SANKHYA INFOTECH LIMITED ANNUAL REPORT 2010-2011 CHAIRMAN'S REPORT Dear Shareowners, It is an honour and a moment of great pride for me to serve this fascinating organization as its third Chairman. My distinguished predecessors have made exemplary contributions to the growth and provided leadership during various turbulent times. While thanking you for the support that you have so generously extended to the previous Chairmen, I urge you to guide my team and me in our task to build a much stronger Sankhya now. 'Tough times don't last but tough men do' is an apt statement that describes the leadership team of your company. Despite the pain, the company had to go for through three successive years because of the problems associated with the Income Tax and the uncertainty in the global economy; we successfully stood the severe test it had put on our ability to sustain. We made some mistakes but kept our discipline and charged ourselves to emerge out of those challenging times. My parents have themselves seen several challenges in their lives, and have imbibed the values of integrity, honesty and commitment into me. I take pledge to serve your organization with strong adherence to these values. I ask you not to simply trust me, but trust your values, our values, and hold me responsible to living up to them. Some opportunities and precious time may have been lost during these three years, but they could not shake our will, commitment and the ability to grow the company to greater heights. I am delighted that the company has emerged triumphantly and has marched ahead with better performance this year. This performance is all the more remarkable because our talented team achieved it. Confidently I can say that the raise of the company has only begun now. In our pursuit to create a globally reputed organization, I can say with humility that we are the pioneers in many areas. Your company is the first company in the world to have launched the web-based simulation for the Aviation Industry and was appreciated by the US Federal Aviation Administration. Your company holds the unique distinction of being the first ever Indian IT company to be able to sell a 'Software Product' to any American Defense Organization. The biggest strength that I derived when I took over as a Chairman is the strong support of its investors. Several of them met me directly to express their support. As a company, we have been able to emerge stronger only because of this help from all of you. This is my first opportunity to be able to reach you. I assure you we will create an appropriate infrastructure to be in constant touch with you. One of the major developments of the previous year has been the strategic investment from HBL Power Systems Limited. We work in similar markets, sometimes-same clients; however, the biggest advantage comes from the fact that we can provide collaborative services that enhances the value proposition to our clients. Proven reliability of our products at several reputed clients makes us confident to pursue Business to Consumer (B2C) market even as we target to expand our footprint in the Business-to-Business (B2B) model. Your company is expanding its market domains. Recently your company emerged highly successful in the Banking Finance Securities & Insurance (BFSI) market by winning the largest bank contract of India from State Bank Group and a follow on contract from Union Bank of India. We crossed a major milestone in our pursuit to offer world class Simulation and Virtual Training products. Your company recently delivered an advanced simulation product to the Indian Defense forces. As I said already, we have just begun a new journey now, experiences of our past mistakes, associations and failures have taught us lessons that we shall never forget. We will be vigilant and as famous American President Ronald Regan said, 'To whatever history will recall about me, I hope you will recall, that I have appealed to your best hopes and not your worst fears, to your confidence rather than your doubts'. Sincere regards N. Sridhar Chairman & Managing Director.