date as considered in the Consolidated Financial Statements. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts included in respect of these subsidiaries and joint ventures is based solely on the reports of the other auditors.

(b) The financial statements of one associate, which reflect the Groups share of profits of Rs.247.18 lacs for the year ended March 31, 2010 and Groups share of profits of Rs.379.21 lacs upto March 31, 2010 are not audited and we have relied upon the unaudited financial statements as provided by the management of that company.

4) We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements), Accounting Standard 23 (Accounting for Investment in Associates in Consolidated Financial Statements) and Accounting Standard 27 (Financial Reporting of Interest in Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006.

(i) As stated in Note 12, no provision has been considered necessary by the management in respect of the net assets included in theseaccounts reflectingthevalueofinvestmentofRs.2764.50lacs and advance against equity of Rs.33.91 lacs held by the Company in its subsidiary, SPIC Electric Power Corporation Private Limited. In view of the considerable delay in the implementation of the project we are unable to express an opinion on the provision, if any, required in respect of the said net assets reflecting the value of the above referred investments and advance against equity.

(ii) as stated in Note 13, assets held by the company amounting to Rs. 2123.63 lacs are expected to be transferred to the proposed overseas project at not less than cost. We are unable to express an opinion on the realisable value of these assets.

5) Based on our audit and on consideration of the separate audit reports on the individual financial statements of the Company, and the aforesaid subsidiaries and joint ventures and associates, and to the best of our information and according to the explanations given to us, subject to our comments in the paragraph 4 (i) & (ii) above, the effect of which could not be determined, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March 2010;

(b) in the case of the Consolidated Profit and Loss Account, of the profit of.the Group for the year ended on that date; and

(c) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

*

For Deloitte Haskins & Sells

Chartered Accountants (Registration NO.008072S)

B.Ramaratnam Place: Chennai Partner

Date ; 5th May 2010 Membership No. 21209

 
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