Board's Report- Sec. 134(3)
To the Members of
S KUMARS ONLINE LIMITED
Your Directors have pleasure in presenting the 18 Annual Report of the Company togetherwith the Audited Accounts for the financial year ended on 31 March 2017 for your perusalconsideration and adoption.
State of Affairs of the Company:
|Particular ||Unconsolidated ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Total Revenue ||5415174 ||5729436 ||5415174 ||5729436 |
|Less :- Total expenditure ||(7669638) ||(9275480) ||(7690312) ||(9288877) |
|Profit (Loss) before Exceptional and Extraordinary items and Tax ||(2254464) ||(3546044) ||(2275138) ||(3559441) |
|Prior period adjustments ||- ||(2500) ||- ||(2500) |
|Profit (Loss) before Extraordinary items and Tax ||(2254464) ||(3548544) ||(2275138) ||(3561941) |
|Extraordinary items ||- ||- ||- ||- |
|Profit (Loss) before Tax ||(2254464) ||(3548544) ||(2275138) ||(3561941) |
|Tax: Current Tax ||- ||- ||- ||- |
|Tax Liability of Previous Years ||- ||- ||- ||- |
|Deferred Tax (Liability)/Assets ||19695 ||31911 ||19695 ||31911 |
|Profit (Loss) for the year before minority interest ||(2234769) ||(3516633) ||(2255418) ||(3530014) |
|Minority interest (share of loss transferred to minority) ||- ||- ||25 ||16 |
|Profit (Loss) after Tax (PAT) ||(2234769) ||(3516633) ||(2255418) ||(3530014) |
|Less:- Appropriation: || || || || |
|Adjustment relating to fixed Assets ||- ||- ||- ||- |
|Balance brought forward from previous year ||(385239245) ||(381722611) ||(385296472) ||(381766458) |
|Balance carried to balance sheet ||(387474014) ||(385239245) ||(387551890) ||(385296472) |
Review of operations:
There is no change in the nature of business of the company. During the year underreview your Company earned a total income of Rs. 5415174/- as compared to atotal income of Rs. 5729436/- of the previous year and a net loss after tax ofRs. 2234769/- as compared to net loss after tax of Rs. 3516633/- of theprevious year.
Transfer to Reserves
In view of overall accumulated losses the directors express their inability totransfer any amount to reserves for the financial year 2016-17.
In view of overall accumulated losses the directors express their inability torecommend any dividend on Equity Shares for the financial year 2016-17.
Your company has not accepted any deposits from public and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.
Management discussion and analysis:
1. Industry Structure and Developments
Slothful business due to immense competition among the I. T. Management consultancyservices and "Moviegear" Equipment Rental business sector forced us to keepourselves in the back foot for considerably long span during the year. It is the snappingfactor responsible for our declined business growth and development. However the Companycontinued with its I. T. Management consultancy services and "Moviegear"Equipment Rental business during the year.
2. Industry Outlook:
The Company is an information technology services consulting and business solutionsrelated Company. The Company provides end-to-end technology and technology relatedtele-communication related communication systems satellite and satellite relatedsoftware and software related computer hardware and hardware related E-commerce andE-commerce related services etc.
3. Opportunities and Threats:
The Company recognizes the need to accelerate ability to connect more deeply with ourcustomers to enable true transformation. Increasing IT usage and adoption within thecountry is enhancing competitiveness of the Indian economy and the user community. Indianbusinesses that are using Information Technology as an enabler are becomingincreasingly competitive in the global arena.
The demand environment will continue to remain buoyant in the coming fiscals due toincreased IT Consultancy spend by organizations as well as greater acceptance of theglobal delivery model. Due to immense competition the company is facing threat to itsexisting line of businesses.
4. Segmentwise performance:
During the year the your Company operated in three segments viz.
1. I. T. Management Consultancy;
2. Equipment Rental;
Segment-wise Revenue Results and Capital Employed as required u/s 133 of the CompaniesAct 2013 and under Schedule IV of the SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 for the year ended 31 March 2017 are as follow:
|Particulars ||Year ended 31/03/2017(Rs. In Lakh) |
| ||(Audited) |
|1 Segment-wise Revenue || |
|(Net Sales / Income from each segment): || |
|a) IT Management Consultancy ||51.00 |
|b) Equipment Rental ||- |
|c) Unallocated ||- |
|Total ||51.00 |
|Less: Inter Segment Revenue ||- |
|Total Net Sales / Income from Operations ||51.00 |
|2 Segment-wise Results || |
|Profit from Operations of each segment || |
|a) IT Management Consultancy ||30.79 |
|b) Equipment Rental ||-7.99 |
|c) Unallocated ||-48.51 |
|Profit before Interest & Tax ||-25.69 |
|Less: || |
|(i) Interest ||- |
|(ii) Other Unallocable Expenditure net off ||- |
|(iii) Other Income (Unallocable) ||3.15 |
|Total Profit Before Tax ||-22.54 |
| ||Year ended 31/03/2017(Rs. In Lakh) |
|Particulars || |
| ||(Audited) |
|3 Capital Employed || |
|(Segment-wise Asset Segment-wise Liabilities) || |
|a) IT Management Consultancy ||-20.05 |
|b) Equipment Rental ||60.08 |
|c) Unallocated ||-1052.27 |
|Total ||-1012.24 |
5. Research and Development:
Our Research and Development (R & D) focus is to drive innovation in all areas ofour business resulting in improvements in product quality cost savings higherefficiencies. We have integrated our R&D practices to operate in cope with all ourbusinesses and various product categories. We leverage R & D activities to keep wellinformed of changing consumer preferences. This includes consumer studies to gaugefeedback on new products modifying products to suit consumer tastes and adding featuresand variants to existing products to provide alternative solutions to our consumers.
6. Risks Management and compliance:
Your Company has an elaborate risk management procedure which is entirely based ondifferent parameters related to business operations. Some of the risks related tocompetitive intensity and cost volatility. Major risks identified by the Audit Committeeare systematically addressed. These are discussed with both Board and Audit Committee.These are routinely tested and certified by Internal Auditors/Statutory Auditors and coverall offices divisions and key areas of business. Significant audit observations andfollow up actions thereon are reported to the Audit Committee. The Audit Committee reviewsadequacy and effectiveness of the Company's internal control environment and monitors theimplementation of audit recommendations including those relating to strengthening of theCompany's risk management policies and systems.
7. Internal financial control system and their adequacy:
Your Company has proper and adequate system of internal financial controls to providereasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable statutes safeguarding assets fromunauthorised use executing transactions with proper authorisation and ensuring complianceof corporate policies. The internal financial control is supplemented by an extensiveprogramme of external audits and periodic review by the management.
The system is designed to adequately ensure that financial and other records arereliable for presenting financial information and other data and maintainingaccountability of assets.
8. Human Resource:
Your Company regularly organizes in-house training programmes for employees to improveoperational efficiency. Company's strategy is to recruit qualified and talented employees.
Statement in this Management Discussion and Analysis deals with Company's objectivesprojections estimates expectations and predictions. The expectations of the managementare regarded as forward looking statements with meaning of applicable securities laws andregulations. These forward looking statements' are inherently subject to risks anduncertainties beyond the control of the Company or its management. Many factors couldcause the actual results performance and achievements of the Company to be materiallydifferent from any future results performances or achievement that may be expressed orimplied by such forward looking statements. S Kumars Online Limited shall not be liablefor any loss which may arise as a result of any action taken on the basis of theinformation contained herein nor would be under any obligation to update the forwardlooking statements to reflect developments of events of circumstances hereafter.
Extract of Annual Return
As provided under Section 92(3) of the Act the extract of annual return is given in AnnexureI in the prescribed Form MGT-9 which forms part of this report.
Number of Board Meetings
Five meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport.
Based on the confirmation / disclosures received from the Directors and on evaluationof the relationships disclosed the following Non-executive Directors are Independent interms of SEBI (LODR) Regulations 2015 and Section 149(6) of the Companies Act 2013:-
1) Mr. Ramesh Gangwal
2) Mr. Rudra Narain Jha
The Company has received a declaration from the Independent Director(s) that they meetthe criteria of independence as provided in Section 149(6) of the Companies Act 2013 andRegulation 16(b) of the SEBI (LODR) Regulations 2015 are annexed in Annexure IIwhich forms part of this report.
Director's Responsibility Statement:
Pursuant to Section 134(5) read with Section134(3)(c) of the Companies Act 2013 inbest of their knowledge and belief the Board of Directors confirm that:
a. In preparation of the annual accounts the applicable accounting standards had beenfollowed along with the proper explanation relating to material departures;
b. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to true and fairview of the affairs of the company at the end of the financial year and of the profit andloss of the company for that period;
c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d. The Directors had prepared the annual accounts on a going concern basis;
e. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderThe Auditors M/s. S M M P & Associates Chartered Accountants (Formerly known as M/s.Shyam Malpani & Associates)who were appointed as statutory auditors of the Companytill the conclusion of the 18 Annual General Meeting (AGM) of the Company at aremuneration (including term of payment) to be fixed by Board of Directors of the Companyplus service tax and such other tax(es) as may be applicable & reimbursement of allout-of-pocket expenses in connection with the audit of the accounts of the Company. Theterms of existing Auditors is being expired at ensuing Annual General Meeting. Hence onrecommendation of Audit Committee your Board of Directors propose the appointment of M/s.SKHD & Associates Chartered Accountants (Firm Reg. No. 105929W) at ensuingAnnual General Meeting for a term of Five years on such terms and conditions as mentionedin the Notice Calling 18 Annual General Meeting.
No Fraud has been reported by Auditors under section 143(12) of the Companies Act 2013for the Financial Year 2016-17.
Explanation on qualifications in Auditors' Report
Company has continued with its IT management consultancy business during the quarterunder review. Company has discontinued its old model of e- Commerce business due to whichit is facing cash flow mismatches. However the management is constantly trying tointroduce new e-Commerce business model. Management is confident that in near futureCompany will be in revival mode and thereby going concern will not be affected.
Secretarial Auditors' Report
During the period under review the Company has complied with the provisions of the ActRules Regulations Secretarial Standards etc. issued by the regulatory bodies. TheSecretarial Audit Report is annexed as Annexure III with this Report.
The Company has appointed Internal Auditor for the Financial Year 2016-17. The scopeand authority of the Internal Auditor is as per the terms of reference approved by theAudit Committee. To maintain its objectivity and independence the Internal Auditorreports to the Chairman of the Audit Committee of the Board and to the Chairman &WholeTime Director.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies of the Company.
Based on the report of Internal Auditor process owners undertake corrective action intheir respective areas and thereby strengthen the controls. Significant audit observationsand recommendations along with corrective actions thereon are presented to the AuditCommittee of the Board.
Policy / Details of directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration is available on websiteof Company and other matters provided in Section 178(3) of the Act has been disclosed inthe corporate governance report which forms part of the directors' report.
Particulars of Contracts or arrangements with related parties
Your Company has not entered into any contracts or arrangements of material nature withrelated parties i.e. Directors or their relatives which may conflict with the interest ofthe Company at large during F.Y. 2016-17. The details of the related party transactionsif any are disclosed in the financial section of this Annual Report and in prescribedform AOC-2 which is annexed as Annexure IV with this Report.
Particulars of loans guarantees or investments under section 186:
Your Company has not given any loans guarantee or made any investments incontravention of section 186 of the Companies Act 2013 during F.Y. 2016-17. Theparticulars of loans guarantees and investments if any are disclosed in the financialsection of this Annual Report.
Conservation of energy technology absorption and Foreign Exchange Earning & Outgo:
A. Conservation of Energy:
During the year under review the Company has not spent any significant amount onconservation of energy. Hence the Company has nothing to report as per the requirements ofSection 134 (3) (m) of the Companies Act 2013 read with the Companies (Accounts) Rule2014.
B. Technology Absorption:
During the year under review the Company has not absorbed any technology and hence theCompany has nothing to report as per the requirements of Section 134 (3) (m) of theCompanies Act 2013 read with the Companies (Accounts) Rule 2014.
C. Foreign Exchange Earning & Outgo:
|Earning ||: NIL |
|Outgo ||: NIL |
The Company is taking all possible and reasonable efforts to have export earnings.
Annual Evaluation of Board's and Committee's Performance:
The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by SEBI under SEBI (LODR) Regulations2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings etc.
The Board and / or the Nomination and Remuneration Committee reviewed the performanceof the individual directors on the basis of the criteria such as the contribution of theindividual director to the Board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and of the Chairman was evaluated takinginto account the views of executive and non-executive directors. The same was discussed inthe board meeting that followed the meeting of the independent Directors at which theperformance of the Board its committees and individual directors was also discussed.
Composition of Committees and other related details:
The Composition of various committees and other related details are disclosed inCorporate Governance Report forming part of this Annual Report.
The company has a policy on vigil mechanism and the same has been kept on the websiteof the company.
Corporate Social Responsibility (CSR)
The provisions relating to Corporate Social Responsibly are not applicable to theCompany.
Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Companys operations in future.
Particulars of Employees:
The information required under Section 197 of the Act read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from timeto time are given below:
1) The ratio of the remuneration of each director to the median remuneration ofthe employees of the Company for the financial year:
|Name of the Directors with Category ||Ratio to median remuneration |
|Mr. Ramesh Gangwal - Non-Executive Independent Chairman ||- |
|Mr. RudraNarain Jha - Non-Executive Independent Director ||- |
|Mr. Omprakash P. Pacheria (Whole Time Director) Executive Non-Independent Director ||3.73 |
|Dr. Sadhana Sachin Deshmukh - Non-Executive Non-Independent Director ||- |
2) The percentage increase in remuneration of each director chief financial officerin the financial year:
|Name of the Directors CFO and CS ||% increase in remunerationin the financialyear |
|Mr. Ramesh Gangwal Non-Executive Independent Chairman ||- |
|Mr. Rudra Narain Jha Non-Executive Independent Director ||- |
|Mr. Omprakash P. Pacheria (Whole Time Director) Executive Non-Independent Director ||- |
|Dr. Sadhana S. Deshmukh Non-Executive Non-Independent Director ||- |
|Mr. Samir S. Patil Chief Financial Officer ||- |
|Mr. Hitendrakumar Ranka Company Secretary & Compliance Officer || |
|On 01/04/2016 ||20.00% |
|On 01/09/2016 ||33.33% |
3) The percentage increase in the median remuneration of employees in the financialyear: 38.46%
4) The number of permanent employees on the rolls of Company at 31.03.2017: 6 (Six)
5) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average annual increase made in the salaries of employees other than the managerialpersonnel in the last financial year was around 38.46%. Increase in the managerialremuneration for the year was NIL. Hence No justification requires as such.
6) Affirmation that the remuneration is as per the remuneration policy of the Company:
Your Company affirms that the remuneration is as per the remuneration policy of theCompany.
7) There is no employee drawing remuneration covered under section 197(12) readwith Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
During the year under review e-Assurance Services (India) Ltd' is the onlysubsidiary of the Company. The said subsidiary is material in nature non-listedsubsidiary company as defined under the Company's Policy for determining MaterialSubsidiaries. Pursuant to Section 129 of the Companies Act 2013 the Company is requiredto attach to its Annual Report the Directors' Report and financial statements as well asthe Company's interest in the Subsidiary Company. Accordingly all the above detailspertaining to e-Assurance Services (India) Limited have been annexed and form part of thisAnnual Report.
Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company.
Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013
Our Company is committed to providing work environment that ensures every employee istreated with dignity and respect and afforded equitable treatment. The Company is alsocommitted to creating a healthy working environment that enables employees to work withoutfear of prejudice gender bias and sexual harassment. During the financial year 2016-17there were no cases reported under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The Company has taken appropriate steps and measures to comply with all the applicableprovisions of Corporate Governance requirement of SEBI (LODR) Regulations 2015. Aseparate report on Corporate Governance along with a certificate of Practicing CompanySecretary is annexed with this Report. A certificate from the Whole Time Director andChief Accounts Officer of the Company confirming internal controls and checks pertainingto financial statements for the year ended March 31 2017 was placed before the Board ofDirectors and the Board has noted the same. A list of the committees and other relatedinformation is detailed in the enclosed Corporate Governance Report.
Further there is no revision in financial statements or board report u/s 131 of theCompanies Act 2013 made by the company.
The Directors thank the Company's customers franchisees contractors vendorsbankers Government & other authorities and the shareholders for their support to theCompany. The Directors also sincerely acknowledge the contribution made by all theemployees for their services to the company.
|Place Mumbai ||For and on behalf of the Board of Directors of || |
| ||S KUMARS ONLINE LIMITED || |
|Date 11 August 2017 ||Sd/- ||Sd/- |
| ||O. P. Pacheria ||R. N. Jha |
| ||Whole Time Director ||Director |
| ||(DIN: 00105278) ||(DIN: 00033291) |