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Ovobel Foods Ltd.

BSE: 530741 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE812S01012
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NSE 05:30 | 01 Jan Ovobel Foods Ltd
OPEN 19.00
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VOLUME 6000
52-Week high 28.00
52-Week low 13.13
P/E 1.69
Mkt Cap.(Rs cr) 19
Buy Price 18.50
Buy Qty 600.00
Sell Price 18.50
Sell Qty 17000.00
OPEN 19.00
CLOSE 18.50
VOLUME 6000
52-Week high 28.00
52-Week low 13.13
P/E 1.69
Mkt Cap.(Rs cr) 19
Buy Price 18.50
Buy Qty 600.00
Sell Price 18.50
Sell Qty 17000.00

Ovobel Foods Ltd. (OVOBELFOODS) - Auditors Report

Company auditors report

Annexure IX

To

The Members

OVOBEL FOODS LIMITED

Report on the Standalone IND AS Financial Statements

1. We have audited the accompanying Ind AS financial statements of OVOBEL FOODSLIMITED ("the Company") which comprise the Balance Sheet as at 31 March2018 the Statement of Profit and Loss (Including Other Comprehensive Income) the CashFlow Statement and the statement of changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the Indian Accounting Standards("Ind AS") specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended and other accounting principlesgenerally 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 Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditors Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theIndian Accounting and auditing standards and matters which are required to be included inthe audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

4. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2018 and its profits total other comprehensive income the changesin equity and its cash flows for the year ended on that date.

Emphasis of Matter

5. We draw attention to the following matters in the notes to the standalone Ind ASfinancial statements:

a. Note 4 to the standalone Ind AS financial statements pertaining to advance for landof Rs. 200 lakhs given in April' 14 & it was outstanding as on balance sheet date.

b. Note 4 to the standalone Ind AS financial statements pertaining to Advances againstOTS Offers a portion of which has been adjusted during the year against the correspondingloan and accrued interest liability.

c. Notes 12 44 & 45 to the standalone Ind AS financial statements pertaining tothe KSIIDC transfer of 500000 Equity Shares during the year in favour of the Company interms of Buy back of share approved by KSIIDC vide approval dated 02 February 2015.However the shares held on behalf of Ministry of Food Processing Industries [MFPI](shareholding less than 5%) are still under the possession of KSIIDC due to pending No DueCertificate from MFPI. The Company is in the process of obtaining the SEBI approval forthe accounting treatment of the Share capital redeemed from KSIIDC once the MFPI No duecertificate is received.

d. Note 14 to the standalone Ind AS financial statements pertaining to long termoutstanding dues to

Public Financial Institutions a portion of which has been written back during the yearpursuant to issuance of no due certificate from the lender. The MFPI portion of financialassistance is still disclosed without giving any effect to the settlement since the No duecertificate was not received.

e. Note 38 to the standalone Ind AS financial statements pertaining trade receivablestrade payables and loans & advances are subject to balance confirmation andreconciliation.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. As required by Section143 (3) of the Act we report to the extent applicable that:a) We have sought and obtained all the information and explanations which to the best ofour 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 it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome Statement of changes in Equity and the Statement of Cash flows dealt with by thisReport are in agreement with the books of account; d) In our opinion the aforesaidstandalone Ind AS financial statements comply with the Indian Accounting Standardsprescribed under Section 133 of the Act read with relevant rules issued thereunder; e) Onthe basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164(2) of the Act; f) With respect to the adequacy of the Internal financialcontrols with reference to financial reporting of the Company and the operatingeffectiveness of such controls refer to our separate Report in

"Annexure B" and

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule

11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us: i. The Company has nopending litigation; ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There wereno amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.

"Annexure A" to the Independent Auditor's Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal and RegulatoryRequirement' of our Report of even date to the Standalone Ind AS financial statements forthe year ended on 31stMarch 2018 of OVOBEL FOODS LIMITED.

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone Ind AS financial statements of the Company and taking intoconsideration the information and explanation given to us and the books of account andother records examined by us in the normal course of audit we report that:

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

(b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. However in the current year no physicalverification of fixed assets has been done by the Company and hence we are unable tocomment on the discrepancies as no physical verification has been conducted.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company title deeds of immovable properties asdisclosed in Note 2 of the standalone financial statements are held in the name of theCompany.

ii. The inventory has been physically verified by the management during the year andthe discrepancies noticed on such verification between the physical stock and the bookrecords were not material. In our opinion the frequency of such verification isreasonable.

iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under Section 189 of the Companies Act 2013.Accordingly the provisions of paragraph 3 (iii) (a) (b) and (c) of the Order are notapplicable.

iv. In our opinion and according to the information and explanations given to us thecompany has not granted any loans to parties and accordingly the paragraph 3(iv) relatingto provisions of Section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security does not apply.

v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2013 andthe rules framed there under. vi. As informed to us the maintenance of Cost Records hasnot been specified by the Central

Government under sub- section (1) of Section 148 of the Act in respect of theactivities carried on by the company.

vii. a) Undisputed Statutory dues including PF ESI Income tax Sales tax ServiceTax duty of custom Duty of Excise Value added Tax Cess have generally been regularlydeposited with the appropriate authorities expect for few delays.

According to the information and explanations given to us no undisputed amountspayable in respect of the above were in arrears as at March 31 2018 for a period of morethan six months from the date on when they become payable. b) According to the informationand explanations given to us there are no dues of income tax sales tax value added taxservice tax duty of customs duty of excise which have not been deposited with theappropriate authorities on account of any dispute. viii. Based on our audit procedures weare of the opinion that the company has not defaulted in repayment of dues to its bankfinancial institutions and Government. Further the Company has not issued any Debentureshence the comment on default of payment to Debenture holders is not applicable. ix. TheCompany has not raised any moneys by way of initial Public offer / Further Public offer

(including debt instruments) or term loans and hence the reporting under said clause isnot applicable. x. Based upon the audit procedures performed and the information andexplanations given by the management we report that no material fraud by the Company andno material fraud on the company by its officers or employees has been noticed or reportedduring the year.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of Section 197 read with theSchedule V to the Companies 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. According to the information and explanations given to us and based onour examination of the records of the company transactions with the related parties arein compliance with Section 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable Indian Accounting standards. xiv. Based upon the audit proceduresperformed and the information and explanations given by the management the company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. xv. Based upon the audit procedures performed andthe information and explanations given by the management the company has not entered intoany non- cash transactions with directors or persons connected with him. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company. xvi. The Company is notrequired to be registered under section 45IA of the Reserve Bank of India Act 1934 andaccordingly paragraph 3(xvi) of the Order is not applicable to the Company.

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL

STATEMENTS OF OVOBEL FOODS LIMITED

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 controls over financial reporting of OvobelFoods Limited as of March 31 2018 in conjunction with our audit of the standalone IndAS 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 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

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") and the Standards on

Auditing as specified under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 procedures may deteriorate.

Opinion

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

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the standalone IND AS financial statements of the Company which comprise the BalanceSheet as at March 31 2018 and the related Statement of Profit and Loss and Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information and our report even dated expressed an "unqualifiedopinion thereon"

For Nara Hari & Raghavendra

Chartered Accountants

Firm Registration No: 014509S

Nara Hari Navakanth

Partner

Membership No: 229212

Place: Bangalore.

Date: 31st May 2018.