7Seas Entertainment Ltd.
|BSE: 540874||Sector: IT|
|NSE: N.A.||ISIN Code: INE454F01010|
|BSE 00:00 | 06 Jan||7Seas Entertainment Ltd|
|NSE 05:30 | 01 Jan||7Seas Entertainment Ltd|
|BSE: 540874||Sector: IT|
|NSE: N.A.||ISIN Code: INE454F01010|
|BSE 00:00 | 06 Jan||7Seas Entertainment Ltd|
|NSE 05:30 | 01 Jan||7Seas Entertainment Ltd|
To the Members
M/s.7seas Entertainment Limited Hyderabad
The Directors have pleasure in presenting before you the Directors Report of the Company together with the Audited Statements of Accounts for the year ended 31st March 2019.
1. Financial summary/highlights:
The performance during the period ended 31st March 2019 has been as under: (Amount in Lakhs)
(Amount In Rs.)
2. Overview & state of the company's affairs:
During the year under review the Company has recorded an income of Rs.19.98 Lakhs and Loss of Rs.-1133.46 Lakhs as against the income of Rs.134.33 Lakhs and loss of Rs. -61.21 Lakhs in the previous financial year ending 31.03.2018.
Keeping the Company's growth plans in mind your Directors have decided not to recommend dividend for the year.
4. Transfer to reserves:
Pursuant to provisions of Section 134 (3) (j) of the Companies Act 2013 the company has not proposed to transfer any amount to general reserves account of the company during the year under review.
5. Material changes & commitment affecting the financial position of the company :
There have been no material changes and commitments affecting the financial position of the Company which have occurred during the end of the Financial Year of the Company to which the financial statements relate and the date of the report.
6. Significant & material orders passed by the regulators or courts or tribunals:
No significant or material orders have been passed against the Company by the Regulators Courts or Tribunals which impacts the going concern status and company's operations in future.
7. Transfer of un-claimed dividend to Investor Education and Protection:
There is no such amount of Un-paid or Unclaimed Dividend be transferred to Investor and Education and Protection Fund for the financial year ended 31st March 2019.
8. Details of Nodal Officer:
The Company has designated Mr. L.Maruti Sanker as a Nodal Officer for the purpose of IEPF.
9. Revision of financial statements:
There was no revision of the financial statements for the year under review.
10. Change in the nature of business if any:
During the period under review and the date of Board's Report there was no change in the nature of Business.
11. Deposits from public:
The Company has not accepted any public deposits during the Financial Year ended March 31 2019 and as such no amount of principal or interest on public deposits was outstanding as on the date of the balance sheet.
Details of deposits not in compliance with the requirements of the Act:
Since the Company has not accepted any deposits during the Financial Year ended March 312019 there has been no non-compliance with the requirements of the Act.
Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January 2019 amending the Companies (Acceptance of Deposits) Rules 2014 the Company is required to file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 for outstanding receipt of money/loan by the Company which is not considered as deposits.
The Company would be complying with this requirement within the prescribed timelines.
12. Depository System:
SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 mandate that the transfer except transmission and transposition of securities shall be carried out in dematerialized form only with effect from 1st April 2019. In view of the numerous advantages offered by the Depository system as well as to avoid frauds members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has directly as well as through its RTA sent intimation to shareholders who are holding shares in physical form advising them to get the shares dematerialized.
13. Selection and procedure for nomination and appointment of directors:
The Company has a Nomination and Remuneration Committee (NRC) which is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company including its strategies environment operations and financial condition and compliance requirements.
The NRC makes recommendations to the Board in regard to appointment of new Directors and Key Managerial Personnel (KMP) and senior management. The role of the NRC encompasses conducting a gap analysis to refresh the Board on a periodic basis including each time a Director's appointment or re-appointment is required. The NRC is also responsible for reviewing the profiles of potential candidates' vis-a-vis the required competencies undertake a reference and due diligence and meeting of potential candidates prior to making recommendations of their nomination to the Board.
The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.
14. Criteria for determining qualifications positive attributes and independence of a director:
In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the Listing Regulations the NRC has formulated the criteria for determining qualifications positive attributes and independence of Directors the key features of which are as follows:
Qualifications - The Board nomination process encourages diversity of thought experience knowledge age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in the Act the Directors are expected to demonstrate high standards of ethical behaviour communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Act the Rules framed thereunder and Regulation 16(1) (b) of the Listing Regulations.
15. Training of Independent Directors:
Your Company's Independent Directors are highly qualified and have been associated with corporate and business organizations. They understand Company's business and activities very well however pursuant to Regulation 4 of the Listing Regulations the Board has shown all the Independent Directors Company's business and manufacturing activities and were also introduced to Company's staff.
16. Independent director's familiarization programmes:
The familiarization program aims to provide the Independent Directors with the scenario within the software technology/services the socioeconomic environment in which the Company operates the business model the operational and financial performance of the Company significant development so as to enable them to take well-informed decisions in timely manner. The familiarization programme also seeks to update the Directors on the roles responsibilities rights and duties under the Act and other statutes. The policy on Company's familiarization programme for Independent Directors is hosted on your Company's website and its web link is http://www.7seasent.com
17. Board Evaluation
The Board of Directors of the Company carried out annual evaluation of its own performance Committees of the Board and individual Directors pursuant to various provisions under the Act Regulation 17 19 and Schedule II of the Listing Regulations the SEBI circular dated January 5 2017 circular dated January 10 2019 which provides further clarity on the process of Board Evaluation (SEBI Guidance Note) and SEBI circular dated February 5 2019.
The Company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.
The procedure followed for the performance evaluation of the Board Committees and individual Directors is enumerated in the Corporate Governance Report.
18. Audit Committee Recommendations :
During the year all recommendations of Audit Committee were approved by the Board of Directors.
19. Number of Board the Meetings:
During the year Five (5) meetings of the Board of Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meeting attendance by the directors are given in the Corporate Governance Report forming an integral part of this report.
20. Committees of the Board
There are various Board constituted Committees as stipulated under the Act and Listing Regulations namely Audit Committee Nomination and Remuneration Committee Stakeholders Relationship and Risk Management Committee. Brief details pertaining to composition terms of reference meetings held and attendance thereat of these Committees during the year has been enumerated in Corporate Governance report.
21. Directors and key managerial personnel:
As on date of this report the Company has six Directors out of those three are Independent Directors including one Woman Independent Director.
a) Appointment /Re-Appointment of Directors of the Company:
(i) Pursuant to provisions of Section 152 of the Companies Act 2013 read with the Companies (Appointment and Qualification of Directors) Rules 2014 Mr. B. Mohan Rao (DIN 07233665) is liable to retire by rotation at the ensuing 23rd Annual General Meeting and being re- appointed.
(ii) Mr. Narra Venkateswarlu was appointed as the additional director and independent director of the Company on 28th May 2019 subject to approval of members in Annual General Meeting.
(iii) Mr. Piduru Raja Sekhar was appointed as the additional director and independent director of the Company on 8th June 2019 subject to approval of members in Annual General Meeting.
(iv) Disclosure pursuant to Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) with respect to Directors seeking re-appointment/appointment at the Meeting is given below:
b) Key Managerial Personnel:
Key Managerial Personnel for the financial year 2018-19
Mr. L. Maruti Sanker Managing Director of the company.
Mr. L.Hemalatha Whole Time Director cum Chief financial officer of the company.
Mr. Remo John Company Secretary of the Company.
Mr. L. Hemalatha was appointed as the chief financial officer of the Company with effect from April 23 2019 and Mr. Remo John was appointed as the Company Secretary of the Company with effect from April 10 2019 in place of Ms. Nida Siddiqui who ceased to be the Company Secretary of the Company w.e.f. April 08 2019.
22. Indian Accounting Standards:
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 has notified the Companies (Indian Accounting Standards) Rules 2015. In pursuance of the said notification the Company adopts Indian Accounting Standards with effect from 01st April 2017. The implementation of Indian Accounting Standards (IAS) is a major change process for which the Company has set up a dedicated team and is providing desired resources for its completion within the time frame. The impact of the change on adoption of said IAS is being assessed.
23. Information about The Financial Performance / Financial Position Of The Subsidiaries / Associates:
The Company does not have any subsidiary. During the year neither any company became a subsidiary nor ceased as a subsidiary.
24. Compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015:
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has signed uniform listing agreement with ASE Limited and framed the following policies which are available on Company's website i.e. www.7seasent.com
Board Diversity Policy
Policy on preservation of Documents
Risk Management Policy
Whistle Blower Policy
Familiarisation programme for Independent Directors
Anti Sexual Harrassment Policy
Related Party Policy
Code of Conduct
25. Statutory audit and auditors report:
The members of the Company at their Annual General Meeting held on 29th November 2018 have appointed Mr. Kamlesh Kumar Bhargava as statutory auditors of the Company to hold office until the conclusion of 31st Annual General meeting of the Company. The Auditors' Report for fiscal 2019 does not contain any qualification reservation or adverse remark. The Auditors' Report is enclosed with the financial statements in this Annual Report. The Company has received audit report with unmodified opinion for Standalone audited financial results of the Company for the Financial Year ended March 31 2019 from the statutory auditors of the Company.
26. Internal auditors:
Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rules 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board and its Powers) Rules 2014; during the year under review the Internal Audit of the functions and activities of the Company was undertaken by the Internal Auditor of the Company on quarterly basis by M/s. DVAK & Co. the Internal Auditor of the Company.
Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns if any are reported to Board. There were no adverse remarks or qualification on accounts of the Company from the Internal Auditor.
The Board has re-appointed M/s. DVAK & Co. Chartered Accountants Hyderabad as Internal Auditors for the Financial Year 2019-20.
27. Secretarial Auditor & Audit Report:
In terms of section 204 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 based upon the recommendations of the Audit Committee the Board of Directors had appointed M/s. Sathwik & Associates Practicing Company Secretaries (Cp No. 16937) as the Secretarial Auditor of the Company for conducting the Secretarial Audit for financial year ended March 312019
The Secretarial Audit was carried out by M/s. Sathwik & Associates Company Secretaries (CP No. 16937) for the financial year ended March 312019. The Report given by the Secretarial Auditor is annexed herewith and forms integral part of this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverse remark.
28. Annual Secretarial Compliance Report:
SEBI vide its Circular No. CIR/CFD/CMD1/27/2019 dated February 08 2019 read with Regulation 24(A) of the Listing Regulations directed listed entities to conduct Annual Secretarial compliance audit from a Practicing Company Secretary of all applicable SEBI Regulations and circulars/guidelines issued thereunder. Further Secretarial Compliance Report dated May 14 2019 was given by M/s. Sathwik & Associates Practicing Company Secretary which was submitted to Stock Exchanges within 60 days of the end of the financial year.
The Secretarial Compliance Report does not contain any qualification reservation or adverse remark.
29. Cost records and cost audit:
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.
30. No Frauds reported by statutory auditors:
During the Financial Year 2018-19 the Auditors have not reported any matter under section 143(12) of the Companies Act 2013 therefore no detail is required to be disclosed under section 134(3) (ca) of the Companies Act 2013.
31. Declaration by the Company:
The Company has issued a certificate to its Directors confirming that it has not made any default under Section 164(2) of the Act as on March 31 2019.
32. Conservation of energy technology absorption and foreign exchange outgo:
The required information as per Sec.134 (3) (m) of the Companies Act 2013 is provided hereunder and Rule 8 of Companies (Accounts) Rules 2014:
A. Conservation of Energy:
Your Company's operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
1. Foreign Exchange Earnings: Nil
2. Foreign Exchange Outgo: Nil
The properties and assets of your Company are adequately insured.
34. Management discussion and analysis report:
Management discussion and analysis report for the year under review as stipulated under Regulation 34 (e ) read with schedule V Part B of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with the stock exchange in India is annexed herewith as Annexure- 1 to this report.
35. Risk management policy:
The Board of Directors had constituted Risk Management Committee to identify elements of risk in different areas of operations and to develop policy for actions associated to mitigate the risks. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continual basis.
36. Corporate governance:
Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under the Listing Regulations. A separate section on Corporate Governance forming a part of this Report and the requisite certificate from the Company's Auditors confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance
37. Extract of Annual Return:
Pursuant to Sections 92 & 134(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules 2014 the extract of Annual Return in Form MGT-9 is provided in Annexure -F to this Report and is also available on the Company's website URL: https://www.7seasent.com
38. Authorised and paid up capital of the company:
The authorized capital of the company stands at Rs. 112500000/- divided into 11250000 equity shares of Rs.10/- each. The company's paid up capital is Rs. 111109000/- divided into 11110900 equity shares of Rs. 10/- each.
39. Ratio of remuneration to each director :
Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of the Companies(Appointment & Remuneration) Rules 2014 the ratio of Managing Director's (Mr. L. Maruti Sanker) and Whole-Time Director's (Mrs. L. Hemalatha) remuneration to median employees is 2.75:1 and 0.266:1 respectively.
40. Declaration of independence:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16(1)(b) read with Regulation 25 of the Listing Regulations.
The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct.
In terms of Regulations 25(8) of the Listing Regulations the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.
During the year Independent Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors and Committee(s).
41. Director's Responsibility Statement:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 your Directors confirm that: -
a) in the preparation of the annual accounts for the financial year ended 31 March 2019 the applicable accounting standards and schedule III of the Companies Act 2013 have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as on 31 March 2019 and of the profit and loss of the Company for the financial year ended 31 March 2019;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) Proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) Proper systems to ensure compliance with the provisions of all applicable laws were followed and that such systems were adequate and operating effectively.
42. Vigil Mechanism/Whistle Blower Policy:
The Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act 2013 and Regulation 22 of the Listing Regulations. The Company has a vigil mechanism to deal with fraud and mismanagement if any. The policy is on the website of the Company.
The policy provides for adequate safeguards against the victimisation of the employees who use the vigil mechanism. The vigil mechanism is overseen by the audit Committee.
43. Corporate social responsibility policy:
Since your Company does not have net worth of Rs. 500 Crore or more or turnover of Rs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial year section 135 of the Companies Act 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.
44. Secretarial Standards:
The company is in compliance with Secretarial Standards issued by The Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.
45. Particulars of loans guarantees or Investments:
The Company has availed Credit and Guarantee facilities from Indian Overseas Bank Raj Bhavan Road Branch during the year. Due to nonpayment of interest on cash credit accounts the bank has classified cash credit as NPA account.
Further the company has not given loans or Guarantees or made investments attracting section 186 of the Companies Act 2013 during the year under review.
46. Internal Financial Control Systems:
Your Company has well laid out policies on financial reporting asset management adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the internal auditors.
The internal audit is conducted at the Company and covers all key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.
47. Related Party Transactions:
All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. During the financial year 2018-19 there were no materially significant related party transactions made by the Company with Promoters Directors Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
In line with the provisions of Section 177 of the Act read with the Companies (Meetings of the Board and its Powers) Rules 2014 omnibus approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.
The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm's length basis and in the ordinary course of business
The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is is annexed herewith as Annexure- D to this report.
48. Policy on directors appointment and remuneration:
In adherence to the provisions of Section 134(3)(e) and 178(1) & (3) of the Companies Act 2013 the Board of Directors upon recommendation of the Nomination and Remuneration Committee approved a policy on Director's appointment and remuneration including criteria for determining qualifications positive attributes independence of a Director and other matters. The said Policy extract is covered in Corporate Governance Report which forms part of this Report and is also uploaded on the Company's website at www.palred.com .
49. Employee Relations and Remuneration:
Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company.
None of the employees is drawing Rs. 850000/- and above per month or Rs.10200000/- and above in aggregate per annum the limits prescribed under Section 197(12) of Companies Act 2013 read with Rule 5 of Companies(Appointment & Remuneration Of Managerial Personnel) Rules 2014.
50. Non-executive directors' compensation and disclosures:
None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.
51. Industry based disclosures as mandated by the respective laws governing the company:
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosures is not required.
52. CEO/CFO Certification:
As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the CEO/CFO certification is attached with the annual report.
53. Prevention of sexual harassment at workplace:
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment at workplace.
This is in line with provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 ('POSH Act') and the Rules made thereunder. With the objective of providing a safe working environment all employees (permanent contractual temporary trainees) are covered under this Policy. The policy is available on the website at www.palred.com .
As per the requirement of the POSH Act and Rules made thereunder the Company has constituted an Internal Committee at all its locations known as the Prevention of Sexual Harassment (POSH) Committees to inquire and redress complaints received regarding sexual harassment. During the year under review there were no Complaints pertaining to sexual harassment.
54. Green Initiatives:
In commitment to keep in line with the Green Initiative and going beyond it to create new green initiatives electronic copy of the Notice of 20th Annual General Meeting of the Company are sent to all Members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their e-mail addresses physical copies are sent through the permitted mode.
55. Other Disclosures:
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a. Issue of equity shares with differential rights as to dividend voting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.
c. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
56. Appreciation & acknowledgement:
Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels for the continued growth and prosperity of your Company.
Your Directors also wish to place on record their appreciation of business constituents banks and other financial institutions other statutory authorities like SEBI ROC Stock Exchanges NSDL CDSL etc and shareholders of the Company for their continued support for the growth of the Company.
For and on behalf of the Board 7Seas Entertainment Limited
L. Maruti Sanker L. Hemalatha
Place: Hyderabad Managing Director Whole-Time Director
Date: 12.08.2019 (DIN: 01095047) (DIN: 02226943)