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Smruthi Organics Ltd.

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Smruthi Organics Limited is not listed on NSE

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Smruthi Organics Limited(the Company), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive Income), the Cash Flow Statement and the statement of changes of equity for the year ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, profit or loss (financial performance including other comprehensive Income and cash flows and changes in the equity of the Company in accordance with the accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Standalone IndAS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Standalone Ind AS financial statement in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including Ind AS of the state of affairs ( Financial Position) of the Company as at March 31, 2018, and its loss (Financial performance including other comprehensive Income) and its cash flows and the changes in equity for theyearended on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (the Order) issued by the Central Government in terms of sub-section (11) of section 143 of the Act, we give in Annexure A, a statement on matters specified in paragraphs 3 and 4 of the said order .

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, Cash Flow Statement and statement of changes in equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015.

(e) In the course of our audit we have not come across any transactions or matters which have any adverse effects on the functioning of the company.

(f) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the adequacy of the internal financial control over financial reporting of the company and operating effectiveness of such controls - Annexure B.

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

i. The Company does not have any pending litigations on its financial position in Standalone Ind AS financial statement.

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

iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure-A to the Independent Auditor’s Report

Referred to in paragraph 1 under the heading of Report on other legal and regulatory requirements of our report of even date.

Smruthi Organics Limited

For the Year Ended March 31st 2018

1. Fixed Assets [Clause 3(I)]:

a) Proper Records: The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets:

b) Physical Verification: These fixed assets have been physically verified by the management at reasonable intervals - Not Applicable.

Any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account by the management at regular intervals.

c) Title Deed: The title deeds of immovable properties are held in the name of the company.

2. Inventory [Clause 3(ii)]:.

Physical verification: Physical verification of inventory has been conducted at reasonable intervals by the managements; Valuation of closing stock is taken as certified, valued and verified by the management by the Company

No such material discrepancies were noticed on such verification. And if so, whether the same have properly dealt with in the books of account is not applicable;

3. Loan given by Company [Clause 3(iii)]:

a) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships(LLP) or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

b) Terms and Conditions: The terms and conditions of the grant of such loans are not prejudicial to the company’s interest Not Applicable.

c) Regular Recovery: The schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular; Not Applicable.

d) Steps for Recovery: If the amount is overdue, state the total amount overdue for more than 90 days, and whether reasonable steps have been taken by the company for recovery of the principal and interest. Not Applicable.

4. Loan to the Directors and investment by Company [Clause3(iv)];

The company has not granted or made any investments, guarantees, and security to the parties covered under section 185 and 186 of the Companies Act, 2013 have been complied with. If not, provided the details thereof. Not Applicable.

5. Deposits[Clause3(v)]:

If the company has not accepted any deposits from the public within the meaning of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder - Not Applicable.

6. Cost Records [Clause3(vi)]:

The Central Government has specified maintenance of cost records under section 148 (1) of the Companies Act, 2013, and hence such accounts and records have been made and maintained.

7. Statutory Dues [Clause 3(vii)]

Following matters shall be reported for statutory dues and disputes for tax and duties.

a) Statutory Dues for more than 6 Months: Whether the company is regular in depositing undisputed statutory dues with the appropriate authorities including:

i. Provident fund; No Such Dues

ii. Employee’s state insurance ;No Such Dues

iii. Income - tax; No Such Dues

iv. Sales- tax; No Such Dues

v. Service tax; No Such Dues

vi. Duty of customs; No Such Dues

vii. Duty of excise; No Such Dues

viii. Value Added Tax (VAT);No Such Dues

ix. Cess; and No Such Dues

x. Any other statutory dues. No Such Dues

If the company is not regular in depositing such statutory dues, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor. No such dues are pending.

a) According to the records of the company and as per information and explanation given to me, there are no dues of Sales Tax or Value added tax and Excise which have not been deposited on account of any dispute as on 31.03.2018,

8. Repayment of Loans [Clause 3(viii)]

The company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government.

9. Utilization of IPO and further Public offer [Clause 3(ix)]:

The Company has not raised money by way of initial public offer or further public offer and Term Loans where applied for the purposes for which those are raised,

If not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported - Not applicable.

10 Reporting of Fraud [Clause(x)]:

No fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.

11 Approval of Managerial Remuneration [Clause 3(xi)]:

Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.

12 Nidhi Company [Clause3 (xii)]:

Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1:20 to meet out the liability and whether the Nidhi Company is maintaining 10% unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet our the liability; Not Applicable

13 Related Party Transaction [Clause 3 (xiii)]:

All transactions with the related parties are in compliance with sections 177 and 188 Companies Act, 2013. The details of such related party transaction have been disclosed in the Financial Statements as required under Indian Accounting Standard (Ind AS) 24, related party disclosures specified under section 133 of the Act.

14 Private Placement or Preferential Issues [Clause 3(xiv)]:

The company has not made any preferential allotment or private placement of shares or fully or party convertible debentures during the year under review. Accordingly the provisions of Clause 3 (xiv)of the order are not applicable to the company.

15 Non- cash Transactions [Clause 3(xv)]:

The company has not entered into any non-cash transactions with directors of persons connected with him. Accordingly provisions of [Clause 3(xv)] of the order are not applicable to the company.

16 Register under RBI Act 1934 [Clause 3 (xvi)]:

The company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly provision of Clause 3 (xvi) of the order are not applicable to the company.

Annexure - B to the Independent Auditors’ Report

Referred to in paragraph 2(g) under the heading of Report on other legal and regulatory requirements of our report of even date.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the Act)

We have audited the internal financial controls over financial reporting of Smruthi Organics Ltd (the Company) as of 31st March 2018 in conjunction with our audit of the standalone 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

N.R.Waghchaure & Associates

Chartered Accountants,

FRN : 114999W

Nilkanth R Waghchaure

Place : Solapur Proprietor

Date : 19th May, 2018 ICAI Membership No :048890