To the Members of
Fine Organic Industries Limited
(Formerly known as Fine Organic Industries Private Limited')
RepORt On the StandaLOne FInancIaL StatementS
We have audited the accompanying standalone financial statements of Fine OrganicIndustries Limited (the Company') which comprise the Balance Sheet as at
31st March 2018 the Statement of Profitand Loss (including
Other Comprehensive Income) the Statement of Changes in Equity and the Statement ofCash Flows for the year then policies ended and a summary of the significant and otherexplanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act') with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flow of the Company in accordance with the Indian Accounting Standards (Ind AS)prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities selection and application ofappropriate accounting policies only making judgements and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under and the Orderissued under Section 143(11) of the Act.
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgement including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements. We believethat the audit evidence obtained by us is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the
Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2018 and its profitTotal comprehensive income the changesin equity and its cash flows for the year ended on that date.
The comparative financial information of the Company for the transition date openingBalance Sheet as at 1st April 2016 included in this standalone Ind ASfinancial statements are based on the previously issued statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited bythe predecessor auditor whose report for the year ended 31st March 2016 dated3rd August 2016 expressed an unmodified opinion on that standalone financialstatements and have been restated to comply with Ind AS Adjustments made to thepreviously issued said financial information prepared in accordance with the Companies(Accounting Standards) Rules 2006 to comply with Ind AS have been audited by us.
Our opinion is not modified in respect of these matters.
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) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet 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 books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act. (e) On the basis ofthe written representations received from the directors of the Company as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof 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 our separate reportin annexure a'. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.
(g) 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 financial statements.
(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if anyonlong-termcontractsincludingderivativecontracts.
(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's Report) Order 2016 (the Order')issued by the Central Government in terms of Section 143(11) of the Act we give in annexureb' a statement on the matters specified in paragraphs 3 and 4 of the Order.
A NNEXURE 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 Industries Limitedof even date) Report on the Internal Financial Controls Over Financial Reporting underClause (i) of sub-section 3 of Section 143 of the Companies Act 2013 (the Act') Wehave audited the internal financial controls over financial reporting of Fine OrganicIndustries Limited (the Company') as of 31st March
2018 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance NOTE on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
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 and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk.
The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
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. A 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 authorisations 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.
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.
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 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance NOTE on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
A NNEXURE 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 Industries Limitedof even date)
(i) In respect of the Company's a) The Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets. to coverb) The Company has a program of verification all the items of fixed assets in a phasedmanner which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets.
Pursuant to the program certain fixed assets were physically verified by theManagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification. c) According to the informationand explanations given to us the records examined by us and based on our examination ofthe records provided to us we report that the title deeds comprising immovableproperties of land and buildings which are freehold if any are held in the name of theCompany as at the Balance Sheet date.
(ii) In respect of the Company's Inventories: a) The inventory has been physicallyverified during the year by the management. In our opinion the frequency of verificationis reasonable. of b) The procedures for physical verification inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business. c) On the basis of our examination of the records of inventory weare of the opinion that company is maintaining proper records of inventory. No materialdiscrepancies were noticed 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 31st March 2018 as prescribed under the provision ofthe section 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 company. However we have not made adetailed examination of the cost records with a view to assets: 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 Sales Tax Service TaxGoods and Service Tax Value Added Tax Customs Duty Excise Duty Cess and other materialstatutory dues applicable to it with the appropriate authorities.
b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Value Added Tax Goods and ServiceTax Customs Duty Excise Duty Cess and other material statutory dues in arrears as at 31stMarch 2018 for a period of more than six months from the date they became payable.
c) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at 31st March 2018 on account of disputeare given below :
|Sr. no. ||Financial year / period ||Nature of demand ||Appellate authority where dispute is pending ||Amounts ( Rs in lakhs) |
|1 ||2005-2006 ||Income Tax ||Hon'ble High Court Mumbai ||74.90 |
|2 ||2008-2009 ||Income Tax ||Hon'ble High Court Mumbai ||126.00 |
|3 ||2009-2010 ||Income Tax ||Hon'ble High Court Mumbai ||140.58 |
|4 ||April' 2010 to March' 2012 ||Service Tax ||Commissioner of Central Excise (Appeal) Thane ||11.96 |
(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) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans during the year and hence reporting underClause 3 (ix) of the Order is not applicable to the Company.
(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) of the Orderis 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 financial statements as required by theapplicable 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 persons connected to its directors and hence provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For b y & associates
Firm's registration number: 123423W
Ca bhavesh Vora
Membership Number: 043908
Date: 13th August 2018
Place : Mumbai