The Board of Directors hereby submits the report of the business and operations of thecompany along with the audited financial statements for the financial year ended 31 March2016. The Consolidated performance of the company and its subsidiaries has been referredto wherever required.
The Company's operating performance during the year ended 31 March 2016 is summarizedbelow:
|Particulars || |
Standalone figures for the year ended
Consolidated figures for the year ended
| ||31-03-2016 ||31-03-2015 ||31-03-2016 ||31-03-2015 |
|Revenue From Operations ||15293.78 ||18197.55 ||15293.78 ||18197.55 |
|Other Income ||503.06 ||0.90 ||503.06 ||0.91 |
|Total Revenue ||15796.84 ||18198.45 ||15796.84 ||18198.46 |
|Employee Benefit Expenses ||8322.95 ||10652.43 ||8323.16 ||10652.43 |
|Other Operating Expenses ||1210.67 ||1020.49 ||1212.28 ||1021.21 |
|Administrative Expenses ||3442.90 ||3073.59 ||3442.90 ||3073.58 |
|Finance Cost ||490.47 ||476.51 ||490.47 ||476.51 |
|Depreciation and Amortization Expense ||530.03 ||510.75 ||530.03 ||510.75 |
|Other Expenses ||1243.73 ||1937.03 ||1243.73 ||1937.04 |
|Total Expenses ||15240.75 ||17670.80 ||15242.57 ||17671.52 |
|Profit Before Exceptional and Extraordinary Items and Tax ||556.09 ||527.65 ||554.27 ||526.93 |
|Extraordinary Items ||- ||- ||- ||- |
|Profit Before Tax ||556.09 ||527.65 ||554.27 ||526.93 |
|Current Tax ||119.10 ||112.55 ||118.72 ||112.41 |
|Deferred Tax ||(22.13) ||178.34 ||(22.13) ||178.34 |
|Previous Years Tax Provision ||62.00 ||90.00 ||62.00 ||90.00 |
|Profit/(Loss) for the period ||397.11 ||146.76 ||395.68 ||146.18 |
|Basic and Diluted Earnings per Share (Rs.) ||3.53 ||1.31 ||3.52 ||1.30 |
For the financial year ended March 31 2016 asfollows:-
Standalone Financial Performance
Standalone total Revenue for the current year was Rs. 15.796.84 Lacs.
Profit before Exceptional and Extraordinary Items and Tax was Rs. 556.09 Lacs.
Net Profit / (Loss) was Rs. 397.11 Lacs.
The basic and diluted Earnings per Share (EPS) was Rs. 3.53 for the year.
Consolidated Financial Performance:
Consolidated total Revenue for the current year was Rs. 15.796.84 Lacs.
Profit before Exceptional and Extraordinary Items and Tax was Rs. 554.27 Lacs.
Net Profit / (Loss) was Rs. 395.68 Lacs.
The basic and diluted Earnings per Share (EPS) was Rs. 3.52 for the year.
The Company's current year financial summary and highlights along with future outlookare mentioned in the Management Discussion and Analysis Report annexed to this report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Report.
As on 31 March 2016 the company has 3 Subsidiaries. During the year the Board ofDirectors reviewed the affairs of the subsidiaries. Pursuant to the provisions of Section129(3) of the Companies Act 2013 the consolidated financial statements of the companyhas been prepared which forms part of this Annual Report. Further a statement containingsalient features of financial statements of subsidiary along with the extent of holdingtherein are provided in the Form AOC 1 attached to the Accounts which covers theperformance and financial position of the subsidiaries.
The financial position of the said Companies is also given in the Notes to Consolidatedfinancial statements.
The Highlights of the performance of subsidiaries are as follows:
|Particulars ||Mahasena Info Technologies India Private Limited ||Sankhya SARL France ||Sankhya US Corporation |
|Total Income ||NIL ||NIL ||NIL |
|Total Expenses ||0.20 ||0.21 ||1.41 |
|Profit Before Tax ||(0.20) ||(0.21) ||(1.41) |
|Current Tax ||NIL ||NIL ||NIL |
|Deferred Tax ||NIL ||NIL ||NIL |
|Previous Years Tax Provision ||NIL ||NIL ||NIL |
|Profit/(Loss) for the period ||(0.20) ||(0.21) ||(1.41) |
In accordance of the Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of thecompany are available on our website. These documents will also be available forinspection at the registered office of the Company during working hours. The Company willalso make available a copy thereof to any member of the Company who may be interested inobtaining the same.
CONSOLIDATED FINANCIAL STATEMENTS (CFS)
The Consolidated Financial Statements of your Company for the financial year 2015-16are prepared in compliance with applicable provisions of the Companies Act 2013 readwith the Rules issued thereunder applicable Accounting Standards and the provisions ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The consolidatedfinancial statements have been prepared on the basis of audited financial statements ofyour Company its subsidiaries as approved by the respective Board of Directors.
The Board of Directors are confident that with their efforts to strive hard to maximizethe shareholders returns the company would be able to declare dividend in the nearfuture.
TRANSFER TO RESERVE
The Directors propose to transfer a sum of Rs. 397.11 Lacs to General Reserve out ofthe profits earned by the Company at the standalone level.
AUTHORISED SHARE CAPITAL
The Authorised Share Capital of the Company stands at Rs. 15.00. 00.000/- (RupeesFifteen Crores Only) divided into 1.50.00. 000 (One Crore Fifty Lacs Only) Equity Sharesof Rs. 10/- (Rupees Ten Only) each.
During the Year there has been no change in the Authorised Share Capital of theCompany.
PAID UP SHARE CAPITAL
The Paid Up share Capital of the Company stands at Rs. 112452050/- (Rupees ElevenCrore Twenty Four Lacs Fifty Two thousand and Fifty Only) divided into 11245205 (OneCrore Twelve Lacs Forty Five Thousand Two Flundred and Five) Equity Shares of Rs. 10/-(Rupees Ten Only) each.
SHIFTING OF REGISTERED OFFICE
The Board of Directors of the company at its meeting held on 14 November 2015 hasapproved the shifting of Registered Office of the Company w.e.f 14 November 2015 from"FI No. 1-13-30/ 76 B76 Dr. AS Rao Nagar Hyderabad- 500062 Telangana" to"Plot no: 8-2-686/DB/19 Mount View Enclave Road No # 12 Banjara Hills Hyderabad-500 034."
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
The Company has neither accepted nor renewed any deposits from public within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 during the year under review.
INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company's internal audit systems are geared towards ensuring adequate internalcontrols commensurate with the size and needs of the business with the objective ofefficient conduct of operations through adherence to the Company's policies identifyingareas of improvement evaluating the reliability of Financial Statements ensuringcompliances with applicable laws and regulations and safeguarding of assets fromunauthorized use.
Details of the internal controls system are given in the Management Discussion andAnalysis Report which forms part of the Directors' Report.
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL
All the Independent Directors have given declarations under section 149(7) of theCompanies Act 2013 that they meet the criteria of independence as laid down under Section149(6) of the Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. In the opinion of the Board they fulfill theconditions of independence as specified in the Companies Act 2013 and the Rules madethere under and are independent of the management.
Based on the confirmations received none of the Directors are disqualified for beingappointed/re-appointed as directors in terms of Section 164 of the Companies Act 2013.
In accordance with the provisions of Section 152 of the Companies Act 2013 Ms. NaliniNadupalli Director of the Company is liable to retire by rotation and is eligible forreappointment.
There have been no changes in Directors and Key Managerial Personnel during the year.
Further Mr. Pudhota Partha Saradhi has been appointed as Additional (IndependentDirector) and Ms. Neha Pamnani as Company Secretary and Compliance Officer of the Companyin the Board Meeting held on 28 May 2016.
The Company has adopted Governance Guidelines or code of conduct on Board IndependentDirector Key Managerial Personnel or senior managerial personnel. The GovernanceGuidelines or code of conduct cover aspects related to role of the Board diversitydefinition of independence and duties of independent Directors Code of Conduct Moralethics and principles to be followed.
NOMINATION REMUNERATION AND PERFORMANCE EVALUATION POLICY
The requisite details as required by Section 134(3) Section 178(3) & (4) of theCompanies Act 2013 and Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is provided in the Corporate Governance Report.
TRANSACTIONS WITH RELATED PARTIES
The requisite details as required by Section 134 & 188 of the Companies Act 2013and Regulation 23 & 34(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is provided in the Corporate Governance Report.
BOARD AND COMMITTEE MEETINGS
Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Section 173(1) of the Companies Act 2013 and Regulation 17(2) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory Costand Secretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2015-16.
Accordingly pursuant to Section 134(3) (c) and 134(5) of the Companies Act 2013 theBoard of Directors to the best of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company forthat period;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Provisions of Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 are not applicable to the Company.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee known as the Prevention of Sexual Harassment(POSH) Committee to inquire into complaints of sexual harassment and recommendappropriate action. In the Financial year 2015- 16 the Company has not received anycomplaints which fall within the scope of this policy.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The requisite details as required by Section 177 of the Companies Act 2013 andRegulation 22 & 34(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is provided in the Corporate Governance Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
(1) Statutory Auditors:
M/s. Komandoor & Co Chartered Accountants are the statutory auditors of theCompany and hold office till the conclusion of the 19th Annual General Meeting (AGM).Pursuant to the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 Members are requested to consider theratification of appointment of Auditors for the balance term.
The Statutory Auditors of the Company has submitted Auditors' Report on the Standaloneand Consolidated Financial Statements for the year ended on 31 March 2016.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed Mr. Ashish Kumar Gaggar to undertake the Secretarial Audit ofthe Company for the year ended 31 March 2016. The Secretarial Audit Report in the FormMR-3 is annexed as Annexure A.
The Secretarial Audit Report for the financial year ended 31 March 2016 contains thefollowing qualification:
a) The Company did not have Chief Financial Officer and Company Secretary asrequired under Section 203 of the Companies Act 2013 read with Rule 8 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
Management's Explanation to the above Auditors' Qualifications:
Company is in the process of finding a suitable person for the appointment as ChiefFinancial Officer and shall be appointing soon.
Company was in the process of identifying a suitable person and accordingly hasappointed Ms. Neha Pamnani as
Company Secretary of the company with effective from 28 May 2016.
b) The Company did not appoint Internal Auditor as required under Section 138 ofthe Companies Act 2013 read with Rule 13 of the Companies (Accounts) Rules 2014.
Management's Explanation to the above Auditors' Qualifications:
Company is in the process of finding a suitable person for the appointment as InternalAuditor and shall be appointing soon.
c) The Constitution of Board of Directors was not in accordance of Clause 49 ofListing Agreement / Regulation 17 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
Management's Explanation to the above Auditors' Qualifications:
The Company has reconstituted the Board with the appointment of Mr. Pudhota ParthaSaradhi as an Independent Director. Now the constitution of the Board of Directors is inaccordance with Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
d) The Constitution of Nomination and Remuneration Committee was not in accordance ofClause 49 of Listing Agreement/ Regulation 19 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
Management's Explanation to the above Auditors' Qualifications:
The Company has reconstituted its Nomination and Remuneration Committee with theappointment of Mr. Pudhota Partha Saradhi as an Independent Director. Now the constitutionof the Committee is in accordance with Regulation 19 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 are as follows:
A. Conservation of energy
Your Company is not engaged in any manufacturing activity and thus its operations arenot energy intensive. However adequate measures are always taken to ensure optimumutilisation and maximum possibility of saving of energy.
B. Technology absorption
Your Company has not undertaken any research and development activity for anymanufacturing activity nor was any specific technology obtained from any external sourceswhich needs to be absorbed and adopted.
C. Foreign exchange earnings and outgo
The foreign exchange earned in terms of actual inflows during the year and the foreignexchange outgo during the year in terms of actual outflows:
| ||2015-16 ||2014-15 |
|Foreign exchange earnings ||15220.24 ||17899.72 |
|Foreign exchange outgo ||13220.45 ||15714.60 |
PARTICULARS OF REMUNERATION
Disclosure under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
Employees employed throughout the year and in the aggregate were in receipt ofremuneration of not less than Rs. 102 lakhs perannum:
None of the employee of the company in the aggregate draws remuneration of more thanRs. 102 Lakhs perannum.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 the extract of Annual Return in form MGT-9 isannexed as Annexure B.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report as required under Regulation 34(2) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthe Annual Report and give detail of the overview industry structure and developmentsdifferent product groups of the Company operational performance of its various businesssegments.
The Company is committed to the tenets of good Corporate Governance and has takenadequate steps to ensure that the requirements of Corporate Governance as laid down inListing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 are complied with.
A separate report on Corporate Governance and Management Discussion and Analysis Reportis being presented as part of the Annual Report.
A declaration of Code of Conduct from Mr. Sridhar N. Chairman and Managing Directorforms part of the Corporate Governance Report.
M/s Komandoor &Co. LLP Chartered Accountants in practice has certified that theCompany has complied with the conditions of Corporate Governance as stipulated in ChapterIV of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 pursuant tothe Listing Agreement of the Company with Stock Exchange.
Mr. Sridhar N. Chairman and Managing Director and Mr. Srinivas Nadupalli Director ofthe Company have given a certificate to the Board as contemplated in Regulation 17(8) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
All assets of the Company and other potential risks have been adequately insured.
The relationship with the workmen and staff remained cordial and harmonious during theyear and the management received full co-operation from the employees.
Your Directors wish to place on record the appreciation and gratitude for all theassistance and support received from Banks and officials of concerned governmentdepartments for their co-operation and continued support extended to the Company. TheBoard also places on record its deep appreciation for the dedication and commitment of theemployees at all levels as their hard work co-operation and support had enabled theCompany to maintain its consistent growth. They also thank the Members for the confidencethey have reposed in the Company and its management.
|For and on behalf of the Board of Directors of |
| ||Sankhya Infotech Limited |
| ||Sridhar N |
|Date: 30th August 2016 ||Chairman & Managing Director |
|Place: Flyderabad ||DIN:00089548 |