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Directors Report of Vedavaag Systems Ltd.

Mar 31, 2016

DIRECTOR’S REPORT

Dear Members,

The Directors are pleased to present the 18th Annual Report for the year ended 31st March 2016.

FINANCIAL RESULTS:

(Rs In lakhs)

Particulars

2015-16

2014-15

Total Income

8358.38

6707.13

Profit before Depreciation and Tax

1360.89

1251.34

Depreciation

729.71

847.08

Extraordinary Items

-

-

Profit before Tax

631.18

404.26

Provision for Tax

93.39

114.29

Profit after Tax

537.79

289.97

Balance brought forward from previous year

1178.76

1154.91

Amount available for the appropriations

1716.55

1178.76

Surplus carried forward

1716.55

1178.76

BUSINESS OUT LOOK AND MANAGEMENT DISCUSSION

Your Directors are pleased to share with you that your company has completed Eighteen years and achieved a turnover of Rs.83.58 Crs during the year.

MANAGEMENT DISCUSSION & ANALYSIS:

Financial Inclusion:

Vedavaag has become the national Business Correspondent for State Bank of India apart from being BC for State Bank of Patiala. This new addition is expected to facilitate multiword growth in coverage area and volume of financial transaction services rendered by us.

We are facilitating servicing for over 20 lakh house holds spread across 1500 panchayats in the rural India. We are keen to enhance our service portfolio into other areas such as BFSI, health care, and retailing to leverage our rural reach.

E-Governance:

Vedavaag has been in the top 20 enrolment agencies in the country and facilitated Aadhar enrolment services for over 1.5Cr population. The company has been operating more than 500 permanent enrolment censers to facilitate service in the neighbourhood of the rural citizen. The company is now participating in the Aadhar seeding program of the government to facilitate direct benefit to the citizen as per the government policy.

Acquisition of Synaptic Software, a rural primary agricultural cooperatives IT solution provider, Vedavaag is expanding its operations portfolio by acquiring a Primary Agricultural Cooperative Software and Implementation services company “Synaptic systems private limited”. Synaptic has a proven ERP for PACS and has completed two audit cycles of implementation for over 100 PACs in AP. The company similarly received mandate from five PACs in Telangana to do the pilot.

Across India over 1 lakh PACs are functional and with average IT infra cost per PAC at Rs 5 lacs approximately, this is considered to be a Rs 5000 Cr niche market place to operate.

SHARE CAPITAL:

The paid up Share capital of the company now stands at Rs.14,13,00,000 represented by 1,41,30,000 equity shares of Rs. 10/- each after exercise of option for conversion of FIVE lakhs equity warrants by the promoter issued to him earlier on preferential basis.

EXTRACT OF ANNUAL RETURN:

Pursuant to subsection 3(a) of section 134 and subsection (3) of section 92 of the companies act 2013 read with rule 12 of the companies (Management and administration) rules 2014 ,the extract of annual return as at 31st March 2016 forms part of this report as annexure.

RESERVES AND SURPLUS:

During the year under review the reserves and surplus stood at Rs. 2,453.22 Lakhs as compared to Rs.1,915.43 Lakhs in the previous year.

DIVIDEND ON EQUITY:

Your Directors do not recommend any appropriation towards dividend on equity share capital for the year ended 31st March 2016.

FIXED DEPOSITS:

The Company has not invited/accepted any fixed deposits.

DIRECTORS RESPONSIBILITY STATEMENT :

To the best of their knowledge and belief and according to the information and explanation obtained by them , your Directors make the following in terms of section 134(5) of companies act 2013.

i) That in accordance with the preparation of the accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) That the directors have selected such accounting policies and applies 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 as at the end of the financial year and of the profit of the company for the year under review.

iii) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities ;and

iv) That the directors have prepared the annual accounts on a ‘Going Concern’ basis.

v) The company maintains adequate internal controls in order to operate effectively.

v) PARTICULRS OF LOANS, GUARANTEES AND INVESTMENTS

During the year under review the company did not give any loans nor provided guarantees nor made investments covered under the provisions of section 186 of the companies Act 2013.

RISK MANAGEMENT POLICY

The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedures are reviewed by the Board on quarterly basis at the time of review of performance of the Company.

ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

A formal evaluation mechanism has been adopted for evaluating the performance of the Board as well as performance of Committees and individual Directors. Performance of all Directors and the Company has been carried out by way of structured evaluation process. Criteria for evaluation includes attendance and contribution at the meetings, preparedness for the meetings, effective decision making ability etc.

INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Company’s business, size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review has been marked as Annexure ll.

Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has constituted an Internal Compliant Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaint was made before the Committee.

CORPORATE SOCIAL RESPONSIBILTY POLICY

During the financial year, the CSR Provisions of the Company Act, 2013 have become applicable and the board has formed CSR Committee for defining the policy and future course of action.

RELATED PARTY TRANSACTIONS:

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 the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large and thus disclosure in Form AOC-2 is not required.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitments

STATUTORY AUDITORS:

The Auditors M/S Mahesh, Virender and Sriram, Chartered Accountants, Hyderabad, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The company has received letter from the auditors to the effect that their appointment holds good as auditors if they are reappointed as statutory auditors.

REPLIES TO AUDITOR’S REPORT:

Since the company is engaged in the infrastructure establishment and maintenance projects and without adequate bank support and with considerable delay in receivables from state governments, there was certain delay in depositing statutory dues .However ,the efforts are in place to overcome such instances

SECRETARIAL AUDIT REPORT:

Pursuant to Section 204 of the companies Act 2013 and rules there under, the board of directors of the company appointed Mr. N. Lakshmi Narayana, ACS No. A34340 practicing Company secretary to conduct secretarial audit of records and documents of the company.

The Sectretarial audit report confirms that the company has generally complied with all applicable provisons of the Acts, Rules, Regulations, Guidelines etc., applicable to the Company subject to the following observations :

1) Section 137 of the Companies Act, 2013 has not been complied with.

Reply : The company has taken steps to file the Annual Returns of both the wholly owned subsidiaries.

The Report of Secretarial Audit in form MR-3 for the Financial Year ended 31st March 2016 is annexed to the report.

CASH FLOW STATEMENT:

Cash flow statement for the year ended 31stMarch, 2016 is attached with the annual audited accounts of the company.

LISTING INFORMATION:

The Securities of the company are listed with and traded in dematerialized form at Bombay Stock Exchange Ltd from March 2009,on wards. The BSE Scrip code number 533056 and ISIN NO of the company INE359B01010. The company has paid Annual Listing Fees for the year 2015-2016 to the Bombay Stock Exchange.

CHANGE IN THE NATURE OF BUSINESS:

There is no change in the nature of business of the company, during the year under review.

In accordance with section 149(7) of the companies’ act 2013 each Independent Director confirmed the company that he or she meets the criteria of Independence laid down in section 149(6) of Companies Act 2013 and Clause 49 of the Listing agreement.

APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY: The assessment and appointment of members to the Board is based on the combination of criterion that includes ethics personal and professional stature domain

In accordance with section 178(3) of the companies Act 2013 Clause 49 (IV)(B) of Listing Agreement and on recommendation of the Nomination and Remuneration Committee the Board adopted a remuneration policy for the Directors key management Personnel (KMP’s) and senior management. The Policy is attached as an annexure to Board’s report.

NUMBER OF BOARD MEETINGS:

The Board of Directors met ten (10) times during the year under review .. Details of Board meeting are laid out in Corporate Governance Report which forms part of Annual Report.

AUDIT COMMITEE:

The Audit Committee of the Board of Directors consists of all Independent Directors .The Board has accepted all the recommendation made by audit committee during the year. The audit committee met 4 times during the year .

CORPORATE GOVERNANCE:

Corporate Governance report is set out as annexure to the Report

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The required information as per section 134(3)(m) of the companies Act 2013 is provided here under.

1. Conservation of Energy:

The operations of the company involve low energy consumption; adequate measures however have been taken to conserve energy.

i) Technology Absorption:

Since business and technologies are changing constantly, investment in research and development activities is of paramount importance. Your company continues its focus on quality up gradation of product and services development.

Foreign Exchange Income and Out go:

Foreign Exchange

2015-2016

2014-2015

Income

-

-

Out Go

-

-

PERSONNEL:

As regards ,information pursuant to section 197(12) of the companies act 2013 ,read with rules 5(1)and 5(2) of the companies (appointment and remuneration of managerial personnel rules 2014) ,there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and your directors appreciate sincere and efficient services rendered by employees of the company at all the levels towards successful working of the company.

INTERNAL CONTROL SYSTMES AND THEIR ADEQUACY:

Adequate internal control systems are in vogue commensurate with the size of the operations of the organization. Continuous efforts are being made by constant review to improve the same.

DECLARATION:

The Company is filing all Forms and Returns with the Registrar of Companies as required under Companies Act, 2013. The Company has not committed any of the defaults under section 164 of companies Act 2013 disqualifying the directors to act as directors of other public Limited Companies.

APPRECIATION:

Your Directors take this opportunity to thank all the investors, business partners, clients, bankers regulatory and Government authorities, Stock exchanges and employees for their continues support and confidence in the company.

Place: Hyderabad For & on behalf of the board

Date : 12.08.2016 Sd/ Sd/

J.S.R. Durga Prasad J.Murali Krishna

Chairman Managing Director


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their 16th Annual Report together with the Audited Accounts for the financial year ended 31st March 2014.

FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2013-14 2012-13

Total Income 6299.00 5062.66

Profit before Interest, Depreciation and Taxation 1055.32 871.20

Interest 10.92 20.17

Depreciation 666.26 475.18

Extraordinary Items - -

Profit before Taxation 378.14 375.85

Provision for Taxation 130.69 8.94

Profit after Taxation 247.45 366.91

Balance brought forward from previous year 907.46 540.55

Amount available for the appropriations 1154.91 907.46

Surplus carried forward 1154.91 907.46

BUSINESS OUTLOOK AND MANAGEMENT DISCUSSION:

Your directors are pleased to share with you that your Company has completed Sixteen years and achieved a turnover of Rs.63 Cr.

E-Governance Services:

The Company continued to get good e-governance orders for projects such as National population register and biometric data collection for Aadhaar Card generation and has a healthy Order Book position.

With the parliament elections and followed by government change of stand from UID to NPR and back we are impacted in the last quarter of the year under consideration and current year. However, the company is in the process of realigning all its resources and is confident of streamlining the operations in the current year to achieve performance more than last year.

Financial Inclusion:

The Company is associated with State Bank of India, State Bank of Patiala, Punjab National Bank, Central Bank Of India and Bank of Baroda and has transaction volumes of over Rs 400 Cr in the last year with an account holder base of over 5 lacs. The Company is aggressively pursuing this direction to expand its operations to other Hindi Speaking States apart from Bihar.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share capital:

The paid up share capital now stands at Rs.9,35,00,000/- represented by 93,50,000 equity shares of Rs.10/-each.

Reserves and surplus:

During the year under review the reserves and surplus stood at Rs.1891.59 lakhs as compared to Rs.1644.14 lakhs in the previous year.

Dividend on Equity:

Your Directors do not recommend any appropriation towards dividend on Equity Share Capital for the year ended 31st March, 2014.

Fixed Deposits:

The Company has not invited / accepted any fixed deposits within purview of Section 58 A during the year under review.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following in terms of Section 217 (2AA) of the Companies Act, 1956.

i. That in accordance with the preparation of the accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared the annual accounts on a going concern basis.

STATUTORY AUDITORS:

The Auditors, M/s Mahesh, Virender & Sriram, Chartered Accountants, Hyderabad, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received letter from the Auditors to the effect that their appointment as Auditors, if made, would be within the limits under Section 224 (1-B) of the Companies Act, 1956.

REPLIES TO AUDITORS'' REPORT:

The company is in the process of valuing the employee retirement benefits by actuarial valuation and shall provide for the same on completion of the assessment.

Reconciliation of customer/supplier accounts is a continuous ongoing process and any discrepancies shall be rectified in due course.

CASH FLOW STATEMENT:

A Cash Flow Statement for the year ended 31st March, 2014 is attached with the Annual Audited Accounts of the Company.

LISTING INFORMATION:

The Securities of the Company are listed with and traded in dematerialized form at Bombay Stock Exchange Ltd from March 17th, 2009 onwards. The BSE Scrip Code is 533056 and ISIN No of the Company is INE359B01010. The Company has paid the Annual Listing Fees for the year 2014-15 to the Bombay Stock Exchange Ltd.

CORPORATE GOVERNANCE:

The Corporate Governance report is set out as Annexure to this Report.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988:

A. Conservation of Energy:

The operations of the Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

B. Technology Absorption:

Since business and technologies are changing constantly, investment in research and development activities is of paramount importance. Your Company continues its focus on quality up gradation of product and services development.

C. Foreign Exchange Income and Out go:

Rs. in Lakhs

Foreign Exchange 2013-14 2012-13

Income - 58.93

Out go - -

PERSONNEL:

As regards, information pursuant to Section 217(2AA) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels towards the successful working of the Company.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

Adequate internal control systems are in vogue commensurate with the size of the operations of the organization. Continuous efforts are being made by constant review to improve the same.

DECLARATION:

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956. The Company has not committed any of the defaults specified under Section 274 (1)(g) of the Companies Act, 1956 (as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

APPRECIATION:

Your Directors take this opportunity to thank all the investors, business partners, clients, bankers, regulatory and Governmental authorities, stock exchanges and employees for their continued support and confidence in the Company.

For & on behalf of the Board

Sd/ Sd/ Place: Hyderabad J S R Durga Prasad J Murali Krishna Date : 30.08.2014 Chairman Managing Director


Mar 31, 2013

The Directors have pleasure in presenting their 15th Annual Report together with the Audited Accounts for the financial year ended 31st March 2013.

FINANCIAL RESULTS:

Rs in Lakhs.

Particulars 2012-13 2011-12

Total Income 5062.66 2509.49

Profit before Interest, Depreciation and Taxation 871.20 744.08

Interest 20.17 22.33

Depreciation 475.18 596.57

Extraordinary Items - 19.46

Profit before Taxation 375.85 105.72

Provision for Taxation 8.94 19.64

Profit after Taxation 366.91 86.08

Balance brought forward from previous year 540.55 454.47

Amount available for the appropriations 907.46 540.55

Surplus carried forward 907.46 540.55

BUSINESS OUTLOOK AND MANAGEMENT DISCUSSION:

Your directors are pleased to share with you that your company has completed fifteen years and showed a substantial progress in many of the parameters and crossed the turnover mark of Rs. 50 cr.

E-Governance Services:

The company continued to get good e-governance orders for projects such as national population register and biometric data collection for aadhar card generation and has a healthy order book position.

Financial Inclusion:

The company has entered into business correspondent arrangement with State Bank of Patiala in addition to the State Bank of India. As a state central agency for common service centers (CSC) the company got the mandate from Punjab National Bank and other public sector banks also for Financial Inclusion services. The company is progressing will in this direction.

Debtors Management:

The company has critically reviewed the quality of debtors and decided to write off those which are irrecoverable. The company maintained healthy operations, despite the write off and the huge working capital needs and hopes to improve the liquidity position further in this year.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share capital:

The paid up share capital now stands at Rs.9,35,00,000 represented by 93,50,000 equity shares of Rs.10/-each.

Reserves and surplus:

During the year under review the reserves and surplus stood at Rs.1647.07 lakhs as compared to Rs.1280.15 lakhs in the previous year.

Dividend on Equity:

Your Directors do not recommend any appropriation towards dividend on Equity Share Capital for the year ended 31st March, 2013.

Fixed Deposits:

The Company has not invited / accepted any fixed deposits within purview of Section 58 A during the year under review.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following in terms of Section 217 (2AA) of the Companies Act, 1956.

i. That in accordance with the preparation of the accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the company for the year under review.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv. That the directors have prepared the annual accounts on a ''going concern'' basis.

STATUTORY AUDITORS:

The Auditors, M/s Mahesh, Virender & Sriram, Chartered Accountants, Hyderabad, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received letter from the Auditors to the effect that their appointment as Auditors, if made, would be within the limits under Section 224 (1-B) of the Companies Act, 1956.

REPLIES TO AUDITORS'' REPORT:

Since the Company is engaged in infrastructure establishment and maintenance projects, and without adequate bank support and with considerable delay in receivables from state governments, there were certain delays in depositing statutory dues. However, the efforts are in place to overcome such instances.

CASH FLOW STATEMENT:

Cash Flow Statement for the year ended 31st March, 2013 is attached with the Annual Audited Accounts of the Company.

LISTING INFORMATION:

The Securities of the Company are listed with and traded in dematerialized form at Bombay Stock Exchange Ltd from March 17th, 2009 onwards. The BSE Scrip Code is 533056 and ISIN No of the Company is INE359B01010. The Company has paid the Annual Listing Fees for the year 2013-14 to the Bombay Stock Exchange Ltd.

CORPORATE GOVERNANCE:

The Corporate Governance report is set out as Annexure to this Report.

A. Conservation of Energy:

The operations of the Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

B. Technology Absorption:

Since business and technologies are changing constantly, investment in research and development activities is of paramount importance. Your Company continues its focus on quality up gradation of product and services development.

PERSONNEL:

As regards, information pursuant to Section 217(2AA) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels towards the successful working of the Company.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

Adequate internal control systems are in vogue commensurate with the size of the operations of the organization. Continuous efforts are being made by constant review to improve the same.

DECLARATION:

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956. The Company has not committed any of the defaults specified under Section 274 (1)(g) of the Companies Act, 1956 (as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

APPRECIATION:

Your Directors take this opportunity to thank all the investors, business partners, clients, bankers, regulatory and Governmental authorities, stock exchanges and employees for their continued support and confidence in the Company.

For & on behalf of the Board

Place: Hyderabad J S R Durga Prasad Murali Krishna

Date : 28.05.2013 Chairman Managing Director


Mar 31, 2012

The Directors have pleasure in presenting their 14th Annual Report together with the Audited Accounts for the financial year ended 31st March 2012.

FINANCIAL RESULTS:

Rs in Lakhs

Particulars 2011-12 2010-11

Total Income 2509.49 1724.78

Profit before Interest, Depreciation and Taxation 744.08 687.53

Interest 22.33 5.20

Depreciation 596.57 656.92

Extraordinary Items 19.46

Profit before Taxation 105.72 25.41

Provision for Taxation 19.64 4.71

Profit after Taxation 86.08 20.70

Balance brought forward from previous year 454.47 433.77

Amount available for the appropriations 540.55 454.47

Surplus carried forward 540.55 454.47

BUSINESS OUTLOOK AND MANAGEMENT DISCUSSION:

Your directors are pleased to share with you that your company has completed fourteen years. E-Governance Services:

The company has received an order worth over Rs 45 Crs from consortium of public sector undertakings for Socio Economic Caste Census (SECC) in the states of Bihar and UP.

The company has bid for such other e-governance projects and expected to have a healthy order book position from this segment.

Financial Inclusion:

The company has increased its customer service points (CSP) working for State Bank of India to more than 200 centers in the state of Bihar. The business is growing at a healthy rate.

Debtors Management:

The receivables from government continue to be accumulating with low recovery for varied reasons of delay in releases from the state governments.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: Share capital:

The paid up share capital now stands at Rs.9,35,00,000 represented by 93,50,000 equity shares of Rs.10/-each.

Reserves and surplus:

During the year under review the reserves and surplus stood at Rs.1280.15 lakhs as compared to Rs. 1194.07 lakhs in the previous year.

Dividend on Equity:

Your Directors do not recommend any appropriation towards dividend on Equity Share Capital for the year ended 31st March, 2012.

Fixed Deposits:

The Company has not invited / accepted any fixed deposits within purview of Section 58 A during the year under review.

DIRECTORS: DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following in terms of Section 217 (2AA) of the Companies Act, 1956.

i. That in accordance with the preparation of the accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true

and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for the year under review.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. That the directors have prepared the annual accounts on a going concern basis. STATUTORY AUDITORS:

The Auditors, M/s Mahesh, Virender&Sriram, Chartered Accountants, Hyderabad retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received letter from the auditors to the effect that their appointment as Auditors, if made, would be within the limits under Section 224 (1-B) of the Companies Act, 1956.

REPLIES TO AUDITORS’ REPORT:

Since the company is engaged in infrastructure establishment and maintenance projects, and without adequate bank support and with considerable delay in receivables from state governments, there were certain delays in depositing statutory dues. However, the efforts are in place to overcome such instances.

CASH FLOW STATEMENT:

A Cash Flow Statement for the year ended 31st March, 2012 is attached with the Annual Audited Accounts of the Company.

LISTING INFORMATION:

The Securities of the Company are listed with and traded in dematerialized form at Bombay Stock Exchange Ltd from March 17th, 2009 onwards. The BSE Scrip Code is 533056 and ISIN No of the Company is INE359B01010. The Company has paid the Annual Listing Fees for the year 2012-13 to the Bombay Stock Exchange Ltd.

CORPORATE GOVERNANCE:

The Corporate Governance report is set out as Annexure to this Report.

AUDIT COMMITTEE:

Audit Committee consists of the Directors namely Sri V.Umapathi, Sri G T Murthy and Sri J.S.R.Durga Prasad

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988:

A. Conservation of Energy:

The operations of the Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

B. Technology Absorption:

Since business and technologies are changing constantly investment in research and development activities is of paramount importance. Your Company continues its focus on quality upgradation of product and services development.

C. Foreign Exchange Income and Outgo:

In Rs. Lakhs 2011-12 2010-11

Foreign Exchange Earnings: 84.37 37.88

Foreign Exchange out go :

PERSONNEL:

As regards, information pursuant to Section 217(2AA) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels towards the successful working of the Company.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

Adequate internal control systems are in vogue commensurate with the size of the operations of the organization. Continuous efforts are being made by constant review to improve the same.

DECLARATION:

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956. The Company has not committed any of the defaults specified under Section 274 (1)(g) of the Companies Act, 1956 (as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

APPRECIATION:

Your Directors take this opportunity to thank all the investors, business partners, clients, bankers, regulatory and Governmental authorities, stock exchanges and employees for their continued support and confidence in the Company.

For & onbehalf ofthe Board J. S. R. Durgaprasad J. Muralikrishna

Chairman Managing Director

Place: Hyderabad Date : 31.8.2012


Mar 31, 2010

The Directors have pleasure in presenting their 12th Annual Report together with the Audited Accounts for the financial year ended 31st March 2010.

FINANCIAL RESULTS:

(Rupees in Lakhs)

Particulars 2009-2010 2008-2009

Total Income 1654.23 1336.93

Profit before Interest, Depreciation and Taxation 778.90 629.5

Interest 82.24 73.86

Depreciation 686.38 467.47

Preliminary & Public issue expenses w/off 2.46 3.07

Profit before Taxation 7.87 85.20

Provision for Taxation

Fringe Benefit Tax - 1.08

Income Tax 1.22 8.80

Deferred Tax - 52.17

Profit after Taxation 6.65 23.14

Balance brought forward from previous year 427.13 413.35

Amount available for the appropriations 433.78 436.49

Preference Dividend - 8.00

Corporate Dividend tax - 1.36

Surplus carried forward 433.78 427.13

BUSINESS OUTLOOK AND MANAGEMENT DISCUSSION:

Your directors are pleased to share with you that your company has completed twelve years.

E-Governance and Common Service Centers:

The company has established citizen service centers (known as common service centers) in rural India in Bihar and Haryana. While the company won support price in Bihar, the centers in Haryana were setup with no support price as at that point of time rural market boom was greatly envisaged. The various G2C services enunciated by the governments in the request for proposal are taking more time to launch and hence the gestation of the project to generate significant revenues also is extended.

After the global financial meltdown, again the finance industry is looking up and more products and services are entering into the rural market in a big way. Accordingly your company is soliciting tie-up with various insurance and financial services players and banks to play a significant role in financial inclusion.

The company is exploring tie-up with various portal based education service providers and skill imparting industry to launch the same in rural markets.

The company is bidding for National Population Register (NPR) in some of the states where it has presence/well established operations. National Poulation register is an exercise being done by registrar general of India as part of census process. RGI is intending collection biometrics information and digitizing the citizen information as per UID guidelines. This initiative provides a great opportunity for your company in the states it is present to get good volume of work. In the year 2010-11 and 2011-2012 these projects are expected to mature and give good results to your company.

Portals for Rural Market:

The company is hosting rural product marketing portal www.vabhee.in to launch intra village trading services. The portal is expected to give new dimension and broad base the business of SARK to rural retailing and merchandising.

It is also felt that the business of SARK has to be broad based than limiting only to e-Govemance which is resulting stinted growth because of revenue dependence from only one sector - e governance and there by cash flow uncertainties leading to working capital problems. These issues accumulate to an extent that the growth of the organization also is getting stifled. It is expected that alternate cash flow generation will help in mitigating these risks.

Debtors Management:

The collections management from Government sector continued to be a strenuous exercise that is impacting the growth of the company also. Hence conscious decision is made to broad base the operations to reduce this single customer base-Government sector.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share capital:

The paid up share capital now stands at Rs.9,35,00,000 represented by 93,50,000 equity shares of Rs.10/-each.

Reserves and surplus:

During the year under review the reserves and surplus stood at Rs.1173.38 lakhs as compared to Rs. 1166.73 lakhs in the previous year.

Fixed Assets:

The gross fixed assets of the company stood at Rs.4882.37 lakhs as at the end of the current year as compared to Rs. 4587.45 lakhs of previous year.

Net Current Assets:

The net current assets of the company have increased to Rs.1080.00 lakhs as on 31s1 March, 2010 from Rs.923.80 lakhs as at 31st March, 2009.

Dividend on Equity:

Your Directors do not recommend any appropriation towards dividend on Equity Share Capital for the year ended 31st March, 2010.

Fixed Deposits:

The Company has not invited / accepted any fixed deposits within purview of Section 58 A during the year under review.

DIRECTORS:

Shri P V Narasimham, has resigned from the board expressing his inability to attend the board matters with his other preoccupation. Your board places on record the great services rendered by Shri Narasimham and the valuable advice during his association with us.

Shri Guhan Subramaniam has resigned from the board subsequent to the divesting of shares held by SARA Fund Trustee company (P) Limitred and managed by IL & FS as Mr Guhan is the nominee on Board from Sara Fund. The board acknowledges the valuable advice rendered by Shri Guhan Subramaniam during his association with SARK.

Dr G. T Murthy and Shri V Umapathi directors of the company retire by rotation at the forthcoming annual general meeting and being eligible offer themselves for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following in terms of Section 217 (2AA) of the Companies Act, 1956.

i. That in accordance with the preparation of the accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for the year under review.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. That the directors have prepared the annual accounts on a going concern basis.

STATUTORY AUDITORS:

The Auditors, M/s Mahesh, Virender & Sriram, Chartered Accountants, Hyderabad retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received letter from the auditors to the effect that their appointment as Auditors, if made, would be within the limits under Section 224 (1-B) of the Companies Act, 1956.

REPLIES TO AUDITORS REPORT:

Since the company is engaged in infrastructure establishment and maintenance projects, and without adequate bank support, there were certain delays in depositing statutory dues. However, the instances are kept to the minimum and efforts are in place to ensure such instances do not happen in future,

CASH FLOW STATEMENT:

A Cash Flow Statement for the year ended 31st March, 2010 is attached with the Annual Audited Accounts of the Company.

LISTING INFORMATION:

The Securities of the Company are listed with and traded in dematerialized form at Bombay Stock Exchange Ltd from March 17th, 2009 onwards. The BSE Scrip Code is 533056 and ISIN No of the Company is INE359B01010. The Company has paid the Annual Listing Fees for the year 2009-10 to the Bombay Stock Exchange Ltd.

CORPORATE GOVERNANCE:

The Corporate Governance report is set out as Annexure to this Report.

AUDIT COMMITTEE:

Audit Committee consists of the Directors namely Sri V.Umapathi, Sri P.V.Narasimham and Sri J.S.R.Durga Prasad

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988:

A. Conservation of Energy:

The operations of the Company involve low energy consumption. Adequate measures have, ftowever, been taken to conserve energy.

B. Technology Absorption:

Since business and technologies are changing constantly, investment in research and development activities is of paramount importance.

Your Company continues its focus on quality upgradation of product and services development.

PERSONNEL:

As regards, information pursuant to Section 217(2AA) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels towards the successful working of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Adequate internal control systems are in vogue commensurate with the size of the operations of the organization. Continuous efforts are being made by constant review to improve the same.

DECLARATION:

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956. The Company has not committed any of the defaults specified under Section 274 (1)(g) of the Companies Act, 1956 (as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

APPRECIATION:

Your Directors take this opportunity to thank all the investors, business partners, clients, bankers, regulatory and Governmental authorities, stock exchanges and employees for their continued support and confidence in the Company.

For & on behalf of the Board Place: Hyderabad J.S.R. Durga Prasad J. Murali Krishna

Date: 05.12.2010 Chairman Managing Director

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