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Organic Coatings Ltd.

BSE: 531157 Sector: Industrials
NSE: N.A. ISIN Code: INE412E01011
BSE 00:00 | 11 Jun 6.70 0.20
(3.08%)
OPEN

6.60

HIGH

6.80

LOW

6.20

NSE 05:30 | 01 Jan Organic Coatings Ltd
OPEN 6.60
PREVIOUS CLOSE 6.50
VOLUME 1900
52-Week high 8.42
52-Week low 2.29
P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.60
CLOSE 6.50
VOLUME 1900
52-Week high 8.42
52-Week low 2.29
P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Organic Coatings Ltd. (ORGANICCOATINGS) - Auditors Report

Company auditors report

To

The Members of Organic Coatings Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Organic CoatingsLimited (“the Company”) which comprise the Balance Sheet as at March 31 2020and the statement of Profit and Loss(including Other Comprehensive Income) the Statementof Changes in Equity and the Statement of Cash Flows for the year ended on that date andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.(hereinafter referred to as the “standalonefinancial 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 Companies Act 2013 (the “Act”) in the manner so required and give a trueand fair view in conformity with Indian Accounting Standards prescribed under section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended(“Ind As”) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 the loss and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe 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 we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

1. Trade Receivables - The company is in the supply of printing inks and auxiliaries toprinters all over India. In the printing press industry the preference of payments forsupplier of inks is the lowest. Some trade receivables are slow in recovery and take timefor recovery beyond the limitation period. In some cases suits have been fled for recoveryand the court judgments are yet to be received. There is therefore a risk for realisationof the trade receivables (refer note no 37).

How our audit address the key audit matter-

Our audit procedure included among others examining the pattern of subsequent receiptsthe status of various legal cases and management's method to determine the recoverabilityof the amount considering the feedback from the market. We validated the appropriatenessof the related disclosures in note no of 37 of the financial statements.

2. Examination of documents/ records in lockdown conditions due to covid-19 pandemic -The Financial Statements of the Company for the year ended March 31 2020 were auditedunder exceptional circumstances due to prevailing lockdown conditions on account ofCovid-19 pandemic. Due to the restrictions on physical movement the entire audit teamcould not visit the company and we have examined the books of accounts and relevantdocuments through scanned documents / spread sheets received in electronic mode and not inoriginal. Our audit procedures were designed to obtain sufficient appropriate auditevidence under these exceptional circumstances.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report and Shareholder Information but doesnot include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone 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.

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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 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 standalonefinancial 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 accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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 interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 (“the Order”)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the “Annexure B” a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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.

(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 Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial 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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions 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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

For Praneti Yadav & Co.

Chartered Accountants

ICAI Firm Registration No. 137534W

Praneti Yadav

Proprietor

Membership No. 156403

UDIN:20156403AAAAAF7873

Mumbai

June302020

Annexure ‘A' to the Independent Auditor's Report

(Referred to in paragraph (f) under ‘Report Report on Other Legal and RegulatoryRequirements' section of our report 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 OrganicCoatings Limited (“the company”) as at March 312020 in conjunction with ouraudit of the standalone Ind AS financial statements of the company for the year ended onthat 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 (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 tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the “Guidance Note”) issued by the ICAI and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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. 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 authorities 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 procedure 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 2020 based on the internal controlover financial reporting criteria established by the company 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.

For Praneti Yadav & Co.

Chartered Accountants

ICAI Firm Registration No. 137534W

Praneti Yadav

Proprietor

Membership No. 156403

UDIN:20156403AAAAAF7873

Mumbai

June 302020

Annexure ‘B' to the Independent Auditor's Report

Referred to in paragraph 1 under ‘Report Report on Other Legal and RegulatoryRequirements' section of our report the members of Organic Coatings Limited of even date

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

(b) As explained to us the fixed assets have been physically verified by themanagement at reasonable intervals during the year which in our opinion is reasonablehaving regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such verification;

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company;

(ii) As explained to us physical verification of inventories has been conducted atreasonable intervals by the management during the year and the discrepancies noticed onverification between the physical stocks and book records were not material and the samehave been properly dealt with in the books of accounts;

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013;

(iv) The Company has not given loans or made investments or given guarantees andprovided security in terms of provisions of section 185 and 186 of The Companies Act2013.

(v) The Company has not accepted any deposits and hence the directives issued by theReserve Bank of India and the provisions of the sections 73 to 76 or any other relevantprovisions of the Act and the rules framed there under are not required to be compliedwith by the Company.

(vi) The Maintenance of cost records has not been specified by the Central Governmentunder sub-section 1 of the section 148 of the Act for any of the products manufactured bythe Company. Accordingly paragraph 3(vi) of the order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employee's stateinsurance income tax sales tax goods and service tax service tax duty of customsduty of excise value added tax cess and any other statutory dues have been regularlydeposited during the year by the Company with the appropriate authorities and noundisputed amounts payable were in arrears as at 31 March 2020 for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us there are no duesoutstanding of income tax sales tax goods and service tax service tax duty of customsduty of excise and value added tax on account of dispute which have not been depositedwith the concerned authorities;

(viii) In our opinion and according to the information and explanation given to us theCompany has not defaulted in repayment of loans or borrowings to a bank and financialinstitutions. The Company has not taken loan from the Government and has not issued anydebentures;

(ix) The company has raised monies by way of term loans from bank and the same wereapplied for the purposes for which they were raised.

(x) In our opinion and according to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the year.

(xi) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us thecompany is not a Nidhi company. Accordingly paragraph 3(xii)of the order is notapplicable.

(xiii) In our opinion and according to the information and explanations given to usand based on our examination of the records of the Company all transactions with therelated parties are in compliance with sections 177 and 188 of the Act where applicableand the details of the same have been disclosed in the financial statements as required bythe applicable accounting standards;

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv)of the order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the order is not applicable.

(xvi) The Company is not required to be registered under section 45-1A of the ReserveBank of India 1934. Accordingly paragraph 3(xvi)of the order is not applicable.

For Praneti Yadav& Co.

Chartered Accountants

ICAI Firm Registration No. 137534W

Praneti Yadav

Proprietor

Membership No. 156403

UDIN:20156403AAAAAF7873

Mumbai

June302020