To the Members of Thermax Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of ThermaxLimited ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the standaloneInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312018 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to note 32A(a) of the standalone Ind AS financial statements relatingto the demand orders/ show cause notice on the Company for Rs. 1376.92 crores (includingpenalty of Rs. 325.29 crores and excluding interest not presently quantified) by theCommissioner of Central Excise Pune. The Company has filed an appeal against the saidorders and filed replies to the show cause notice cum demand order. Our opinion is notqualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act were port that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;
(e) The matter described in Emphasis of matter paragraph above in our opinion mayhave an adverse effect on the functioning of the Company;
(f) On the basis of written representations received from the directors as on March312018 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2018 from being appointed as a director in terms of section164 (2) of the Act;
(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report;
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its standalone Ind AS financial statements - Refer Note 32A(a) to thestandalone Ind AS financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 18(b) to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;
iv. The disclosure with respect to holding of and dealings in Specified Bank Notes isnot applicable to the Company for the year ended March 31 2018 and accordingly have notbeen reported by us. Refer note 13(c) of the standalone Ind AS financial statements.
For SRBC & COLLP
ICAI Firm Registration Number: 324982E/E300003
per Tridevlal Khandelwal
Membership Number: 501160
Place of Signature: Pune
Date: May 18 2018
Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date
Re: Thermax Limited (the Company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.
(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 312018 and no material discrepancies were noticed inrespect of such confirmations.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 (the Act'). Accordingly the provisions of clause 3(iii)(a)(b)and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Act in respect of loans to directors includingentities in which they are interested and in respect of loans and advances giveninvestments made and guarantees and securities given have been complied with by theCompany.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of chemicals andare of the opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.
(c) According to the records of the Company the dues of income-tax sales-tax servicetax duty of custom duty of excise value added tax and cess on account of any disputeare as follows:
|Name of the Statute ||Nature of Dues ||Forum where the dispute is pending ||Forum where the dispute is pending ||Disputed dues not deposited* (Rs. in crores) |
|Central Excise Act 1944 || |
|Supreme Court ||1997-98 ||- [net of deposit Rs 5.31] |
|Appellate Tribunal ||2000-01 to 2015-16 ||1360.31 [net of deposit Rs 20.34] |
|Income Tax Act 1961 || |
|Appellate Tribunal ||AY 2003-04 to 2009-10 ||25.71 |
|Appellate Authority upto Commissioner Level ||AY 2014-15 ||0.13 |
|Central Sales Tax and Local Sales tax || |
Sales Tax and Value Added Tax
|High Court ||2000-012001-022010-11 2012-13 to 2014-15 ||43.58 [net of deposit Rs 0.24] |
|Appellate Tribunal ||2003-04 2006-07 2008-092013-14 ||0.43 |
|Appellate Authority upto Commissioner Level ||2004-05 2006-07 to 2014-15 ||17.51 [net of deposit Rs 0.56] |
|Finance Act 1994 ||Service Tax ||Appellate Tribunal ||2012-13 to 2015-16 ||2.62 [net of deposit Rs 0.20] |
|Customs Act 1962 || |
|Supreme Court ||2005-06 ||- [net of deposit Rs 0.56] |
|Appellate Tribunal ||2005-06 ||0.56 [net of deposit Rs 0.02] |
*net of deposits paid under protest
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of dues to a bank. The Company hasno loan/dues towards any financial institution debenture holders orfrom the government.
(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer / debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Standalone Ind AS financial statements and according to the informationand explanations given by the management we report that no fraud by the Company ormaterial fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.
(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theAct where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable Accounting Standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the Balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting under clause 3(xiv) is not applicable to the Companyand not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any noncash transactions with directors or persons connected withthem as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
For SRBC & CO LLP
ICAI Firm Registration Number: 324982E/E300003
per Tridevlal Khandelwal
Membership Number: 501160
Place of Signature: Pune
Date: May 182018