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Saka Ltd.

BSE: 517242 Sector: Consumer
NSE: N.A. ISIN Code: N.A.
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Saka Ltd. (SAKA) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SAKA LIMITED

Report on the financial statements

We have audited the accompanying financial statements of SAKA LIMITED ("theCompany") which comprise the Balance Sheet as at 31st March 2017 the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary of thesignificant accounting policies and other explanatory information.

Management's responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the Accounting Standards specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityincludes the design implementation and maintenance of internal control relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness of theentity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Basis for Qualified Opinion

1. Reference is invited to Note 2.6(a) to the financial statements advancesrecoverable includes

Rs 112.00 Lacs (previous year Rs 112.00 Lacs) from corporate companies for which noprovision has been made. However as per analysis of their net worth based on thefinancial statements available the recovery of the amount is doubtful.

2. No provision have been made for Income Tax Penalty of Rs. 22.86 lacs the appealfor which have been dismissed by HRsble ITAT

Qualified opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid 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:

a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2017; b) in the case of the Statement of Profit and Loss of the loss for the yearended on that date; and c) in the case of the Cash Flow Statement of the cash flows forthe year ended on that date.

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 ofthe Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 227(3) of the Act we report that we have sought andobtained:

a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books and proper returns adequate for the purposesof our audit have been received from the branches not visited by us.

c) the report on the accounts of the branch offices audited under section 143(8) by aperson other than the company's auditor has been sent to us as required by proviso toclause (8) of section 143 and have been dealt with in preparing our report in the mannerconsidered necessary by us- Not applicable

d) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us.

e) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;

f) Observation or the comments on financial transaction on matters having adverseeffect on the functioning of company :-

i) Reference is invited to Note 2.6(a) to the financial statements advancesrecoverable includes

Rs. 112.00 Lacs (previous year Rs. 112.00 Lacs) to corporate companies for which noprovision has been made as the confirmation of balances from the parties are not on record& as per analysis of their net worth based on the financial statements available therecovery of the amount is doubtful.

ii) We draw attention to Note 2.11 to the financial statements on balances groupedunder Sundry Creditors Advances received from customers and advances received fromcustomers and advance recoverable are under reconciliation and subject to confirmationfrom respective parties. The final adjustment if any shall be made on reconciliation ofthe same. The impact if any on the profit for the year cannot ascertained at this stage.

iii) We draw attention to Note 2.17 to the financial statements the company has closedown its manufacturing operations with effect from 20.07.2004 under section 6 W to be read6 V of U.P. Industrial Dispute Act. 1947. The accounts have been prepared as a goingconcern inspite of the fact the company has close down its manufacturing operations andits entire net worth has been eroded..

iv) Trading of shares of the company has been suspended by the stock exchanges becauseof penal reasons.

g) on the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of sub-section (2) ofsection164 of the Companies Act 2013.

h) In our opinion proper books of account as required by law have been maintained bythe Company so far as appears from our examination of those books.

i) In our opinion and according to the information and explanations given to us thereis generally an adequate internal control systems in place and operative effectiveness ofsuch controls commensurate with the size of the company and the nature of its business.

j) Report on Other matters prescribed in clause no 11 of The Companies (Audit &Auditors) Rules 2014

a) No provision have been made for the following disputed dues on account of taxeswhich has not been deposited. This liability will impact adversely on the financials ofthe company:-

Name of Statue Nature of dues Amount Financial year Forum where pending
(Rs in Lacs) to which relates
Central Excise Laws Excise duty - Differential Duty Interest and Penalty 34.08 Lacs 1998-99 Supreme Court
Income tax Penalty 22.86 Lacs 2007-08 ITAT

b) As per the books of accounts & as explained to us there are no materialforeseeable losses on long term contracts including derivatives contract.

c) The amount required to be transferred to investor education and protection fund inaccordance with the relevant provisions of the Companies Act 2013 and rules made thereunder has been transferred to such fund within time.

FOR AGARWAL SETH & CO

CHARTERED ACCOUNTANTS

FRN:- 511761C

Vikas Agarwal

Partner

Membership No.:090508

Place : New Delhi

Dated : 29th May 2017

The Annexure referred to in paragraph 1 of the Our Report of even date to the membersof

Saka Limited on the accounts of the company for the year ended 31st March 2017.

On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:

1. The company does not have any fixed assets .

2. The company does not have any inventory at the end of the year.

3. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not taken any loans any loan from /to companies or firm covered in the register maintained under section 189 of the CompaniesAct 2013 during the year.

The company had granted loans to associate company and other related parties amountingto Rs.10502336/- (Previous year Rs. 10502336/-)which is outstanding in the books ofaccounts as Advances Recoverable from corporate companies. In our view the recovery ofthese loans is doubtful but no provision has been made in the books of accounts .

(a) The confirmation of balances from the parties is not made available for ourverification & as per analysis of their net worth based on the financial statementsavailable the recovery of the amount is doubtful.

(b) The schedule of repayment of principal and payment of Interest has not beenstipulated.

(c) Due to lack of information we are not able to comment on whether reasonable stepshave been taken by the company for recovery of the principal and interest

(d) The said loan is prejudicial to the interest of the company being interest free& non recoverable.

In respect of loans investments guarantees and security provisions of section 185and 186 of the

4. Companies Act 2013 have been complied with.

The company has not accepted any deposits from the public covered under section 73 and76 of the

5. Companies Act 2013.

The company has not maintaining any cost records under section 148(1) of the CompaniesAct 2013 as no

6. manufacturing activities have been carried out during the year.

(a) According to the records of the company undisputed statutory dues includingProvident Fund Investor

7. Education and Protection Fund Employees' State Insurance Income-tax Sales-taxWealth Tax Custom Duty Excise Duty cess to the extent applicable and any otherstatutory dues have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us there were no outstandingstatutory dues as on 31st of March 2017 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us there is no dues ofsales tax income tax custom duty wealth tax and cess which have not been deposited onaccounts of any dispute. However according to the records of the company and theinformation and explanations given to us the following are the particulars of disputeddues on account of excise duty which has not been deposited.

Name of Statue Nature of dues Amount Financial year Forum where pending
(Rs in Lacs) to which relates
Central Excise Laws Excise duty - Differential Duty Interest and Penalty 34.08 Lacs 1998-99 Supreme Court
Income tax Penalty 22.86 lacs 2007-08 ITAT

8. Based on our audit procedures and on the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto a financial institution bank government or dues to debenture holders.

9. Moneys raised by way of initial public offer or further public offer (including debtinstruments) and term loans were applied for the purposes for which those were raised.

10. Based on the audit procedures performed and the information and explanations givento us we report that no fraud by the Company or any fraud on the company by its officersor employees has been noticed or reported during the year nor have we been informed ofsuch case by the management.

11. Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

12. The Company is not a Nidhi Company.

13. The company does not have constituted Audit Committee so the provisions of Section177 of the

Companies Act 2013 have not been complied .

All the transactions covered under section 188 of Companies Act 2013 are in compliancewhere applicable and details have been disclosed in the Financial Statements etc. asrequired by the applicable accounting standards;

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.

15. The company has not entered into any non-cash transactions with directors orpersons connected with him.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

FOR AGARWAL SETH & CO.

CHARTERED ACCOUNTANTS

FRN:511761C

Vikas Agarwal

(Partner)

Membership No. : 090508

Place: New Delhi

Date: 29-05-2017