TO THE MEMBERS OF SAKUMA EXPORTS LIMITED
Report on the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Ind AS financial statementsof SAKUMA EXPORTS LIMITED ("the Company") which comprise theBalance Sheet as at 31st March 2020 the Statement of Profit and Loss(Including Other Comprehensive Income) the Cash Flow Statement and the Statement ofchanges in Equity for the year then ended and notes to the financial statements includinga summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2020 its profit including other comprehensive income its cash flows and thechanges in equity for the year ended on that date.
Basis of Opinion
We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the Company in accordancewith the Code of Ethics' issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we pro for our audit opinion onthe have obtained is sufficient Standalone appropriate to Ind AS financialstatements.
Emphasis of Matter
We draw attention to note 46 to the accompanying standalone financialstatements which describes the effects of uncertainties relating to Covid-19 pandemicoutbreak on the Company's operations and management's evaluation of its impacton the accompanying standalone financial statements as at 31st March 2020 theimpact of which is dependent on future developments which are highly matter uncertain .Ouropinion is not modified inrespect
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended 31 st March 2020. These matters were addressed in thecontext of our audit of the standalone Ind AS financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.For each matter below our description of how our audit addressed the matter is providedin that context. We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.
|Key Audit Matters ||How our audit addressed the key audit matter |
|1. Impact of COVID-19 pandemic on the future financial performance and position of the Company ||Our audit procedures considered the guidance laid down by the ICAI Accounting & Auditing Advisory March 2020 Impact of Corona virus on Financial Reporting and the Auditors Consideration' highlighting few important areas which require particular attention in respect of the audit of the financial statements for the year 2019-20 including: |
|(as described in Note 46 of the Ind AS Balance Sheet) The extent to which the COVID-19 pandemic will impact the Company's financial performance and position will depend on future developments which are highly uncertain. ||a) Impairment of Non-financial Assets |
| ||b) Impairment Losses (ECL Bad-debts etc.) |
| ||c) Revenue |
| ||d) Borrowing Costs |
| ||e) Provisions Contingent Liabilities and Contingent Assets |
| ||f) Modifications or termination of Contracts or Arrangements |
| ||g) Going Concern Assessment |
| ||h) Post Balance Sheet Events |
| ||i) Presentation of Financial Statements |
| ||j) Changes in Internal Controls |
| ||k) External Confirmations |
| ||l) Audit evidences through electronic mode We considered the above guidance and appropriately applied to our response to modification of our audit procedures to obtain sufficient appropriate audit evidence on the significant audit areas and reached appropriate conclusions thereon. |
|2. Assessment of impairment of investment in subsidiaries || |
|(Refer Note 5 of the Standalone Ind AS Balance Sheet) As at 31st March 2020 the Company balance sheet includes investment in subsidiaries & associates of Rs. 2224.53 lakhs In accordance with Indian Accounting Standards (Ind-AS) the management has allocated these balances to their respective cash generating units (CGU) and tested these for impairment using a discounted cash flow model. The management compares the carrying value of these assets with their respective recoverable amount. A deficit between the recoverable amount and CGU's net assets would result in impairment. The inputs to the impairment testing model which have most significant impact on the modeld) We tested the arithmetical accuracy of the models includes: ||As a part of our audit we have carried out the following procedures: |
|a) Sales growth rate; b) Operating margin; c) Working capital requirements; d) Capital expenditure; and flo e) Discount rate applied to the projected cash The impairment test model includes sensitivity testing of key assumptions. The annual impairment testing is considered a significant accounting judgment and estimate and a key audit matter because the assumptions on which the tests are based are highly judgmental and are affected by future market and economic conditions which are inherently uncertain and because of the materiality of the whole balances to the financial statements as a ||a) We assessed the Company's methodology applied in determining the CGUs to which these assets are allocated. b) We assessed the assumptions around the key drivers of the cash flow forecasts including discount rates expected growth rates and terminal growth rates used; c) We also assessed the recoverable value by performing sensitivity testing of key assumptions used. e) Performed analysis of the disclosures related to the impairment tests and their compliance with Indian Accounting Standard (Ind-AS). |
|3. Revenue Recognition (Refer to the accounting policies in || |
|Note 2 to the financial statements) Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customer. The Company uses a variety of shipment terms across its operating markets and this has an impact on the timing of revenue recognition. There is a risk that revenue could be recognised in the incorrect period for sales transactions occurring on and around the year-end therefore revenue recognition has been identified as a key audit matter. ||a) Our audit procedures included reading the Company's revenue recognition accounting policies to assess compliance with Ind AS 115 "Revenue from contracts with customers". |
| ||b) We performed test of controls of management's process of recognizing the revenue from sales of goods with regard to the timing of the revenue recognition as per the sales terms with the customers. |
| ||c) We performed test of details of the sales transactions testing based on a representative sampling of the sales orders to test that the related revenues and trade receivables are recorded taking into consideration the terms and conditions of the sale orders including the shipping terms. |
| ||d) We also performed audit procedures relating to revenue recognition by agreeing deliveries occurring around the year end to supporting documentation to establish that sales and corresponding trade receivables are properly recorded in the correct period. |
| ||e) Audit procedures relating to revenue recognition were extended to a longer period to ensure that there is no impact on the revenue numbers reported based on the possible effects of pandemic relating to Covid-19. |
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Directorsreport but does not include the Standalone Ind AS financial Our opinion on the standaloneInd AS financial statements does not cover the other of assurance conclusion thereon. Inconnection with our audit of the standalone Ind AS financial statements ourresponsibility doing so consider whether such other information is materiallyinconsistent with the financial in the audit or otherwise appears to be materiallymisstated. 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 mattersstated in section 134(5) of the Act with respect to the preparation of these standaloneInd AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors are alsoresponsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to the audit inorder to 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 thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany'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 auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the Standalone IndAS financial statements for the financial year ended 31 st March 2020 and aretherefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 (theorder); issued by the Central Government of India in terms of sub-section (11) of section143 of the Companies Act 2013 we give in the Annexure - A a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss including thestatement of Other Comprehensive Income Cash Flow Statement and Statement of Changes inEquity dealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid Standalone IND AS financialstatements comply with the Indian Accounting Standards specified under section 133 of theAct read with relevant Rules issued there under.
(e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directorsnone of the directors is disqualified as on 31st March 2020 from beingappointed as a director in terms of section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure - B.
(g) In our opinion the managerial remuneration for the year ended 31stMarch 2020 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act; (h) With respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: a. The company has disclosedthe impact of pending litigations on its financial position in its financial statementRefer Note no. 37. b. The Company has made provision as required under the applicable lawor Ind AS for material foreseeable losses if any on long-term contracts includingderivative contracts. c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
For M. L. Sharma & Co Firm Reg. No. 109963W Chartered Accountants
|(CA S. M. Bandi) |
|Membership No. 109101 |
|UDIN: 20109101AAAACA4685 |
|Place of Signature: Mumbai |
|Date :29th July 2020 |
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in our Report of even date to the Members ofSAKUMA EXPORTS LIMITED on the Standalone Financial Statements for the year ended 31stMarch 2020 We report that:
1a According to information and explanations given to us The Companyhas maintained proper records showing full particulars including quantitative details andsituation of fixed assets.
1b As explained to us the fixed assets of the company have beenphysically verified by the Management in a phased manner as per regular program ofverification which in our opinion is reasonable having regard to the size of the Companyand nature of its assets. Pursuant to this program some of the fixed assets have beenphysically verified by the management during the year and no material discrepancies havebeen noticed on such verification.
1c The Company does not own any immovable property (Except leaseholdproperties) accordingly provision of clause 1 (iii) of the order is not applicable to theCompany.
2 The stock of Finished Goods Goods-in-Process Raw Materials andStores & Spares parts have been physically verified during the year by the Management.In our opinion the procedures of physical verification of the above Inventories followedby the Management are reasonable and adequate in relation to the size of the Company andnature of its business. In respect of inventories lying with the third parties these havesubstantially been confirmed by them.
3 The Company has not granted any loans secured or unsecured to theCompanies Firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the companies Act 2013 and Accordingly provision ofclause 3 (iii) (iii) (a) (iii) (b) & (iii) (c) of the order are not applicable tothe Company..
4. In our opinion and according to the information and explanationsgiven to us the company has not granted any loans or provided any guarantees or securityin respect of any loans to any party covered under section 185 of the Act. In respect ofloans granted to guarantees or security in respect of any loan and Investments made inbody corporate by the Company the provisions of Section 186 of the Act has been compliedwith.
5. The Company has not accepted any deposits from the public to whichthe directives issued by the Reserve Bank of India and the provisions of section 73 to 76and any other relevant provision of the Companies Act 2013 and the rules framed thereunder apply.
6. In our opinion and according to the information and explanationsgiven to us the Company is not required to maintain cost records specified by the centralgovernment under section 148 (1) of the Companies Act 2013.
7 a According to the information and explanation given to us and therecords of the Company examined by us the Company is generally regular in depositingprovident fund dues employees state insurance income tax goods and service tax salestax service tax custom duty excise duty cess and any other statutory dues with theappropriate authorities and there are no undisputed amounts payable for the same wereoutstanding as at 31st March 2020 for a period exceeding six months from the date theybecame payable; 7 b According to the information and explanation given to us and therecords of the Company examined by us the Particulars of disputed statutory dues undervarious act as at 31st March 2020 which have not been deposited with the appropriateauthorities are as under:
|Name of the Statute ||Nature of dues ||Amount (in Lakhs) (Rs.) ||Forum where dispute is pending |
|Income Tax Act 1961 ||For A. Y. 2009-10 ||2.13 ||Jurisdictional AO |
|Income Tax Act 1961 ||For A. Y. 2012-13 ||168.55 ||Jurisdictional AO |
|Income Tax Act 1961 ||For A.Y. 2016-17 ||152.68 ||CPC |
|Income Tax Act 1961 ||For A.Y. 2017-18 ||28.13 ||CPC |
|Income Tax Act 1961 ||For A.Y. 2018-19 ||2.73 ||CPC |
|Income Tax Act 1961 ||TDS Defaults for various years ||0.23 ||TDS Officer Mumbai |
8. According to information and explanations given to us the companyhas not defaulted in repayment of loans or borrowings to a financial institution or bankand company does not have any outstanding loans or borrowing from Government or dues todebenture holders during the year.
9. The Company has not raised money by way of initial public offer orfurther public offer (including debt instruments) however the term loans have availed bythe company and were applied for the purposes for which those were raised.
10. According to the information and explanations given to us by themanagement which has been relied upon by us no fraud by the company or any fraud on theCompany by its officers or employees has been noticed or reported during the year. 11. Inour opinion and according to the information and explanations given to us the Companyhas paid/provided for managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V of the companies Act 2013.
12. In our opinion the Company is not a Nidhi Company. Therefore theprovisions of clause 3 (xii) of the order are not applicable to the Company.
13. In our opinion and according to the information and explanationsgiven to us all transactions with the related parties are in compliance with section 177and 188 of the companies Act 2013 where applicable. The details of related partytransactions have been disclosed in the financial statements as required under Ind AS"24" Related Party Disclosures specified under section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2015.
14. In our opinion and according to the information and explanationsgiven to us the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the and accordingly the provisionsof clause 3 (xiv) of the order is not applicable to the Company.
15. In our opinion and according to the information and explanationsgiven to us the Company has not entered into any Non-Cash transaction with directors orpersons connected with the directors. Accordingly the provisions of clause 3 (xv) of theorder is not applicable to the Company.
16. In our opinion and according to the information and explanationsgiven to us the company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly the provisions of clause 3 (xvi) of theorder is not applicable to the Company.
For M. L. Sharma & Co Firm Reg. No. 109963W CharteredAccountants
|(CA S. M. Bandi) |
|Membership No. 109101 |
|UDIN: 20109101AAAACA4685 |
|Place of Signature: Mumbai |
|Date : 29th July 2020 |
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in our Report of even date to the Members ofSAKUMA EXPORTS LIMITED for the year ended 31st March 2020. We report that: Report on theInternal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of SAKUMA EXPORTS LIMITED ("the Company") as of 31stMarch 2020 in conjunction with our audit of the Standalone Ind AS financial statements ofthe Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention frauds and errorsthe accuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding the design and of internal financial operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment 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 sufficientandappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting with reference to financial statements.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted principles and that receipts and expenditures of the company are being made onlyin accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial financial controls over financialreporting were operating effectively as at 31 st March 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.
For M. L. Sharma & Co Firm Reg. No. 109963W Chartered Accountants
|(CA S. M. Bandi) |
|Membership No. 109101 |
|UDIN: 20109101AAAACA4685 |
|Place of Signature: Mumbai |
|Date : 29th July 2020 |