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INDEPENDENT AUDITORS' REPORT
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, 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.
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 nder. 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.
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 201 5,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; 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 TO INDEPENDENT AUDITORS' REPORT
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 31 st 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 duty, Service tax and Income Tax have explanations given to us, and as per not been deposited on account of some the records of the Company, following dispute or are partially deposited under dues of Sales tax, Custom duty, Excise protest
(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.
Firm Registration No.105146W
Hasmukh B Dehdia
Membership No. F–33494
Date : 15th May, 2015
Camp : Chennai