SINGAPORE (Dec 3): Oceanus Group, the seafood supplier and land-based abalone producer, plans to appoint RSM Chio Lim LLP as auditors for the FY18 ending Dec.

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The recommendation follows Oceanus’ receipt of a notice dated Sept 28 from current auditors Foo Kon Tan LLP stating its intention to resign.

“The board, having reviewed and deliberated on the suitability of several audit firms, and in consultation with the audit committee, has nominated and recommended RSM to replace FKT as the auditors,” says Oceanus in its Monday night filing.

Oceanus says the change in auditors would also further strengthen the corporate governance processes of the company.

“A change of auditors would also enable the company to benefit from fresh perspectives and views of another professional audit firm, and thus, enhance the value of the audit of the group,” says Oceanus.

FKT has served as Oceanus’ auditors since the financial year ended 2013 and was last re-appointed at the AGM held on April 30 and was supposed to hold office until the conclusion of the next AGM.

On Nov 13, FKT informed the company that it had applied to the Accounting and Corporate Regulatory Authority (ACRA) to seek the latter’s consent.

According to the rules in the listing manual of Singapore’s Companies Act, the appointment of RSM must be approved by shareholders of the company at an Extraordinary General Meeting to be convened.

To recap, Oceanus Group on June 1 applied to the Singapore Exchange (SGX) to exit the bourse's watch-list for the fulfilment of the financial exit criteria.

SGX's financial exit criteria says firms may be removed from the watch-list if they record consolidated pre-tax profit for the most recently completed financial year, and post an average daily market capitalisation of at least $40 million over the last six months.

Oceanus was first placed on the watch-list on Dec 14, 2015 and was given a six-month extension from Dec 2, 2017 to meet the requirements to exit from the watch-list (financial criteria) on March 6.

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For the 9M ended Sept, Oceanus reported a net profit of RMB4 million ($0.8 million) compared to a net loss of RMB32.8 a year ago.

This was mainly due to improved overall gross profit margins, the absence of a RMB55.8 million compensation amount recognised in 9M17; reduction in depreciation expenses as well as absence of finance cost.

Total revenue generated came in at RMB13.8 million, 7% higher than the RMB12.8 million recorded in 9M17.

Shares in Oceanus closed at 0.4 cent on Monday.