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Directors Report of Sankhya Infotech Ltd.

Mar 31, 2015

To the Members,

The Directors have pleasure in presenting before you the 18th Annual Report of the Company together with the Audited Statements of Accounts on standalone & consolidated basis for the year ended 31st March, 2015.

FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFAIRS:

The performance during the period ended 31st March, 2015 has been as under:

(Amount in Lakhs)

Particulars 2014-15 2013-14

Income from Operations 18,197 13,881

Other Income 90 647

Total Income 18,198 14,528

Total Expenditure 16,683 13,153

Earnings before depreciation and tax 1,515 1,375

Depreciation 511 471

Interest 477 458

Profit Before tax 527 445

Provision for tax including 113 137

Other provisions 267 219

Profit after tax 147 90

Earnings Per Share 1.31 1

BUSINESS OPERATIONS:

The total revenue of the Company for the financial year under review on consolidated basis was Rs.18,198.46 Lakhs as against Rs.14,528.82 lakhs. The net profit was Rs.146.18 lakhs for the financial year as against the net profit of Rs. 88.81 lakhs for the previous year.

OUT LOOK:

Over the past three years, your company has been showing low profitability due to shifting of offshore jobs to onsite. The company experienced stress on margins in the past two years and due to the combined effect of low margins, lack of adequate working capital the company has experienced stress on margins.

Annual Report of FYE'14 mentioned of the company's efforts to bring the onsite jobs back to India. The company has the pleasure to share that it is now reversing the trend and positive impact on profitability can be seen from the first quarter of FYE'16.

Your company has an excellent order book and has renewed contracts with all the major customers. Your company projects that it would be able to return to good profitability and with steady growth.

DIVIDEND:

The Board of Directors are confident that with their efforts to strive hard to maximize the shareholders returns, the company would be able to declare dividend in the near future.

SUBSIDIARY COMPANIES

The Financial Details of the Subsidiary companies as well as the extent of holding therein are provided in a separate section of the Annual Report at Annexure 1:

Under section 212(8) of the Companies Act, 1956 the ministry of Corporate Affairs has exempted from attaching a copy of the Balance sheet, Profit and loss accounts and Notes thereof, Director's Report and Auditors Report of the subsidiary companies and other documents required to be attached under section 212(1) of the act to the balance sheet of the company, Accordingly the said documents are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are available for inspection by any member/investor and the Company will make available these documents/details upon request by any member of the company or its subsidiaries interested in obtaining the same. However the data of the subsidiaries has been furnished along with the statement pursuant to section 212 of the Companies Act, 1956 forming part of the Annual Report. Further pursuant to Accounting Standard (AS)-21 issued by the Institute of Chartered Accountants of India, your company has presented the Consolidated Financial Statements which include financial information relating to its subsidiaries and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of the Accounting Standards 21, issued by the institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors' Report thereon forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis as required under clause 49(VIII)(D) of the Listing Agreement forms a part of this Report.

CORPORATE GOVERNANCE

A Separate section titled "Report on Corporate Governance" along with the Auditors' Certificate on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this report.

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report.

DIRECTORS AND KEY MANANGERIAL PERSONNEL:

During the year, Ms. Nalini Nadupalli was appointed as an Additional Director. Now the Board proposes to appoint her as a Director of the Company.

Notice has been received from a Member proposing candidature of the Director namely Mr. Nadupalli Sridhar for the office of Director of the Company. In the opinion of the Board, she fulfils the conditions specified in the Companies Act, 2013 and the Rules made there under for appointment as Director of the Company.

In line with the requirements of the Companies Act, 2013, it is therefore proposed to appoint a new additional director in the promoter category, as Director on the Board. A brief profile of the proposed Director, including nature of her expertise, is provided in the Annual Report.

Mr. N. Sridhar will retire by rotation at the ensuing Annual General Meeting in terms of Section 152 and any other applicable provisions of the Companies act, 2013 and being eligible offers himself for re-appointment.

Details of re-appointment /appointment of the Directors:

Name of the Director Mr. N. Sridhar Ms. Nalini Nadupalli

Date of Appointment 21.07.1997 14.02.2015

Qualifications Msc. Computer Science MS

No. of Shares held in the Company 410852 50000

Directorships held in other companies (excluding foreign companies) NIL NIL

Positions held in mandatory committees of other companies NIL NIL

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received a declaration from M r. ANAND CHERUKUPALLI and Mr. VENKATESWARA RAO KRISHNA MURTHY JUJHVARAPU, Independent directors of the company to the effect that they are meeting the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013 and are annexed herewith.

VIGIL MECHANISM:

Vigil Mechanism Policy has been established by the Company for directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The Directors had 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 the company at the end of the financial year and of the profit and loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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; and

(e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS REPORT

Your Company has decided to appoint M/s. Komandoor & Co., Chartered accountants as statutory Auditors for the current Financial Year 2015-16. The Board of Directors records its deepest appreciation to M/S T.R. Chadha & Co for the excellent services they have rendered during the previous two years.

INTERNAL AUDIT:

The Company has adequate internal audit control mechanism at all levels of the organisation.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of managerial personnel) Rules 2014, Mr. K. Bhima Sankara Rao, Practicing Company Secretary has conducted Secretarial Audit of the Company for the FY 2014-15. The Secretarial Audit Report for the FY 2014-15 is annexed hereto and forms part of this Annual report.

The following observations has made by the Secretarial Auditor during his audit.

i. The Company has not been regular in depositing its undisputed statutory dues in respect of Provident Fund, Employee State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authorities in India during the year.

ii. The Company has created provision for TDS but the same has not been remitting with the Income Tax Department. The company has been fulfilling its obligations irregularly due to cash flow issues and low working capital availability.

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

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:

Your Company has not undertaken any research and development activity for any manufacturing activity nor was any specific technology obtained from any external sources which needs to be absorbed or adapted.

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings : Rs. 17899.72 Lacs

Foreign Exchange Outgo : Rs. 15714.60 Lacs

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec. 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014, during the financial year under review.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board.

INSURANCE:

The properties and assets of your Company are adequately insured.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of loans, guarantees or investments made under section 186 of the companies Act, 2013 are given in the note to the financial statements.

RISK MANAGEMENT POLICY:

Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk management process.

CORPORATE SOCIAL RESPONSIBILITY:

It is not applicable as it does meet the criteria mentioned as per the company's act 2013.

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. There were no materially significant related party transactions made by the Company with the promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to your Company.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE limited where the Company's Shares are listed.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Directors are happy to report that your Company is compliant with the Corporate Governance requirements as per Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance and Management Discussion and Analysis together with a certificate from the Statutory Auditor confirming compliance is set out in the Annexure forming part of this report.

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.

SECRETARIAL STANDARDS EVENT BASED DISCLOSURES

During the year under review, the Company has not taken up any of the following activities:

1. Issue of sweat equity share: NA

2. Issue of shares with differential rights: NA

3. Issue of shares under employee's stock option scheme: NA

4. Disclosure on purchase by company or giving of loans by it for purchase of its shares: NA

5. Buy back shares: NA

6. Disclosure about revision: NA

7. Preferential Allotment of Shares: NA

EMPLOYEE RELATIONS:

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. 5,00,000/- and above per month or Rs.60,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed during the calendar year.

- No. of complaints received : Nil

- No. of complaints disposed off : Nil

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to 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 and shareholders of the Company like SEBI, BSE, NSE, MCX, NSDL, CDSL, Canara Bank, HDFC Bank etc. for their continued support for the growth of the Company.

By order of the Governing Board

For Sankhya Infotech Limited

Place : Hyderabad N.Sridhar

Date : 29.08.2015 Chairman & Managing Director


Mar 31, 2014

Dear Members,

The directors are pleased to present the 17th Annual Report and Audited accounts for the financial year ending 2013-14. Focus in this financial year was to achieve improvement in margins. The key success has been that the company has started to bring back works from Onsite to offshore. This process will continue with an aim to bring over 60% of onsite jobs to offshore that would have a good impact on the margins. This year sales recorded 39% growth.

FINANCIAL HIGHLIGHTS 2013-14

(Rs. In Lakhs)

FINANCIAL HIGHLIGHTS 2013-14 2012-13

Income from Operations 13,881 10,571

Other Income 647 (53)

Total Income 14,528 10,518

Total Expenditure 13,153 9,348

Earnings before Depreciation, 1,375 1,170 Interest & Tax

Depreciation 471 480

Interest 458 401

Profit Before Tax 445 289

Provision for Tax including 137 6

Other Provisions 219 277

Profit after Tax 90 6

Earnings Per Share 1 0

BUSINESS OPERATIONS

The company has successfully completed the execution of the prestigious Mumbai Rail Vikas Corporation Simulation project. Dubbed as the most complex rail network in the world Sankhya successfully completed the simulation project for MRVC that would help the corporation prepare train schedules for improved productivity and efficiency of rail assets utilization. Won against stiff international competition this World Bank project has been completed in a record time.

The company has also won another prestigious contract from Delhi Metro Rail Corporation for Simulation of the rail track maintenance. The company is scheduled to complete the execution of this project within the time.

Your company has won the CBSE online education project that aims to provide online education to over 11.5 million students.

Management focus this year has been in improving margin, therefore the company focused on brining the onsite jobs back to offshore, and this process has been successfully started.

OUTLOOK

Your company has collaborated with Microsoft and ported its applications on Windows AZURE platform, the company has won its first customer for its online delivery model. This is a significant development and paves way for a tremendous growth in the future.

Your company has excellent order book that got better with the CBSE contract and the company aims to both achieve a target growth of above 20% and substantially improved margins.

Your Company aims to bring over 60% of the jobs from onsite to offshore. This would substantially improve the margins of the company.

SUBSIDIARY COMPANIES

The financial details of the subsidiary companies as well as the extent of holding therein are provided in a separate section of the Annual Report at Annexure 1:

Under section 212(8) of the Companies Act, 1956 the ministry of Corporate Affairs has exempted from attaching a copy of the Balance Sheet, Profit and loss accounts and Notes thereof, Director''s Report and Auditors Report of the subsidiary companies and other documents required to be attached under section 212(1) of the act to the balance sheet of the company. Accordingly the said documents are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are available for inspection by any member / investor and the Company will make available these documents / details upon request by any member of the Company or its subsidiaries interested in obtaining the same. However the data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further pursuant to Accounting Standard (AS)-21 issued by the Institute of Chartered Accountants of India, your company has presented the Consolidated Financial Statements which include financial information relating to its subsidiaries and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of the Accounting Standards 21, issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors'' Report thereon forms part of the Annual Report.

DEPOSITS

The Company has not accepted any Deposits from the Public during the year pursuant to Section 58A of the Companies Act, 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

1. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures from the same.

2. Directors have selected the appropriate Accounting Policies and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014, and of the profit of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Annual Accounts have been prepared on a going concern basis.

THE BOARD OF DIRECTORS

The Company had, pursuant to the provisions of clause 49 of the Listing Agreements entered into with Stock Exchange, appointed Dr. J. Venkateswara Rao as Independent Director of the Company.

Mr. N Srinivas is retiring by rotation at the AGM and is offering himself for re-appointment.

AUDITORS

The Company''s auditors M/s. T.R. Chadha & Co., Chartered Accountants retire at the ensuing Annual General Meeting and expressed their willingness to continue as Auditors of the Company.

CONSERVATION OF ENERGY & ABSORPTION.

Your company''s operations are software oriented and not energy intensive. Adequate measures are taken to conserve energy wherever possible.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provision of clause 49 of the listing agreement, a report on Management Discussion & Analysis is enclosed as Annexure 2 to this report.

CORPORATE GOVERNANCE

As per clause 49 of the listing agreement with the stock exchanges, a separate report on Corporate Governance is enclosed as Annexure 3 forming part of the Annual Report

A certificate from a firm of Chartered Accountant in whole time practice confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is annexed to this report as Annexure

4. CMD''s DECLARATION

Pursuant to the provision of clause 49 (I) (D) (ii) of the Listing Agreement, a declaration by the Chairman & Managing Director of the company declaring that all the members of the Board and the senior Management personnel of the company have affirmed compliance with the code of conduct of the company, is enclosed as Annexure 5 of this report.

PARTICULARS OF EMPLOYEES

"No Employee of the company was in receipt of remuneration during the financial year 2013-14 in excess of the sum prescribed under section 217(2A) of the companies Act, 1956 read with the companies (Particulars of Employees) Rule, 1975."

INDUSTRIAL RELATIONS

Your company enjoys cordial employee relations, marked by empowerment and delegation.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the unstinted support extended by the esteemed Customers, Bankers and Institutions.

Your Directors also are pleased to record their appreciation for the services rendered by the employees at all levels in bringing about a better performance.

Your directors express thanks to the Company''s Shareholders, and the Investors for their sustained confidence in the Management of the Company.

By Order of the Board N.Sridhar

Chairman & Managing Director

Place : Hyderabad Date : 14.08.2014


Mar 31, 2013

Dear Shareholders,

The directors are pleased to present 16th Annual Report and Audited accounts for the financial year ending 2012-13. The current year has seen a strong growth in terms of topline with 38% growth in sales, however, margins were stressed due to continued onsite costs, and write-off recommended by the auditors to a tune of Rs.2.77 crores.

(Rs. in Lakhs)

FINANCIAL HIGHLIGHTS 2012-13 2011-12

Income from Operations 10571.08 7654.03

Other Income -52.84 49.49

Total Income 10518.24 7703.52

Total Expenditure 9625.17 6895.27

Earnings before Depreciation, 893.07 808.25 Interest & ax

Depreciation 479.89 345.97

Interest 401.09 308.08

Profit Before Tax 12.09 154.2

Provision for Tax including (FBT) 2.30 30.85

Other Provisions 3.74 50.03

Profit after Tax 6.05 73.31

Earnings Per Share 0.05 0.65



BUSINESS OPERATIONS

Your company embarked on services sales as planned last year and the results have been good. The company has won a large World Bank contract against stiff international competition. The company has expanded its business in the banking industry by winning contracts from Union Bank and Andhra Bank. Today nearly, 52% of all bank employees of the country use your company''s online learning systems.

Your company has strengthened simulation business by adding non-defense customers, especially in the area of transportation, energy, manufacturing and medical simulation. Defense related business simulation has also expanded and the company has been able to add new customers in both overseas and domestic market.

OUTLOOK

Your company continues to serve major airframe manufacturers around the globe, and with the worst situations for airline industry ending the company foresees major expansion in this area.

Your company''s collaboration with IT majors such as IBM, Microsoft to expand its operations in BFSI and education sector is likely to add tremendous opportunity in the future.

PREFERENTIAL ALLOTMENT

The board during its meeting held on 11-02-2013 has approved to issue 14,75,400 shares on preferential basis to the promoters as per the rules and regulations under SEBI(DIP)guidelines.

Subsequently this issue has not been taken up for further process due to prevailing market conditions.

SUBSIDAIRY COMAPNIES

The financial details of the subsidiary companies as well as the extent of holding therein are provided in a separate section of the Annual Report at Annexure 1:

Under section 212(8) of the Companies Act, 1956 the ministry of Corporate Affairs has exempted from attaching a copy of the Balance Sheet, Profit and loss accounts and schedules thereof, Director''s Report and Auditors Report of the subsidiary companies and other documents required to be attached under section 212(1) of the act to the balance sheet of the company. Accordingly the said documents are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are available for inspection by any member / investor and the Company will make available these documents / details upon request by any member of the Company or its subsidiaries interested in obtaining the same. However the data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further pursuant to Accounting Standard (AS)-21 issued by the Institute of Chartered Accountants of India, your company has presented the Consolidated Financial Statements which include financial information relating to its subsidiaries and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of the Accounting Standards 21, 23 & 27 issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors'' Report thereon forms part of the Annual Report.

DEPOSITS

The Company has not accepted any Deposits from the Public during the year pursuant to Section 58A of the Companies Act, 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

1. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures from the same.

2. Directors have selected the appropriate Accounting Policies and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2013, and of the profit of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Annual Accounts have been prepared on a going concern basis.

THE BOARD OF DIRECTORS

Mrs.Kavita Prasad is retiring by rotation at the AGM and is offering herself for re-appointment.

AUDITORS

Your company proposed to appoint M/s T.R. Chadha & Co., Chartered Accountants, for the current financial year. The board records its deepest appreciation to M/s.P.Murali & Co. for the excellent services they have rendered during the previous four years. As a prudent practice, the company has been rotating Auditors every 4 years. The same was done in the previous occasions also.

CONSERVATION OF ENERGY & ABSORPTION.

I. Conservation of energy your company''s operations are software oriented and not energy intensive. Adequate measures are taken to conserve energy wherever possible.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provision of clause 49 of the listing agreement, a report on Management Discussion & Analysis is enclosed as Annexure 2 to this report.

CMD''s DECLARATION

Pursuant to the provision of clause 49(I)(D)(ii) of the Listing Agreement, a declaration by the Chairman & Managing Director of the company declaring that all the members of the Board and the senior Management personnel of the company have affirmed compliance with the code of conduct of the company, is enclosed as Annexure 3 of this report.

CORPORATE GOVERNANCE

As per clause 49 of the listing agreement with the stock exchanges, a separate report on Corporate Governance is enclosed as Annexure 4 forming part of the Annual Report

A certificate from a firm of Chartered Accountant in whole time practice confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is annexed to this report as Annexure 5.

PARTICULARS OF EMPLOYEES

"No Employee of the company was in receipt of remuneration during the financial year 2012-13 in excess of the sum prescribed under section 217(2A) of the companies Act, 1956 read with the companies (Particulars of Employees) Rule, 1975."

INDUSTRIAL RELATIONS

Your company enjoys cordial employee relations, marked by empowerment and delegation.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the unstinted support extended by the esteemed Customers, Bankers and Institutions.

Your Directors also are pleased to record their appreciation for the services rendered by the employees at all levels in bringing about a better performance. Your directors express thanks to the Company''s Shareholders, and the Investors for their sustained confidence in the Management of the Company.



By Order of the Board

Place: Hyderabad N Sridhar

Date : 29th May, 2013 Chairman & Managing Director


Mar 31, 2012

Dear Shareholders,

The directors are pleased to present 15th Annual Report and Audited accounts for the financial year ending 2011-12. We have continued our growth trajectory from past year. The top line growth has increased by 47.82% to reach Rs. 77.04 cr. as against the previous year''s sales of Rs. 52.12 cr.

FINANCIAL HIGHLIGHTS 2011-12 (Rs. in Lakhs)

FINANCIAL HIGHLIGHTS 2011-12 2010-11

Income from Operations 7654.03 5,211.56

Other Income 49.49 9.03

Total Income 7703.52 5,220.59

Total Expenditure 6895.27 3740.44

Earnings before Depreciation, Interest & Tax 808.25 1480.15

Depreciation 345.97 303.68

Interest 308.08 392.95

Profit Before Tax 154.2 783.53

Provision for Tax including (FBT) 30.85 156.16

Other Provisions 50.03 0.00

Prior Period Excess Income written back - 11.28

Profit after Tax 73.31 616.09

Earnings Per Share 0.65 7.25

BUSINESS OPERATIONS

Continuing its business operations with the existing customers your company this year has added new customers under its fold in India and around the world. The Indian IT companies were under pressure during the current year because of US & Euro zone crises. Notwithstanding the adverse situations your company was successful in not only retaining its customers during this time but also has added new domains with the existing customers.

Indian IT companies are predominately a service industry and therefore your company has also decided to enter into service domain in which the return of investment is always higher with minimum working capital requirement. Considering this your company has built a dedicated sales force in India stationed in various states like: Delhi, Gujarat, Maharashtra & Andhra Pradesh etc.

Your company is also in process of signing new JV agreements with corporate to enhance its business scalability and operations in new domains with existing expertise.

Your Company managed with great strain of not having Working Capital limits from Banks for 1.5 years. However since the company was able to obtain working Capital limits in Dec'' 2011, the company faced substantial financial strain and had to pay higher interest on unsecured loans which effected the profitability of the Company as well.

OUTLOOK

Contracts with several fortune 500 customers are renewed and order book position for the current year is close to Rs. 106 cr. The company is also consistently winning new customers. Further, efforts to restructure the business model and improve productivity would not only help win new business but also yield better financial results.

SUBSIDAIRY COMAPNIES

The financial details of the subsidiary companies as well as the extent of holding therein are provided in a separate section of the Annual Report at Annexure 1:

Under section 212(8) of the Companies Act, 1956 the ministry of Corporate Affairs has exempted from attaching a copy of the Balance Sheet, Profit and loss accounts and schedules thereof, Director''s Report and Auditors Report of the subsidiary companies and other documents required to be attached under section 212(1) of the act to the balance sheet of the company. Accordingly the said documents are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are available for inspection by any member / investor and the Company will make available these documents / details upon request by any member of the Company or its subsidiaries interested in obtaining the same. However the data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further pursuant to Accounting Standard (AS)-21 issued by the Institute of Chartered Accountants of India, your company has presented the Consolidated Financial Statements which include financial information relating to its subsidiaries and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of the Accounting Standards 21, 23 & 27 issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors'' Report thereon forms part of the Annual Report.

DEPOSITS

The Company has not accepted any Deposits from the Public during the year pursuant to Section 58a of the Companies Act, 1956. DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

1. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures from the same.

2. Directors have selected the appropriate Accounting Policies and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012, and of the profit of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Annual Accounts have been prepared on a going concern basis.

THE BOARD OF DIRECTORS

The company has proposed to appoint Mr.Satish Kulkarni as a director in place of Mr.Mahesh Bhandari. The board places on record his contribution for the progress and development of the company.

AUDITORS

The Company''s auditors M/s. P. Murali & Co., Chartered Accountants retire at the ensuing Annual General Meeting and expressed their willingness to continue as Auditors of the Company. CONSERVATION OF ENERGY & ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

I. Conservation of energy your company''s operations are software oriented and not energy intensive. Adequate measures are taken to conserve energy wherever possible.

II. Foreign exchange earnings and outgo

(Rs. in Lacs)

Year ended Particulars 31-Mar-12 31-Mar-11

Earnings 7433.33 4443.45

Expenditure 5995.42 2736.24

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provision of clause 49 of the listing agreement, a report on Management Discussion & Analysis is enclosed as Annexure 2 to this report.

CMD''s DECLARATION

Pursuant to the provision of clause 49(I)(D)(ii) of the Listing Agreement, a declaration by the Chairman & Managing Director of the company declaring that all the members of the Board and the senior Management personnel of the company have affirmed compliance with the code of conduct of the company, is enclosed as Annexure 3 of this report.

CORPORATE GOVERNANCE

As per clause 49 of the listing agreement with the stock exchanges, a separate report on Corporate Governance is enclosed as Annexure 4 forming part of the Annual Report

A certificate from a firm of Chartered Accountant in whole time practice confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is annexed to this report as Annexure 5.

PARTICULARS OF EMPLOYEES

"No Employee of the company was in receipt of remuneration during the financial year 2011-12 in excess of the sum prescribed under section 217(2A) of the companies Act, 1956 read with the companies (Particulars of Employees) Rule, 1975."

INDUSTRIAL RELATIONS

Your company enjoys cordial employee relations, marked by empowerment and delegation.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the unstinted support extended by the esteemed Customers, Bankers and Institutions.

Your Directors also are pleased to record their appreciation for the services rendered by the employees at all levels in bringing about a better performance.

Your directors express thanks to the Company''s Shareholders, and the Investors for their sustained confidence in the Management of the Company.

By Order of the Board

Place: Hyderabad N Sridhar Date: 30th August 2012 Chairman & Managing Director


Mar 31, 2010

The Directors have pleasure in presenting this 13th Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2010. As members would have noticed the company has gone through challenging times during the past one year. While the global recession and its effect has been significant in itself, we also faced problem from the Income Tax case that had raised a demand of over Rs.7.09 Crores (Refer page 14 of Annual Report 2008-2009). The good news is that the company has won the appeal against this Income Tax order with no tax liability for the demand. The companys results for the year 2009-10 are as under:



FINANCIAL HIGHLIGHTS 2009-10 (Rs. in Lakhs)

FINANCIAL HIGHLIGHTS 2009-10 2008-09

Income from Operations 4077.95 4173.28

Other Income 2.90 14.39

Total Income 4080.86 4187.67

Total Expenditure 3204.44 3171.44

Earnings before Depreciation,

Interest & Tax 876.42 1016.23

Depreciation 248.16 274.89

Interest 208.40 168.06

Profit Before Tax 419.87 573.28

Provision for Tax (including FBT) 71.36 130.67

Profit after Tax 273.63 442.62

Earnings Per Share 3.22 5.97



During the Financial Year 2009-10, the Company recorded a Total Income of Rs.4,077.95 lakhs (out of which Export Income accounted for Rs.3,386.01lakhs) compared to Rs.3,944.62 Lakhs for the previous Financial Year. The Profit before Interest, Depreciation and Tax is Rs.876.42 Lakhs compared to Rs.1,016.23 Lakhs and the Earning per Equity Share to Rs.3.22 from Rs.5.97 in the previous year.

OPERATIONS

The order book of the company is robust and stands at Rs.104 Crores at the end of the current financial year. The company has added three new customers for courseware development. The company has secured a contract in the area of advance-distributed simulation from a defense public sector undertaking of India. The company has achieved one new license sales for the SILICON™ products during this financial year. The company has completed the implementation of its ongoing project with Kingfisher Airlines. Due to general slowdown of the industry, the company faced slowdown in award of work packages for existing contracts and approval of completed work packages from the customers. This has been particularly significant in the area aerospace and defense industry customers. The companys cash flows have been affected due to the income tax order and some of the measures taken by the authorities, this in turn affected schedule of deliveries. This has also been a contributing factor for modest performance during the current financial year.

PREFERENTIAL OFFER:

The company has obtained the shareholders consent for issue of 22,69,400 convertible warrants on preferential basis to Non-promoters and 30,00,600 convertible warrants to Promoters through postal ballot on 27th July 2010.

The Company has made in-principle approval application with the Bombay Stock Exchange Limited, Mumbai for listing of the aforesaid warrants allotment. Once BSE Approves the proposal, the Board will allot the afore mentioned Convertible Warrants to promoters and Non-promoters.

OUTLOOK

Your company enjoys the unbroken patronage of Fortune 500 companies for the past several years. Contracts with these customers are renewed and are current for the next five to seven years. Order book position therefore is good and going ahead further efforts would improve the position of the company. The company is consistently winning new customers. The company therefore is optimistic of bright outlook based on the above two factors. Further, efforts restructure the business model and improve productivity would not only help win new business but also yield better financial results.

SUBSIDIARY COMPANIES

The Financial details of the subsidiary companies as well as the extent of holdings therein are provided in a separate section of the Annual report. The Company received permission (vide letter No 47/646/2010-CLIII Dt 27/07/2010) from Central Government Under Section 212(8) of Companies Act, 1956, exempting from attaching a copy of Balance Sheet, Profit and Loss Account and schedules thereof, Directors Report and Auditors Report of the subsidiary Companies and other documents required to be attached under section 212(1) of the Act to the Balance Sheet of the Company. Accordingly the said documents are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are available for inspection by any member / investor and the Company will make available these documents / details upon request by any member of the Company or its subsidiaries interested in obtaining the same. However the data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further pursuant to Accounting Standard (AS)-21 issued by the Institute of Chartered Accountants of India, your company has presented the Consolidated Financial Statements which include financial information relating to its subsidiaries and forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of the Accounting Standards 21, 23 & 27 issued by the Institute of Chartered Accountants of India.

The Audited Consolidated Financial Statements together with Auditors Report thereon forms part of the Annual Report.

DEPOSITS

The Company has not accepted any Deposits from the Public during the year pursuant to Section 58A of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed that:

1. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures from the same.

2. Directors have selected the appropriate Accounting

Policies and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2009, and of the profit of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Annual Accounts have been prepared on a going concern basis.

THE BOARD OF DIRECTORS

Mr. N. Ramakrishna Rao, retires by rotation at the ensuing Annual General Meeting and is not offering himself for reappointment due to professional obligations.

Mr. Santhana Krishnan, who was appointed as Additional Director of the Company, on 30th January 2010, shall continue to hold the office of Director until the ensuing 13th Annual General Meeting of the Company, in accordance with Section 260 of the Companies Act, 1956 and not received a notice from a Member under Section 257 of the Act proposing his candidature for the office of Director.

Ms.Kavita Prasad has been appointed as an Additional Director by the Board on 1st May, 2010 and has been proposed for regularisation in ensuing Annual General Meeting.

Mr.N.Rangachari & Dr.Santanu Paul tendered resignations as Directors of the Company which was accepted by the Board in its meeting held on 30th January, 2010.

AUDITORS

The Companys auditors M/s. P.Murali&Co., Chartered Accountants retire at the ensuing Annual General Meeting and expressed their willingness to continue as Auditors of the Company.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

I. Conservation of Energy

Your companys operations are software oriented and not energy intensive. Adequate measures are taken to conserve energy wherever possible.

II. Foreign exchange earnings and outgo

(Rs. in Lacs)

Year ended

Particulars 31- Mar-10 31-Mar-09

Earnings 3386.01 3944.62

Expenditure 2746.54 2629.13



The following are missing in the Directors Report:

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis is enclosed as Annexure 2 to this Report.

CEOs DECLARATION

Pursuant to the provisions of Clause 49(I)(D)(ii) of the Listing Agreement, a declaration by the Managing Director and CEO of the Company declaring that all the members of the Board and the Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct of the Company, is enclosed as Annexure 4 to this Report.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate Report on Corporate Governance is enclosed as Annexure 3 forming part of the Annual Report.

A Certificate from a firm of Chartered Accountants in whole time practice confirming compliance with conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this Report as Annexure 5.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and forming part of Directors Report for the year ended 31st March 2010.



Name Qualifica- Date of Joining Designation Previous Experi- / Nature of Employer ence tions Employment

N. Sri nivas M.Com. 21.07.1997 Vice Chairman Sankhya 21 yrs / Contractual Management Services Ltd

N. Sri dhar M.Sc 21.07.1997 Managing Sankhya 21 yrs / Contractual Director & Management CEO Services Ltd



Name % of equity Age Remuneration shares held by employee in the Company

N. Srinivas 9.66 50 Rs.36.07 Lakhs

N. Sridhar 9.65 46 Rs.36.07 Lakhs



INDUSTRIAL RELATIONS

Your Company enjoys cordial employee relations, marked by empowerment and delegation.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the unstinted support extended by the esteemed Customers, Bankers and Institutions. Your Directors also are pleased to record their appreciation for the services rendered by the Employees at all levels in bringing about a better performance.

Your Directors express their thanks to the Companys Shareholders, and the Investors for their sustained confidence in the Management of the Company.



For and on behalf of the Board of Directors

Place: Secunderabad N R Mohanty

Dated: 14th August 2010 Chairman

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