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Oricon Enterprises Ltd.

BSE: 513121 Sector: Industrials
NSE: ORICONENT ISIN Code: INE730A01022
BSE 00:00 | 09 Jul 20.40 3.40
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NSE 00:00 | 09 Jul 20.30 3.35
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OPEN 17.50
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VOLUME 376188
52-Week high 24.40
52-Week low 8.90
P/E 10.46
Mkt Cap.(Rs cr) 320
Buy Price 20.40
Buy Qty 50583.00
Sell Price 20.40
Sell Qty 6678.00
OPEN 17.50
CLOSE 17.00
VOLUME 376188
52-Week high 24.40
52-Week low 8.90
P/E 10.46
Mkt Cap.(Rs cr) 320
Buy Price 20.40
Buy Qty 50583.00
Sell Price 20.40
Sell Qty 6678.00

Oricon Enterprises Ltd. (ORICONENT) - Auditors Report

Company auditors report

TO THE MEMBERS OF ORICON ENTERPRISES LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Oricon Enterprises Limited (the Company) which comprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the standalone financial statements).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended (Ind AS) and other accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 the profit and total comprehensive income 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 the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance 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 financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit MatterHow our audit addressed the key audit matter
Evaluation of Provision and Contingent Liabilities:We have reviewed and held discussions with the management to understand their processes to identify new possible obligations and changes in existing obligations for compliance with the requirements of Ind AS 37 on Provisions Contingent
As at the Balance Sheet date the Company has open litigation and other contingent liabilities as disclosed in note no. 46 & 68. The assessment of the existence of the present legal or constructive obligation analysis of the probability or possibility of the related payment require the management to make judgement and estimates in relation to the issues of each matter.Liabilities and Contingent Assets.
We have also discussed with the management significant changes from prior periods and obtained a detailed understanding of these items and assumptions applied. We have held regular meetings with the management and key legal personnel responsible for handling legal matters.
In addition we have reviewed:
The management with the help of opinion and advise of its experts have made such judgements and estimates relating to the likelihood of an obligation arising and whether there is a need to recognize a provision or disclose a contingent liability. the details of the proceedings before the relevant authorities including communication from the advocates / experts;
 status of each of the material matters as on the date of the balance sheet.
Due to the level of judgement relating to recognition valuation and presentation of provision and contingent liabilities this is considered to be a key audit matter.We have assessed the appropriateness of provisioning based on assumptions made by the management and presentation of the significant contingent liabilities in the financial statements.

Information Other than the Standalone Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis Directors' Report including Annexures to Directors' Report and Corporate Governance Report but does not include the standalone financial statements and our auditor's report thereon. The Board's Report including Annexures to Board's Report and Corporate Governance Report is expected to be made available to us after the date of this auditor's report.

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

In connection with our audit of the standalone financial statements our responsibility is to read the other information identified above when it becomes available and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Board's Report including Annexures to Board's Report if we conclude that there is a material misstatement therein we are required to communicate the matter to those charged with governance and describe actions applicable in the applicable laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position financial performance total comprehensive income changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

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

The Board of Directors are responsible for overseeing the Company's financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

 Identify and assess the risks of material misstatement of the standalone financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

 Obtain an understanding of internal financial controls relevant to the audit in order to design 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 has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

 Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the standalone 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.

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

Materiality is the magnitude of misstatements in the standalone financial statements that individually or in aggregate makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced.

We consider quantitative 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 financial statements.

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

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

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

The comparative financial statements issued earlier for the year ended March 31 2018 have been restated to give effect to the Scheme of Amalgamation of Oriental Containers Limited and Shinrai Auto Services Limited wholly owned subsidiaries of the Company with the Company as explained in note 56 to the standalone financial statements.

Our opinion on the financial statements and our report is not modified in respect of the above matter.

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 of India in terms of sub-section (11) of section 143 of the Companies Act 2013 we give in the Annexure `A' a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. 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 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 including Other Comprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disqualified as on March 312019 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 financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure `B'. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor's Report in accordance 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 explanations given to us the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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 as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 312019 on its financial position in its standalone financial statements - Refer Note 62 to the standalone financial statements.

ii. The Company did not have any long term contracts including derivatives contracts for which there were any material foreseeable losses - Refer Note 63 to the standalone financial statements.

iii. There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Company during the year ended March 312019 - Refer Note 64 to the standalone Ind AS financial statements.

For S G N & Co.

Chartered Accountants

Firm Registration No: 134565W

Shreyans Jain

Partner

Membership Number: 147097

Place: Mumbai

Date: May 25 2019

Annexure A to Independent Auditors' Report of even date on the standalone financial statements of Oricon Enterprises Limited

The Annexure referred to in Independent Auditors' Report to the members of the Company on the standalone financial statement for the year ended March 312019. We report that:

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

b) The Company has a programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner. In our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its business. In accordance with the said programme certain fixed assets were physically verified by the management and no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company except for Residential flats as disclosed under note 4 having gross block value of Rs.256.47 lakhs and net block value of Rs.203.95 lakhs the title deeds of immovable properties are held in the name of the Company.

ii) The management has conducted physical verification of the inventory at reasonable intervals except material/goods in transit and stocks lying with third parties and in bonded warehouse which are verified with reference to the certificates obtained and / or subsequent clearance of goods. In our opinion the frequency of physical verification is reasonable. No material discrepancies were noticed on physical verification between the physical stock and book records.

iii) According to the information and explanations given to us the Company has granted unsecured loans to three companies covered in the register maintained under Section 189 of the Act.

(a) The terms and conditions of the grant of such loans are in our opinion prima facie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

iv) In our opinion and according to the information and explanations given to us the Company has complied with the provisions of section 185 and 186 of the Act with respect to the loans and investments made.

v) The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules made thereunder.

vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Act in respect of Company's products and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) a) According to the information and explanations given to us

and on the basis of records examined by us the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund Employees' State Insurance Income Tax Sales Tax Goods and Service Tax Duty of Custom Duty of Excise Value Added Tax Cess and any other statutory dues wherever applicable. According to the records of the Company there were no undisputed amounts payable in respect of Provident Fund Employees' State Insurance Income Tax Sales Tax Goods and Service Tax Duty of Custom Duty of Excise Value Added Tax Cess and any other statutory dues in arrears as at March 312019 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us the dues of Income Tax Sales Tax Service Tax Goods and Service Tax Duty of Custom Duty of Excise and Value Added Tax which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Sr. No.Name of the StatuteNature of the DuesPeriod to which amount relates (Financial year)Amount (Rs. in lakhs)Forum where dispute is Pending
1.Central Excise Act 1944Excise Duty (Classification on of goods)March 2001 to August 200162.31Assistant Commissioner of Central Excise
2.Central Excise Act 1944Excise Duty (Classification on of goods)June 1996 to February 20010.76Central Excise & Service Tax Appellate Tribunal
Penalty30.81
3.Central Excise Act 1944Excise Duty (Classification on of goods)July 1998 to February 20001.42Central Excise & Service Tax Appellate Tribunal
Penalty10.25
4.Goa Value added Tax Act 2005VATFY 2009-106.41Assistant commissioner of Commerical Taxes Panaji
Sr. No.Name of the StatuteNature of the DuesPeriod to which amount relates (Financial year)Amount (Rs. in lakhs)Forum where dispute is Pending
5Goa Value added Tax Act 2005VATFY 2010-114.59Assistant commissioner of Commerical Taxes Panaji
6Goa central sales Tax Act 2005CSTFY 2011-1212.45Assistant commissioner of Commerical Taxes Panaji
7Goa central sales Tax Act 2005CSTFY 2012-1376.36Assistant commissioner of Commerical Taxes Panaji
8Goa central sales Tax Act 2005VATFY 2013-1435.54Assistant commissioner of Commerical Taxes Panaji
9Goa central sales Tax Act 2005VATFY 2015-166.33Assistant commissioner of Commerical Taxes Panaji
10Central Excise Act 1944CENVAT Credit AvailedFY 2004-055.38Tribunal Mumbai (CESTAT)
11Central Excise Act 1944CENVAT Credit AvailedFY 1985-862.39Tribunal Mumbai (CESTAT)
12Income Tax Act 1961Income TaxFY 2008-0956.03High Court Mumbai
13Income Tax Act 1961Income TaxFY 2013-1448.74Income Tax Appellate Tribunal (Mumbai)
14Income Tax Act 1961Income TaxFY 2015-162.23Assistant commissioner of Income tax

viii) In our opinion and according to the information and explanations given to us the Company has not defaulted in repayment of dues to a financial institution or bank.

ix) In our opinion the term loans raised during the year have been applied for the purpose for which they were raised.

x) Based upon the audit procedures performed and information and explanations given to us we report that no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi) According to the information and explanations given to us and based on our examination of the records of the Company the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

xii) In our opinion and according to the information and explanations given to us the Company is not a Nidhi Company. Therefore the provisions of clause 3(xii) of Companies (Auditor's Report) Order 2016 are not applicable to the Company.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company transactions with the related parties are in compliance with sections 177 and section 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore the provisions of clause 3(xiv) of Companies (Auditor's Report) Order 2016 are not applicable to the Company.

xv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not entered into non-cash transactions with directors or persons connected with him. Therefore the provisions of clause 3(xv) of Companies (Auditor's Report) Order 2016 are not applicable to the Company.

xvi) According to the information and explanations given to us the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For S G N & Co.

Chartered Accountants

Firm Registration No: 134565W

Shreyans Jain

Partner

Membership Number: 147097

Place: Mumbai

Date: May 25 2019

Annexure B to the Independent Auditor's Report of Even Date On the Standalone Financial Statements of Oricon Enterprises Limited

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

We have audited the internal financial controls over financial reporting of Oricon Enterprises Limited (the Company) as of March 31 2019 in conjunction with our audit of the standalone 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 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 deemed to be prescribed under section 143(10) of the Act 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 ICAI. 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 judgement including the assessment of the risks of material misstatement of the 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 March 31 2019 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.

For S G N & Co.

Chartered Accountants

Firm Registration No: 134565W

Shreyans Jain Partner

Membership Number: 147097

Place: Mumbai Date: May 25 2019