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Fine Organic Industries Ltd.

BSE: 541557 Sector: Industrials
NSE: FINEORG ISIN Code: INE686Y01026
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NSE 00:00 | 21 Jan 3771.30 20.00
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OPEN 3775.00
PREVIOUS CLOSE 3751.80
VOLUME 1922
52-Week high 4040.00
52-Week low 2130.00
P/E 81.50
Mkt Cap.(Rs cr) 11,557
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3775.00
CLOSE 3751.80
VOLUME 1922
52-Week high 4040.00
52-Week low 2130.00
P/E 81.50
Mkt Cap.(Rs cr) 11,557
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Fine Organic Industries Ltd. (FINEORG) - Auditors Report

Company auditors report

to the members of

Fine organic industries limited report on the audit of the standalone ind as financialstatements opinion

We have audited the accompanying standalone ind as financial statements of fineorganic industries limited

(herein referred to as the "company") which comprise the balance sheet as atmarch 31 2021 the statement of profitand loss (including other comprehensiveincome) the statement of changes in equity the statement of cash flows for the year thenended and notes to the standalone ind as financial statements including a summary ofpolicies and other explanatory thesignificant 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 2021 and itsprofit (including other comprehensive income) statement of changes in equity and its cashflows for 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 (sas). Our responsibilities under those standards arefurther described in the auditor's responsibilities for the audit of standalone ind asfinancial statements section of our report. We are independent of the company inaccordance with the code of ethics issued by the institute of chartered accountants ofindia together with the ethical requirements that are relevant to our audit of thestandalone ind as financial statements under the provisions of the companies act 2013 andthe rules made there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the icai's code of ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for ouropinion on standalone ind as financial statement.

Emphasis of matters

We draw attention to note no. 43 of the standalone ind as financial statement asregards the management's evaluation of covid-19 impact on the future performance of thecompany. We further draw attention to advances given to maharashtra industrial developmentcorporation (midc) of rs.2420 lakhs for allotment of plot at pale ambernath(maharashtra) appearing in note no. 11 of the standalone ind as financial statements andrelevant note given by the management of the company.

Our opinion is not modified in respect of these matters.

Key audit matters

Key audit matters are those matters that in our professional e in our audit of thesignificanc judgment were of most 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 theauditor's 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 revenue recognition

for the year ended march 31 2021 the company has recognised revenue from contractswith customers amounting to rs.112125.25 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. Thecompany has generally concluded that as principal it typically controls the goods orservices before transferring them to the customers.

the variety of terms that define when controls are transferred to the customers aswell as 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.

accordinglyduetothesignificantrisk associated with revenue recognition in accordancewith terms of ind as

115 ‘revenue from contracts with customers' it was determined to be a key auditmatter 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 controls relatedto revenue recognition discounts and rebates.

performed sample tests of individual sales transaction and traced to sales invoicessales orders and other related documents. Further in respect of these samples checkedthat the revenue has been recognised as per the terms.

to test cut off selected sample of sales transactions made pre and post-year endagreeing the period of revenue recognition to third party support such as transporterinvoice and confirmationof customer receipt of goods.

tested the provision calculations related to discounts and rebates by agreeing a sampleof amounts recognised to underlying arrangements with customers and other supportingdocuments.

performed analytical procedures of revenue by streams to identify any unusual trends.

the company has provided confirmations from customers on sample basis to supportexistence assertion of trade receivables and assessed the relevant disclosures made in thestandalone ind as financial statements; to ensure revenue from contracts with customersare in accordance with the requirements of relevant accounting standards.

Information other than the standalone ind as financial statements and auditor's reportthereon

The company's management and board of directors' are responsible for the otherinformation. The other information comprises the information included in the company'sannual report for example corporate overview key highlights board's report report oncorporate governance management discussion & analysis report business responsibilityreports etc. but does not include the standalone ind as financial statement and ourauditor's report thereon.

Our opinion on the standalone ind as financial statements 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 ind as financial statements

The company's management and board of directors are responsible for the mattersspecified in the act with respect to the preparation of these standalone ind as financialstatements that give a true and fair view of the financial position financial othercomprehensive income changes in equity and cash flows of the company in accordance withthe ind as and other accounting principles generally accepted in india. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provisions of the act for safeguarding of the assets of the company and forpreventing and detecting the frauds and other irregularities selection and application ofappropriate accounting policies making judgments and estimates that are reasonable andprudent and design implementation and maintenance of internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone ind as financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone ind as financial statements the management and board ofdirectors are responsible for assessing the company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the company orto cease operations or has no realistic alternative but to do so.

The board of directors are also responsible for overseeing the company's financialreporting process.

Auditor's responsibility for the audit of the standalone ind as financial statements

Our objectives are to obtain reasonable assurance about whether the standalone ind asfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's 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 standalone ind 134(5)of as financial statements.

As part of an audit in accordance with sas we exercise professional judgment andmaintain professional skepticism performance including 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 financialcontrol relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

evaluate the appropriateness of the accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

conclude on the appropriateness of the management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that doubt on the company's ability may castsignificant to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the standalone ind as financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's 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 ind asfinancial statements including the disclosures and whether the standalone ind asfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the significantaudit findings including and ininternal control that we identify anysignificant 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 statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public f such communication interestbenefits .

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 aforesaidstandalone ind as financial statements.

B) in our opinion proper books of account as required by law relating to preparationof the aforesaid

Standalone ind as 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 the indian accounting standards prescribed undersection 133 of the act.

E) on the basis of the written representations received from the directors of thecompany as on march 31 2021 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 2021 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 financialcompany and the operating effectiveness of such controls; refer to our separate report in ‘annexurea'. Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the company's internal financial reporting.

G) with respect to the other matters to be included in the auditor's 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 auditor's 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 (auditor'sreport) order 2016 ("the order") issued by the central government in terms ofsection 143(11) of the act we give in the ‘annexure b' a statement on thematters specified in paragraph 3 and 4 of the order.

‘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 auditedthe internal financial controls over financial reporting of fine organic industrieslimited (‘the company') as of march 31 2021 in conjunction with our audit of thestandalone ind as financial statements of the company for the year ended on that date.

Management's responsibility for internal financial controls

The company's management is responsible for establishing and maintaining 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 financialcontrols 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 under the companies act 2013.

Auditor's responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the based on our audit. We conducted our audit in accordance withthe guidance note on audit of internal financial controls over financial reporting (the‘guidance note') issued by the institute of chartered accountants of india and thestandards on auditing prescribed under section 143(10) of the companies act 2013 to theextent applicable to an audit of internal financial controls. Those standards and theguidance note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financialreporting was established and maintained and if such controls operatedeffectively 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 internal financial controls over financial reporting assessing the risk thata material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone ind as 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 standalone ind as financial statements for external purposes in accordancewith generally accepted accounting principles. A 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 standaloneind as financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of the management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standaloneind as 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 because of changes in conditions or that the degree of compliance with thepolicies 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 over financial reporting were operating effectively as at march 312021 based on the criteria for internal financial control over financial reportingcriteria established by the

Company considering the essential components of internal control stated in the guidancenote on audit of internal financial controls over financial reporting issued by theinstitute of chartered accountants of india. Reporting may become inadequate

‘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 fix detailsandsituationof

b) the company has verificationto cover programof 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 program certain fixed assets werephysically verified during the year. According to the information and explanations givento us no material discrepancies werenoticedonsuchverification.

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 verificationof physical 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 any unclaimeddeposits as at by themanagement march 31 2021 as prescribed under the provision of thesection 73 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 the company. However we have notmade a detailed 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 undisputedstatutory dues including provident fund employees' state insurance income tax goodsand service tax customs duty cess and other material statutory dues applicable to itwith the appropriate authorities. B) there were no undisputed amounts payable in respectof provident fund employees' state insurance income tax goods and service tax customsduty cess and other material statutory dues in arrears as at march 31 2021 for a periodof more than six months from the 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 2021 on account of dispute are givenbelow:

Sr. No. Financial year / Period Nature of Demand Appellate authority where Dispute is pending Amounts (rs.in lakhs)
1 2005-2006 Income tax Commissioner of income tax (appeal) mumbai 3.34
2 2009-2010 Income tax Commissioner of income tax (appeal) mumbai 6.11
3 2015-2016 Income tax Commissioner of income tax (appeal) mumbai 149.17
4 2017-2018 Income tax Commissioner of income tax (appeal) mumbai 373.55
5 2014- 2015 Mvat Department of sales tax 27.16

(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 financialinstitution or bank or government. The company has not issuedany debentures during the year.

(ix) during the year the company has not raised money by way of initial public offer orfurther public offer (including debt instruments). 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 2021

Place : mumbai

Udin: 21043908aaaaar2085

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