Tanfac Industries Ltd Directors Report

Dear Members,

The Board of Directors of your Company has pleasure in presenting the Fifty-Second (52^nd) Annual Report on the operational and business performance of the Company together with the Audited Financial Statements for the financial year ended March 31, 2026.

FINANCIAL RESULTS:

Particulars	Financial Year 2025-26	Financial Year 2024-25
Sales	71,107.40	55,698.07
Other Income	234.29	295.70
Operating Expenditure	59,901.00	42,811.67
Profit before Depreciation, Finance Cost and Taxation (PBDIT)	11,440.69	13,182.10
Finance Cost	429.81	259.76
Depreciation/Impairment/Amortization	1,747.06	1,046.27
Profit before Tax (PBT)	9,263.82	11,876.07
Current Tax/Deferred Tax (Net of MAT Credit Entitlement)	2,249.55	3,061.36
Profit After Tax (PAT)	7,014.29	8,814.71
Other Comprehensive Income	2.61	36.46
Total Comprehensive Income	7,016.91	8,851.17

FINANCIAL HIGHLIGHTS OF PERFORMANCE:

During the financial year under review, the Company delivered a strong operational and financial performance, achieving its highest-ever revenue. Revenue from Operations increased to Rs. 71107.40 Lakhs as against Rs. 55698.07 Lakhs in the previous year, registering a growth of 27.67%. The growth in revenue was driven by higher sales volumes and increased demand across key product segments.

During the year, the Company successfully commissioned both phases of the Solar Grade Dilute Hydrofluoric Acid (DHF) Project, taking the total installed capacity to 20,000 TPA. The Company also secured long-term orders aggregating approximately Rs. 1,06,800 Lakhs for Solar Grade DHF, providing strong business visibility for the coming years.

Further, the Company initiated the implementation of downstream fluorochemical projects with an estimated capital outlay of approximately E 49,500 Lakhs to expand its portfolio of value•added products and strengthen its presence in high-growth sectors. Supported by strong customer relationships, operational efficiencies and strategic growth initiatives, the Company remains well•positioned to capitalize on emerging opportunities in the fluorochemicals industry and create sustainable value for its stakeholders.

DIVIDEND:

Considering the Companys overall performance, future growth prospects and in accordance with the Dividend Distribution Policy, the Board of Directors at its meeting held on May 06, 2026, recommended a dividend of Rs. 4.50 per equity share (90%) on equity shares of face value Rs. 5/•each for the financial year ended March 31, 2026.

The payment of dividend is subject to the approval of the Members at the ensuing Annual General Meeting ("AGM"). Upon approval by the Members, the dividend will be paid to those Members whose names appear in the Register of Members of the Company or in the records of the Depositories as beneficial owners as on September 16, 2026, being the Record Date fixed for the purpose.

In terms of the provisions of the Income-tax Act, 1961, dividend income is taxable in the hands of the Members and the Company shall accordingly deduct tax at source, as applicable.

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Dividend Distribution Policy, is available on the Companys website at: https:// tanfaccms.tinglabs.in/uploads/TANFAC-Dividend•Distribution-Policy.pdf

TRANSFER TO RESERVES:

The Company has not transferred any amount to the general reserve for the year ended March 31, 2026.

SHARE CAPITAL:

During the year under review, pursuant to the approval of shareholders at the Extra-Ordinary General Meeting held on February 23, 2026, the Company had sub-divided its equity shares of face value of 510 each into equity shares of face value of 55 each. Consequently, the Authorised Share Capital of the Company comprising 2.50.00. 000 equity shares of face value of 510 each aggregating to 525,00,00,000 was sub-divided into 5.00. 00.000 Equity Shares of face value of 55 each. The preference share capital comprising 10,00,000 Redeemable Cumulative Preference Shares of face value of 5100 each aggregating to 510,00,00,000 remained unchanged. Accordingly, the issued, subscribed, and paid-up equity share capital of the Company was sub-divided from 99,75,000 equity shares of face value of 510 each to 1,99,50,000 Equity Shares of face value of 55 each.

Subsequent to the close of the financial year, pursuant to the approval of the shareholders accorded through Postal Ballot on February 23, 2026 and receipt of the requisite statutory and regulatory approvals, the Company allotted 12.58.918 equity shares of face value of 55 each to Qualified Institutional Buyers ("QIBs") on June 25, 2026 at an issue price of 51,985.83 per equity share, aggregating to 524,999.97 Lakhs through a Qualified Institutions Placement ("QIP").

Consequent to the aforesaid allotment, the paid•up equity share capital of the Company increased by 562.95 Lakhs from 5997.50 Lakhs comprising 1,99,50,000 equity shares of face value of 55 each as on March 31, 2026 to 51,060.45 Lakhs comprising 2.12.08.918 equity shares of face value of 55 each.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report, except for the Qualified Institutions Placement ("QIP") undertaken by the Company. Pursuant to the approval of the shareholders obtained through EGM on February 23, 2026 and receipt of applicable statutory and regulatory approvals, the Company allotted 12,58,918 equity shares of face value of 55 each to Qualified Institutional Buyers ("QIBs") on June 25, 2026 at an issue price of 51,985.83 per equity share, aggregating to 52-4,999.537 Lakhs.

Consequent to the aforesaid allotment, the paid•up equity share capital of the Company increased from 5997.50 Lakhs comprising 1,99,50,000 equity shares of face value of 55 each to 51,060.45 Lakhs comprising 2,12,08,918 equity shares of face value of 55 each.

Further, the Board of Directors and the Preferential Issue Committee, a t their meetings held on July 6, 2026 and July 8, 2026, respectively, approved the issuance of up to 4,24,647 equity shares on a preferential basis, subject to the approval of the shareholders and receipt of applicable statutory and regulatory approvals.

DEPOSITS FROM PUBLIC:

The Company did not accept any deposits from the public within the meaning of Chapter V of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED:

Your Company has not provided any loan(s), guarantee(s) to any person or body corporate and has not made any investment(s) during the year under Section 186 of the Companies Act, 2013.

CAPITAL EXPENDITURE:

The Company continues to make significant progress on its strategic capital expenditure programmes aimed at strengthening its position in the fluorochemicals value chain. During the year, the Company successfully commissioned both phases of the Solar Grade Dilute Hydrofluoric Acid (DHF) Project, taking the total installed capacity to 20,000 TPA. The Company has also secured longterm customer orders aggregating approximately Rs. 1,06,800 Lakhs for Solar Grade DHF, providing strong revenue visibility for the coming years.

The Company is also implementing a 20,000 MTPA HFC-32 (r-32) Refrigerant Gas Project, which represents a key milestone in its forward integration strategy. The project is being funded through a combination of internal accruals and capital raised through the Qualified Institutions Placement (QIP) and other fund-raising initiatives. The Company has already secured long-term refrigerant gas supply arrangements aggregating approximately 53,61,250 lakhs over a period of five to seven years, together with an additional arrangement of approximately 56,100 lakhs per annum for an indefinite duration, covering close to 67.5% of the planned annual capacity and providing strong revenue visibility upon commissioning.

Further, the Company has initiated downstream fluorochemical expansion projects to diversify its portfolio of value-added products and strengthen its presence in high-growth sectors. These strategic investments are expected to enhance the Companys competitive position, deepen customer relationships and support sustainable long-term growth.

CHANGES IN THE NATURE OF BUSINESS:

During the year under review, there was no change in the nature of business of the Company.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

The Business Responsibility and Sustainability Report (BRSR) for the financial year 2025-26, as required under Regulation 34(2) of the SEBI Listing Regulations, is presented in a separate section and forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

As required under Section 134(3)(i) of the Companies Act, 2013, the State of Affairs of the Company along with operational performance/review has been discussed in Management Discussions and Analysis Report which is appended in this annual report pursuant to Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CORPORATE GOVERNANCE REPORT:

The Corporate Governance Report, pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report and is annexed as Annexure •D to this Boards Report.

CREDIT RATINGS:

During the financial year, ICRA Limited reaffirmed the Companys strong credit ratings for its bank facilities, reflecting its consistent financial performance and stable credit profile.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Appointments:

Based on the recommendation of the Nomination and Remuneration Committee, the Board has considered and approved the following:

1) The Board of Directors, through a Circular Resolution passed on March 29, 2025, approved the appointment of Dr. Ravindra Kumar Tyagi (DIN: 01509031) as an Additional Director in the category of Independent Director of the Company for a term of five consecutive years commencing from April 01, 2025 up to March 31, 2030, not liable to retire by rotation. The appointment was subsequently approved by the shareholders on June 10, 2025.

2) The Board of Directors, through a Circular Resolution passed on March 29, 2025, approved the appointment of Mr. Amreek Singh Sandhu (DIN: 08064880) as an Additional Director in the category of Independent Director of the Company for a term of five consecutive years commencing from April 01, 2025 up to March 31, 2030, not liable to retire by rotation. The appointment was subsequently approved by the shareholders on June 10, 2025.

3) The Board of Directors, through a Circular Resolution passed on May 28, 2025, approved the appointment of Dr. M. Anuradha Reddy (DIN: 11123956) as an Additional Director in the category of Independent Director of the Company for a term of five consecutive years commencing from May 28, 2025 up to May 27, 2030, not liable to retire by rotation. The appointment was subsequently approved by the shareholders on August 19, 2025.

4) The Board of Directors at their meeting held on May 06, 2026, approved the appointment of Dr. Ajay Kumar Singh (DIN: 08532830) as an Additional Director in the category of Independent Director of the Company for a term of five consecutive years commencing from May 06, 2026 up to May 05, 2031, not liable to retire by rotation. The appointment was subsequently approved by the shareholders on June 11, 2026.

5) The Board of Directors at their meeting held on January 09, 2026, approved the appointment of Mr. Afzal Malkani (DIN: 07194226) as Managing Director of the Company for a term of 5 (five) consecutive years commencing from January 09, 2026 up to January 08, 2031, liable to retire by rotation. The appointment was subsequently approved by the shareholders on February 23, 2026.

6) The Board of Directors at their meeting held on January 09, 2026, based on the nomination of Tamil Nadu Industrial Development Corporation Limited (TIDCO), approved the appointment of Mrs. Sandhya Venugopal Sharma (DIN: 08445015) as Chairperson and Additional Director in the category of Non-Executive Nominee Director of the Company with effect from January 09, 2026, liable to retire by rotation. The appointment was subsequently approved by the shareholders on February 23, 2026.

7) The Board of Directors at their meeting held on May 06, 2026, approved the appointment of Dr. Ravichandran (DIN: 02643264) as WholeTime Director of the Company for a term of 2 (two) consecutive years commencing from May 06, 2026 up to May 05, 2028, liable to retire by rotation. The appointment was subsequently approved by the shareholders on June 11, 2026.

8) The Board of Directors at their meeting held on July 06, 2026, based on the nomination of Tamil Nadu Industrial Development Corporation Limited (TIDCO), approved the appointment of Dr. D. Karthikeyan (DIN: 02259481) as Chairperson and Additional Director in the category of Non-Executive Nominee Director of the Company with effect from July 06, 2026, liable to retire by rotation. The appointment is subject to the approval of the shareholders at the Extra-Ordinary General Meeting scheduled to be held on July 30, 2026.

Cessation:

1) Mr. K. Sendhil Naathan, Managing Director was re-appointed as the Managing Director of the Company for a term of six months from February 27, 2025 to August 26, 2025. He, ceased to become the Managing Director of the Company from April 18, 2025 due to his demise. The Board places on record its heartfelt gratitude for his notable contributions to the Company.

2) Ms. Mariam Pallavi Baldev (DIN: 09281201) resigned from the position of Chairperson and Non-Executive Director of the Company with effect from January 09, 2026, consequent to the withdrawal of her nomination by Tamil Nadu Industrial Development Corporation Limited.

3) Ms. Sandhya Venugopal Sharma (DIN: 08445015) resigned from the position of Chairperson and Nominee Director of the Company with effect from July 06, 2026, consequent to the withdrawal of her nomination by Tamil Nadu Industrial Development Corporation Limited.

Retirement by rotation:

Mr. R Karthikeyan (DIN: 00824621), Non-Executive Non-Independent Director, is liable to retire by rotation at the forthcoming 52^nd AGM and being eligible, seeks re-appointment. For reference of members, a brief profile of Mr. R Karthikeyan is given in the Notice convening the 52^nd AGM.

Changes in Key Managerial Personnel:

During the year under review, the following directors/ executives served as Key Managerial Personnel of the Company:

1. Mr. Afzal Malkani, Managing Director

2. Mr. Ravichandran, Whole-Time Director

3. Mr. Hemango Gupta, Chief Executive Officer

4. Mr. N R Ravichandran, Chief Financial Officer

5. Mr. Vinod Kumar S, Company Secretary and Compliance Officer

INDEPENDENT DIRECTORS AND THEIR DECLARATION:

In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has confirmed that he or she meets the criteria of independence laid down in Section 149(6) of the Act and is in compliance with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 as well as Regulation 16(1)(b) of the SEBI Listing Regulations. Furthermore, each Independent Director has affirmed adherence to the Code of Conduct for Independent Directors prescribed in Schedule IV of the Act, and the Board has duly taken these declarations on record after assessing their veracity.

EVALUATION OF THE BOARDS PERFORMANCE, ITS COMMITTEES AND DIRECTORS:

The Board has carried out an annual evaluation of its own performance, as well as that of its Committees and individual Directors, for the financial year, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The performance of the Board and individual Directors was evaluated by the Board after seeking inputs from all the Directors. The evaluation criteria for the Board included, inter alia, its composition and structure, effectiveness of Board processes, and its role in long-term strategic planning. The performance of the Committees was similarly evaluated by the Board based on inputs received from the respective Committee members. In a separate meeting, the Independent Directors evaluated the performance of the Non-Independent Directors and the Board as a whole, including that of the Chairman, taking into account the views of the Executive and Non-Executive Directors. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and individual Directors. The outcomes of these evaluations were discussed at the Board Meeting, along with feedback received from the Directors on the functioning of the Board and its Committees.

FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS:

The Independent Directors of the Company are eminent professionals with extensive experience across diverse fields such as strategy, general management, finance, engineering, governance and other allied disciplines and are well acquainted with the Companys business and operations. The Company has in place an ongoing familiarisation programme for Independent Directors to apprise them of their roles, rights, duties and responsibilities, as well as the nature of the industry in which the Company operates and its business model. At the time of their appointment, Independent Directors are familiarised with the Companys operations and businesses. The Company facilitates interactions with the senior leadership team, including Business Heads and key executives. Detailed presentations on the operations of various business divisions are made periodically to the Directors. Additionally, meetings with the Managing Director, Whole-time Director and senior management personnel are arranged to enable new appointees to gain deeper insights into the Companys business, policies and practices. Further, periodic updates are shared with the Directors on regulatory developments, corporate governance matters, industry trends and emerging risks that may have an impact on the Companys business and operations. Details of the familiarisation programme are available on the Companys website at: https://tanfaccms.tinglabs. in/uploads/familiarisation-programe.pdf

REMUNERATION POLICY:

Based on the recommendation of the Nomination and Remuneration Committee, the Board has formulated a Policy fortheselectionand appointment of Directors and Senior Management personnel, as well as for determining their remuneration. The salient features of the Remuneration Policy are disclosed in the Corporate Governance Report. The Remuneration Policy is available on the Companys website at: https://tanfaccms.tinglabs.in/uploads/ TANFAC-Remuneration-Policy.pdf

BOARD MEETINGS:

During the year under review, 7 (seven) board meetings were held. The details of the Board Meetings and attendance of Directors are provided in the Corporate Governance Report, which forms part of this Annual Report.

AUDIT COMMITTEE AND OTHER BOARD COMMITTEES:

As on March 31, 2026, the Board has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

All the recommendations made by the Board committees, including the Audit Committee, were accepted by the Board. The details of the above Committees are given in the Chapter on Corporate Governance forming part of this Integrated Report.

SEPARATE MEETING OF INDEPENDENT DIRECTORS:

In terms of the requirements under Schedule IV of the Companies Act, 2013 and Regulation 25(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the Independent Directors of the Company was held during the year to review the performance of the Non-Independent Directors and the Board as a whole, review the performance of the Chairperson of the Company and assess the quality, quantity and timeliness of the flow of information between the Company Management and the Board, without the presence of the Non-Independent Directors and members of the Management. The Independent

Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS:

In terms of Section 118(10) of the Companies Act, 2013, the Company complies with Secretarial Standards 1 and 2, relating to the Meetings of the Board of Directors and General Meetings, respectively as issued by the Institute of Company Secretaries of India ("ICSI") and approved by the Central Government.

RELATED PARTY TRANSACTIONS:

The Company has in place a Policy on Related Party Transactions, in line with the provisions of the Act and the SEBI Listing Regulations, which is available on its website at: https://tanfaccms.tinglabs.in/ uploads/Policy-on-materiality-of-related-party•transactions.pdf

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. All related party transactions and subsequent modifications are placed before the Audit Committee for review and approval.

Prior omnibus approval is obtained for related party transactions on a quarterly basis for transactions which are of repetitive nature and/or entered in the ordinary course of business and are at arms length. All contracts and arrangements with related parties were at arms length and in the ordinary course of business of the Company. There are no materially significant related party transactions entered into by the Company with related parties which may have potential conflict of interest with the Company at large. Statement of transactions with related parties during the year is given at Note No. 31 of the Notes to standalone financial statements.

In accordance with Section 134(3)(h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of the contracts or arrangements with related parties referred to in Section 188(1) of the Act, are provided in Form AOC-2 attached as Annexure •B to this Report.

INTERNAL FINANCIAL CONTROL (IFC):

The Company has in place adequate internal financial controls with reference to its financial statements. These controls ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements. Details in respect of internal financial controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this Annual report.

RISK MANAGEMENT POLICY:

The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedures are reviewed by the Audit Committee, Risk Management Committee and the Board on periodical basis. The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act, 2013 and Regulation 21 of the SEBI Listing Regulations and the same is also made available on the Companys website at: https://tanfaccms.tinglabs.in/uploads/ Risk-Management-Policy.pdf

DIRECTORS RESPONSIBILITY STATEMENT:

Accordingly, pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors, to the best of their knowledge and ability, confirm that for the year ended March 31, 2026:

a. In the preparation of the annual accounts, the applicable accounting standards (IND AS) had been followed along with proper explanation relating to material departures;

b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2026 and of the profit of the Company for that period;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Companys CSR initiatives are focused on creating sustainable and inclusive impact across communities surrounding its operations. Key areas of intervention include healthcare and sanitation, safe drinking water, education and skill development, women empowerment, environmental sustainability, infrastructure development and community welfare.

During the year under review, the Company undertook various CSR initiatives aimed at improving the quality of life of the communities in and around its areas of operation. These initiatives included support towards healthcare and sanitation programmes, provision of safe drinking water, promotion of education and livelihood enhancement, women empowerment, environmental sustainability and conservation of natural resources, as well as infrastructure development and community welfare projects. Through these initiatives, the Company continues to contribute towards inclusive and sustainable development while creating a positive social impact in the communities it serves.

The Companys CSR Policy is available on its website at: https://tanfaccms.tinglabs.in/uploads/TANFAC•CSR-Policy.pdf

The Annual Report on Corporate Social Responsibility (CSR) activities for the financial year 2025-26 is annexed as Annexure-F to this Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Pursuant to Sections 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established a Vigil Mechanism through a Whistle Blower Policy. The details of the said Policy are disclosed in the Annual Report in accordance with Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Vigil Mechanism/Whistle Blower Policy is available on the website of the Company at: https:// tanfaccms.tinglabs.in/uploads/policy-Whistle•Blower.pdf

ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the Companys website at: https:// tanfac.com/investors/results-reports/annual•returns

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required under Section 134 (3)(m) of The Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished as Annexure-A to the Annual Report.

PARTICULARS OF EMPLOYEES AND REMUNERATION:

The disclosure relating to remuneration and other details as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report and is annexed as Annexure •E.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary of the Company.

STATUTORY AUDITORS:

In terms of the provisions of Section 139 of the Companies Act, 2013 ("Act") read with the Companies (Audit and Auditors) Rules, 2014, M/s. Singhi & Co., Chartered Accountants, (Firm Registration No. 302049E) were appointed as the Statutory Auditors of the Company for a term of five consecutive years from the conclusion of the 47^th Annual General Meeting ("AGM") held on September 28, 2021 up to the conclusion of the ensuing 52^nd AGM of the Company.

Accordingly, the tenure of M/s. Singhi & Co., Chartered Accountants, as the Statutory Auditors of the Company shall conclude at the ensuing 52^nd AGM. The Board of Directors places on record its appreciation for the valuable services rendered by them during their tenure as Statutory Auditors of the Company.

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Report given by the Auditors on the financial statements of the Company for the financial year ended March 31, 2026 forms part of the Annual Report. The Auditors have not reported any qualification, reservation, adverse remark or disclaimer in their reports. Accordingly, no explanation or comments of the Board are required in terms of Section 134(3) (f) of the Companies Act, 2013. Further, no fraud was reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 during the year under review.

Pursuant to the recommendation of the Audit Committee, the Board of Directors at its meeting held on July 24, 2026, approved the appointment of M/s. Ramasamy Koteswara Rao and Co LLP, Chartered Accountants (Firm Registration No. 010396S/S200084) as the Statutory Auditors of the Company for a term of five consecutive years commencing from the conclusion of the ensuing 52^nd Annual General Meeting till the conclusion of the 57^th Annual General Meeting of the Company, at such remuneration, as recommended by the Audit Committee and as may be mutually agreed between the Board of Directors of the Company and the statutory auditors from time to time, subject to the approval of shareholders at the 52^nd AGM.

COST AUDITOR:

Pursuant to the provisions of Section 148(1) of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendments Rules, 2014, the cost records maintained by the Company are required to be audited.

Pursuant to the recommendation of the Audit Committee, the Board of Directors at its meeting held on May 06, 2026, approved the appointment of Mr. N. Krishna Kumar, Cost Accountant (Membership No. 27885), as the Cost Auditor of the Company to conduct the audit of the cost records of the Company for the financial year 2026-27 at a remuneration of E 80,000/•(Rupees Eighty Thousand only) plus applicable taxes as well as reimbursement of reasonable out-of-pocket expenses at actuals. Mr. N. Krishna Kumar has confirmed that the appointment is in compliance with the provisions of the Companies Act, 2013.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking Members ratification of the remuneration payable to Mr. N. Krishna Kumar Cost Auditors is included in the Notice convening the AGM.

The Cost Audit Report for the FY 2024-25 was filed with the Ministry of Corporate Affairs. The report was unmodified and did not contain any qualification or reservation or adverse remark or disclaimer. The Cost Audit Report for the FY 2025-26 will be filed before the due date.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 ("Act") read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Ms. Kalyani Srinivasan, Practicing Company Secretary, as the Secretarial Auditor of the Company for the financial year 2025-26. The Secretarial Audit Report in Form MR-3 for the financial year ended March 31, 2026 forms part of this Report as Annexure •C. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Subsequent to the close of the financial year, Ms. Kalyani Srinivasan, Practicing Company Secretary, resigned from the position of Secretarial Auditor of the Company. In order to comply with the provisions of Section 204 of the Act, and based on the recommendation of the Audit Committee, the Board of Directors at its meeting held on May 06, 2026 approved the appointment of M/s. M D Baid & Associates, Practicing Company Secretaries, Peer Reviewed Firm (Peer Review Certificate No. 7396/2025 and FRN: P2004GJ015700) as the Secretarial Auditors of the Company for a term of five consecutive years commencing from FY 202627 up to FY 2030-31, subject to the approval of the Members at the ensuing Annual General Meeting.

Accordingly, a resolution seeking Members approval for the appointment of M/s. M D Baid & Associates, Practicing Company Secretaries, has been included in the Notice convening the Annual General Meeting.

The Company does not have any subsidiary company. Accordingly, the requirement to annex the Secretarial Audit Report of a material unlisted subsidiary in terms of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

EXPORTS:

Export turnover had increased by Rs.3583.43 lakhs against Rs.3083.56 Lakhs in the previous year. Your Company endeavors continuously to improve export performance by expanding the customer base in the current market and penetrating to new markets.

INDUSTRIAL RELATIONS:

Employee relations continued to be cordial throughout the year. The whole-hearted support of employees in the implementation of ISO-9001 systems, ISO 14001, ISO 45001 in energy contribution initiatives and amply demonstrates the high level of teamwork, sense of belonging to the organization, and solidarity with the Management.

SAFETY, HEALTH AND ENVIRONMENT PROTECTION (SHE):

Your Company remains committed to maintaining high standards of safety, occupational health, environmental stewardship and sustainable business practices across its operations. Safety continues to be a core organisational value and an integral part of the Companys operational excellence and growth strategy.

The Company operates under an Integrated Management System certified to ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018, providing a structured framework for quality, environmental management and occupational health and safety.

During the year, the Company strengthened its safety culture through enhanced process safety initiatives, employee awareness programmes, safety training, mock drills and periodic risk assessments. The leadership team, under the guidance of the Managing Director, continued to place strong emphasis on safety performance, operational discipline and responsible manufacturing practices.

As part of its commitment to continuous improvement, the Company implemented AI-enabled safety monitoring for real-time identification of safety noncompliances and introduced an Integrated Work Permit System to strengthen control over critical and non-routine activities. The Company also enhanced its emergency preparedness and transportation safety management systems to further strengthen operational resilience.

Environmental sustainability remains an important pillar of the Companys long-term strategy. During the year, the Company expanded the use of renewable energy through solar and wind power sources and continued its focus on energy efficiency, water conservation, rainwater harvesting and green belt development.

As the Company expands into higher-value fluorochemicals and downstream fluorine products, safety, sustainability and responsible operations will continue to remain central to its long-term value creation strategy.

OTHER DISCLOSURES:

1. The Company doesnt have any subsidiaries, joint venture or associate companies;

2. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as on March 31, 2026;

3. There were no applications made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016.

4. There was no instance of any one-time settlement or any requirement of a valuation for any loan from the banks or financial institutions during the year;

5. The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and no complaints were received or pending during the year;

6. The Company has been regular and prompt in the payment of interest and repayment of principal amounts to banks and financial institutions. The Board places on record its appreciation for the continued support and cooperation extended by the banks and financial institutions; and

7. There were no significant or material orders passed by the regulators or courts or tribunals which could impact the going concern status of the Company and its future operations.

MANAGEMENT POLICY:

At TANFAC Industries Limited, we are dedicated to the continual improvement of our Management Systems, which impact quality, cost, and delivery while minimizing environmental impact. We are committed to preventing pollution, complying with customer and stakeholder requirements, and upholding public responsibilities.

ACKNOWLEDGEMENT:

The Board of Directors wishes to place on record its sincere appreciation to the customers, suppliers, business partners and shareholders for their support. The Directors would like to thank the Bankers and financial Institutions as well. The Directors would take this opportunity to appreciate and sincerely acknowledge the dedication and hard work of the employees for the growth of the Company.

For and on behalf of the Board of Directors	Mr. Afzal Malkani	Dr. Ravichandran
	Managing Director	Whole-Time Director
Date: July 24, 2026	DIN: 07194226	DIN: 02643264
Place: Cuddalore	Place: Cuddalore	Place: Cuddalore