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Sakuma Exports Ltd.

BSE: 532713 Sector: Others
NSE: SAKUMA ISIN Code: INE190H01024
BSE 00:00 | 27 Feb 6.07 -0.39
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NSE 00:00 | 27 Feb 6.05 -0.35
(-5.47%)
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OPEN 7.00
PREVIOUS CLOSE 6.46
VOLUME 11558
52-Week high 37.00
52-Week low 5.51
P/E 8.09
Mkt Cap.(Rs cr) 129
Buy Price 6.07
Buy Qty 10.00
Sell Price 6.07
Sell Qty 100.00
OPEN 7.00
CLOSE 6.46
VOLUME 11558
52-Week high 37.00
52-Week low 5.51
P/E 8.09
Mkt Cap.(Rs cr) 129
Buy Price 6.07
Buy Qty 10.00
Sell Price 6.07
Sell Qty 100.00

Sakuma Exports Ltd. (SAKUMA) - Auditors Report

Company auditors report

TO THE MEMBERS OF SAKUMA EXPORTS LIMITED

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS financial statements of SAKUMAEXPORTS LIMITED ("the Company') which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (Including Other Comprehensive Income) the CashFlow Statement and the Statement of changes in Equity for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31st March2019 its profit including other comprehensive income its cash flows and the changes inequity for the year ended on that date.

Basis of Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS 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 Ind AS financial statements for the financialyear ended 31st March 2019. These matters were addressed in the context of our audit ofthe standalone Ind AS financial statements as a whole and in forming our opinion thereonand we do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key Audit Matters How our audit addressed the key audit matter
Assessment of impairment of investment in subsidiaries (Refer Note 5 of the Standalone Ind AS Balance Sheets)
As at 31st March 2019 the Company balance sheet includes investment in subsidiaries 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 model includes: As a part of our audit we have carried out the following procedures:
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.
a) Sales growth rate; d) We tested the arithmetical accuracy of the models
b) Operating margin; e) Performed analysis of the disclosures related to the impairment tests and their compliance with Indian Accounting Standard (Ind-AS).
c) Working capital requirements;
d) Capital expenditure; and
e) Discount rate applied to the projected cash flows.
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 balances to the financial statements as a whole.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern 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 also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SA's will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

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

1. Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

2. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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 auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

5. Evaluate the overall presentation structure and content of the standalone Ind ASfinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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 standalone Ind AS financialstatements for the financial year ended 31st March 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 (the order); issued by theCentral Government of India in terms of sub-section (11) of section 143 of the CompaniesAct 2013 we give in the Annexure - A a statement on the matters specified in paragraphs3 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 explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

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

(c) The Balance Sheet Statement of Profit and Loss including the statement of OtherComprehensive Income Cash Flow Statement and Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under section 133 of the Act read with relevantRules issued thereunder.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of section164 (2) of the Act.

(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.

(g) In our opinion the managerial remuneration for the year ended 31st March 2019 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 in our opinionand to the best of our information and according to the explanations given to us:

a. The company has disclosed the impact of pending litigations on its financialposition in its financial statement — Refer Note no. 33 to the financial statement.

b. The Company has made provision as required under the applicable law or Ind AS formaterial foreseeable losses if any on long-term contracts including derivativecontracts.

c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For M. L. Sharma & Co.
Firm Reg. No. 109963W
Chartered Accountants
Place of Signature: Mumbai (Shailesh M Bandi) Partner
Date : 29th May 2019 Membership No. 109101

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in our Report of even date to the Members of SAKUMA EXPORTSLIMITED on the Standalone Financial Statements for the year ended 31st March 2019 Wereport that:

1a According to information and explanations given to us The Company has maintainedproper records showing full particulars including quantitative details and situation offixed assets.

1b As explained to us the fixed assets of the company have been physically verified bythe Management in a phased manner as per regular program of verification which in ouropinion is reasonable having regard to the size of the Company and nature of its assets.Pursuant to this program some of the fixed assets have been physically verified by themanagement during the year and no material discrepancies have been noticed on suchverification.

1c The Company does not own any immovable property (Except leasehold properties)accordingly provision of clause 1 (iii) of the order is not applicable to the company.

2. The stock of Finished Goods have been physically verified during the year by theManagement. In our opinion the procedures of physical verification of the aboveInventories followed by the Management are reasonable and adequate in relation to the sizeof the Company and nature of its business. In respect of inventories lying with the thirdparties these have substantially been confirmed by them.

3 a The Company has not granted any loans secured or unsecured to the CompaniesFirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the companies Act 2013 and Accordingly provision of clause 3 (iii)(iii) (a) (iii) (b) & (iii) (c) of the order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us thecompany has not granted any loans or provided any guarantees or security in respect of anyloans to any party covered under section 185 of the Act. In respect of loans granted toguarantees or security in respect of any loan and Investments made in body corporate bythe Company the provisions of Section 186 of the Act has been complied with.

5. The Company has not accepted any deposits from the public to which the directivesissued by the Reserve Bank of India and the provisions of section 73 to 76 and any otherrelevant provision of the Companies Act 2013 and the rules framed there under apply.

6. In our opinion and according to the information and explanations given to us theCompany is not required to maintain cost records specified by the central government undersection 148 (1) of the Companies Act 2013.

7a According to the information and explanation given to us and the records of theCompany examined by us the Company is generally regular in depositing provident funddues employees state insurance income tax goods & service tax sales tax servicetax custom duty excise duty cess and any other statutory dues with the appropriateauthorities and there are no undisputed amounts payable for the same were outstanding asat 31st March 2019 for a period exceeding six months from the date they became payable;

7b According to the information and explanation given to us and the records of theCompany examined by us the Particulars of disputed statutory dues under various act as at31st March 2019 which have not been deposited with the appropriate authorities are asunder: -

Name of the Statute Nature of dues Amount ( Rs in Lakhs) Forum where dispute is pending
Income Tax Act 1961 For A. Y 2009-10 2.13 A. O.
Income Tax Act 1961 For A. Y 2016-17 152.68 CPC Bengaluru
Income Tax Act 1961 TDS Defaults for AY 2017-18 & AY 2018-19 .30 TDS Officer Mumbai

8. According to information and explanations given to us the company has not defaultedin repayment of loans or borrowings to a financial institution or bank and company doesnot have any outstanding loans or borrowing from Government or dues to debenture holdersduring the year.

9. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) and the Company has not availed any term loans duringthe current year and accordingly the provision of clause 3 (ix) of the order is notapplicable to the Company.

10. According to the information and explanations given to us by the management whichhas been relied upon by us no fraud by the company or any fraud on the Company by itsofficers or employees has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to us theCompany has paid/provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V of the companiesAct 2013.

12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the order are not applicable to the Company

13. In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with section 177 and 188 of thecompanies Act 2013 where applicable. The details of related party transactions have beendisclosed in the financial statements as required under Ind AS "24" RelatedParty Disclosures specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2015.

14. In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the and accordingly the provisions of clause 3 (xiv)of the order is not applicable to the Company.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any Non-Cash transaction with directors or persons connectedwith the directors. Accordingly the provisions of clause 3 (xv) of the order is notapplicable to the Company.

16. In our opinion and according to the information and explanations given to us thecompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly the provisions of clause 3 (xvi) of the order is not applicable tothe Company.

For M. L. Sharma & Co.
Firm Reg. No. 109963W
Chartered Accountants
Place of Signature: Mumbai (Shailesh M Bandi) Partner
Date : 29th May 2019 Membership No. 109101

ANNEXURE - "B" TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in our Report of even date to the Members of SAKUMA EXPORTSLIMITED for the year ended 31st March 2019. We report that:

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 SAKUMAEXPORTS LIMITED ("the Company") as of 31st March 2019 in conjunction withour audit of the Standalone Ind AS financial statements of the Company for the year endedon 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 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 judgment 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 Company's internal financial controls systemover financial 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 31st March 2019 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
Place of Signature: Mumbai (Shailesh M Bandi) Partner
Date: 29th May 2019 Membership No. 109101