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Ovobel Foods Ltd.

BSE: 530741 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE812S01012
BSE 16:01 | 26 Sep 94.55 4.50
(5.00%)
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NSE 05:30 | 01 Jan Ovobel Foods Ltd
OPEN 85.55
PREVIOUS CLOSE 90.05
VOLUME 1200
52-Week high 127.90
52-Week low 21.00
P/E 13.90
Mkt Cap.(Rs cr) 99
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 85.55
CLOSE 90.05
VOLUME 1200
52-Week high 127.90
52-Week low 21.00
P/E 13.90
Mkt Cap.(Rs cr) 99
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ovobel Foods Ltd. (OVOBELFOODS) - Auditors Report

Company auditors report

TO THE MEMBERS OF OVOBEL FOODS LIMITED Report on the audit of Financial StatementsOpinion

We have audited the accompanying financial statements of Ovobel Foods Limited("the Company") which comprises of the Balance Sheet as at March 31 2021 theStatement of Profit and Loss including (Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (the "Act") in the manner so required and give a true andfair view in conformity with Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India a. Incase of Balance Sheet of the state of affairs of the Company as at 31st March 2021; b.In case of Statement of Profit and Loss of the Loss for the year ended on that date; c.In case of Statement of cash flows of the cash flows for the year ended on that date; andd. In case of Statement of changes in equity changes in equity for the year ended on thatdate

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act (SAs). Our responsibilitiesunder those Standards are further described in the ‘Auditor’s Responsibilitiesfor the Audit of the Financial Statements’ section of our report. Weare independentof the Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the independence requirements that are relevantto our audit of the financial statements under the provisions of the Act and the Rulesmade thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI’s Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion 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 thefinancial statements and in forming ouropinion thereon and we do not provide a separate opinion on these matters. We havedetermined the matters described below to be the key audit matters to be communicated inour report.

Key Audit Matter Remarks
1 Accuracy of recognition measurement presentation and disclosure of revenue and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customer" (new revenue accounting standard) The application of revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of basis used to measure revenue recognized over a period. Additionally revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Note 20
Auditor response
Principle Audit Procedure
We assessed the Company’s process to identify the impact of adoption of the revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Evaluated the design of internal controls relating to implementation of the revenue accounting standard.
Selected a sample of contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
Selected a sample of contracts and performed the following procedures:
Read analyzed and identified the distinct performance obligations in these contracts.
Compared these performance obligations with that identified and recorded by the Company.
Considered the terms of the contracts to determine the transaction price including any variable considerationto verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
In respect of samples relating to sale of goodscontracts progress towards satisfaction of performance obligationused to compute recorded revenue was verified with actual and estimated efforts.
Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.

Emphasis of Matter

1. We draw attention to the following matters in the notes to the Ind AS financialstatements:

a. Note 12 to the Ind AS financial statements pertaining to Advances against OTSOffers a portion of which has been adjusted during the previous year against thecorresponding loan liability.The company has filed an application with the BSE on 17thMarch 2020 for the accounting treatment of the Share capital redeemed from KSIIDC &MFPI. The Company has received a letter from BSE on 18th March 2020 to enable filing thescheme with Hon'ble NCLT which was duly filed and hearings were in progress. As on thereporting date the bench is yet to receive inputs from concerned Regional director andROC.

b. Note 35(a) to the Ind AS financial statements pertaining to Trade receivables. Trade

Payable and Loans and Advances balances disclosed in the financial statements aresubjected to the confirmation and reconciliation as at the end of the financial year.

c. Note 35(b) to the Ind AS financial statements pertaining to Bank balances presentedare subject to confirmations as at the end of the financial year

d. We draw attention to Note 41 of the Ind AS financial statementsthe outbreak of

Coronavirus (COVID-19) pandemic globally is causing significant disturbance andslowdown of economic activity. In many countries businesses are being forced to cease orlimit their operations for long or indefinite period of time. Measures taken to containthe spread of the virus including travel bans quarantines social distancing andclosures of non-essential services have triggered significant disruptions to businessesworldwide resulting in an economic slowdown and uncertainties pertaining to futureoperations. This could result in company’s experiencing reduced revenue operationalchanges and increased administrative changed the company has considered the possibleeffects that may result from COVID 19 on the carrying amounts of receivables andinventory.

In developing the assumption relating to the possible future uncertainties in theglobal conditions because of the pandemic the company as on date of approval of thesefinancial statements has used internal and external sources of information. The companyhas also used the principles of prudence in applying judgements estimates and assumptionsincluding sensitivity analysis and based on the current estimates the Company expects torecover the carrying amount of receivables and has made adequate provision againstdoubtful receivable. As the outbreak continues to evolve the Company will continue toclosely monitor any material changes to future economic conditions. Our opinion is notmodified in respect of this matter.

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 the

Management Discussion and Analysis Board’s Report including Annexures toBoard’s Report Business Responsibility Report Corporate Governance andShareholder’s

Information but does not include the financial statements and our auditor’sreport 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 theInd AS financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or ourknowledge obtained during the course of our audit or otherwiseappears 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 section

134(5) of the Act with respect to preparation of these financial statements that give atrue and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind As andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of Financial Statements that give a true and fair view andare free from material misstatements whether due to fraud or error.

In preparing the Financial Statements management is responsible for assessing the

Company’s ability to continue as a going concern disclosing as applicablematters related to going concern basis and using the going concern basis of accountingunless management either intends to liquidate the Company or to cease operations or hasno realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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 ahigh level of assurancebut is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in aggregate theycould reasonably be expected to influence the economic decisions of users taken on basisof these financial statements.

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

? Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

? Obtain an understanding of internal financial controls relevant to the audit in orderto 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 reasonableness ofaccounting 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’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our audit report. However future events or conditions may cause the Company tocease to continue as a going concern.

? Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matters

On account of the COVID-19 related lock-down restrictions the management was not ableto perform year end physical verification of inventories subsequent to the year end.Consequently we have performed alternative procedures to audit the existence of Inventoryas per the guidance provided by in SA 501 "Audit Evidence Specific Consideration forselected Items" and have obtained sufficient audit evidence to issue our unmodifiedopinion on these Ind AS financial statements. Our Report on the statement is not modifiedin respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

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 bestof our knowledge and belief were necessary for the purposes of our audit.

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

c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account d. In our opinion theaforesaid financial statements comply with the Ind AS specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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". Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

g. With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

(iii) The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.

For Nara Hari & Raghavendra

Chartered Accountants

Firm Registration No: 014509S

Muppadisetty Raghavendra

Partner

Membership No: 229018

UDIN-21229018AAAAFW1409

Place: Bangalore

Date: 24 July 2021

"Annexure A" to the Independent Auditor’s Report

Referred to in paragraph 2under the heading ‘Report on Other Legal and RegulatoryRequirement’ of our Report of even date to the Ind AS financial statements for theyear ended on 31stMarch 2021 of OVOBEL FOODS LIMITED.

Based on the audit procedures performed for the purpose of reporting a true and fairview on the Ind AS financial statements of the Company and taking into consideration theinformation and explanation given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:

i. (a) The company is in the process of updating the records showing full particularsincluding quantitativedetails 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 past two years no physicalverification of fixed assets has been done by the Company and hence we are unable tocomment on any discrepancies.

(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 Ind AS financial statements are held in the name of theCompany.

ii. The inventories are physically verified by the management during the year atregular intervals. However the documentation related to physical verification needs to bestrengthen. Hence we are unable to comment on the discrepancies noticed on suchverification between the physical stock and the book records.

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 has not been specified by theCentral 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.According to the information and explanationsgiven to us no undisputed amounts payable in respect of the above were in arrears as atMarch 31 2021 for a period of more than six months from the date on when they becomepayable.

b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax duty of customs duty of excise whichhave not been deposited with the appropriate authorities on account of any dispute.

viii. Based on our audit procedures we are of the opinion that the company has notdefaulted in repayment of dues to bank. The company has not borrowed from any financialinstitutions or has any dues payable to debentureholders.

ix. The Company has not raised any moneys by way of initial Public offer / FurtherPublic offerduring the Year.The company has utilised the term loan taken during the yearfor the purpose for which it was raised.

x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company and no fraud on the company byits officers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management managerial remuneration has been paid to managerial personneldefined as persection197read with Schedule V tothe 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 on ourexamination of the records of the company transactions with the related parties are incompliance with Section 188 of the Act where applicable and details of such transactionshave been disclosed in theInd AS financial statements as required by the applicable IndianAccounting standards.

xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.

xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non- cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable to the Company.

xvi. The Company is not required to be registered under section 45IA of the ReserveBank of India Act 1934 and accordingly paragraph 3(xvi) of the Order is not applicableto the Company.

For Nara Hari & Raghavendra

Chartered Accountants

Firm Registration No: 014509S

Muppadisetty Raghavendra

Partner

Membership No: 229018

UDIN-21229018AAAAFW1409

Place: Bangalore

Date: 24 July 2021

"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 theCompanies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of OvobelFoods Limited as of March 31 2021 in conjunction with our audit of the Ind ASfinancial statements of the Company forthe 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 section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 auditor’s judgement including the assessment of the risks ofmaterial misstatement 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 thecompany;

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 2021 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 IND AS financial statements of the Company which comprise the Balance Sheet asat March 31 2021 and the related Statement of Profit and Loss changes in equity andCash Flow Statement for the year then ended and a summary of significant accountingpolicies and other explanatory information and our report even dated expressed an"unqualified opinion thereon"

For Nara Hari & Raghavendra

Chartered Accountants

Firm Registration No: 014509S

Muppadisetty Raghavendra

Partner

Membership No: 229018

UDIN-21229018AAAAFW1409

Place: Bangalore

Date : 24 July 2021

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