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Ovobel Foods Ltd.

BSE: 530741 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE812S01012
BSE 00:00 | 28 Jul 38.00 -2.00
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NSE 05:30 | 01 Jan Ovobel Foods Ltd
OPEN 38.00
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VOLUME 500
52-Week high 52.35
52-Week low 16.80
P/E
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 38.00
CLOSE 40.00
VOLUME 500
52-Week high 52.35
52-Week low 16.80
P/E
Mkt Cap.(Rs cr) 40
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 standalone financial statements of Ovobel FoodsLimited ("the Company") which comprises of the Balance Sheet as at March 312020 the Statement of Profit and Loss including (Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (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 standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with Indian Accounting Standards prescribed under section 133of 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

a) state of affairs of the company as at March 31 2020

b) the profit (including total comprehensive income)

c) changes in equity and its

d) cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto 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 mostsignificance 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 financialstatements and in forming our opinion thereon and we do not provide a separate opinionon these matters. We have determined the matters described below to be the key auditmatters to be communicated in our report.

Sl. No. Key Audit Matter Remarks
1 Accuracy o f 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 o f 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 o f 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 o f procedures involving enquiry and observation re-performance 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 consideration to 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 goods contracts progress towards satisfaction of performance

Emphasis of Matter

1. 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 inter corporateadvance of Rs. 200 lakhs given in April' 14 & it was outstanding as on balance sheetdate.

b. Note 4 to the standalone Ind AS financial statements pertaining to Advances againstOTS Offers 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

c. Note 35 to the standalone Ind AS financial statements pertaining to Tradereceivables. Trade Payable and Loans and Advances balances disclosed in the financialstatements are subjected to the confirmation and reconciliation as at the end of thefinancial year.

d. We draw attention to Note 42 of the financial statements which describes theeconomic and social consequences the entity is facing as a result of COVID-19 which isimpacting Consumer demand supply chains and commodity prices.

Our opinion is not modified 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 ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course 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 Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind As and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of Financial Statements that give atrue and fair view and are free from material misstatements whether due to fraud orerror.

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 basis and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

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 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 aggregate they couldreasonably be expected to influence the economic decisions of users taken on basis ofthese 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 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 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 audit 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 financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Materiality is the magnitude of misstatements in the 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 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 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.

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 Considerationfor selected Items" and have obtained sufficient audit evidence to issue ourunmodified opinion on these Standalone Financial Results. Our Report on the statement isnot modified in respect of this 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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 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 31 2020 taken on record by the Board of Directors none of the directors is disqualified as on March 31 2020 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 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 & Raghvendra
Chartered Accountants
Firm Registration No: 014509S
Muppadisetty Raghvendra
Partner
Membership No: 229018
UDIN- 20229018AAAABD3870
Place: Bangalore
Date: 12.08.2020

"Annexure A" to the Independent Auditor's Report

Referred to in paragraph 2 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 31st March 2020 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:

1. (a) The company is in the process of updating the records showing full particularsincluding quantitative 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 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 standalone financial statements are held in the name of theCompany.

2. The inventories are not physically verified by the management during the year.Hence we are unable to comment on the discrepancies noticed on such verification betweenthe physical stock and the book records.

3. 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.

4. 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.

5. 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.

6. 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.

7. a) Undisputed Statutory dues including PF ESI Income tax Sales tax Service Taxduty 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 2020 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.

8. Based on our audit procedures we are of the opinion that the company has notdefaulted in repayment of dues to its bank.

9. The Company has not raised any moneys by way of initial Public offer / FurtherPublic offer and Terms Loans during the Year. Accordingly paragraph 3(ix) of the Order isnot applicable.

10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company and no fraud on thecompany by its officers or employees has been noticed or reported during the year.

11. Based upon the audit procedures performed and the information and explanationsgiven by the management managerial remuneration has been paid to managerial personneldefined as per section 197 read with Schedule V to the Companies Act;

12. 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.

13. 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 the standalone Ind AS financial statements as required by theapplicable Indian Accounting standards.

14. 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.

15. 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.

16. The Company is not required to be registered under section 45IA of the Reserve Bankof India Act 1934 and accordingly paragraph 3(xvi) of the Order is not applicable to theCompany.

For Nara Hari & Raghvendra
Chartered Accountants
Firm Registration No: 014509S
Muppadisetty Raghvendra
Partner
Membership No: 229018
UDIN- 20229018AAAABD3870
Place: Bangalore
Date: 12.08.2020

"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 2020 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 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 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 2020 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 2020 and the related Statement of Profit and Loss changes inequity and Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information and our report even dated expressedan "unqualified opinion thereon"

For Nara Hari & Raghvendra
Chartered Accountants
Firm Registration No: 014509S
Muppadisetty Raghvendra
Partner
Membership No: 229018
UDIN- 20229018AAAABD3870
Place: Bangalore
Date : 12.08.2020

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