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Notes to Accounts of S Kumars Online Ltd.

Mar 31, 2015

1 Corporate information

S Kumars Online Ltd. is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The company is mainly engaged in E-Commerce business. The company also provides IT Management Consultancy and Equipment Rental Services.

2. Contingent liabilities and commitments (to the extent not provided for)

(a) Income Tax Matters ( Details given in table below) 820.74 820.74

(b) Legal cases with Franchisees and Strategic 11.68 32.14 Business Associates

3. The Management is constantly trying to introduce new e-Commerce business model and revival of the 'IT Management Consultancy' segment of the company to eradicate cash flow mismatches and negative net worth of the company. Management is confident that in near future Company will be in revival mode and thereby going concern will not be affected.

4. During the previous year, the Company has settled certain pending legal cases with the Franchisees and SBAs by opting for Out of Court Settlements with the said parties. This has resulted in a charge to the Profit and Loss Account by Rs. 1.86 Lacs under the head Loss on Settlement (Net).

5. In the opinion of the management, the Current Assets, Loans and Advances are realizable at the values represented in the accounts and adequate provision has been made in the accounts for all known liabilities, except to the extent wherever stated otherwise.

6. The following table summarizes the components of the net employee benefit expenses recognized in the Profit and Loss Account and in the Balance Sheet for the gratuity as per the recommendations of the Accounting Standard - 15 Employee Benefits. No provision towards leave encashment is considered in the Company's accounts.

7. Outstanding amounts payable to Micro, Small and Medium Enterprises included under Current Liabilities, as per the information available with the Company and relied upon by the auditors - Nil (Previous year-Nil).

8. Taxation

No provision has been made towards Current taxation keeping in view the carried forward losses under the Income Tax Act, 1961.

9. The Company has two reportable segments i.e. IT Management Consultancy, Equipment Rental and E-Commerce. The disclosure requirements as per the recommendations of Accounting Standard - 17 Segment Reporting, during the year under review, are given as under:

10. The Company is of the view that there are no indications of material impairment and the carrying amount of its fixed assets or where applicable, the cash generating unit to which these assets belong, do not exceed their recoverable amounts (i.e., the higher of the assets' net selling price and value in use). Hence, no impairment had arisen during the year as per the recommendations of AS 28 - "Impairment ofAssets".

11. Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortised carrying value is being depreciated / amortised over the revised/ remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted in the opening balance of Profit and Loss Account amounting to Rs. 3,31,686.

12. Product wise details

13. Expenditure in Foreign Currency- Rs. NIL (Previous Year - Rs. NIL) Earnings in Foreign Currency- Rs. NIL (Previous Year - Rs. NIL).


Mar 31, 2014

1 Corporate information:

S Kumars Online Ltd. is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The company is mainly engaged in E-Commerce business. The company also provides IT Management Consultancy and Equipment Rental Services.

Note 2: Additional Information to the Financial Statements

(fig, in lacs) Mar. 31,2014 Mar. 31,2013 Amount in Rs. Amount in Rs.

2.1 Contingent liabilities and commitments (to the extent not provided for)

(a) Income Tax Matters

(Details given in table below) 820.74 1,360.78

(b) Legal cases with Franchisees and Strategic Business Associates 32.14 38.13

2.2 During the year, the Company has settled certain pending legal cases with the Franchisees and SBAs by opting for Out of Court Settlements with the said parties. This has resulted in a charge to the Profit and Loss Account by Rs. 1.86 Lacs under the head Loss on Settlement (Net) (Previous Year- Rs. 3.25 Lacs).

2.3 In the opinion of the management, the Current Assets, Loans and Advances are realizable at the values represented in the accounts and adequate provision has been made in the accounts for all known liabilities, except to the extent wherever stated otherwise.

The defined Gratuity benefit obligation of the Company is unfunded and hence there are no planned assets which are maintained exclusively therefore. Accordingly, the said disclosure is not given.

2.4 Outstanding amounts payable to Micro, Small and Medium Enterprises included under Current Liabilities, as per the information available with the Company and relied upon by the auditors-Nil (Previous year-Nil).

2.5 Taxation

No provision has been made towards Current taxation keeping in view the carried forward losses under the Income Tax Act, 1961

2.6 The Company has two reportable segments i.e. E-Commerce and IT Management Consultancy. The disclosure requirements as per the recommendations of Accounting Standard -17 Segment Reporting, during the year under review, are given as under:

2.7 The Company is of the view that there are no indications of material impairment and the carrying amount of its fixed assets or where applicable, the cash generating unit to which these assets belong, do not exceed their recoverable amounts (i.e., the higher of the assets'' net selling price and value in use). Hence, no impairment had arisen during the year as per the recommendations of AS 28 - "Impairment of Assets".

2.8 Expenditure in Foreign Currency- Rs. Nil Lacs (Previous Year - Rs. 28.28 Lacs) Earnings in Foreign Currency- Rs. Nil (Previous Year- Nil Lacs).

2.9 During the previous year Company has written back the balances identified as not payable to the extent of Rs. 263.46 Lacs and written off the balances identified as not receivable to the extent of Rs. 3.93 Lacs. The same has been reflected under Exceptional Items in Profit & Loss Account amounting to Rs. 259.53 Lacs (Net).

2.10 The Company has asked for account confirmations from all the Franchisees and Strategic Business Associates (SBAs) of which a substantial part have been received and duly settled by the Company from time to time. During the previous year, the Company has written back the balances of remaining Franchisees and SBAs, who did not reply to the confirmation letters sent for more than 3 years, to the extent of Rs. 106.41 Lacs and Rs. 73.79 Lacs respectively.

2.11 During the previous year Company has written off pre-operative expenses amounting to Rs. 52.57 Lacs pertaining the project Bollywood Central Online (BCOL), a new business which has been discontinued during the year.

In terms of our report attached.


Mar 31, 2013

1 Corporate information:

S Kumars Online Ltd. is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The company is mainly engaged in E-Commerce business. The company also provides IT Management Consultancy and Equipment Rental Services.

(fig. in lacs)

Mar. 31,2013 Mar. 31,2012 Amount in Amount in

2.1 Contingent liabilities and commitments (to the extent not provided for)

(a) Income Tax Matters

(Details given in table below) 1,360.78 1,360.78

(b) Legal cases with Franchisees and

Strategic Business Associates 38.13 34.63

2.2 During the year Company has written off pre-operative expenses amounting to Rs. 52.57 Lacs pertaining the project Hollywood Central Online (BCOL), a new business which has been discontinued during the year.

2.3 The Company has asked for account confirmations from all the Franchisees and Strategic Business Associates (SBAs) of which a substantial part have been received and duly settled by the Company from time to time. During the year, the Company has written back the balances of remaining Franchisees and SBAs, who did not reply to the confirmation letters sent for more than 3 years, to the extent of Rs. 106.41 Lacs and Rs. 73.79 Lacs respectively.

2.4 During the year, the Company has settled certain pending legal cases with the Franchisees and SBAs by opting for Out of Court Settlements with the said parties. This has resulted in a charge to the Profit and Loss Account by Rs. 3.25 Lacs under the head Loss on Settlement (Net) (Previous Year - Rs. 2.79 Lacs).

2.5 During the year Company has identified certain balances outstanding for a long period as non-payable and written back the same to profit and loss account to the extent of Rs. 81.67 Lacs. (Previous Year - Rs. 22.17 Lacs).

2.6 During the year Company has written back the balances identified as not payable to the extent of Rs. 263.46 Lacs and written off the balances identified as not receivable to the extent of Rs. 3.93 Lacs. The same has been reflected under Exceptional Items in Profit & Loss Account amounting to Rs. 259.53 Lacs (Net).

2.7 In the opinion of the management, the Current Assets, Loans and Advances are realizable at the values represented in the accounts and adequate provision has been made in the accounts for all known liabilities, except to the extent wherever stated otherwise.

2.8 The following table summarizes the components of the net employee benefit expenses recognized in the Profit and Loss Account and in the Balance Sheet for the gratuity as per the recommendations ofthe Accounting Standard -15 Employee Benefits. No provision towards leave encashment is considered in the Company''s accounts.

The defined Gratuity benefit obligation of the Company is unfunded and hence there are no planned assets which are maintained exclusively therefore. Accordingly, the said disclosure is not given. Also, during the year Company has paid Rs. 16,200/- as gratuity payments.

2.9 Outstanding amounts payable to Micro, Small and Medium Enterprises included under Current Liabilities, as per the information available with the Company and relied upon by the auditors-Nil (Previous year-Nil).

2.10 Taxation

a) Current Taxation

No provision has been made towards Current taxation keeping in view the carried forward losses under the Income Tax Act,

(ii) Deferred Tax Asset on carried forward losses as Perthelncome-tax Act, 1961 has not been recognized in the accounts upon consideration of prudence aspect.

2.11 The Company is of the view that there are no indications of material impairment and the carrying amount of its fixed assets or where applicable, the cash generating unit to which these assets belong, do not exceed their recoverable amounts (i.e., the higher of the assets'' net selling price and value in use). Hence, no impairment had arisen during the year as per the recommendations of AS 28 - "Impairment of Assets".

2.12 Expenditure in Foreign Currency-Rs. 28.28 Lacs (Previous Year-Rs.3.16 Lacs) Earnings in Foreign Currency-Rs. Nil (Previous Year-5.32 Lacs).


Mar 31, 2012

1 Corporate information:

S Kumars Online Ltd. is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The company is mainly engaged in E-Commerce business. The company also provides IT Management Consultancy and Equipment Rental Services.

(fig. in lacs)

Mar. 31,2012 Mar. 31,2011 Amount in Rs. Amount in Rs.

2.1 Contingent liabilities and commitments (to the extent not provided for)

(a) Income Tax Matters

(Details given in table below) 1,360.78 1,360.78

(b) Legal cases with Franchisees and Strategic Business Associates 34.63 40.78

2.2 The Company has during the year, continued to incur pre-operative expenses in one of its new lines of business viz., Bollywood portal (BCOL) amounting to Amount in Rs. 21.87 Lacs which has been grouped under Fixed Assets in Balance Sheet. The management is of the opinion that the business is of enduring nature and the benefits will flow to the Company in the subsequent years. However during the year Company has written off pre-operative expenses amounting to Amount in 7 9.45 Lacs pertaining Media Centre (BTA), a new business which has been discontinued during the year.

2.3 The Company is in regular communication, asking for account confirmations from all the Franchisees and Strategic Business Associates (SBAs) of which a substantial j part have been received and duly settled by the Company from time to time. The balances of remaining Franchisees and SBAs as represented by the books of account of the Company are subject to regular confirmation/reconciliation, if any, and the consequential effect on the loss for the year and on the respective assets and liabilities are presently unascertainable. However, the Company is of the opinion that no significant liability would arise on account of the said confirmation/reconciliation.

2.4 During the year, the Company has settled certain pending legal cases with the Franchisees and SBAs by opting for Out of Court Settlements with the said parties. This has resulted in a charge to the Profit and Loss Account by Rs. 2.79 Lacs under the head Loss on Settlement (Net) (Previous Year-Rs. 4.07 Lacs).

2.5 In the opinion of the management, the Current Assets, Loans and Advances are realizable at the values represented in the accounts and adequate provision has been made in the accounts for all known liabilities, except to the extent wherever stated otherwise.

2.6 The following table summarizes the components of the net employee benefit expenses recognized in the Profit and Loss Account and in the Balance Sheet for the gratuity as per the recommendations of the Accounting Standard -15 Employee Benefits. No provision towards leave encashment is considered in the Company's accounts.

The defined Gratuity benefit obligation of the Company is unfunded and hence there are no planned assets which are maintained exclusively therefore. Accordingly, the said disclosure is not given. Also, no gratuity payments were made during the year ended 31st March 2012.

2.7 Outstanding amounts payable to Micro, Small and Medium Enterprises included under Current Liabilities, as per the information available with the Company and relied upon by the auditors-Nil (Previous year-Nil).

2.8 Taxation

a) Current Taxation

No provision has been made towards Current taxation keeping in view the carried forward losses under the Income Tax Act, 1961.

b) Deferred Taxation

(i) Breakup of Net Deferred Tax asset for the year

(ii) Deferred Tax Asset on carried forward losses as per the Income-tax Act, 1961 has not been recognised in the accounts upon consideration of prudence aspect. '

2.9 The Company has two reportable segments i.e. E-Commerce and IT Management Consultancy. The disclosure requirements as per the recommendations of Accounting Standard -17 Segment Reporting, during the year under review, are given as under: '

2.10 The Company is of the view that there are no indications of material impairment and the carrying amount of its fixed assets or where applicable, the cash generating unit to which these assets belong, do not exceed their recoverable amounts (i.e., the higher of the assets' net selling price and value in use). Hence, no impairment had arisen during the year as per the recommendations of AS 28 - "Impairment of Assets".

2.11 Expenditure in Foreign Currency- 7 3.16 Lacs (Previous Year - Rs. 78.79 Lacs) Earnings in Foreign Currency- Rs. 5.32 Lacs (Previous Year-1.58 Lacs).

2.12 Till the year ended 31 st March, 2011 the company was using pre-revised Schedule VI To the Companies Act, 1956, for preparation and presentation of its Financials Statement. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company. The adoption of revised schedule VI does not impact recognition and measurement principles, however it impacts disclosure and presentation of financials statements.


Mar 31, 2010

1. Contingent Liabilities

a) (i) On account of disputed tax liability arising due to claims made by the Income-tax authorities and appealed against by the Company - Rs. 820.74 Lacs (Previous year- 820.74).

(ii) Penalty demand made by the Income Tax authorities - Rs. 540.04 Lacs (Previous Year - Rs. 540.04 Lacs)

b) On account of legal cases filed against the Company including those under arbitration, in addition to liability already represented in the books of accounts and contested by the Company Rs. 83.90 Lacs (Previous Year Rs. 85.0 Lacs).

c) As may arise due to delay in payments to Sundry Creditors, etc. - Amount presently unascertainable (Previous year - Amount unascertainable).

d) As may arise as a consequence of inspection under the provisions of the Companies Act, 1956 . Amount Unascertainable (Previous Year - Amount Unascertainable)

2. During the year, the Company has commenced a new activity of providing IT Management Consultancy. Further the Company has also continued with the activity of Online Dropp-off Stores under the name eDropp. Income from business a represented in Profit and Loss Account of the current year was from the above salt activities.

3. The Company is in regular communication, asking for account confirmations from all the Franchisees and Strategic Business Associates (SBAs) of which a substantia part have been received and duly settled by the Company from time to time. The balances of remaining Franchisees and SBAs as represented by the books of account of the Company are subject to regular confirmation/reconciliation, if any and the consequential effect on the loss for the year and on the respective assets and liabilities are presently unascertainable. However, the Company is of the opinio: that no significant liability would arise on account of the said confirmation/reconciliation

4. The Company, as per the terms of agreements entered with the Franchisees vide clauses no. 18 and 19 respectively, read together with clauses no. 15 and 16 respectively and with the SBAs vide clauses no. 19 and 20 respectivety, read together with clauses no. 16 and 17 respectivety, has adjusted certain amounts received from those Franchisees and SBAs who had not adhered to/severed connections with the Company and has continued during the year to adjust the same in its account which had resulted in a further payment to Franchisees and SBAs and a charge to the Profit and Loss Account amounting to Rs. 3.10 Lacs under Prior Period Adjustments (Previous year - Rs. 2.38 Lacs).

5. During the year, the Company has settled certain pending legal cases with the Franchisees and SBAs by opting for Out of Court Settlements with the said parties. This has resulted in a charge to the Profit and Loss Account by Rs. 11.38 Lacs under the head Loss on Settlement (Net) (Previous Year - Rs. 3.87 Lacs).

6. In the opinion of the management, the Current Assets, Loans and Advances are realizable at the values represented in the accounts and adequate provision has been made in the accounts for all known liabilities, except to the extent wherever stated otherwise.

7. The following table summarizes the components of the net employee benefit expenses recognized in the Profit and Loss Account and in the Balance Sheet for the gratuity as per the recommendations of the Accounting Standard - 15 Employee Benefits.

No provision towards leave encashment is considered in the Companys accounts.

8. During the year, Company has issued 28,25,000 Equity Shares on Preferential Basis to a promoter company at par. The Company has, in this respect, received all necessary approvals as required under clause 24(a) of the Listing Agreement from the Bombay Stock Exchange (BSE) and the said Equity Shares are listed on BSE.

9. Closing balances of Unsecured Loans amounting to Rs. 14.55 Lacs are subject to confirmation from respective parties. Further the balances appearing under the head Current Liabilities, including vendor accounts are subject to confirmation reconciliation from the respective parties.

10. Outstanding amounts payable to Micro, Small and Medium Enterprises include under Current Liabilities, as per the information available with the Company relied upon by the auditors - Nil (Previous year-Nil).

11. Related Party transactions as per Accounting Standard-18

a) Subsidiaries & Associates

Subsidiary Company E-Assurance Services (India) Ltd.

Associates Hanumesh Realtors Pvt. Ltd.

b) Key Management Personnel

Shri O. P Pacheria-Whole Time Director

12. Taxation

a) Current Taxation

No provision has been made towards Current taxation keeping in view the carried forward losses under the Income Tax Act. 1961.

(ii) Deferred Tax Asset on carried forward fosses as per the Income-tax Act, 1961 has not been recognised in the accounts upon consideration of prudence aspect.

13. The Company on the basis of Memorandum of Understanding (MOU) with SKM Fabrics (Andheri) Ltd has given an advance of Rs 348.50 Lacs for a space admeasuring 10,000 square feet in Raaj Chambers. As per the terms of the MOU, the said advance is interest free and is adjustable against deposit or any other amount payable by the Company.

14. The Company is of the opinion that there was no material impairment in its fixed assets during the year under review within the definition of Accounting Standard - 28. Impairment of Assets issued by the Institute of Chartered Accountants of India. However, in the absence of a valuation being carried out in this regard, any impairment in the Companys assets as at the Balance Sheet date remains unascertainable (Previous Year - Amount unascertained).

15. Figures of the previous year have been re-grouped/re-arranged wherever considered necessary.

 
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