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Sankhya Infotech Ltd.

BSE: 532972 Sector: IT
NSE: N.A. ISIN Code: INE877A01013
BSE 00:00 | 01 Jul 6.78 -0.35
(-4.91%)
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NSE 05:30 | 01 Jan Sankhya Infotech Ltd
OPEN 6.78
PREVIOUS CLOSE 7.13
VOLUME 15483
52-Week high 20.70
52-Week low 4.85
P/E
Mkt Cap.(Rs cr) 10
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.78
CLOSE 7.13
VOLUME 15483
52-Week high 20.70
52-Week low 4.85
P/E
Mkt Cap.(Rs cr) 10
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

RESOLUTION PROFESSIONAL REPORT

To the Members

SANKHYA INFOTECH LIMITED

The Resolution Professional takes pleasure in presenting the 24th Annual Report of theCompany together with the Audited Statements of Accounts for the year ended 31st March2021.

FINANCIAL RESULTS:

The financial performance during the period ended 31st March 2021 is as under:

(Rs.In Lakhs)

Particulars 2020-21 2019-20
Revenue From Operations - 159.97
Other Income - 28.42
Total Revenue - 188.39
Employee Benefit Expenses 0.01 3255.49
Other Operating Expenses 5.71 319.83
Finance Cost 5.60 51.09
Depreciation and Amortization Expense 767.87 910.38
Other Expenses 19.53 2742.05
Total Expenses 798.72 7278.84
Profit Before Exceptional and Extrodinary Items and Tax (798.72) (7095.45)
Extraordinary Items - -
Profit BeforeTax (798.72) (7095.45)
Current Tax - -
Deferred Tax (40.09) 30.58
Profit/(Loss) for the period (750.63) (7121.03)
Basic and Diluted Earnings per Share (Rs.) (5.14) (48.78)

REVIEW OF OPERATIONS:

For the Financial year ended 31st March 2021 as follows:- FinancialPerformance

• Total Revenue for the current year is Nil

• Profit/(Loss) before Exceptional and Extraordinary Items and Tax is Rs. (798.72)Lakhs

• Net Profit/(Loss) is Rs. (750.63) Lakhs

• Basic and diluted EPS is Rs. (5.14) for the year

The Company's current year financial summary and highlights are mentioned in theManagement Discussion and Analysis Report annexed to this report.

STATUS OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP):

The present situation is summarized as follows:

Corporate Insolvency Resolution Process ('CIRP') has been initiated for the Companyunder the provisions of Section 7 of the Insolvency and Bankruptcy Code 2016 ('IBC') bythe National Company Law Tribunal Hyderabad Bench ('Adjudicating Authority') vide Orderdated 28th July 2021 in CP(IB)No. 235/7/HDB/2020 ('order').

Mr. Jagadees Kumar Morri (IP Registration No.IBBI/IPA-001/ IP-P00398/2017- 2018/10716)was appointed as Interim Resolution Professional. His appointment was subsequentlyconfirmed by the Committee of Creditors ('COC') as the Resolution Professional (the 'RP')in the first COC meeting held on 26th August 2021.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

There are material changes and commitments affecting the financial position of theCompany during the financial year.

As per the financial statements for FY20-21 which indicates that the company incurreda net loss of Rs. (750.63) lakhs during the year ended March 31st 2021 and asof that date the Company's current liabilities exceeded its current assets by Rs. 3725.46lakhs.

The events and conditions as set below indicate that a material uncertainty existsthat may cast significant doubt on the company's ability to continue as a going concern.

1. Substantial increase in losses.

2. Continuous cancellation of orders and no new orders to execute.

3. As there are no contracts to execute there are no employees continuing in thecompany at the end of financial year.

4. Negative working capital.

5. Overdue working capital loans from IDBI Bank Ltd.

INFORMATION ABOUT FINANCIAL PERFORMANCE/ FINANICIAL POSITION OF THE SUBSIDIARIES/BRANCHES/ASSOCIATES/JOINTVENTURES

There are no Subsidiaries/Branches/Associates/Joint Ventures.

DIVIDEND

As the Company has reported losses for the last two financial years your Directors havenot recommended payment of Dividend for the Financial Year 2020-21.

TRANSFER TO RESERVE

During the year under review company has not transferred any amount to reserves.

AUTHORISED SHARE CAPITAL

The Authorized Share Capital of the Company stands at Rs.200000000/-(Rupees TwentyCrores Only) divided into 20000000 (Two Crores Only) Equity Shares of Rs.10/- (RupeesTen Only) each.

PAIDUP SHARE CAPITAL

The Paid Up share Capital of the Company stands at Rs.145970570/-(Rupees FourteenCrores Fifty Nine Lakhs Seventy Thousand and Five Hundred and Seventy Only) divided into14597057(One Crore Forty Five Lakhs Ninety Seven Thousand Fifty Seven Only) EquityShares 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 2013form part of the notes to the financial statements provided in this Annual Report. TheCompany has complied with the applicable provisions of Companies Act 2013 and rulesframed there under in respect of section 186 of the Companies Act 2013.

DEPOSITS

The Company has neither accepted nor renewed any deposits from public within themeaning of Section 76 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 has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed. Details of the internalcontrols system are given in the Management Discussion and Analysis Report which formspart of the Resolution Professional's Report.

DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL UPTO COMMENCEMENT OF CIRP

None of the directors of the company are disqualified under the provisions of theCompanies Act 2013('Act') or under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. All Independent Directors have provided confirmations ascontemplated under section 149(7) of the Act up to commencement of CIRP. After initiationof CIRP the powers of the board stood suspended.

Mr. Sridhar Krishna has been appointed as Chief Financial Officer w.e.f. 15.09.2020;Mr. Pratik Jain has been appointed as the Company Secretary and Compliance Officer of theCompany w.e.f. 05.10.2020 and Pratik Jain resigned as Company Secretary and ComplianceOfficer w.e.f. 05.04.2021; and Mr. Partha Saradhi Pudhota (Vacation of office u/s 167 on30.06.2021). Mrs. Dipti S Pacholi has been appointed as Company Secretary and ComplianceOfficer w.e.f. 01.11.2021

Except above there was no change in the Composition of the Board and in the KeyManagerial Personnel.

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.

COMMITTEES OF THE BOARD UPTO COMMENCEMENT OF CIRP

Pursuant to requirement under Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors has constitutedvarious committees such as Audit Committee Nomination and Remuneration CommitteeStakeholders Relationship Committees and Corporate Social Responsibility Committee. Thedetails of Composition and terms of reference of these committees that were up tocommencement of CIRP are mentioned in the Corporate Governance Report.

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.

Up to initiation of CIRP the board of directors has carried out an annual evaluationof its own performance board committees Independent Directors Chairperson and ManagingDirector and Non-Executive and Non-independent Directors pursuant to the provisions of theschedule IV of the Companies Act 2013 and the corporate governance requirements asprescribed by Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

Up to initiation of CIRP the Board has carried out the annual performance evaluationof its own performance the Directors individually as well as evaluation of the working ofits Board Committees. A structured questionnaire was prepared covering various aspects ofthe Board's functioning such as adequacy of the composition of the Board and itsCommittees Board Culture execution and performance of specific duties obligations andgovernance.

Up to initiation of CIRP A meeting of the Independent Directors was also held whichreviewed performance of nonindependent directors performance of the board as a whole andperformance of the chairman after taking in to account the views of executive directorsand non-executive directors.

Up to initiation of CIRP The same was discussed in the board meeting at which theperformance of the board its committees and individual directors was also discussed.Performance evaluation of independent directors was done by the entire board excludingthe independent director being evaluated.

FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

Independent Directors are familiarised about the Company's operations and businesses.Interaction with the Business heads and key executives of the Company is also facilitated.Detailed presentations on important policies of the Company is also made to the directors.The details of familiarisation programme held in FY 2020-2021 are also disclosed on theCompany's website at www.sankhya.net/investors.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER 149 (6) OF THE COMPANIESACT 2013

All the Independent Directors of the Company have given declaration stating that theymeet the criteria of independence as provided under Companies Act 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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 developmentsoperational performance of its various business segments and is attached as Annexure -III.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

The Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 34 of SEBI LODR Regulations till commencement of CIRP.A report on theCorporate Governance is included as a part of this Annual Report and is attached asAnnexure - I.

A declaration of Code of Conduct from Mr. Jagadees Kumar Morri Resolution Professionalforms part of the Corporate Governance Report.

A Certificate from the Statutory Auditors of the Company M/s. Ravi Rajan & Co.Chartered Accountants confirming compliance with the conditions of the CorporateGovernance as stipulated under above regulation is included as a part of this Report andis attached as Annexure - V.

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. The policy for relatedparty transactions is available on the website of the Company at www.sankhya.net/policies.

There were no related party transactions entered into by the Company during thefinancial year. There are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.

Your Directors draw attention of the members to Notes 25(4) to the financial statementwhich sets out related party disclosures.

BOARD AND COMMITTEE MEETINGS

During the financial year 2020-21 Six Board Meetings were held. The details of thecomposition of the Board and its Committees and of the Meetings held and attendance of theDirectors at such Meetings are provided in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the Section173(1) of the Companies Act 2013 and Regulation 17(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

RESOLUTION PROFESSIONAL'S RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 I hereby state and confirm thatthe Company:

a. in the preparation of the annual accounts for the year ended 31stMarch2021 has followed the applicable accounting standards along with proper explanationrelating to material departures;

b. has selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the Profit/ Loss of the Company for the same period;

c. has taken proper and sufficient care for maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d. has prepared the annual accounts on a going concern basis;

e. has laid down internal financial controls and these are adequate and are operatingeffectively.

f. has devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.

CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the financialyear under review.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of section 135 is not applicable to the Company. However the Companyhas constituted the CSR Committee with Mr. Sridhar Krishna as the Chairman Mr. RamamohanReddy Yarragudi as the Member and Ms. Putcha Sarada as the Member of the Committee.

DISCLOSURE PERTAINING TO SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has always believed in providing a safe and harassment free workplace forevery individual working in premises through various interventions and practices. TheCompany always endeavours to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment.

During the Financial year ended 31st March2021 the Company has neitherreceived any complaints nor there are any pending complaints pertaining to sexualharassment.

VIGIL MECHANISM:

The Board of Directors of the Company has adopted Whistle Blower Policy. This policy isformulated to provide an opportunity to employees and an avenue to raise concerns and toaccess in good faith the Audit Committee to the highest possible standards of ethicalmoral and legal business conduct and its commitment to open communication in case theyobserve unethical and improper practices or any other wrongful conduct in the Company toprovide necessary safeguards for protection of employees from reprisals or victimizationand to prohibit managerial personnel from taking any adverse personnel action againstthose employees. During the year the Whistleblower policy was amended inline with SEBI(Prohibition of Insider Trading) (Amendment) Regulations 2018 enabling the employees toreport any violations under the insider trading regulations and leak of UnpublishedPrice-Sensitive Information (UPSI) and the policy is available on the website of theCompany at www.sankhya.net/Policies.aspx.

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

Corporate Insolvency Resolution Process ('CIRP') has been initiated for the Companyunder the provisions of Section 7 of the Insolvency and Bankruptcy Code 2016 ('IBC') bythe National Company Law Tribunal Hyderabad Bench ('Adjudicating Authority') vide Orderdated 28th July 2021 in CP(IB)No. 235/7/HDB/2020 ('order').

Mr. Jagadees Kumar Morri (IP Registration No.IBBI/IPA-001/ IP-P00398/2017- 2018/10716)was appointed as Interim Resolution Professional. His appointment was subsequentlyconfirmed by the Committee of Creditors ('COC') as the Resolution Professional (the 'RP')in the first COC meeting held on 26th August 2021.

AUDIT OBSERVATIONS:

The observations given by the Auditors are suitably explained in the Notes to Accountsand are self-explanatory.

AUDITORS:

Statutory Auditors:

The members of the Company at their Annual General Meeting (AGM) held on 28th November2017 have appointed M/s. Ravi Rajan & Co. Chartered Accountants (ICAI FirmRegistration Number 009073N) as statutory auditors of the Company to hold office untilthe conclusion of 25th Annual General Meeting of the Company to be held in the year 2022which was subject to ratification as per the provisions of Companies Act 2013.

However pursuant to notification from the MCA dated 07.05.2018 ratification ofappointment of statutory auditors at every Annual General Meeting has been dispensed with.

Internal Auditors:

Pursuant to the provisions of Section 138 of the Companies read with rules made thereunder the Board has appointed M/s. RRCO Consulting Private Limited New Delhi as InternalAuditors of the Company for the financial year 2020-2021.

Cost Audit:

Cost Audit is not applicable to your Company.

Secretarial Auditors:

M/s. Pooja Ojha Practicing Company Secretaries Nagpur have been appointed as theSecretarial Auditors to conduct the Secretarial Audit of the Company for the FinancialYear 2020-21. The Secretarial Audit Report for the year ended 31stMarch 2021 (in FormMR-3) submitted by them is enclosed to this Report as Annexure-VII.

THE SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31.03.2021 CONTAINS THEFOLLOWING QUALIFICATIONS:

a. As mandated under Regulation 17(4) SEBI LODR Regulations 2015 for SeniorManagement the Company did not have a Chief Financial officer for the period startingfrom 01/04/2020 till 14/09/2020.

b. As mandated under Regulation 6(1) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI LODR Regulations) 2015 alisted entity shall appoint a qualified company secretary as the compliance officer theCompany was not having a Qualified Company Secretary as Compliance Officer for the periodstarting from 01/04/2020 till 04/10/2020.

c. The company also failed to comply with Regulation 23(9) of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 forSeptember 2020 for disclosure of Related Party Transactions and file with Bombay StockExchange (BSE) on time for which the company was imposed fine of Rs. 3 Lakhs.

d. As mandated under Secretarial Standards and various provisions of the Companies Act2013 the Company has failed to provide sufficient information as regards to circulationof minutes of the various Board Meetings/ Committee meetings held during the year underreview.

MANAGEMENT EXPLANATION TO THE ABOVE SECRETARIAL AUDITORS' QUALIFICATIONS:

a. The Company has appointed Mr. Sridhar Krishna as Chief Financial Officer on15/09/2020.

b. The Company has appointed a Qualified Company Secretary on 05/10/2020.

c. The Company made application to BSE for waiving the fine and also rectified thedefect by filing the disclosure with BSE.

d. The company didn't have a full time Company Secretary for the continuous periodunder review and neither there were any employee (except the office of Company Secretaryfor limited period) owing to which the company was tardy in maintaining and at someinstances in retrieving the circulation of minutes sent to the Directors whereas thecompany has adhered to the other compliances in reporting the same duly to BSE/ROC/makingnewspaper advertisements where ever mandated and as may be applicable. Although noDirectors has raised any objection for the same and were continuously attending themeetings and has taken or record the minutes circulated except for the director Mr.Partha Saradhi Pudhota who continuously abstained himself from attending the meetings forthe FY 2020-21.

DETAILS IN RESPECT OF FRAUDS QUALIFICATIONS MADE IF ANY REPORTED BY AUDITORS UNDER SUBSECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRALGOVERNMENT:

There have been no frauds reported by the auditors u/s 143(12).

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 optimumutilization 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.

Research and Development (R & D):

1. Specific areas in which R & D carried out by the Company:

The Company continues to focus and invest in R & D activities for developing andimproving the quality and enhancing the benefits of its software products. The Company isa product oriented Company and the continuous development of new products and the existingproducts is an ongoing exercise.

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 of actual inflows during the year and the foreignexchange outgo during the year in terms of actual outflows:

(Rs. in Lakhs)

Particulars 2020-2021 2019-2020
Foreign exchange Earnings Nil 130.79
Foreign exchange Outgo Nil 5465.93

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 attached as Annexure- VI.

In accordance with Section 136 of the Companies Act 2013 the same can be checked bymaking a request through e-mail at comp.officer@sankhya.net between 14.11.2021 to18.11.2021.

Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration ManagerialPersonnel) Rule 2014 there are no employees who are in receipt of remuneration of Rs.102 Lakhs per annum or Rs. 8.5 Lakhs or more per month if employed for a part of the year.

BOARD POLICIES:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies. All the policies areavailable on our website (www.sankhya.net/policies.aspx). The policies are reviewedperiodically by the Board and updated based on need and new compliance requirement.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexedhereto as Annexure - II.

CEO/CFO CERTIFICATION:

Mr. Jagadees Kumar Morri Resolution Professional of the Company have given acertificate to the Board as contemplated in Regulation 17(8) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and is attached as Annexure-IV.

RISK MANAGEMENT POLICY:

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

The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the company has laid down various steps to mitigate theidentified risk. The audit committee has additional oversight in the area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis.

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 Senior Management Personnel.

APPRECIATION:

The Board of Directors places on record its gratitude to Financial Institutions Banksvarious State and Central Government Agencies and governments of various countries wherewe had our operations. The Board also acknowledges the support of the shareholders of theCompany. The Board also places on record their deep sense of appreciation for thecommitted services of all the employees of the Company.

For SANKHYA INFOTECH LIMITED
Sd/-
Jagadees Kumar Morri Resolution Professional
Place: Hyderabad IP Registration No.IBBI/IPA-001/
Date: 03.11.2021 IP-P00398/2017-18/10716

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