We have audited the attached Balance Sheet of SAKUMA EXPORTS LTD. as at
31st March, 2007 and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date, annexed thereto and report
as under. These financial statements are the responsibility of the
company s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. These standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes
examining, on test basis, evidence supporting the amount and disclosure
in financial statements. An audit also include assessing the accounting
principal used and significant estimates made by management, as well as
evaluating the over all financial statements presentation. We believe
that our audit provides reasonable basis for opinion.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Central Government in terms of sub-section (4A) Section 227 of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the Said Order.
Further to our comments in the Annexure referred to above, we report
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion, proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of the
c) The Balance Sheet, Profit and Loss account and Cash Flow Statement
dealt with by this report are in agreement with the books of account
maintained by the company.
d) On the basis of confirmations received from the directors no such
director is disqualified from being appointed as a director of the
Company under section 274 (1) (g) of the Companies Act, 1956.
e) In our opinion the Balance Sheet, Profit and Loss account and Cash
Flow Statement comply with the accounting standards referred to in sub-
section (3C) of Section 211 of the Companies Act, 1956.
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said Statement of Accounts, read
together with notes and schedules annexed thereto and forming part
thereof, gives the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view:
i) In so far as it relates to the Balance Sheet, of the state of
affairs of the Company as at 31st March, 2007.
ii) In so far as it relates to the Profit and Loss Account of the
Profit of the company for the year ended on that date.
iii) In so far as it relates to cash flow of the company for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Referred to in paragraph 3 of our report of even date,
i. In respect of its fixed assets:
(a) The Company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the management, which
in our opinion is reasonable having regard to the size of the company
and the nature of its assets. Pursuant to above verification no
material discrepancies between the book records and the physical
inventory have been noticed.
(c) No substantial part of the fixed assets has been disposed off by
the Company during the year.
ii. In respect of its inventory:
(a) As explained to us, the inventory has been physically verified at
reasonable intervals during the year by the management.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, Company has maintained proper records of stock and no
material discrepancies were noticed on physical verification.
iii. (a) The Company had taken interest free unsecured loan from
directors, companies and other parties covered in the register
maintained under section 301 of the Companies Act, 1956 in the previous
year & has been repaid during the year. The maximum amount involved
during the year was Rs. 48.79 lacs. According to the information and
explanation given to us the company has not granted any loans, secured
or unsecured to the companies, firms and other parties covered under
the register maintained under section 301 of the Companies Act, 1956.
(b) In our opinion, other terms and conditions of such loans are not
prima facie prejudicial to the interest of the company.
(c) As there is no outstanding dues at the year end hence the reporting
requirement relating to terms of repayment is not applicable.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. During the course of our audit no major weaknesses has
been noticed in the internal controls.
v. (a) According to the information and explanation given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the company has not made any transactions exceeding the
value of Rs. five lacs with any party listed in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, clause 4 (v)
(b) of the Companies (Auditors Report) Order, 2003 is not applicable.
vi. The company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA of the Act and the rules framed
vii. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
viii. The company is not engaged in manufacturing activities; hence the
maintenance of cost records in accordance with section 209(l)(d) of the
Companies Act, 1956, is not applicable.
ix. (a) According to the information and explanations provided to us,
the company is generally regular in depositing with appropriate
authorities undisputed amount of provident fund, employees state
insurance, income-tax, sales-tax, wealth-tax, customs duty, excise
duty, cess and other material statutory dues wherever applicable to it
and no undisputed amounts payable were outstanding as at 31stMarch,
2007 for a period of more than six months from the date they became
(b) According to the records of the company, dues of Income Tax that
has not been deposited on account of any dispute is as follows:
Stature Nature of Dues
Income Tax Act, 1961 Interest levied by the department.
Amount (Rs.) Forum where the dispute is pending
2,45,931/- Chief Commissioner of Income Tax.
Further, there is no other dues in respect of sales-tax, customs duty,
wealth-tax, excise duty and cess that have not been deposited on
account of any dispute
x. The company has no accumulated losses as at March 31, 2007 and it
has not incurred any cash loss in the financial year ended on that
xi. According to records of the company examined by us and the
information and explanation given to us, the company has not defaulted
in repayment of dues to any financial institution or bank as at the
balance sheet date.
xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii. The provisions of any special statute applicable to chit fund/
nidhi / mutual benefit fund/ societies are not applicable to the
xiv. The nature of Companys business/activities during the year does
not include dealing in shares, securities, debentures or other
investments, hence the requirement of offering comments on this clause
is not applicable.
xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others, from banks or financial institutions during the year.
xvi. The company has not taken any term loans, except vehicle loan,
which has been applied for the purposes for which it was obtained,
xvii. On the basis of an overall examination of the balance sheet and
cash flow statement of the company, in our opinion and according to the
information and explanations given to us, there are no funds raised on
a short-term basis, which have been used for long-term investment.
xviii.The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
xix. No debentures have been issued by the Company during the year.
xx. We have verified the end use of money raised by public issue in the
previous financial year as disclosed in the notes to the financial
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
audited practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of such case by the management.
For and on behalf of
MITTAL & ASSOCIATES
M. No. 77881
PLACE : MUMBAI
DATED : 31.05.2007