To the Members of S Kumars Online Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the standalone financial statements of S Kumars Online
Limited (“the Company”), which comprise the Balance Sheet as at 31st
March 2020, the Statement of Profit and Loss (including other Comprehensive Income), the
Statement of Changes in Equity) and the Statement of Cash Flows for the year ended on that
date, and notes to the Standalone Financial Statements, including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as
“the Standalone Financial Statements”).
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matters described in the Basis of
Qualified Section of our report, the aforesaid standalone financial statements give the
information required by the Companies Act 2013 (“the Act”) in the manner so
required and give a true and fair view in conformity with the India Accounting Standards
prescribed under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules 2015, as amended, (“Ind As”) and other accounting principles
generally accepted in India, of the state of affairs of the Company as at March 31,2020,
the loss and total comprehensive income, changes in equity and its cash flows for the year
ended on that date.
Basis for Our Qualified Opinion
(1) Refer Note No.24to the standalone audited financial statement of
the Company has been incurring constant losses and also the net worth of the Company has
been fully eroded. Further, the Company has also discontinued all its major line of
business and it has also been facing cash-flow mismatches and as of 31st March
2020 the Company liabilities exceeded its assets. These factors along with other matters
as set forth in said note raise substantial doubt about the Companys ability to continue
as a going concern in the foreseeable future. However, the Companys standalone financial
statement has been prepared on going concern basis. If the management is not able to
infuse adequate money on appropriate time than the going concern assumption might get
impacted. However the standalone financial Statement of the Company is prepared on going
concern basis.
(2) Refer Note No. 26to the standalone audited financial statement of
the Company has not carried out Actuarial valuation as per the recommendations of Ind AS
15 “Employee Benefits” and instead provided for Gratuity on accrual basis as per
Management Estimates. The amount of shortfall in such provision is currently
unascertainable since the Actuarial Valuation was not carried out. However, the management
is of the opinion that the provision created in the books is sufficient considering the
number of employees.
We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under section 143(10) of the Act. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the
Standalone Financial Statements section of our report. We are independent of the Company
in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (CAI) together with the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Act and the Rules made
thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics issued by the ICAI. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the Standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial statements of the
current period. These matters were addressed in the context of our audit of the standalone
financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. We have determined the following matter to be the Key
audit matter to be communicated in our Report.
| Key Audit Matter |
Auditors Response |
| The Company as stated above has been facing
liquidity issues as hence there has been delays in payment of statutory liabilities of
the company. Refer Note No. 40 of the Standalone Financial Statement |
We have observed that there has been delays
payment of statutory liabilities filing of returns by the company in view of cash flow
mismatches the same has been adequately disclosed in Companies (Auditors Report) Order,
2016. |
| The Company did not have any Whole time Company
Secretary as well as CFO as required by the Companies Act, 2013. Refer Note No. 39 of the
Standalone Financial Statement. |
The Company did not have any Whole time Company
Secretary as well as CFO as required by the Companies Act, 2013 |
Information Other than the Standalone Financial Statements and
Auditors Report Thereon
The Companys Board of Directors is responsible for the preparation of
the other information. The other information comprises the information included in the
Management Discussion and Analysis, Boards Report including Annexures to Boards Report,
Business Responsibility Report and Shareholders Information, but does not include the
standalone financial statements and our auditors report thereon. Our opinion on the
standalone financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon. In connection with our audit of the standalone
financial statements, Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the standalone
financial statements or our knowledge obtained during the course of our audit or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard expect that stated in Basis of
Qualified Opinion and Key Audit Matter above.
Managements Responsibility for the Standalone Financial
Statements
The Companys Board of Directors is responsible for the matters stated
in section 134(5) of the Act, with respect to the preparation of these standalone
financial statements that give a true and fair view of the financial position, financial
performance, total Comprehensive Income, changes in equity and cash flows of the Company
in accordance with the Ind AS and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the standalone
financial statement that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is
responsible for assessing the Companys ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the
Companys financial reporting process.
Auditors Responsibilities for the Audit of the Standalone
Financial Statements
Our objectives are to obtain reasonable assurance about whether the
standalone financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditors report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these standalone financial statements.
As a part of an audit in accordance with the SAs, we exercise professional judgment and
maintain professional scepticism throughout the Audit.
We also:
• Identify and assess the risk of material misstatement of the
standalone financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis of our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal financial controls relevant
to the audit in order to design audit procedures that are appropriate in the
circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing
an opinion on whether the Company has adequate internal financial controls system in place
and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Companys ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors report to the
related disclosures in the standalone 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
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures, and whether the standalone
financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it probable that the
economic decisions of a reasonably knowledgeable user of the standalone financial
statements may be influenced. We consider quantitative materiality and qualitative factors
in (i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financial
statements.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards. From the matters
communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone financial statements of the current
period and are therefore the key audit matters.
We describe these matters in our auditors report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
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” a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. 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 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.
c) The Balance Sheet, the Statement of Profit and Loss including other
Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt
with by this Report are in agreement with the relevant books of accounts.
d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial
statements comply with the Ind As specified under Section 133 of the Act, read with Rule 7
of the Companies (Accounts) Rules, 2014.
e) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified Opinion paragraph
above.
f) On the basis of the written representations received from the
Directors as on 31stMarch, 2020 taken on record by the Board of Directors, none
of the Directors is disqualified as on 31stMarch, 2020 from being appointed as
a director in terms of Section 164 (2) of the Act.
g) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of such controls, refer
to our separate Report in “Annexure B”. Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls over financial reporting.
h) With respect to the other matters to be included in the Auditors
Report in accordance with the requirements of Section 197(6) of the Act, as amended Rule
11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of
our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its standalone financial statements.
ii. The Company does not have long-term contracts including derivative
contracts requiring provision for material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the Company.
|
For S K H D & Associates |
|
Chartered Accountants |
|
Firm Registration No. 105929W |
|
Sd/- |
|
Krunal Furia |
|
Partner |
|
Membership No. 151805 |
| Mumbai, 31st July 2020 |
|
| UDIN : 20151805AAAAAZ2510 |
|
Annexure A to the Independent Auditors Report (Referred to in our
report of even date)
In terms of the information and explanations given to us and the books
and records examined by us and on the basis of
such checks, as we considered appropriate, we further report as under:
(i) Fixed Assets:
a) In our opinion, the Company is maintaining proper records showing
the relevant particulars including quantitative details of its fixed assets.
b) The Company due to lockdown was not able to conduct a physical
verification of its fixed asset as at the end of the year. The Company is in process of
tagging individual fixed assets. There were no discrepancies noticed on such verification.
c) In our opinion and according to information and explanations given
to us and on the basis of an examination of the records of the Company, the company does
not have any immovable properties.
(ii) Inventories:
As explained to us, the management was not able to conduct physical
verification of inventory as at the close of the year due to COVID pandemic. However, the
Company has written off the said inventory in its books as the same is old and does not
have any realizable value.
(iii) Loans & Advances granted and taken:
During the year, the Company has not granted any loans and advances,
secured or unsecured, to any parties covered in the register maintained under Section 189
of the Companies Act.
(iv) Compliance of Sec 185 and 186 of Companies Act, 2013
In our opinion, in respect of loans, investments, guarantees, and
security, provisions of section 185 and 186 of the Companies Act, 2013 have been complied
with.
(v) Public Deposits:
According to the information and explanations given to us, the Company
has not accepted deposits as per the directives issued by Reserve Bank of India and the
provisions of Sections 73 and 76 or any other relevant provisions of the Act and the rules
framed there under.
(vi) Cost Records:
As explained to us, maintenance of cost records under of section 148(1)
of the Act is not applicable to the Company during the year under review.
(vii) Statutory Dues:
a) As per the records verified by us, there had been delays/defaults in
depositing the statutory dues involving Provident Fund, Profession Tax, Income-tax (TDS)
with the appropriate authorities. Dues outstanding for a period exceeding six months is on
account of Profession Tax of Rs.15,800, Provident Fund of Rs. 68,568 and Income Tax (TDS)
of Rs. 15,649.
We were explained that the statutes pertaining to Employees State
Insurance Corporation, Excise Duty, Customs Duty are not applicable to the Company during
the year under review.
b) According to the information and explanations given to us, there
were no disputed dues of Sales Tax and Income Tax which have not been deposited by the
Company during the year under review, except in respect of Income Tax matters as per the
details given below:
| Authority |
Nature of Dues |
Amount (Rs.) |
Assessment Year |
Forum |
| Income Tax Department |
Income Tax and Interest |
8,20,73,960 |
2002-2003 |
Mumbai High Court |
(viii) Dues to Financial Institutions/Banks/Debenture Holders:
As per the records verified by us and based on our audit procedures,
there were no secured loans taken by the Company during the current year. The Company has
not issued any debentures during the year under review.
(ix) Utilization of funds raised:
As per the records verified by us and based on our audit procedures,
the Company has not raised moneys by way of initial public offer or further public offer
(including debt instruments) and no term loans were taken by the Company during the
current year.
(x) Frauds:
To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on or by the Company by its
officers or employees during the year was noticed or reported, nor have we been informed
of such case by the management.
(xi) Managerial remunerations:
As per the Companys records, managerial remuneration paid by the
Company is in accordance with section 197 of the Act read with schedule V.
(xii) Nidhi Company
According to the information and explanation given to us, the Company
is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly paragraph
3(xii) of the order is not applicable to the Company.
(xiii) Related Party Transaction
According to the information and explanation given to us, all the
transactions with the related parties are in compliance with sections 177 and 188 of
Companies Act, 2013, where applicable and the details have been disclosed in the
standalone Financial Statements as required by the applicable accounting standards;
(xiv) Preferential or private allotment
According to the information and explanation given to us and based on
our examination of records of the Company, the company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year under review.
(xv) Non cash transaction with Directors
According to the information and explanation given to us and based on
our examination of records of the Company, the company has not entered into non-cash
transactions with directors or persons connected with him.
(xvi) Non Banking Financial Institution
According to the information and explanation given to us, the company
is not required to be registered under section 45-IA of the Reserve Bank of India Act,
1934. Accordingly, paragraph 3(xvi) is not applicable.
|
For S K H D & Associates |
|
Chartered Accountants |
|
Firm Registration No. 105929W |
|
Sd/- |
|
Krunal Furia |
|
Partner |
|
Membership No. 151805 |
| Mumbai, 31st July 2020 |
|
| UDIN : 20151805AAAAAZ2510 |
|
Annexure B to the Auditors Report of even date on the standalone financial statement -
Annexure B Report on the Internal Financial Controls under Section 143(3)(i) of the
Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial
reporting of S Kumars Online Limited (“the Company”) as of 31st
March, 2020 in conjunction with our audit of the standalone financial statements of the
Company comprising of the Balance Sheet as at March 31st2020, the Statement of
Profit and Loss including Comprehensive Income, Statement of Changes in Equity and Cash
Flow Statement for the period then ended.
Managements Responsibility for Internal Financial Controls :
The Companys management is responsible for establishing and
maintaining internal financial controls based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI).
These responsibilities include the design, implementation and maintenance of adequate
internal financial controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to Companys policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility:
Our responsibility is to express an opinion on the Companys internal
financial controls over financial reporting based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting and the Standards on Auditing, issued by the ICAI deemed to be prescribed under
section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of
internal financial controls, both applicable to an audit of Internal Financial Controls
and, both issued by the ICAI. Those standards and the Guidance Note that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness.
Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditors judgment, including the assessment of the
risks of material misstatement of the standalone financial statements, whether due to
fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Companys internal financial
controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting :
A companys internal financial control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of standalone financial statements for external purposes in
accordance with generally accepted accounting principles. A companys internal financial
control over financial reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
company;
(2) Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of standalone financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors
of the company; and
(3) Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the companys assets that
could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial
Reporting :
Because of the inherent limitations of internal financial controls over
financial reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not
be detected. Also, projections of any evaluation of the internal
financial controls over financial reporting to future periods are subject to the risk that
the internal financial control over financial reporting may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Opinion:
According to the information and explanations given to us, in our
opinion, the Company has,in all material respects, established an adequate internal
financial controls system over financial reporting on criteria based on or considering the
essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Control over Financial Reporting issued by the Institute of Chartered
Accountants of India. Such internal financial controls over financial reporting were
operating effectively as at March 31st 2020.
|
For S K H D & Associates |
|
Chartered Accountants |
|
Firm Registration No. 105929W |
|
Sd/- |
|
Krunal Furia |
|
Partner |
|
Membership No. 151805 |
| Mumbai, 31st July 2020 |
|
| UDIN : 20151805AAAAAZ2510 |
|
+91-9892691696
