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Oceanic Foods Ltd.

BSE: 540405 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE711V01010
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NSE 05:30 | 01 Jan Oceanic Foods Ltd
OPEN 57.50
PREVIOUS CLOSE 57.50
VOLUME 1602
52-Week high 65.30
52-Week low 31.80
P/E 29.34
Mkt Cap.(Rs cr) 65
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 57.50
CLOSE 57.50
VOLUME 1602
52-Week high 65.30
52-Week low 31.80
P/E 29.34
Mkt Cap.(Rs cr) 65
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Oceanic Foods Ltd. (OCEANICFOODS) - Auditors Report

Company auditors report

To the Members of Oceanic Foods Limited

Report on the Audit of Financial Statements

We have audited the accompanying financial statements of Oceanic Foods Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and a summaryof significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

a. in the case of the Balance Sheet of the state of affairs of the Company as at March31 2019;

b. in the case of the Statement of Profit and Loss for the year ended on that date and

c. in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Companies Act 2013 (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules 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 ouraudit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.The following are the key audit matters which were of most significance in our audit ofthe financial statements of the current period:

Key Audit Matter Auditor's Response
1. Valuation of Inventory 1. Obtained an understanding of business model and parameters affecting valuation of products
As per Accounting Standard-2 Closing inventories are valued at lower of cost and net realizable value (estimated selling price less estimated cost to sell) 2. Obtained an understanding of the parameters affecting the net realizable value of products and tested the reasonable ness of the significant judgements applied by the management
Considering that since the Company is in the business of Agro based Dehydrated products the following factors impact the valuation of these inventories:
a) Volatility of Agro based market 3. Obtained laboratory testing report of inventory as at 31st March 2019 analyzing various parameters affecting valuation of these products
b) Salability of the product &
c) Qualitative characteristics of the products which are variable in nature.
Thus there is always volatility factor involved in the valuation of these dehydrated products (mainly Onion & Garlic) lying in stock at the year end in any form whether Raw Semi-finished or Finished form. Therefore it has been considered as a key audit matter. 4. Compared the cost of products derived by the weighted average method & NRV of the products based on the quotations received by the company for supply of products having similar parameters
5. Compared the cost of finished goods with the estimated net realizable value and checked if the finished goods were recorded at net realizable value where the cost was higher than the net realizable value.
6. Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Board's Reportincluding Annexure to Board's Report but does not include the financial statements andour auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse 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 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 preparation andpresentation of these financial statement that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theAccounting principles generally accepted in India including the Accounting Standardsspecified u/s 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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

Auditors' Responsibility

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 bestof our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books

c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account

d. in our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 312018 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2018 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 B" and

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 in our opinion theprovisions of section 197 read with Schedule V to the Companies Act relating to payment ofmanagerial remuneration are applicable to the Public Limited Company.

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 explanation given to us;

i. The company has disclosed the impact of pending litigations on its financialposition in its financial statements refer note 1 to the financial statements.

ii. The company does not have any long-term contracts including derivative contractshence the question of any material foreseeable losses does not arise;

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

For Maharishi & Co.

Chartered Accountants

Firm Registration No. 124872W

Kapil Sanghvi

Partner

Membership No. 141168

Signed at Jamnagar on

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the members of OceanicFoods Ltd on the financial statements for the year ended 31st March 2019]

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

(b) All the fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. As informed nomaterial discrepancies 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 are inthe name of the company.

(ii) The inventory (excluding stocks with third parties and work in progress) has beenphysically verified by the management during the year. In respect of inventory lying withthird parties these have substantially been confirmed by them. In our opinion thefrequency of verification is reasonable. Discrepancies noticed during physicalverification were not material and the same has been dealt with in the books of account.

(iii) As informed the company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Act accordingly the provisions stated in paragraph 3 (iii)(a) and 3(iii)(b) of theOrder are not applicable.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and section 186 of the act withrespect to guarantee and investments made.

(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from the public within the provisions of section 73to 76 of the Act and rules framed there under.

(vi) The Central Government of India has not prescribed the maintenance of cost recordsfor any of the products of the company under sub-section (1) of section 148 of the Act andrules framed there under.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund investor education and protectionfund income-tax sales-tax service tax customs duty GST cess and other materialstatutory dues applicable to it.

(b) According to the information and explanation given to us the following dues havenot been deposited as at March 31 2019 on account of any dispute are as follows:

Name of the Statute Nature of Dues Forum where dispute is pending Related to F.Y. Amount(Rs.)
Central Sales Tax Act Tax + Interest Assistant Commissioner of Appeals 2002-03 84553.00
Central Sales Tax Act Tax + Interest Assistant Commissioner of Appeals 2002-03 2440.00

(viii) Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank.

(ix) During F.Y. 2016-17 the company completed the initial public offer (IPO) andraised a total capital of Rs. 65000000 by issuing 1000000 equity shares of Rs 10 eachat a premium of Rs 55 per share. Out of this during the F.Y. 2017-18 Rs. 4500000/-(Total expense amounting to Rs. 5441291/-) were utilized for share issue expenses andRs. 11500000/- were utilized for General Corporate Purpose. During the year ended on31.03.2019 the amount of Rs. 49000000/- were utilised by the company for fulfillingits working capital requirements.

(x) During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the company noticed or reported during the year nor have webeen informed of such case by the management.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197.

(xii) In our opinion the Company is not a nidhi company. Accordingly the provisionsof clause (xii) of paragraph 4 of the Companies (Auditor's Report) Order 2016 are notapplicable to the Company.

(xiii) According to information and explanation given to us and on the basis of booksof accounts and other relevant records of the company all transactions with the relatedparties are in compliance with section 177 and 188 of Companies Act 2013 where applicableand the details have been disclosed in the Note 34 of the Financial Statements as requiredby the applicable accounting standards.

(xiv) Company has not made any private placement or preferential allotment during theyear.

(xv) According to information and explanation given to us and on the basis of books ofaccounts of the company no non cash transaction is entered into by the company during theyear.

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

For Maharishi & Co.

Chartered Accountants

Firm Registration No.124872W

Kapil Sanghvi

Partner

Membership No. 146811

Signed at Jamnagar on

Annexure B to the Auditors' report

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (‘the act')

We have audited the internal financial control over financial reporting of OCEANICFOODS LIMITED (‘the company') as of 31st March 2019 in conjunction with our audit ofthe standalone financial statement 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 (‘ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors and accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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') and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the standalone 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 Control 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 purpose 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 authorization of themanagement 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 misstatement due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 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.

For Maharishi & Co.

Chartered Accountants

Firm Registration No.124872W

Kapil Sanghvi

Partner

Membership No.141168

Signed at Jamnagar on