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Auditor Report of Tanfac Industries Ltd.

Mar 31, 2023

Independent Auditor’s Report

To The Members of Tanfac Industries Limited

Report on the Audit of the Financial Statements

OPINION

We have audited the accompanying financial statements of
Tanfac Industries Limited (“the Company”), which comprise
the Balance Sheet as at 31st March, 2023, the Statement of Profit
and Loss, including the statement of Other Comprehensive
Income, the Cash Flow Statement and the Statement of
Changes in Equity for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies and other explanatory information
(hereinafter referred to as “the financial statements”).

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid financial
statements give the information required by the Companies
Act 2013 (“The Act” or “Act”) in the manner so required and give
a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules, 2015, as
amended, (“Ind AS”) and other accounting principles generally
accepted in India, of the state of affairs of the Company as at
31st March, 2023, its profit including other comprehensive
income, its cash flows and the changes in equity for the year
ended on that date.

BASIS FOR OPINION

We conducted our audit of the financial statements in
accordance with the Standards on Auditing (SAs), as specified
under section 143(10) of the Act. Our responsibilities under
those Standards are further described in the ‘Auditor’s
Responsibilities for the Audit of the Financial Statements’
section of our report. We are independent of the Company in
accordance with the ‘Code of Ethics’ issued by the Institute
of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013
and the Rules thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our audit opinion on the financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of
the financial statements for the financial year ended
31st March, 2023. These matters were addressed in the
context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. Based on our judgement,
we have determined that there is no key audit matter to be
communicated in our report.

INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITOR’S REPORT
THEREON

The Company’s management and Board of Directors is
responsible for the other information. The other information

comprises the information included in the Annual report, but
does not include the financial statements and our auditor’s
report thereon. The Annual Report is expected to be made
available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the
other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information; we are required to report that fact. We have
nothing to report in this regard. When we read the Annual
Report, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to those
charged with governance and take necessary actions, as
applicable under the applicable laws and regulations.

RESPONSIBILITIES OF MANAGEMENT FOR
THE FINANCIAL STATEMENTS

The Company’s management and Board of Directors is
responsible for the matters stated in section 134(5) of the Act
with respect to the preparation of these financial statements
that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash
flows and changes in equity of the Company in accordance
with the accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) specified
under section 133 of the Act read with [the Companies
(Indian Accounting Standards) Rules, 2015, as amended].
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the
Act for safeguarding of 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 the 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.

In preparing the financial statements, management is
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.

Those charged with governance are also responsible for
overseeing the Company’s financial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE
AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of
the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal
financial controls system in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.

• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going
concern.

• Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.

Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We
consider quantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating
the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.

We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.

We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements for the
financial year ended 31st March, 2023 and are therefore the
key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in
our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest
benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS

1. As required by the Companies (Auditor’s Report) Order,
2020, issued by the Central Government of India in terms
of sub-section (11) of section 143 of the Act, (hereinafter
referred to as the “Order”), we give in the “Annexure A”
statement on the matters specified in paragraphs 3 and 4
of the Order.

2. 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
including the Statement of Other Comprehensive
Income, the Cash Flow Statement and Statement of
Changes in Equity dealt with by this Report are in
agreement with the books of account;

(d) In our opinion, the aforesaid financial statements
comply with the Accounting Standards specified
under Section 133 of the Act, read with Companies
(Indian Accounting Standards) Rules, 2015, as
amended;

(e) On the basis of the written representations received
from the directors and taken on record by the Board
of Directors, none of the directors is disqualified
as on 31st March, 2023 from being appointed as a
director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial
controls over financial reporting of the Company
with reference to these financial statements and the
operating effectiveness of such controls, refer to our
separate Report in
“Annexure B” to this report;

(g) With respect to the matter to be included in the
Auditors’ Report under Section 197(16) of the Act, in
our opinion and according to the information and
explanations given to us, the remuneration paid by
the Company to its directors during the current year
is in accordance with the provisions of Section 197
of the Act.

(h) With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
as amended in our opinion and to the best of our
information and according to the explanations
given to us:

i. The Company has disclosed the impact of
pending litigations on its financial position in
its financial statements - Refer Note 28.4 to the
financial statements;

ii. The Company has accounted for material
foreseeable losses, if any, for long-term
contracts including derivative contracts.

iii. There has been no delay in transferring
amounts required to be transferred to the
Investor Education and Protection Fund by the
Company.

iv. a) The management has represented that,

to the best of it''s knowledge and belief,
other than as disclosed in the notes
to the accounts, if any, no funds have
been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in any
other persons or entities, including
foreign entities ("Intermediaries"), with

the understanding, whether recorded
in writing or otherwise, that the
Intermediaries shall, whether, directly
or indirectly lend or invest in other
persons or entities identified in any
manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiaries")
or provide any guarantee, security
or the like on behalf of the Ultimate
Beneficiaries;

b) The management has represented,
that, to the best of it''s knowledge and
belief, other than as disclosed in the
notes to the accounts, if any, no funds
have been received by the Company
from any persons or entities, including
foreign entities ("Funding Parties"), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, whether, directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and

c) Based on such audit procedures, we have
considered reasonable and appropriate
in the circumstances, nothing has come
to their notice that has caused them to
believe that the representations under
sub-clause (i) and (ii) contain any material
mis-statement.

(i) The dividend declared or paid during the year as
well as the dividend proposed (which is subject to
members approval at the ensuing Annual General
Meeting) by the Company are in compliance with
Section 123 of the Act.

(j) As proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 is applicable for the Company only w.e.f.
1st April , 2023, reporting under this clause is not
applicable.

For Singhi & Co.

Chartered Accountants
Firm Registration No: 302049E

Date: 21st April, 2023 Sudesh Choraria

Place: Mumbai Partner

Membership No: 204936
UDIN: 23204936BGYIRO1598


Mar 31, 2018

To

The Members of Tanfac Industries Limited

Report on the Ind AS Financial Statements

1. We have audited the accompanying Ind AS Financial Statements of TANFAC Industries Limited (“the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information (herein after referred to as “Ind AS Financial Statements")

Management''s Responsibility for the Ind AS

Financial Statements

2. The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation of these Ind AS Financial Statements that give a true and fair view of the Financial Position, Financial Performance including Other Comprehensive Income, Changes in Equity and Cash Flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with Rule 3 of Companies (Indian Accounting Standards Rules), 2015.

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 Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Ind AS Financial Statements, the management is responsible for assessing the Company''s ability to continue as a going concern disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these Ind AS 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 Ind AS Financial Statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statement, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of Accounting Policies used and the reasonableness of the accounting estimates made by the Company''s management and Board of Directors, as well as evaluating the overall presentation of the Ind AS Financial Statements

We are also responsible to conclude on the appropriateness of management''s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the Auditor''s Report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the Auditor''s Report. However, future events or conditions may cause an entity to cease to continue as a going concern.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS Financial Statements.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS Financial 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 including the Ind AS of the state of affairs of the Company as at 31st March 2018, its Profit (including Other Comprehensive Income), Changes in Equity and its Cash Flows for the year ended on that date.

Emphasis of Matter Paragraph

7. Attention is invited to Note No 26.4(d) of the Notes to the Ind AS Financial Statements, describing Company''s contention in the matter of Renewable Power Obligation (RPO), which is contested and the Company is anticipating a favorable verdict, based on legal advice received by it. Our report is not qualified on the matter

Other Matter Paragraph

8. The financial information of the Company for the year ended March 31, 2017 and the transition date opening Balance Sheet as at April 1, 2016 included in these Ind AS Financial Statements, are based on the previously issued statutory Financial Statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 23, 2017 and May 24, 2016 respectively. The adjustments to those Financial Statements for the differences in accounting principles adopted by the Company on transition to Ind AS have been audited by us.

Report on Other Legal and Regulatory

Requirements

9. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order") issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the “Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by section 143(3) of the Act, we further 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 purpose of our audit;

b. i n our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. i n our opinion, the aforesaid Ind AS Financial Statements comply with the applicable Indian Accounting Standards specified under Section 133 of the Act;

e. on the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act;

f. With respect to the adequacy of the Internal Financial Controls over Financial Reporting of the Company

and the operating effectiveness of such controls, refer to our separate report in “Annexure B"

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 1 1 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS Financial Statements. Refer Note No. 26.4(h) to the Ind AS Financial Statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets;

(b) According to the information and explanations given to us and based on the records of the Company examined by us, Fixed Assets have been physically verified by the management at regular intervals; and no material discrepancies were noticed on such verification;

(c) The title deeds of Immovable Properties, recorded as Property Plant & Equipment in the books of account of the Company, are held in the name of the Company.

(ii) (a) The management has conducted physical verification of Inventory at reasonable intervals during the year;

(b) The Company is maintaining proper records of Inventory and no material discrepancies were noticed on physical verification;

(iii) As informed, the Company has not granted any Loans, Secured or Unsecured to Companies, Firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 1 89 of the Act. Accordingly, paragraph 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.

(iv) As informed, the Company has not given any loans, or made investments or given Guarantees and securities as covered under Section 185 or 186 of the Act. Accordingly, Paragraph 3(iv) of the order is not applicable to the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there-under.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the Rules framed there-under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) The Company is regular in depositing

with appropriate authorities, undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income Tax, Sales Tax, Goods & Services Tax, Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with the appropriate authorities in India. There are no undisputed statutory dues payable in respect to above statutes, outstanding as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and based on the records of the Company examined by us, following dues of Sales Tax, Service Tax, Customs Duty, Excise Duty & Income Tax which have not been deposited on account of any disputes.

Name of Statute

Nature of the Dues

Disputed

amount

(Rs in Lacs)

Period to which the amount relates

Forum where dispute is pending

TNGST Act, 1959

Levy of sales tax from sales affected through Pondicherry

52.77

1989-90 & 1990-91

Appeal before Tamil Nadu Sales Tax Appellate Tribunal

Customs Act, 1962

Duty on fluorspar shipment shortage

10.79

1998-99

Customs Officer

Central Excise Act, 1944

Interest Accrued to be added

0.27

2001-02

SB, CEGAT, Chennai

Excise duty on freight collected on outward freight

9.85

April''04-

December''08

Joint Commissioner Cuddalore

Excise duty on freight collected on outward freight

0.41

0ctober''09-

March''10

Deputy Commissioner Cuddalore

Excise duty on freight collected on outward freight

0.58

April''10-

December''10

Asst.Commissioner

Cuddalore

Excise duty on freight collected on outward freight

3.55

January''11-

October''11

Asst.Commissioner

Cuddalore

Excise duty on freight collected on outward freight

0.74

January''14-

November''14

Asst.Commissioner

Cuddalore

Excise duty on freight collected on outward freight

0.46

December''14-

June''15

Asst.Commissioner

Cuddalore

Excise duty on Job Work to Shasun Chemicals

10.75

2012-13 & 2013-14

Joint.Commisioner/Audit-II Commissionerate, Chennai

Excise duty on freight collected on outward freight

0.90

January''09-

September''09

Asst.Commissioner

Cuddalore

Excise duty on freight collected on outward freight

2.56

July''15-

February''16

Asst.Commissioner

Cuddalore

Excise duty on Job Work to Shasun Chemicals

8.18

2014-15

Joint.Commisioner/Audit-II Commissionerate, Chennai

Excise duty on Job Work to Shasun Chemicals

34.67

2015-16 & 2016-17

Asst.Commissioner

Cuddalore

Total

72.92

Name of Statute

Nature of the Dues

Disputed

amount

(Rs in Lacs)

Period to which the amount relates

Forum where dispute is pending

Finance Act, 1994 (Service Tax)

Service Tax on Lease Rent

12.30

2001-02 to 2004-05

The Commissioner/The Asst. Commissioner, Pondicherry

Service Tax on Consulting Engineers - Penalty

0.23

2002-03 to 2003-04

CESTAT, Chennai

Service Tax on Freight Outward

20.39

April''06-

March''08

Commissioner,

Pondicherry

Service Tax on Medical Subscription

0.72

July''15-

Mar''16

Superitendent, Cuddalore

Total

33.64

Income Tax Act, 1961

Replacement of equipment claimed as revenue expenditure, reclassified by Dept. as capital expenditure [tax demanded]( Including Interest)

85.39

2002 - 03

Income Tax Appellate Tribunal

Disallowance of various expenses (Including Interest)

75.79

2007-08

The Commissioner of Income Tax [Appeals],Chennai

Total

161.18

(viii) According to the information and explanations given to us and based on the records of the Company examined by us, the Company has not defaulted in repayment of Loans or Borrowings to any Financial Institution, Bank and Government. The Company has not issued any Debentures.

(ix) The Company has not raised any money by way of Initial Public Offer or further Public Offer (including Debt Instruments) and Term Loans during the year. Hence the provision of clause 3(ix) of the Order is not applicable to it.

(x) During the course of our examination of the books and records of the Company, carried in accordance with the Auditing Standards generally accepted in India, we have neither come across any instance of fraud by the Company or on the Company by its officers or employees noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

(xi) According to the information and explanations given to us, Managerial Remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of Section 1 97 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Hence, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanation given to us, all transactions entered into by the Company with the Related Parties are in compliance with Sections 1 77 and 188 of Act, where applicable and the details have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

(xiv) The Company has not made any Preferential Allotment or Private Placement of shares or Fully or Partly Convertible Debentures during the year under review. Hence, paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the year.

(xvi) The Company is not required to Registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly, the provisions of Clause 3(xvi) are not applicable to the Company.

We have audited the Internal Financial Controls over Financial Reporting of Tanfac Industries Limited (“the Company") as at 31 March 2018 in conjunction with our audit of the Ind AS Financial Statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining Internal Financial Controls based on the Internal Control over Financial Reporting criteria established by the Company considering the essential components of Internal Control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI"). These responsibilities include the design, implementation and maintenance of adequate Internal Financial Controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the Accounting Records, and the timely preparation of reliable Financial Information, as required under the Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s Internal Financial Controls over Financial Reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of Internal Financial Controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate Internal Financial Controls over Financial Reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the Internal Financial Controls system over Financial Reporting and their operating effectiveness. Our audit of Internal Financial Controls over Financial Reporting included obtaining an understanding of Internal Financial Controls over Financial Reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and Operating Effectiveness of Internal Control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS Financial Statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s Internal Financial Controls System over Financial Reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company''s Internal Financial Controls over Financial Reporting is a process designed to provide reasonable assurance regarding the reliability of Financial Reporting and the preparation of Financial Statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP). A Company''s Internal Financial Controls over Financial Reporting includes those Policies and Procedures that:

(a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with Generally Accepted Accounting Principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and Directors of the Company; and

(c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s Assets that could have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls

Over Financial Reporting

Because of the inherent limitations of Internal

Financial Controls over Financial Reporting,

including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any Evaluation of the Internal Financial Controls over Financial Reporting to future periods are subject to the risk that the Internal Financial Controls over Financial Reporting may become inadequate because of changes in conditions, or that the degree of compliance with the Policies or Procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate Internal Financial Controls system over Financial Reporting and such Internal Financial Controls over Financial Reporting were operating effectively as at 31 March 2018, based on the Internal Control over Financial Reporting criteria established by the Company considering the essential components of Internal Control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For Khimji Kunverji & Co

Chartered Accountants

Firm Registration No 105146W

Camp : Chennai Hasmukh B Dedhia

Date : May 29, 2018 Partner (F - 33494)


Mar 31, 2016

To

THE MEMBERS

TANFAC INDUSTRIES LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of Tanfac Industries Limited(‘the Company’), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information Managements Responsibility for the Financial

Statements

2. The management and Board of Directors of the Company are 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; 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

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these 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 there under. 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

4. An audit involves performing procedures to obtain audit evidence about the amounts and 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 statement, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the financial statements

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

Opinion

6 . In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial 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 of the state of affairs of the Company as at 31st March 2016, its Profit and its cash flows for the year ended on that date

Emphasis of Matter Paragraph

7. In forming our opinion, which is not qualified, we have considered note no 26.12 of the financial statements stating that, despite losses and reducing net worth, the financial statements of the company have been prepared under ‘Going concern'' assumption basis having regard to the business plans of the company and continued financial support from a promoter.

8. Attention is invited to note no 26.1.(e) of the financial statements, describing company''s contention in the matter of Renewable Power Obligation (RPO), which is contested and the company is anticipating a favorable verdict, based on legal advice received by it. Our report is not qualified on the matter.

Report on Other Legal and Regulatory

Requirements

9. As required by the Companies (Auditor''s Report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the ‘Annexure A’, a statement on the matters specified in paragraphs 3 and 4 of the Order

10. As required by section 143(3) of the Act, we further 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 purpose of our audit;

b. 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 those books;

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

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

e. on the basis of written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ‘Annexure B’

g. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

(i) The impact of pending litigations has been duly disclosed in the financial statements in note no. 26.1(a),(d),(e) and 26.3 to the financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts as at Balance sheet date for which there existed any foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the company.

Annexure A referred to in paragraph 9 Our Report of even date to the members of TANFAC INDUSTRIES Limited on the Financial Statements of the Company for the year ended 31st March, 2016

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

(b) According to the information and explanations given to us and based on the records of the company examined by us, fixed assets have been physically verified by the management at regular intervals; and no material discrepancies were noticed on such verification;

(c) According to the information and explanations given to us and based on the records of the company examined by us, title deed of an immovable property is held in the name of the company.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year;

(b) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) 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 Act.

Hence the requirement of clause 3 (iii) of the order is not applicable.

(iv) According to the records of the company examined by us and as per the information and explanations given to us, the Company has not granted any loans covered under Section 185 and 186 of the Act.

(v) The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act, in respect of company''s products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) According to the information and

explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Value added tax, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India.

(b) According to the information and explanations given to us and based on the records of the company examined by us, following dues of Sales Tax, Service Tax, Customs Duty, Excise Duty and Income Tax which have not been deposited on account of any disputes

Name of Statute

Nature of the Dues

Disputed amount (Rs. in Lacs)

Period to which the amount relates

Forum where dispute is pending

TNGST Act, 1959

Levy of sales tax from sales affected through Pondicherry

52.77

2004-05

Writ petition before Hon''ble High Court of Madras

Custom Act, 1962

Duty on fluorspar shipment shortage

10.79

1998-99

Customs Officer

Central Excise Act, 1944

Interest Accrued to be added

Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Cenvat credit disallowed on steels/pipes Excise duty on freight collected on outward freight

Excise duty on freight collected on outward freight

Excise duty on freight collected on outward freight

Excise duty on freight collected on outward freight

Excise duty on freight collected on outward freight

Excise duty on freight collected on outward freight

Excise duty on Job Work to Shasun Chemicals

Total

0.27

31.02

4.74

4.84 0.47 1.93

10.49

21.55

0.85

9.85 0.41 0.58 3.55 0.74

0.46

10.75

102.50

2001-02

April ''03 -August ''05 September ''05 -March ''06 April ''06 -March ''07 April ''07 -September ''07 October ''07 -March ''08 April ''08 -September ''08 September ''08 -March ''09 April''09 -March''10

April''04 -December''08

October''09 -March''10

April''10-

December''10

January''11-

October''11

January''14-

November''14

December''14-

June''15

2012-13 & 2013-14

SB, CEGAT, Chennai

Additional /

-Joint Commissioner, Pondicherry

Joint Commissioner Cuddalore

Deputy Commissioner Cuddalore

Asst.Commissioner

Cuddalore

Joint.Commisioner/Audit-II Commissionerate, Chennai

Disputed amount (Rs. in Lacs)

Period to which the amount relates

Forum where dispute is pending

12.30

2001-02 to 2004-05

The Commissioner / The Asst. Commissioner, Pondicherry

13.16

2011-12

The Dy. Commissioner, Pondicherry

4.13

January ''14 D January D15

The Assistant Commissioner, Cuddalore

0.23

2002-03 to 2003-04

CESTAT, Chennai

20.39

April''06 -March''08

7.12

December''05 -March''10

_ The Commissioner, Pondicherry

91.82

April''08-

December''10

0.04

0.84

September''14 -June''15

November''14-

August''15

_ Superintendent-Tech, Cuddalore

4.34

3.86

December''14-

July''15

December''14-

September''15

Asst.Commissioner,

Cuddalore

158.24

85.39

2002 D 03

Income Tax Appellate Tribunal

75.79

2007-08

The Commissioner of Income Tax [Appeals],Chennai

161.18

(viii) According to the information and explanations given to us and based on the records of the company examined by us, the Company has not defaulted in repayment of loans or borrowings to any financial institution, bank and Government.

(ix) The company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Hence the provision of clause 3(ix) of the Order is not applicable to it.

(x) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud by the Company or on the Company by its officers or employees noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

(xi) According to the information and explanations given to us and based on the records of the company examined by us the company has not paid or provided managerial remuneration.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company.

Hence, clause 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on the records of the company examined by us, the Company has complied with the provisions of Section 177 read with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014. The transactions with related parties entered into by the Company, disclosures whereof are made as per applicable Accounting Standards, do not attract the provisions of Section 188 of the Act.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence, clause 3(xiv) of the Order is not applicable.

(xv) According to the records of the Company examined in course of our audit and as per the information and explanations given to us, the Company has not entered in any non-cash transactions with directors or persons connected with them. Hence, provisions of Section 192 are not applicable to the Company

(xvi) The Company is not required to registered under Section 45-IA of the Reserve Bank of India Act 1934.

We have audited the internal financial controls over financial reporting of TANFAC INDUSTRIES LIMITED (‘the Company’) as at 31 March 2016 in conjunction with our audit of standalone financial statements of the Company for the year ended on that date.

Annexure B referred to in paragraph 10(f) of Our Report of even date to the members of TANFAC INDUSTRIES LIMITED on the Financial Statements of the company for the year ended 31st March, 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act'')



Management''s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (DICAID). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting are established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

Internal financial control over financial reporting is a process designed by the Company to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Further, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate owing to changes in conditions or that the degree of compliance with the policies or procedures may deteriorate or for other reasons.

Opinion

In our opinion, the Company has an internal financial controls system over financial reporting, design whereof needs to be enhanced to make it comprehensive. Based on selective verification of process controls matrixes, made available to us towards the extreme end of the financial year under report and thereafter, in our opinion and considering the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note, the operating effectiveness of such process controls and appropriate documentation thereof needs to be strengthened to make the same commensurate with the size of the Company and nature of its business.

For Khimji Kunverji & Co

Chartered Accountants

Firm Registration No. 105146W

Camp: Chennai Hasmukh B Dedhia

Date: May 24, 2016 Partner (F - 33494)


Mar 31, 2015

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

Management's Responsibility for the Financial Statements

2. The management and Board of Directors of the Company are 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 Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are 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.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these 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 there under. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and 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 accounting policies used and the reasonableness of the accounting estimates made by the Company's management and Board of Directors, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial 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 of the state of affairs of the Company as at 31st March 2015,its profit/loss and its cash flows for the year ended on that date.

Emphasis of Matter Paragraph

7 In forming our opinion, which is not qualified, we have considered Note No. 27.12 of the financial statements stating that, despite losses and reducing net worth, the financial statements of the company have been prepared under 'Going Concern' assumption basis having regard to the business plans of the company and continued financial support from a promoter

Report on Other Legal and Regulatory Requirements

8 As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

9 As required by section 143(3) of the Act, we further 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 purpose of our audit;

b. 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 those books;

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

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

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

b. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

(i) The impact of pending litigations has been duly disclosed in the financial statements. Refer Note Nos. 27.1.a and 27.3 to the Financial Statements

(ii) The Company did not have any long-term contracts including derivative contracts for which there existed any foreseeable losses

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 8 Our Report of even date to the members of Tanfac Industries Limited on the Financial Statements for the year ended 31st March, 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification;

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year;

(b) The procedures of physical verification of inventory followed by the managements are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification;

(iii) 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 Act. Hence clause (iii)(a) &(iii)(b) of Paragraph 3 of the Order are not applicable.

(iv) Based on our audit procedures, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. On the basis of examination of the books and records of the Company and according to the information and explanations given, and as per checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor have we been reported of any continuing failure to correct major weakness in the internal control system relating to these areas. As regards, the internal controls in the area of sale of services, there is significant improvement as compared to prior years, in our opinion, the same needs to be strengthened further to make it commensurate with the size of the company and nature of its business.

(v) The company has not accepted any deposits from the public, hence requirement of compliance with the provisions of Section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules 2014 are not applicable to the company

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act, in respect of company's products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been maintained.

(vii) (a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other material statutory dues, as applicable, with the appropriate authorities in India ;

(b) According to the information and explanations given to us, and as per the records of the Company, following dues of Sales tax, Custom duty, Excise duty, Service tax and Income Tax have not been deposited on account of some dispute or are partially deposited under protest

Disputed Period to which Name of Nature of the Dues amount the Statute (Rs, in Lacs) amount relates

TNGST Levy of sales tax from Act, sales effected through 52.77 2004-05 1959 Pondicherry

52.77 Custom Duty on fluorspar Act, 10.79 1998-99 shipment shortage 1962

10.79

Central Interest Accrued to be 0.27 2001-02 Excise added Act, 1944 Cenvat credit disallowed (April '03 -

31.02 on steels/pipes August '05

Cenvat credit disallowed September '05 -

4.74 on steels/pipes March '06

Cenvat credit disallowed April '06 -

4.84 on steels/pipes March '07

Cenvat credit disallowed April '07 -

0.47 on steels/pipes March '07

Cenvat credit disallowed October '07 -

1.93 on steels/pipes March '08

Cenvat credit disallowed April '08 -

10.49 on steels/pipes September '08

Cenvat credit disallowed September '08 -

21.55 on steels/pipes March '09)

Excise duty on freight January '14 -

collected on outward 0.74 November '14 freight

Total 76.05

Name of Statute Forum where dispute is pending

TNGST Writ petition before Hon'ble High aCT,1959 Court of Madras

CUSTOM Customs Officer Excise Act,1944

Central SB, CEGAT, Chennai Excise Act,1944 Additional/ ) Joint Commissioner, Pondicherry

Asst. Commissioner, Cuddalore



Disputed Period to which Name of Nature of the Dues amount the Statute (Rs, in Lacs) amount relates

Service Tax on Lease 2001-02 to 12.30 Rent 2004-05

2006-07 to Service tax on GTA 19.64 2007-08

Service Tax Credit

Finance disallowed on 13.16 2011-12 Act, Maintenance/Repairs 1994

Service Tax Credit - (Service Disallowed on Export Tax) (January '14 – Commission paid under 4.13 January '15 the head Business Auxiliary Service

Service tax Credit disallowed courier, January '14 –

3.23 Banking, security, Test, April '14 Inspection etc

Service tax Credit January '14 – disallowed on 4.13 November '14) maintenance/repair

Total 56.82

Replacement of equipment claimed as Income revenue expenditure, Tax reclassified by Dept. as 85.39 2002 – 03 Act, capital expenditure [tax 1961 demanded]( Including Interest)

Disallowance of various expenses (Including 75.79 2007-08

Interest)

Total 161.18

Name of Forum where dispute is pending

The Commissioner/The Asst. Commissioner, Pondicherry

The Commissioner, Pondicherry

Finance The Dy. Commissioner, Pondicherry Act,1994 (Service Tax)

The Assistant - Commissioner, Cuddalore

Income Income Tax Appellate Tribunal Tax Act 1961 The Commissioner of Income Tax [Appeals], Chennai

(c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(viii) The Company has accumulated losses (Debit balance in Profit & Loss Account) of Rs, 4889.66 lacs, and also incurred cash loss of Rs, 97.69 lacs in the current financial year but not in the immediately preceding financial year.

(ix) Based on the audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution or bank.

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

(xi) According to the information and explanations given to us by the management, no term loans are raised/ availed during the year by the Company; hence the provision of paragraph 3(xi) of the Order are not applicable to it.

(xii) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management of the Company.

For Khimji Kunverji & Co.

Chartered Accountants

Firm Registration No.105146W



Hasmukh B Dehdia Camp : Chennai Partner

Date : 15th May, 2015 Membership No. F-33494


Mar 31, 2014

1. We have audited the accompanying financial statements of Tanfac Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. Management is responsible for 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 notified under the companies Act, 1956("the Act"), read with general circular 08/2014 dated 4th April 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial 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 financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the financial 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 March 31, 2014;

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 flows for the year ended on that date.

Emphasis of Matter Paragraph

7. In forming our opinion, which is not qualified, we have considered note no 26.B.13 of the financial statements stating that, despite losses and reducing net worth, the financial statements of the company have been prepared under ''Going Concern'' assumption basis having regard to the business plans of the company and continued financial support from a promoter.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 4 and 5 of the Order.

9. 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 purpose of our audit;

b. 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 those books.

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

i) a. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

b. The Company has phased programme for physical verification of all its fixed Assets, Which in opinion, is reasonable having regard to the size of the company and nature of its asset. As informed to us, no material discrepancies were noticed on such verification.

c. There was no substantial disposal of fixed assets during the year.

ii) a. The management has conducted physical verification of inventories at reasonable intervals during the year;

b. The procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

c. The Company is maintaining proper records of inventory and as informed to us, no material discrepancies were noticed on physical verification.

iii) a. As informed, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Hence, clauses (iii) (b), (c) and (d) of the Order are not applicable.

b. As informed, the Company has not taken any secured or unsecured loans from companies, firms or other parties listed in the Register maintained under Section 301 of the Act. Hence, clauses (iii) (f) and (g) of the Order are not applicable.

iv) 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, for the purchase of inventory and fixed assets, and for the sale of goods and services. During the course of our audit and on the basis of examination of the books and records of the company as also according to information and explanations given, and as per checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor have we been reported of any continuing failure to correct any major weakness in the internal control system of the company

v) (a) According to the information and explanations provided to us, there have been no transactions which need to be entered in the register maintained under Section 301 of the Act. Hence, clause (v) (b) of the Order is not applicable to the Company.

vi) According to the information and explanations given to us, the Company has not accepted any public deposits within the meaning of the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this respect.

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

viii) We have broadly reviewed the books of account 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 Act, in respect of the Company''s products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been maintained.

ix) a. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other undisputed statutory dues outstanding at the year end, for a period of more than six months from the date they became payable except undisputed export obligations as mentioned herein below:

Amount Period To which Nature of Statute Nature of Dues
Profession Tax Profession Tax 1.29 2013-2014

Date of Nature of Statue Due Date Payment<#-

Profession Tax 30/09/2013 24/05/2014

# Cheque remitted by the company on January 28, 2014 become stale on April 28, 2014

c. According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Disputed Period to Name of Nature of the Dues amount which the Statute (Rs.in Lacs) amount relates

TNGST Levy of sales tax from sales 52.77 2004-05 Act 1959 affected through Pondicherry

Customs Duty on fluorspar shipment 10.79 1998-99 Act shortage

Interest Accrued to be added 0.27 2001-02

Cenvat credit disallowed on April ''03 - 31.02 steels/pipes August 05

Cenvat credit disallowed on September ''05 4.74 steels/pipes - March 06

Cenvat credit disallowed on April ''06 - 4.84 steels/pipes March 07

Central Excise Cenvat credit disallowed on 0.47 April ''07 - Act steels/pipes. September ''07

Cenvat credit disallowed on 1.93 October ''07 - steels/pipes March 08

Cenvat credit disallowed on April ''08 - 10.49 steels/pipes September 08

Cenvat credit disallowed on September ''08 21.55 steels/pipes March 09

Total 75.31

Name of Statute Forum where dispute is pending

TNGST Act 1959 Written petition before Hon''ble High Court of Madras

Customs Act Customs Officer

SB, CEGAT, Chennai

Central Excise Act Additional/Joint Commissioner, Pondicherry

Disputed Period to Name of Statute Nature of the Dues amount which the (Rs.in Lacs) amount relates

2001-02 to Service Tax on Lease Rent 12.30 2004-05

Service Tax on consulting Finance Engineers/Management 2002-03 to Act, 1994 Consultancy (including 2003-04 (Service penalty) Tax)

2006-07 to Service Tax on GTA 19.64 2007-08

Service Tax Credit disallowed 13.16 2011-12 on Maintenance/Repairs

Service Tax Credit disallowed on housekeeping / medical 0.87 2011-13 centre & subscription

Total 46.20

Replacement of equipment claimed as revenue expenditure, reclassified by 85.39 2002-03 Dept. as capital Income expenditure [tax demanded] Tax Act (Including Interest)

Disallowance of various 75.79 2007-08 expenses (Including Interest)

161.18



Name of Statute Forum where dispute is pending

Finance Act, 1994 (Service Tax) The Commissioner/The Asst. Commissioner, Pondicherry

CESTAT, Chennai

The Commissioner, Pondicherry

The Dy. Commissioner, Pondicherry

The Assistant Commissioner, Cuddalore

Income Tax Act Income Tax Appellate Tribunal

The Commissioner of Income Tax [Appeals], Chennai

x) The Company has accumulated losses (Debit balance of Profit & Loss Account) of Rs. 4360.67 lacs, and also had incurred cash loss of Rs. 492.04 lacs in the immediately preceding financial year but not in the current financial year.

xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of due to a financial institution or bank. The company has not issued any debentures.

xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv) 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. Accordingly, clause 4(xv) of the order is not applicable to the company.

xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) According to information and explanation given to us and overall examination of the balance sheet of the company, we report that the funds raised on short term basis have been used for long term investment to the extent of Rs. 368.72 lacs.

xviii) During the year, the Company has not made any preferential allotment of share, hence clause 4(xviii) of the order is not applicable to it.

xix) The Company has not issued any debentures. hence clause 4(xix) of the order is not applicable to it

xx) The Company has not raised any money by way of public issue, hence clause 4(xx) of the order is not applicable to it.

xxi) During the course of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the company noticed or reported during the course of our audit nor have we been informed of any such case by the management.



For Khimji Kunverji & Co.

Chartered Accountants

Firm Registration No.105146W

Hasmukh B Dehdia Camp : Chennai Partner

Date : 29th May, 2014 Membership No. F-33494


Mar 31, 2012

1. We have audited the attached Balance Sheet of TANFAC INDUSTRIES LIMITED ('the company') as at March 31, 2012 and also the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date 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 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 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 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 [as amended] ['the order'] issued by the Central Government in terms of subsection [4A] of Section 227 of The Companies Act, 1956,('the Act') we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

i. 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;

ii. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from our examination of those books;

iii. The Balance Sheet, statement of Profit and Loss and Cash Flow Statement dealt with by the report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Act;

v. On the basis of the written representations received from the Directors as on March 31, 2012and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2012 from being appointed as a Director in terms of Section 274(1)(g) of the Act;

vi. 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 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2012.

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 Cash Flow Statement of the Cash Flows of the Company for the year ended on that date.

i. a The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

b) The Company has phased programme for physical verification of all its fixed Assets, which in opinion, is reasonable having regard to the size of the company and nature of its asset. As informed to us, no material discrepancies were noticed on such verification.

c There was no substantial disposal of fixed assets during the year.

ii. a) The management has conducted physical verification of inventories at reasonable intervals during the year;

b) The procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory and as informed to us, no material discrepancies were noticed on physical verification.

iii. a) As informed, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Hence, clauses (iii)(b), (c) and (d) of the Order are not applicable.

b) As informed, the Company has not taken any secured or unsecured loans from companies, firms or other parties listed in the Register maintained under Section 301 of the Act. Hence, clauses (iii) (f) and (g) of the Order are not applicable.

iv. 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, for the purchase of inventory and fixed assets, and for the sale of goods and services. During the course of our audit and on the basis of examination of the books and records of the company as also according to information and explanations given, and as per checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor we have been reported of any continuing failure to correct any major weakness in the internal control system of the company.

v. (a) According to the information and explanations provided to us, there have been no transactions which need to be entered in the register maintained under Section 301 of the Act. Hence, clause (v) (b) of the Order is not applicable to the Company.

vi. According to the information and explanations given to us, the Company has not accepted any public deposits within the meaning of the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this respect.

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

viii.We have broadly reviewed the books of account 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 Act, in respect of the Company's products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been maintained.

ix. a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

outstanding at the year end, for a period of more than six months from the date they became payable

c) According to the records of the Company, the dues outstanding of income-tax, sales- tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of Disputed Period to Forum where Statute Nature of the Dues amount which the dispute is (Rs in Lakhs) amount relates pending

Written petition TNGST Levy of sales tax from sales 52.77 2004 05 before Hon'ble Act 1959 affected through Pondicherry High Court of Madras

Custom Duty on fluorspar shipment 10.79 1998-99 Customs Officer Act shortage

SB,CEGAT Interest Accrued to be added 0.27 2001-02 Chennai

Sale of Scrap 0.74 2003-04 SB,CEGAT Chennai

Additional/Joint Cenvat credit disallowed on April 03 31.02 Commissioner, steels/pipes August '05 Pondicherry

Cenvat credit disallowed on September '05 - Additional/Joint 4.74 Commissioner, Central steels/pipes March '06 Pondicherry

Excise Act

Additional/Joint Cenvat credit disallowed on 4.84 April 06 Commissioner, steels/pipes March '07 Pondicherry

Additional/Joint Cenvat credit disallowed on April 07 0.47 Commissioner, steels/pipes March '07 Pondicherry

Additional/Joint Cenvat credit disallowed on October 07 steels/pipes 1.93 March '08 Commissioner Pondicherry

Additional/Joint Cenvat credit disallowed on April 08 - 10.49 Commissioner, steels/pipes September '08 Pondicherry

Cenvat credit disallowed on September '08 - Additional/Joint 21.55 Commissioner, steels/pipes March '09 Pondicherry

Total 76.05

The 2001-02 to Commissioner/ Service Tax on Lease Rent 12.3 The Asst. 2004-05 Commissioner, Finance Pondicherry Act, 1994 Service tax on consulting 2002-03 to (Service Engineers/ Management 0.46 2003 04 CESTAT, Chennai Tax) Consultancy (including penalty)

The Service tax on GTA 19.64 2006-07 to Commissioner, 2007-08 Pondicherry

Service Tax on tangible assets 1.13 2008-09 CESTAT, Chennai

Total 33.53

Replacement of equipment claimed as revenue expenditure, Income Tax reclassified by Dept. as capital 85.39 2003 - 04 Appellate Tribunal expenditure [tax demanded] (Including Interest)

The Commissioner Disallowance of various expenses 71.95 2005-06 of Income Tax (Including Interest) [Appeals],Chennai

Income The Commissioner Disallowance of various expenses Tax Act 71.42 2006-07 of Income Tax (Including Interest) [Appeals],Chennai

The Commissioner Disallowance of various expenses 75.79 2007-08 of Income Tax (Including Interest) [Appeals],Chennai

The Commissioner Disallowance of various expenses 16.89 2008-09 of Income Tax (Including Interest) [Appeals],Chennai

321.44

x. The Company has accumulated losses of Rs 2.922.42 lakhs and has incurred a cash loss of Rs 1,446.63 lakhs in the current financial year but has not incurred cash loss in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of due to a financial institution or bank. The company has not issued any debenture.

xii. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

xvi. Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii. According to information and explanation given to us and overall examination of the balance sheet of the company, we report that the funds raised on short term basis have been used for long term investment to the extent of Rs 299.32 lakhs

xviii.During the year, the Company has not made any preferential allotment of share, hence clause 4(xviii) of the order is not applicable to it

xix. The Company has not issued any debentures. Hence, clause 4(xix) of the order is not applicable to it

xx. The Company has not raised any money by way of public issue. Hence, clause 4(xx) of the order is not applicable to it

xx. During the course of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the company noticed or reported during the course of our audit nor have we been informed of any such case by the management M/s. Khimji Kunverji & Co. Chartered Accountants

Firm Registration No.105146W

Hashmukh B Dehdia

Camp: Chennai Partner

Date: 29th May, 2012 Membership No. 33494


Mar 31, 2010

We have audited the attached Balance Sheet of TANFAC INDUSTRIES LIMITED as at 31st March, 2010 and the Profit and Loss Account and Cash Flow Statement for the year 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.

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 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies [Auditors Report] Order 2003 [as amended] issued by the Central Government in terms of sub section [4A] of Section 227 of The Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

Further to our comments in the Annexure referred to above, we report that :

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.

2. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from our examination of those books.

3. The Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by the report are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of The Companies Act, 1956.

5. On the basis of the written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2010 from being appointed as a Director in terms of Clause [g] of Subsection (1) of Section 274 of The Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the "NOTES" thereon, 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 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 Loss of the Company for the year ended on that date, and

iii) In the case of Cash Flow Statement of the Cash Flows of the Company for the year ended on that date.

ANNEXURE TO AUDITORS REPORT Referred to in our Report of even date on the Accounts of TANFAC INDUSTRIES LIMITED as at and for le year ended 31st March, 2010]

i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets.

b) The Fixed Assets of the Company have been physically verified by the management, wherever possible, at the close of the year as confirmed by the management. No material discrepancy has come to notice on such physical verification.

c) The Company has not disposed off any substantial part of fixed assets during the year.

ii) a) The management has conducted physical verification of inventories at all its locations at reasonable intervals during the year;

b) The procedures of physical verification of stock followed by the Management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory. As far as we can ascertain and according to the information and the explanations given to us, the discrepancies noticed between the physical stocks and book stocks were not material and the same have been properly dealt with in the books of account.

iii) a) As per the information and explanations provided to us, the Company has not granted any secured or unsecured loans to Companies, firms or other parties listed in the register maintained under Section 301 of The Companies Act, 1956.

b) As per the information and explanations provided to us, the Company has not taken any secured or unsecured loans from companies, firms or other parties listed in the Register maintained under Section 301 of The Companies Act, 1956.

iv) On the basis of checks carried out during the course of audit and as per explanations given to us, in our opinion, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of Inventory and Fixed Assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls in these respects.

v) a). As per the information and explanations given to us, no transactions have been undertaken during the year in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of The Companies Act, 1956.

b) As per the information and explanations given to us, there are no transactions of purchase and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of The Companies Act, 1956.

vi) The Company has not accepted any deposits from the public during the year, to which the provisions of Section 58-A, 58-AA or any other relevant provisions of The Companies Act, 1956 and the rules framed there under apply;

vii) In our opinion, the company has an Internal Audit System, which is commensurate With the size and nature of its business;

viii) The company has maintained proper Cost records as prescribed by the Central Government under Section 209 (1)(d) of the Companies Act 1956 for the manufacture of Sulphuric Acid, but no detailed examination of such records have been carried out by us.

ix) a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax,

Customs Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities;

b) According to the information and explanations given to us and the books and records examined by us, there was no undisputed amount outstanding as on 31st March, 2010 in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custome Duty, Excise Duty, Cess and other statutory dues for a period of more than six months from the date they became payable;

c) According to the records of the Company and as per the information and explanations provided to us, the dues outstanding [net of advances] in respect of Sales Tax, Value Added Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess etc.,on account of any dispute are given below :

Name of the Nature of the Disputed Statute Dues Amount (Rs in Lacs)

TNGST Act 1959 Classification of scrap sales 1.68

Customs Act, 1961 Duty on fluorspar shipment 10.79

Central Excise a) Interest Accrued to be added 0.27 Act 1944 in value

b) Sale of Scrap 0.74

c) Cenvat credit disallowed 32.04 on steels/pipes

d) Interest on Excise Duty 0.85 levied on sale to Govt.

Institution 33.90

Service Tax a) Service Tax on Lease Rent 13.43 Act, 1994

b) Service tax on consulting 3.00 Engineers/Management Consultancy

c) Service tax on GTA 20.39

36.82





Name of the Period to which Forum where Statue the amount dispute is relates pending

TNGST Act 1959 2002-03 Appellate Asst. Commissioner

Customs Act, 1961 1998-99 Customs Officer

Central Excise Act 1944 2001-02 SB, CEGAT, Chennai

2003-04 SB, CEGAT, Chennai

2005-06 to Additional/Point 2009-10 Commissioner, Pondicherry

2006-07 to The Commissioner 2007-08 (appeals),

Service Tax Act, 1994 2001-02 to The Commissioner/ 2008-09 Asst. Commissioner, Cuddalore

2002-03 to The Deputy 2004-05 Commissioner, Cuddalore

2006-07 to The Commissioner, 2007-08 Pondicherry

Name of the Nature of the Disputed Statute Dues Amount (Rs in Lacs)

Income Tax Act, a) Replacement of 85.39 1961 Equipment claimed as revenue expenditure, reclassified by Dept. as capital expenditure

b) Disallowance of benefit 16.10 u/s 80IA relating to 28.93 Sulphuric Acid Plant 0.54

c) Disallowance of various 8.14 expenses

139.10



Name of the Period to which Forum where Statue the amount dispute is relates pending

Income Tax Act, 1961 2003-2004 Income Tax Appellate Tribunal

1990-00 Appeal pending at

2001-02 various forums

2004-05

2006-07 The Commissioner of Income Tax (Appeals), Chennai

x) The Company has no accumulated losses and has incurred cash losses of Rs.621.98 lacs during the year and has not incurred cash losses in the immediatly preceding financial year.

xi) Based on our audit procedures, and as per the information and explanations given to us, by the management, the Company has not defaulted in repayment of dues to financial institutions and banks;

xii) According to the information and explanations given to us, 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, nidhi or mutual benefit fund/societies are not applicable to the Company.

xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments and hence, the requirements of Para 4 (xiv) of the above order are not applicable to the Company.

xv) 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;

xvi) The term loans raised has been applied for the purpose for which it was obtained.

xvii) On the basis of our examination of the cash flow statement, it appears that the funds raised on short term basis have been used for long term purposes to the tune of Rs. 1418 lacs.

xviii) During the year, the Company has not made any preferential allotment of share.

xix) The Company does not have any outstanding debentures during the year.

xx) The Company has not raised any money by way of public issue during the year.

xxi) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given to us 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 BHASKARAN & KRISHNAN For SINGHI & CO

Chartered Accountants Chartered Accountants

(B.GOPALAKRISHNAN) (SUDESH CHORARIA)

Partner Partner

Membership No.1 8702 Membership No. 204936

Firm Regn. No. 00426S Firm Regn. No. 302049E

Chennai,

Dated: 14th May, 2010.

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