TO THE MEMBERS OF SAKA LIMITED
Report on the financial statements
We have audited the accompanying financial statements of SAKA LIMITED ("the
Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of
Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the
significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
Management is responsible for the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and cash flows of the
Company in accordance with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
includes the design, implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a true and fair view
and 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 our
audit. We conducted our audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Companys preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Basis for Qualified Opinion
1. Reference is invited to Note 2.7 to the financial statements, advances recoverable
includes 112.00 Lacs (previous year 112.00 Lacs) from corporate companies for which no
provision has been made. However, as per analysis of their net worth, based on the
financial 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 appeal
for which have been dismissed by Hble ITAT
Qualified opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matter described in the Basis for
Qualified Opinion paragraph, the aforesaid financial statements give the information
required by the Act in the manner so required and give a true and fair view in conformity
with 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 31st
March, 2018;
b) in the case of the Statement of Profit and Loss, of the loss for the year ended on
that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act 2013, we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have 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 and proper returns
adequate for the purposes of 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 a
person other than the companys auditor has been sent to us as required by proviso to
clause (8) of section 143 and have been dealt with in preparing our report in the manner
considered necessary by us- Not applicable
d) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account and with the returns
received from the branches not visited by us.
e) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement comply with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
f) Observation or the comments on financial transaction on matters having adverse
effect on the functioning of company :-
i) Reference is invited to Note 2.7(a) to the financial statements, advances
recoverable includes . 112.00 Lacs (previous year . 112.00 Lacs) to corporate companies
for which no provision 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, the recovery of the amount is doubtful.
ii) We draw attention to Note 2.12 to the financial statements, on balances grouped
under Sundry Creditors, Advances received from customers and advances received from
customers and advance recoverable are under reconciliation and subject to confirmation
from respective parties. The final adjustment, if any, shall be made on reconciliation of
the same. The impact, if any, on the profit for the year cannot ascertained at this stage.
iii) We draw attention to Note 2.18 to the financial statements, the company has close
down its manufacturing operations with effect from 20.07.2004 under section 6 W to be read
6 V of U.P. Industrial Dispute Act. 1947. The accounts have been prepared as a going
concern inspite of the fact the company has close down its manufacturing operations and
its entire net worth has been eroded..
iv) Trading of shares of the company has been suspended by the stock exchanges because
of penal reasons.
v) No TDS has been deducted on Professional fees of Rs. 4,10,000/- paid during the year
for the same . The same may attract tax , interest & penalty during the assessment
proceedings which will have negative impact on books
g) on the basis of written representations received from the directors as on March 31,
2017, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2017, from being appointed as a director in terms of sub-section (2) of
section164 of the Companies Act, 2013.
h) In our opinion proper books of account as required by law have been maintained by
the 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, there
is generally an adequate internal control systems in place and operative effectiveness of
such 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 taxes
which has not been deposited. This liability will impact adversely on the financials of
the company:-
| Name of Statue |
Nature of dues |
Amount ( in Lacs) |
Financial year to which relates |
Forum where pending |
| 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 material
foreseeable losses on long term contracts including derivatives contract.
c) The amount required to be transferred to investor education and protection fund in
accordance with the relevant provisions of the Companies Act, 2013 and rules made there
under 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 : 28th May, 2018
The Annexure referred to in paragraph 1 of the Our Report of even date to the members
of Saka Limited on the accounts of the company for the year ended 31st March, 2018.
On the basis of such checks as we considered appropriate and according to the
information and explanation given to us during the course of our audit, we report that:
1. The company does not have any fixed assets .
The company does not have any inventory at the end of the year.
2. According to the information and explanations given to us and on the basis of our
examination 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 Companies
Act, 2013 during the year.
The company had granted loans to associate company and other related parties amounting
to Rs.1,05,02,336/ (Previous year Rs. 1,05,02,336/ )which is outstanding in the books of
accounts as
Advances Recoverable from corporate companies. In our view the recovery of these 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 our
verification & as per analysis of their net worth, based on the financial statements
available, the recovery of the amount is doubtful. (b) The schedule of repayment of
principal and payment of Interest has not been stipulated.
(c) Due to lack of information we are not able to comment on whether reasonable steps
have 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 185
and 186 of the Companies Act, 2013 have been complied with. 3.
The company has not accepted any deposits from the public covered under section 73 and
76 of the Companies Act, 2013.
4. The company has not maintaining any cost records under section 148(1) of the
Companies Act, 2013 as no manufacturing activities have been carried out during the year.
5.
(a) According to the records of the company, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees State Insurance,
Income-tax, Sales-tax, Wealth Tax, Custom 6. Duty, Excise Duty, cess to the extent
applicable and any other statutory dues have generally been regularly deposited with the
appropriate authorities.
According to the information and explanations given to us there were no outstanding
statutory dues as on 31st of March, 2018 for a period of more than six months from the
date they became payable.
(b) According to the information and explanations given to us, there is no dues of
sales tax, income tax, custom duty, wealth tax and cess which have not been deposited on
accounts of any dispute except for liability that may arise for tax , interest &
penalty on account of non deduction of TDS on professional fees of Rs. 4,10,000/-
However, according to the records of the company and the information and explanations
given to us, the following are the particulars of disputed dues on account of excise duty
which has not been deposited.
| Name of Statue |
Nature of dues |
Amount ( in Lacs) |
Financial year to which relates |
Forum where pending |
| 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 the
management, we are of the opinion that, the Company has not defaulted in repayment of dues
to a financial institution, bank, government or dues to debenture holders.
9. Moneys raised by way of initial public offer or further public offer (including debt
instruments) 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 given
to us, we report that no fraud by the Company or any fraud on the company by its officers
or employees has been noticed or reported during the year, nor have we been informed of
such case by the management.
11. Managerial remuneration has been paid or provided in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Companies
Act, 2013.
12. The Company is not a Nidhi Company.
13. The company does not have constituted Audit Committee so the provisions of Section
177 of the Companies Act, 2013 have not been complied .
All the transactions covered under section 188 of Companies Act, 2013 are in compliance
where applicable and details have been disclosed in the Financial Statements etc., as
required by the applicable accounting standards;
14. The Company has not made any preferential allotment or private placement of shares
or fully or partly convertible debentures during the year.
15. The company has not entered into any non-cash transactions with directors or
persons connected with him.
16. The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934.
FOR AGARWAL SETH & CO.
CHARTERED ACCOUNTANTS
FRN:511761C
Vikas Agarwal
(Partner)
Membership No. : 090508
Place: New Delhi
Date: 28-05-2018
+91-9892691696
