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Sankhya Infotech Ltd.

BSE: 532972 Sector: IT
NSE: N.A. ISIN Code: INE877A01013
BSE 00:00 | 17 Aug 90.85 -2.00
(-2.15%)
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NSE 05:30 | 01 Jan Sankhya Infotech Ltd
OPEN 95.95
PREVIOUS CLOSE 92.85
VOLUME 15590
52-Week high 158.50
52-Week low 42.90
P/E 13.19
Mkt Cap.(Rs cr) 119
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 95.95
CLOSE 92.85
VOLUME 15590
52-Week high 158.50
52-Week low 42.90
P/E 13.19
Mkt Cap.(Rs cr) 119
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sankhya Infotech Ltd. (SANKHYAINFOTECH) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the 20th Annual Report along with theaudited financial statements for the financial year ended 31st March 2017.The Consolidated performance of the company and its subsidiaries has been referred towherever required.

FINANCIAL RESULTS

The Company`s operating performance during the financial year ended 31 st March 2017is summarized below:

Particulars

Standalone figures for the year ended

Consolidated figures for the year ended

31-03-2017 31-03-2016 31-03-2017 31-03-2016
Revenue From Operations 16160.00 15293.78 16160.00 15293.78
Other Income 15.93 503.06 15.93 503.06
Total Revenue 16175.93 15796.84 16175.93 15796.84
Employee Benefit Expenses 8591.47 8322.95 8591.47 8323.16
Other Operating Expenses 1085.74 1210.67 1085.74 1212.28
Administrative Expenses 3188.15 3442.90 3188.15 3442.90
Finance Cost 425.12 490.47 425.12 490.47
Depreciation and Amortization Expense 607.58 530.03 607.58 530.03
Other Expenses 1613.79 1243.73 1621.23 1243.73
Total Expenses 15511.85 15240.75 15519.29 15242.57
Profit Before Exceptional and Extraordinary 664.08 556.09 656.64 554.27
Items and Tax
Extraordinary Items - - - -
Profit Before Tax 664.08 556.09 656.64 554.27
Current Tax 132.87 119.10 132.87 118.72
Deferred Tax 55.00 (22.13) 55.00 (22.13)
Previous Years Tax Provision - 62.00 - 62.00
Profit/(Loss) for the period 476.21 397.11 468.77 395.68
Basic and Diluted Earnings per Share (Rs.) 4.23 3.53 4.17 3.52

OPERATIONS

For the financial year ended 31st March 2017 as follows:-StandaloneFinancial Performance

• Standalone Total Revenue for the current year was Rs. 16175.93 Lakhs.

• Profit before Exceptional and Extraordinary Items and Tax was Rs. 664.08 Lakhs.

• Net Profit / (Loss) were Rs. 476.21 Lakhs.

• The basic and diluted Earnings per Share (EPS) were Rs.

4.23 for the year.

Consolidated Financial Performance:

• Consolidated Total Revenue for the current year was Rs. 16175.93 Lakhs.

• Profit before Exceptional and Extraordinary Items and Tax was Rs. 656.64 Lakhs.

• Net Profit / (Loss) were Rs. 468.77 Lakhs.

• The basic and diluted Earnings per Share (EPS) were Rs.

4.17 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

In terms of Section 134(3)(l) of the Companies Act 2013

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.

SUBSIDIARY

As on 31st March 2017 the company has 3 Subsidiaries.

During the year the Board of Directors reviewed the affairs of the subsidiaries.Pursuant to the provisions of Section 129(3) of the Companies Act 2013 the consolidatedfinancial statements of the company has been prepared which forms part of this AnnualReport. Further a statement containing salient features of financial with the extent ofholding therein are provided in the Form AOC 1 attached to the Accounts whichcovers the performance and financial position of the subsidiaries.(Annexure – II) Thefinancial 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 Sankhya SARL Sankhya US
India Private Limited France Corporation
Total Income NIL NIL NIL
Total Expenses (7.44) NIL NIL
Profit Before Tax (7.44) NIL NIL
Current Tax NIL NIL NIL
Deferred Tax NIL NIL NIL
Previous Years Tax Provision NIL NIL NIL
Profit/(Loss) for the period (7.44) NIL NIL

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.

There are no associate companies or joint venture companies within the meaning ofsection 2(6) of the Companies Act

2013. There has been no material change in the nature of the business of thesubsidiaries.

CONSOLIDATED FINANCIAL STATEMENTS (CFS)

The Consolidated Financial Statements of your Company for the financial year 2016-17are prepared in compliance with applicable provisions of the Companies Act 2013 readwith the Rules issued there under 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.

DIVIDEND

The Company's objective is to achieve the status which can facilitate a steady andconsistent distribution of profits by way of Dividend to its shareholders. Depending onfunding requirements future funding needs as per the Company's growth plans yourDirectors have not recommended payment of Dividend for the Financial Year 2016-17.

TRANSFER TO RESERVE

The Company has proposed to transfer a sum of Rs. 476.21

Lakhs to General Reserve out of the profits

Company at the standalone level for the financial year ended

31st March 2017.

AUTHORISED SHARE CAPITAL

The Authorized Share Capital of the Company stands at Rs. 150000000/- (RupeesFifteen Crores Only) divided into

15000000 (One Crore Fifty Lakhs Only) Equity Shares of

Rs. 10/- (Rupees Ten Only) each.

During the Year there has been no change in the Authorized Share Capital of theCompany.

PAID UP SHARE CAPITAL

The Paid Up share Capital of the Company stands at Rs. 112452050/- (Rupees ElevenCrore Twenty Four Lakhs

Fifty Two Thousand and Fifty Only) divided into 11245205 (One Crore Twelve LakhsForty Five Thousand Two Hundred and Five) Equity Shares of Rs. 10/- (Rupees Ten Only)each.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Loans Guarantees and Investments covered under Section

186 of the Companies Act 2013 form part of the notes to the financial statementsprovided in this Annual Report.

DEPOSITS

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 and Analysis Report which forms part of the Directors' Report.earned by the As per the provisions of Section 134(5)(e) of the Companies Act 2013 theDirectors have an overall responsibility for ensuring that the Company has implementedrobust systems/ framework of internal financial controls to provide them with reasonableassurance regarding the adequacy and operating effectiveness of controls with regards toreporting operational and compliance risks. To enable the Directors to meet theseresponsibilities the Board has devised systems/ frameworks which are operating within theCompany. In line with best practice the Board regularly reviews the internal controlsystem to ensure that it remains effective and fit for purpose. Where weaknesses areidentified as a result of the reviews new procedures are put in place to strengthencontrols and these are in turn reviewed at regular intervals.

The systems/ frameworks include proper delegation of authority policies andprocedures effective IT systems aligned to business requirements internal auditframework ethics framework risk management framework and adequate segregation of dutiesto ensure an acceptable level of risk. Your Company has documented Standard OperatingProcedures (SOPs) for procurement project/ expansion management capex human resourcessales and marketing finance compliance and (HSE) Health Safety and Environment.

DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THE YEAR

Based on the confirmations received none of the Directors are disqualified for beingappointed/re in terms of Section 164 of the Companies Act 2013.

Pursuant to the provisions of section 196 197 198 and

203 read with schedule V of the Companies Act 2013 Mr. N Sridhar (DIN 00089548) wasre-appointed as Managing

Director in the last Annual General Meeting of the Company held on 29thSeptember 2016 for a period of Three (3) years.

Pursuant to the provisions of section 149 and 152 read with schedule IV of theCompanies Act 2013 Mr. Pudhota Partha

Saradhi (DIN: 07516057) was appointed as Independent

Director in the last Annual General Meeting of the Company held on 29thSeptember 2016 for a period of Five (5) years. Pursuant to the provisions of section 149and 152 read with schedule IV of the Companies Act 2013 Mr. Anand Cherukupalli (DIN:02783203) was re-appointed as

Independent Director in the last Annual General Meeting of the Company held on 29thSeptember 2016 for a period of Five (5) years.

In accordance with the provisions of the Companies Act 2013 and in terms of Articlesof Association of the Company Mr. N Sridhar (DIN: 00089548) Director of the Company isliable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.

Ms. Kishwar Fatima was appointed as Company Secretary & Compliance officerof theCompany in lieu of resignation of

Ms. Neha Pamnani in the Board Meeting duly held on 9th January 2017.

Cessation:

Ms. Neha Pamnani who was appointed as Company Secretary of the Company in the BoardMeeting held on 28th May 2016 has submitted her resignation on 30thDecember 2016 stating her inability to continue as Company Secretary of the

Company due to personal commitments same was approved by the Board in its Meetingdated 9th January 2017.

GOVERNANCE GUIDELINES

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 the Companies Act 2013 and Regulation

34 of SEBI (Listing Obligations and Disclosure Requirements)

Regulations 2015 is provided in the Corporate Governance Report.

As per provisions of the Companies Act 2013 and Regulation

17(10) of the SEBI(LODR) Regulations 2015 the Board adopted a formal performanceevaluation policy for evaluating its performance and as well as that of its Committees andindividual Directors including the Chairman of the

Board. The exercise was carried out through a structured -appointed asdirectorsevaluation process covering various aspects of the Board's functioning such as compositionof the Board & committees experience & competencies performance of specificduties & obligations etc. Separate exercise was carried out to evaluate theperformance of individual Directors including the Board Chairman who were evaluated onparameters such as attendance contribution at the meetings and otherwise independentjudgement etc. The evaluation of the Independent Directors and that of the Chairman wascarried out by the entire Board excluding the Director being evaluated and the evaluationof Non-Independent Directors was carried out by the Independent Directors. A separatemeeting of Independent Directors was also held during the year wherein the performance ofChairman Board Executive Directors was evaluated. The Directors were satisfied with theevaluation results which reflected the overall engagement of the Board and its Committeeswith the Company.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSECTION 149 OF THE COMPANIES ACT 2013

The Independent Directors have submitted the Declaration of

Independence as required pursuant to Section 149 (7) of the

Companies Act 2013 stating that they meet the criteria of independence as provided inSub-Section (6) of section 149 of Companies Act 2013.

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. (Annexure IV) The Company is committed to the tenets of good Corporate

Governance and has taken adequate steps to ensure that the requirements of CorporateGovernance as laid down in SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 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. N. Sridhar Chairman and Managing Directorforms part of the Corporate Governance Report. (Annexure V) Komandoor & Co. LLPChartered Accountants in practice has certified that the Company has complied with theconditions of Corporate Governance as stipulated in Chapter

IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 pursuantto the Listing Agreement of the Company with Stock Exchange. (Annexure VI)

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.

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions with Promoters Directors Key Managerial Personnelor other designated persons which may have a potential conflict with the interest of theCompany at large. Your Directors draw attention of the members to Notes 27(3) to thefinancial statement which sets out related party disclosures.

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 Governance

Report. 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

Pursuant to the requirements under Section 134 of the Companies Act 2013 with respectto the Directors'

Responsibility Statement the Board of Directors of the

Company hereby confirms:

(i) that in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards have been followed and that there are nomaterial departures; (ii) that the directors have selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at 31stMarch 2017 and Statement of Profit and Loss of the Company for that period; (iii) thatthe directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act

2013 for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; (iv) that the directors have prepared the annual accounts forthe financial year ended 31st March 2017 on a going concern basis;

(v) that the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; (vi) That the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the

Company during the financial

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.

DISCLOSURE PERTAINING TO SEXUAL HARASSMENT OF WOMEN AT WORKPLACE made by theCompany Your Company has always believed in providing a safe and harassment free workplacefor every individual working in premises through various interventions and practices.

The Company always endeavors to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment.

Also During the Financial year ended 31st March 2017 the Company hasneither received any complaints nor there are any pending complaints pertaining to sexualharassment.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The requisite details as required by Section 177 of the

Companies Act 2013 and Regulation 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 Regulators or Courts or Tribunals which wouldimpact the going concern status of the Company's operations in future during the yearunder review.

AUDITORS

(1) Statutory Auditors:

M/s. Komandoor & Co. LLP Chartered Accountants

Hyderabad (ICAI Firm Registration No. 001420S) have been appointed for 5 years asStatutory Auditors of the

Company to hold the office upto the conclusion of 23rd

Annual General Meeting to be held in the year 2020.

M/s. Komandoor & Co. LLP Chartered Accountants

Hyderabad have tendered their resignation from the position of Statutory Auditors witheffect from 28th

November 2017 due to pre-occupation resulting into a casual vacancy in the office ofStatutory Auditors of the company as envisaged by section 139(8) of the Companies Act2013 ("Act"). Casual vacancy caused by the resignation of auditors can only befilled up by passing a resolution by the members of the Company at general meeting.

Board proposes that M/s. Ravi Rajan & Co. Chartered

Accountants New Delhi be appointed as the Statutory Auditors of the Company to fillthe casual vacancy caused by the resignation of M/s. Komandoor & Co. LLP

Chartered Accountants Hyderabad. M/s. Ravi Rajan &

Co. Chartered Accountants New Delhi have conveyed their consent to be appointed asthe Statutory Auditors of the Company.

Pursuant to the applicable provisions of Companies Act 2013 and relevant rulesprescribed there under the Company has received an eligibility letter from the auditorsto the effect that their appointment if made would be within the limits laid down by theAct shall be as per the term provided under the Act that they are not disqualified forsuch appointment under the provisions of applicable laws and also that the list ofproceedings against them or any of their partners pending with respect to professionalmatter of conduct as disclosed in the certificate is true and

Resolution seeking your approval on this item is included in the Notice of the ensuingAnnual General Meeting

Auditors' Report

The Auditors' Report does not contain any reservation qualification or adverseremarks.

M/s. Komandoor & Co. Statutory Auditors of the Company has submitted Auditors'Report on the Standalone and Consolidated Financial Statements for the year ended on 31stMarch 2017.

(2) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company had appointed Mr. Narendra Purohit to undertake the SecretarialAudit of the Company for the year ended 31st March 2017. The Secretarial AuditReport in the Form MR-3 is annexed as

Annexure VII.

The Secretarial Audit Report for the Financial year ended

31.03.2017 contains the following qualification: The Company did not have ChiefFinancial Officer as required under Section 203 of the Companies Act 2013 read with Rule8 of the Companies (Appointment and

Remuneration of Managerial Personnel) Rule 2014.

Managements explaination to the above Auditors qualification: The CFO has beenappointed and CFO will be taking charge effective from 1st January 2018.

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 read with 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 optimum utilization and maximumpossibility 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.

Research and Development (R & D):

1. Specific areas in which R & D carried out by the Company: The Companycontinues to focus and invest in R &

D activities for developing and improving the quality and enhancing the benefits of itssoftware products.

The Company is a product oriented Company and

. the continuous development of new products and the existing products is an ongoingexercise.

2. Benefits derived as a result of the R & D:

Research and development of new products & processes will continue to be ofimportance to your Company. Products although have a longer gestation are of higherbenefit to the Company and its profitability in the long run.

3. Future plan of Action:

The Company continues to strive for development and innovation of new products andimproving the existing ones in order to meet the changing requirements and to cater tocustomer needs.

C. Foreign exchange earnings and outgo The foreign exchange earned in terms ofactual inflows during the year and the foreign exchange outgo during the year in terms ofactual outflows:

2016-17 2015-16
Foreign exchange earnings 16138.15 15220.24
Foreign exchange outgo 13033.57 13220.45

PARTICULARS OF REMUNERATION

The information relating to remuneration of Directors and details of the ratio of theremuneration of each Director to the median employee's remuneration and other details asrequired pursuant to section 197(12) of the Act read along with Rule 5(1) of the Companies(Appointment and

Remuneration of Managerial Personnel) Rules 2014 is annexed. (Annexure-VIII) Pursuantto Rule 5(2) of the Companies (Appointment and Remuneration Managerial Personnel) Rule2014 there are no employees who are in receipt of remuneration of Rs. 102 Lakhs or moreper annum or Rs. 8.5 Lakhs or more per month or where employed for a part of the year.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return prepared in Form MGT-9 as per the provisions of Section 92of the Companies Act 2013 read with Rule 12 of the Companies (Management and

Administration) Rules 2014 is enclosed as Annexure III to this Report.

CEO/CFO CERTIFICATION

Mr. N Sridhar Chairman and Managing Director of the Company have given a certificateto the Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

RISK MANAGEMENT

All assets of the Company and other potential risks have been adequately insured.

The Board of Directors has adopted an Enterprise Risk

Management Policy framed by the Company which identifies the risk and lays down therisk minimization procedures. These procedures are periodically reviewed to ensure thatexecutive management controls risk through means of a properly defined framework.

EMPLOYEE RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during theyear and the management received full co-operation from the employees.

DECLARATION WITH THE COMPLIANCE WITH THE CODE OF CONDUCT BY MEMBERS OF THE BOARD ANDSENIOR MANAGEMENT PERSONNEL

The Company has complied with the requirements about code of conduct for Board membersand Sr. Management

Personnel. The said policy is available on the website of the Company www.sankhya.net

APPRECIATION

Your Board of Directors are pleased to place on record their appreciation of theco-operation and support extended by the Financial Institutions Banks various State andCentral Board Government Agencies and governments of various countriesas contemplated inwhere we have our operations.

The Board would also like to thank the Company's shareholders customers suppliers forthe support and the confindence which they have reposed

The Board place on record its appreciation of the contribution made by the employees atall levels for their hard wotk solidarity co-operation and support.

For and on behalf of the Board of Directors of
Sankhya Infotech Limited
N. Sridhar
Date: 2nd November 2017 Chairman & Managing Director
Place: Hyderabad DIN: 00089548