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Fine Organic Industries Ltd.

BSE: 541557 Sector: Industrials
NSE: FINEORG ISIN Code: INE686Y01026
BSE 13:53 | 03 Jun 2070.95 76.30
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2079.95

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2079.95

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2016.00

NSE 13:49 | 03 Jun 2068.95 70.90
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2020.00

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2080.00

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1999.00

OPEN 2079.95
PREVIOUS CLOSE 1994.65
VOLUME 314
52-Week high 2548.30
52-Week low 1310.00
P/E 39.80
Mkt Cap.(Rs cr) 6,350
Buy Price 2062.85
Buy Qty 1.00
Sell Price 2070.85
Sell Qty 2.00
OPEN 2079.95
CLOSE 1994.65
VOLUME 314
52-Week high 2548.30
52-Week low 1310.00
P/E 39.80
Mkt Cap.(Rs cr) 6,350
Buy Price 2062.85
Buy Qty 1.00
Sell Price 2070.85
Sell Qty 2.00

Fine Organic Industries Ltd. (FINEORG) - Auditors Report

Company auditors report

To

The Members of

Fine Organic Industries Limited

(Formerly known as ‘Fine Organic Industries Private Limited')

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of Fine OrganicIndustries Limited (herein referred to as the "Company") which comprise theBalance Sheet as at March 31 2019 the Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity the Statement of Cash Flows forthe year then ended and notes to the Financial Statements including a summary of thesignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the [Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 and its profit(including other comprehensive income) statement of changes in equity and its cash flowsfor the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditors' Responsibilities for the Audit of Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the provisions of the Companies Act 2013 and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our opinion on standalone Ind AS financial statement.

KEY AUDIT MATTERS

Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditors' responsibilities for the audit of the Standalone Ind AS Financial Statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind AS Financial Statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Ind AS FinancialStatements.

1 Recoverability of Indirect Tax Receivables

In Note No. 17 ‘Other Current Assets' in respect of Balance with Statutory andGovernment Authorities includes Input Tax Credit (ITC) of Goods & Service Taxrecoverable as at March 31 2019 of ? 5082.97 Lakhs which are pending adjudication.

Auditors' Response

The Company has provided affirmation from Indirect Tax Consultant of the Companyregarding the nature & status of amount recoverable the sustainability and thelikelihood of recoverability upon final resolution.

2 Revenue Recognition

For the year ended March 31 2019 the Company has recognised revenue from contractswith customers amounting to ? 104396.99 Lakhs.

Revenue from contracts with customers is recognised when control of the goods orservices are transferred to the customer at an amount that reflects the consideration towhich the Company expects to be entitled in exchange for those goods or services.

The Company has generally concluded that as principal it typically controls the goodsor services before transferring them to the customer.

The variety of terms that define when control are transferred to the customer as wellas the high value of the transactions give rise to the risk that revenue is notrecognised in the correct period.

Revenue is measured net of returns and allowances cash discounts trade discounts andvolume rebates (collectively ‘discount and rebates'). There is a risk that thesediscount and rebates are incorrectly recorded as it also requires a certain degree ofestimation resulting in understatement of the associated expenses and accrual.

Revenue is also an important element of how the Company measures its performance. TheCompany focuses on revenue as a key performance measure which could create an incentivefor revenue to be recognised before the risk and rewards have been transferred.Accordingly due to the significant risk associated with revenue recognition in accordancewith terms of Ind AS 115 ‘Revenue from contracts with customers' it was determinedto be a key audit matter in our audit of the Standalone Ind AS Financial Statements.

Auditors' Response

Our audit procedures included the following:

• Assessed the Company's revenue recognition procedure as per Ind AS 115 'Revenuefrom contracts with customers'.

• Assessed the design and tested the operating effectiveness of internal controlsrelated to revenue recognition discounts and rebates.

• Performed sample tests of individual sales transaction and traced to salesinvoices sales orders and other related documents. Further in respect of the sampleschecked that the revenue has been recognised as per the terms.

• To test cut off selected sample of sales transactions made pre and post-yearend agreeing the period of revenue recognition to third party support such astransporter invoice and customer confirmation of receipt of goods.

• Tested the provision calculations related to discounts and rebates by agreeing asample of amounts recognised to underlying arrangements with customers and othersupporting documents.

• Performed analytical procedures of revenue by streams to identify any unusualtrends.

• The Company has provided confirmations from customers on sample basis to supportexistence assertion of trade receivables and assessed the relevant disclosures made in theFinancial Statements; to ensure revenue from contracts with customers are in accordancewith the requirements of relevant accounting standards.

3 Evaluation of uncertain tax imposition

The Company has material uncertain tax position including matters under dispute whichinvolves significant judgement to determine the possible outcome of these disputes.

{Refer to note no. 40 of the Standalone Ind AS Financial Statements}

Auditors' Response

We have obtained details of all pending assessments and demands for the year endedMarch 31 2019 from management. We have evaluated the possible outcome of pendingassessments and disputed matters under litigations.

Information other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's annual report forexample Corporate Overview Key Highlights Board's Report Report on CorporateGovernance Management Discussion & Analysis Report Business Responsibility Reportetc. but does not include the standalone Ind AS financial statement and our auditors'report thereon.

Our opinion on the standalone Ind AS financial statement does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statement ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatement or our knowledge obtained during the course of audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Board of Directors of the Company is responsible for the matters specified insection 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes the maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting the frauds and other irregularities selection andapplication of appropriate accounting policies making judgements and estimates that arereasonable and prudent and design implementation and maintenance of internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' report that includes our opinion. Reasonable Assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risk of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of the management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors' report to therelated disclosures in the standalone Ind AS financial statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone Ind AS financial statementsmaybe 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 standalone Ind AS financialstatements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

(1) As required by Section 143(3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the Purposes of our audit of the aforesaidfinancial statements.

b) In our opinion proper books of account as required by law relating to preparationof the aforesaid financial statements have been kept so far as it appears from ourexamination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisreport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the Directors of theCompany as on March 31 2019 taken on record by the Board of Directors of theCompany none of the directors of the Company incorporated in India is disqualified as on March31 2019 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 financialreporting of the Company and the operating effectiveness of such controls; refer to ourseparate report in ‘Annexure - A'. Our report expresses an unmodified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.

g) With respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanation given to us theremuneration paid/provided by the Company to its director during the year is in accordancewith the provision of section 197 of the Act.

h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statement.

(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.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

(2) As required by the Companies (Auditors' Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in the ‘Annexure - B' a statement on the matters specified in paragraph 3and 4 of the Order.

For B Y & Associates

Chartered Accountants

Firm's registration number: 123423W

CA Bhavesh Vora

Partner

Membership Number: 043908

Date : May 27 2019

Place : Mumbai

‘ANNEXURE - A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the members of ‘Fine Organic IndustriesLimited' of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 (‘the Act').

We have audited the internal financial controls over financial reporting of FineOrganic Industries Limited (‘the Company') as of March 31 2019 in conjunctionwith our audit of the Standalone Ind AS Financial Statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the ‘Guidance Note') issued by the Institute of Chartered Accountants ofIndia and the Standards on Auditing prescribed under Section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. The Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations of themanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the criteria forinternal financial control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For B Y & Associates

Chartered Accountants

Firm's registration number: 123423W

CA Bhavesh Vora

Partner

Membership Number: 043908

Date : May 27 2019

Place : Mumbai

‘ANNEXURE - B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the members of ‘Fine Organic IndustriesLimited' of even date)

(i) In respect of the Company's fixed assets:

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

b) The Company has a programme of verification to cover all the items of fixed assetsin a phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme certain fixed assets werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us the records examined byus and based on our examination of the records provided to us we report that the titledeeds comprising immovable properties of land and buildings which are freehold are heldin the name of the Company as at the Balance Sheet date.

(ii) In respect of the Company's Inventories:

a) The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable.

b) The procedures for physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c) On the basis of our examination of the records of inventory we are of the opinionthat Company is maintaining proper records of inventory. No material discrepancies werenoticed on physical verification of stock as compared to book records.

(iii) The Company has not granted any loans secured or unsecured other than advancesfor expenses to companies firms Limited Liability Partnerships or other parties coveredin the register maintained under section 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2019 as prescribed under the provision of the section73 to 76 of the Companies Act 2013 and rules framed there under.

(vi) The Central Government has prescribed maintenance of cost records under clause (d)of sub-section (1) of Section 148 of the Companies Act 2013. As observed by us suchaccounts and records have been made and maintained by Company. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

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

a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialstatutory dues in arrears as at March 31 2019 for a period of more than six months fromthe date they became payable.

c) Details of dues of Income Tax Sales Tax Goods & Service Tax and Value AddedTax which have not been deposited as at March 31 2019 on account of dispute are givenbelow :

Sr. No. Financial Year / Period Nature of Demand Appellate Authority where dispute is pending Amounts
1 2005-2006 Income Tax Hon'ble High Court Mumbai 190.50 Lakhs
2 2009-2010 Income Tax Hon'ble Supreme Court 66.35 Lakhs
3 2015 -2016 Income Tax Commissioner of Income Tax (Appeal) Mumbai 150.30 Lakhs
4 2014-2015 MVAT Department of Sales tax 27.16 Lakhs

(viii) According to records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank or Government. The Company has not issuedany debentures during the year.

(ix) During the year the Company came out with an Initial Public Offer of its EquityShares through offer for sale by its shareholders. According to the information andexplanations given to us the term loans raised have been applied by the Company duringthe year for the purposes for which they were raised.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act

(xii) The Company is not a Nidhi Company and hence reporting under Clause 3 (xii) ofthe Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Standalone Ind AS Financial Statements as requiredby the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder Clause 3 (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its subsidiary companies or persons connected with them andhence provisions of Section 192 of the Act are not applicable.

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

For B Y & Associates

Chartered Accountants

Firm's registration number: 123423W

CA Bhavesh Vora

Partner

Membership Number: 043908

Date : May 27 2019

Place : Mumbai

#AREnd#

#ARCStart#

INDEPENDENT AUDITORS' REPORT

To

The Members of

Fine Organic Industries Limited

(Formerly known as ‘Fine Organic Industries Private Limited')

REPORT ON THE AUDIT OF THE CONSOLIDATED IND AS FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Consolidated Ind AS Financial Statements of FineOrganic Industries Limited (herein referred to as the "Parent Company") and itssubsidiaries (the Parent and its subsidiaries together referred to as "theGroup") its jointly controlled entities which comprise the Consolidated BalanceSheet as at March 31 2019 the Consolidated Statement of Profit and Loss (including OtherComprehensive Income) the Consolidated Statement of Changes in Equity the ConsolidatedStatement of Cash Flow for the year then ended and notes to the Consolidated Ind ASFinancial Statements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the Consolidated Ind ASFinancial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Consolidated Ind AS Financial Statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended (‘Ind AS') and other accounting principles generally accepted inIndia of the consolidated state of affairs of the Group as at March 31 2019 andconsolidated profit their consolidated total comprehensive income their consolidatedstatement of changes in equity and their consolidated cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Consolidated Ind AS Financial Statements in accordancewith the Standards on Auditing (SAs) specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of Consolidated Ind AS Financial Statements section of ourreport. We are independent of the Group in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the Consolidated Ind AS Financial Statements under theprovisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Consolidated Ind AS Financial Statements.

Key Audit Matters

Key Audit Matters are those matters that in our professional judgment were of mostsignificance in our audit of the Consolidated Ind AS Financial Statements of the currentperiod. These matters were addressed in the context of our audit of the Consolidated IndAS Financial Statements as a whole and in forming our opinion thereon and we do notprovide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Consolidated Ind AS Financial Statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Consolidated Ind AS Financial Statements. The results ofour audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying Consolidated Ind AS FinancialStatements.

1 Recoverability of Indirect Tax Receivables

In Note No. 17 ‘Other Current Assets' in respect of Balance with Statutory andGovernment Authorities includes Input Tax Credit (ITC) of Goods & Service Taxrecoverable as at March 31 2019 of ? 5083.55 Lakhs which are pending adjudication.

Auditors' Response

The Group has provided affirmation from Indirect Tax Consultant of the Parent Companyregarding the nature & status of amount recoverable the sustainability and thelikelihood of recoverability upon final resolution.

2 Revenue Recognition

For the year ended March 31 2019 the Group has recognised revenue from contracts withcustomers amounting to ? 106033.07 Lakhs.

Revenue from contracts with customers is recognised when control of the goods orservices are transferred to the customer at an amount that reflects the consideration towhich the Group expects to be entitled in exchange for those goods or services.

The Group has generally concluded that as principal it typically controls the goods orservices before transferring them to the customer.

The variety of terms that define when control are transferred to the customer as wellas the high value of the transactions give rise to the risk that revenue is notrecognised in the correct period.

Revenue is measured net of returns and allowances cash discounts trade discounts andvolume rebates (collectively ‘discount and rebates'). There is a risk that thesediscount and rebates are incorrectly recorded as it also requires a certain degree ofestimation resulting in understatement of the associated expenses and accrual.

Revenue is also an important element of how the group measures its performance. TheGroup focuses on revenue as a key performance measure which could create an incentive forrevenue to be recognised before the risk and rewards have been transferred.

Accordingly due to the significant risk associated with revenue recognition inaccordance with terms of Ind AS 115 ‘Revenue from contracts with customers' it wasdetermined to be a key audit matter in our audit of the Consolidated Ind AS FinancialStatements.

Auditors' Response

Our audit procedures included the following:

• Assessed the Group's revenue recognition procedure as per Ind AS 115‘Revenue from contracts with customers'.

• Assessed the design and tested the operating effectiveness of internal controlsrelated to revenue recognition discounts and rebates.

• Performed sample tests of individual sales transaction and traced to salesinvoices sales orders and other related documents. Further in respect of the sampleschecked that the revenue has been recognised as per the terms.

• To test cut off selected sample of sales transactions made pre- and post-yearend agreeing the period of revenue recognition to third party support such astransporter invoice and customer confirmation of receipt of goods.

• Tested the provision calculations related to discounts and rebates by agreeing asample of amounts recognised to underlying arrangements with customers and othersupporting documents.

• Performed analytical procedures of revenue by streams to identify any unusualtrends.

• The Group has provided confirmations from customers on sample basis to supportexistence assertion of trade receivables and assessed the relevant disclosures made in thefinancial statements; to ensure revenue from contracts with customers are in accordancewith the requirements of relevant accounting standards.

3 Evaluation of uncertain tax imposition

The Group has material uncertain tax position including matters under dispute whichinvolves significant judgment to determine the possible outcome of these disputes.

{Refer to note no. 41 of the consolidated Ind AS financial statement}

Auditors' Response

We have obtained details of all pending assessments and demands for the year endedMarch 31 2019 from management of the Group. We have evaluated the possible outcome ofpending assessments and disputed matters under litigations.

Information Other than the Consolidated Ind AS Financial Statements and Auditor'sReport Thereon

The Parent's Board of Directors is responsible for other information. The otherinformation comprises the information included in the Board's Report including annexure toBoard's Report Management Discussion & Analysis Report Business ResponsibilityReport Corporate Governance and Shareholders Information but does not include theConsolidated Ind AS Financial Statements and our auditors' report thereon.

Our opinion on the Consolidated Ind AS Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the Consolidated Ind AS Financial Statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the Consolidated Ind AS Financial Statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibility of Management and Those Charged with Governance for the Consolidated IndAS Financial Statements

The Board of Directors of the Parent Company is responsible for the matters specifiedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Consolidated Ind AS Financial Statements that give a true and fairview of the consolidated financial position consolidated financial performance includingother comprehensive income consolidated changes in equity and consolidated cash flows ofthe Group including its Jointly Controlled entities in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Therespective Board of Directors of the companies included in the Group are responsible forthe maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding of the assets of the Group and for preventing and detecting thefrauds and other irregularities selection and application of appropriate accountingpolicies making judgments and estimates that are reasonable and prudent and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Consolidated Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error which have been used for the purpose of preparation of ConsolidatedInd AS Financial Statements by the Directors of the Holding Company as aforesaid.

In preparing the Consolidated Ind AS Financial Statements the respective Board ofDirectors of the companies included in the Group and of its jointly controlled entitiesare responsible for assessing the ability of the Group its jointly controlled entities tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless the management either intends toliquidate the Group or to cease operations or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group and of itsjointly controlled entities is responsible for overseeing the financial reporting processof the Group and of its jointly controlled entities.

Auditor's Responsibility for the Audit of the Consolidated Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Consolidated Ind ASFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable Assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Consolidated Ind AS Financial Statements.

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

• Identify and assess the risks of material misstatement of the Consolidated IndAS Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theParent has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Group and its joint ventures to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors' report tothe related disclosures in the Consolidated Ind AS Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However future events orconditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the Consolidated IndAS Financial Statements including the disclosures and whether the Consolidated Ind ASFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Obtain sufficient and appropriate audit evidence regarding the financialinformation of the business activities within the Group and its joint ventures to expressan opinion on the Consolidated Ind AS Financial Statements. We are responsible for thedirection supervision and performance of the audit of the financial statements of suchbusiness activities included in the Consolidated Ind AS Financial Statements of which weare the independent auditors. For the other entities included in the Consolidated Ind ASFinancial Statements which have been either audited by the other auditors or certified bythe management of the Parent Company such other auditors and management of the ParentCompany remain responsible for the direction supervision and performance of the auditscarried out by them. We remain solely responsible for our audit opinion.

Materiality is the magnitude of misstatements in the Consolidated Ind AS FinancialStatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the Consolidated Ind AS FinancialStatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 Consolidated Ind ASFinancial Statements.

We communicate with those charged with governance of the Parent Company and such otherentities included in the Consolidated Ind AS Financial Statements of which we are theindependent auditors regarding among other matters the planned scope and timing of theaudit and significant audit findings including any significant deficiencies in internalcontrol that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the Consolidated Ind AS Financial Statements of the current period and aretherefore the key audit matters. We describe these matters in our auditors' report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Other Matters

The Consolidated Ind AS financial statement include the Group's Share of net loss of ?295.06 lakhs for the year ended March 31 2019 as considered in the consolidated Ind AsFinancial statement in respect of one jointly controlled entity whose financialstatement have not been audited by us. The financial statement has been audited by otherauditor whose report have been furnished to us by the Management and our opinion on theConsolidated Ind AS Financial Statements in so far as it relates to the amounts anddisclosures included in respect of this jointly controlled entity and our report in termsof sub-sections (3) and (11) of Section 143 of the Act in so far as it relates to theaforesaid jointly controlled entity is based solely on the report of the other auditor.

We did not audit the financial statements / financial information of two subsidiarieswhose financial statements / financial information reflect total assets (beforeeliminating inter group balances) of ? 2967.77 lakhs as at March 31 2019 total revenuesof ? 7631.02 lakhs and net cash flows amounting to ? 85.18 lakhs for the year ended onthat date as considered in the Consolidated Ind AS Financial Statements. The ConsolidatedInd AS financial statement also include the Group's share of Net Loss of ? 40.02 lakhs forthe year ended March 31 2019 as considered in the Consolidated Ind AS FinancialStatement in respect of one Jointly controlled entity whose financial statements/financial information have not been audited by us. In case of Financial statement /financial information of these subsidiaries and one jointly controlled entity areunaudited and as informed to us are not required to be audited under the regulationsgoverning the entities and therefore have been compiled by the accountant of thesubsidiaries and one jointly controlled entity and certified by the management and ouropinion on the Consolidated Ind AS Financial Statements in so far as it relates to theamounts and disclosures included in respect of these subsidiaries and jointly controlledentity and our report in terms of sub-section (3) and (11) of Section 143 of the Act inso far as it relates to the aforesaid subsidiaries and one jointly controlled entity isbased solely on the such report / certificate. In our opinion and according to theinformation and explanation given to us by the management these financial statements /financial information are not material to the Group.

Our opinion on the Consolidated Ind AS Financial Statements and our report on OtherLegal and Regulatory Requirements below is not modified in respect of the above matterswith respect to our reliance on the work done and the reports of the other auditors andthe financial statements / financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

As required by Section 143(3) of the Act based on our audit and on the considerationof the reports of the other auditors / certificate of the management on the financialstatements / financial information of the subsidiaries and joint ventures referred to inthe Other Matters section above we report to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit of the aforesaidConsolidated Ind AS Financial Statements.

b) In our opinion proper books of account as required by law relating to preparationof the aforesaid Consolidated Ind AS Financial Statements have been kept so far as itappears from our examination of those books.

c) The Consolidated Balance Sheet the Consolidated Statement of Profit and Loss(including other Comprehensive Income) the Consolidated Statement of Changes in Equityand the Consolidated Statement of Cash Flows dealt with by this Report are in agreementwith the relevant books of account maintained for the purpose of preparation of theConsolidated Ind AS Financial Statements.

d) In our opinion the aforesaid Consolidated Ind AS Financial Statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the Directors of theParent Company as on March 31 2019 taken on record by the Board of Directors of theParent Company and the reports of the statutory auditors of its jointly controlled Companyincorporated in India none of the directors of the Group Companies and its jointlycontrolled companies incorporated in India is disqualified as on March 31 2019 from beingappointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting and the operating effectiveness of such controls; refer to our separate reportin Annexure- A which is based on the auditors' reports of the Group and its jointlycontrolled entities.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirement of the section 197(16) of the Act as amended in ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by Parent Company to its directors during the year is in accordancewith the provision of section 197 of the Act.

h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Consolidated Ind AS Financial Statements disclose the impact of pendinglitigations on the consolidated financial position of the Group and its jointly controlledentities.

(ii) Provision has been made in the Consolidated Ind AS Financial Statements asrequired under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Parent Company and its subsidiarycompanies and its jointly controlled companies incorporated in India.

For B Y & Associates

Chartered Accountants

Firm's registration number: 123423W

CA Bhavesh Vora

Partner

Membership Number: 043908

Date : May 27 2019

Place : Mumbai

‘ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Fine Organic Industries Limited ofeven date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 (‘the Act')

In conjunction with our audit of the Consolidated Ind AS Financial Statements of theGroup and its joint ventures as of and for the year ended March 31 2019 we have auditedthe internal financial controls over financial reporting of Fine Organic IndustriesLimited (hereinafter referred to as ‘the Parent') and its subsidiary companies andjoint ventures which are companies incorporated in India as of that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Parents Company are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the respective companies considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (‘the ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to therespective Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Parent Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (‘the Guidance Note') issued by the Institute of Chartered Accountants ofIndia and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Parent its subsidiary companies and its joint ventures whichare companies incorporated in India.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Parent Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the Parent Company have in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the respective companiesconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For B Y & Associates

Chartered Accountants

Firm's registration number: 123423W

CA Bhavesh Vora

Partner

Membership Number: 043908

Date : May 27 2019

Place : Mumbai