The Board of Directors hereby submits the report of the business and operations of yourCompany along with the audited financial statements for the financial year ended 31stMarch 2020.
The Company's performance during the financial year ended 31st March 2020is summarized below:
(Rs. In Lakhs)
|Particulars || |
Financial figures for the year ended
| ||31-03-2020 ||31-03-2019 |
|Revenue From Operations ||159.97 ||16404.73 |
|Other Income ||28.42 ||18.06 |
|Total Revenue ||188.39 ||16422.79 |
|Employee Benefit Expenses ||3255.49 ||9420.28 |
|Other Operating Expenses ||319.83 ||1194.64 |
|Finance Cost ||51.09 ||432.53 |
|Depreciation and Amortization Expense ||910.38 ||1002.35 |
|Other Expenses ||2742.05 ||4524.59 |
|Total Expenses ||7278.84 ||16574.42 |
|Profit Before Exceptional and Extraordinary Items and Tax ||(7090.45) ||(151.63) |
|Extraordinary Items ||- ||- |
|Profit Before Tax ||(7090.45) ||(151.63) |
|Current Tax ||- ||- |
|Deferred Tax ||30.58 ||8.94 |
|Profit/(Loss) for the period ||(7121.03) ||(160.57) |
|Basic and Diluted Earnings per Share (Rs.) ||(48.78) ||(1.22) |
REVIEW OF OPERATIONS
For the Financial year ended 31st March 2020 as follows:-FinancialPerformance
Total Revenue for the current year was Rs 159.97 Lakhs.
Profit / (Loss) before Exceptional and Extraordinary Items and Tax was Rs.(7090.45) Lakhs.
Net Profit / (Loss) were Rs. (7121.03) Lakhs.
Basic and diluted Earnings per Share (EPS) were Rs. (48.78) for the year.
The Company's current year financial summary and highlights are mentioned in theManagement Discussion and Analysis Report annexed to this report.
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 FY 19-20 which indicates that the company incurreda net loss of Rs.(7111.69) lakhs during the year ended March 31st 2020 and asof that date the Company's current liabilities exceeded its total Assets by Rs. 3694.62lakhs.
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. No business operations in the subsidiary companies during the year and closure ofsubsidiary companies.
4. As there are no contracts to execute there are no employees continuing in thecompany at the end of financial year.
5. Negative working capital.
6. Overdue working capital loans from IDBI Bank Ltd.
IDBI Bank has initiated forensic audit DRT and Insolvency and Bankruptcy Code2016(IBC) proceedings against the Company However as on the date of the report the IBCcase has not been admitted against the Company.
INFORMATION ABOUT FINANCIAL PERFORMANCE / FINANICIAL POSITION OF THE SUBSIDIARIES/BRANCHES/ASSOCIATES/JOINT VENTURES
There are no Subsidiaries/Branches/Associates/Joint Ventures
As the Company has reported losses for the last two financial year's your Directorshave not recommended payment of Dividend for the Financial Year 2019-20.
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.
20.00. 00.000/- (Rupees Twenty Crores Only) divided into
2.00. 00.000 (Two Crores Only) Equity Shares of Rs. 10/- (Rupees Ten Only) each.
PAID UP 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.
During the year under review Company has allotted 1451852 equity shares to Promoter/ Promoter Group upon conversion of warrants on 05.07.2019 as a result of the allotmentof equity shares the paid-up share capital of the Company has increased from Rs.131452050 (Rupees Thirteen Crores Fourteen Lakhs Fifty Two Thousand and Fifty Only) toRs. 145970570 divided into 14597057 Equity Shares of Rs. 10/- 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.
The Company has complied with the applicable provisions of Companies Act 2013 andrules framed there under in respect of section 186 of the Companies Act 2013.
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 internal controls system are given in the Management Discussion andAnalysis Report which forms part of the Directors' Report.
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL
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.
In accordance with the provisions of the Companies Act 2013 and in terms of Articlesof Association of the Company Mr. Sridhar Krishna (DIN:00089548) Director of the Companyis liable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
During the Financial Year Mr. Ramamohan Reddy Yarragudi (DIN: 08517059) has beenappointed as the Additional Director (Non-Executive Independent Director) of the Companyw.e.f. 23.07.2019 and Ms. Putcha Sarada has been appointed as the Additional Director(Non-Executive Independent Director) of the Company w.e.f. 09.08.2019 and the saidDirectors Mr.Ramamohan Reddy and Ms.Putcha Sarada has been appointed as IndependentDirectors after the approval of the shareholders at the ensuing Annual General Meetingheld on 30.09.2019.
Ms. Ruksana Sultana was appointed as the Chief Financial Officer of the Company w.e.f.19.04.2019.
After the closure of the financial year Mr. Sridhar Krishna has been appointed asChief Financial Officer w.e.f 15.09.2020 and Mr. Pratik Jain has been appointed as theCompany Secretary and Compliance Officer of the Company w.e.f. 05.10.2020.
Ms. N. Nalini has resigned w.e.f. 11.07.2019 Mr. Anil Valluri has resigned w.e.f.24.07.2019 and Mr. Bhaskar Pramanik has resigned w.e.f. 23.07.2019 due to personalreasons.
Ms. Munmun Baid Company Secretary and Compliance Officer has resigned w.e.f.08.11.2019 due to personal commitment Ms. Ruksana Sultana Chief Financial Officer hasresigned w.e.f. 31.12.2019 due to personal commitment.
Except above there was no change in the Composition of the Board and in the KeyManagerial Personnel.
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
Pursuant to requirement under Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors has constitutedvarious committees of Board such as Audit Committee Nomination and RemunerationCommittee Stakeholders Relationship Committees and Corporate Social ResponsibilityCommittee. The details of Composition and terms of reference of these committees arementioned 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.
The board of directors has carried out an annual evaluation of its own performanceboard committees Independent Directors Chairperson and Managing Director andNon-Executive and Non-independent Directors pursuant to the provisions of the schedule IVof the Companies Act 2013 and the corporate governance requirements as prescribed bySecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation of the working of its Board Committees. Astructured questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations and governance.
A meeting of the Independent Directors was also held which reviewed performance ofnon-independent directors performance of the board as a whole and performance of thechairman after taking in to account the views of executive directors and non-executivedirectors.
The same was discussed in the board meeting at which the performance of the board itscommittees and individual directors was also discussed. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing 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 2019-2020 are also disclosed on theCompany's website at www.sankhya.net/investors.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSECTION 149 OF THE COMPANIES ACT 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.
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 inSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are compliedwith. A separate report on Corporate Governance is being presented as part of the AnnualReport and is attached as Annexure - I.
A declaration of Code of Conduct from Mr. Sridhar Krishna Chairman and ManagingDirector forms part of the Corporate Governance Report.
M/s. Ravi Rajan& Co. 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 and is 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 bythe Company with Promoters Directors Key Managerial Personnel or other designatedpersons which 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 2019-20 Eight 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.
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 herebyconfirms:
i. that in the preparation of the annual accounts for the financial year ended 31stMarch2020the applicable accounting standards have been followed and that there are no materialdepartures;
ii. that the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and Statement of Profit and Loss of the Company for that period;
iii. that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the directors have prepared the annual accounts for the financial year ended31st March 2020 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 with theprovisions 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 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 31stMarch2020 the Company has neitherreceived any complaints nor there are any pending complaints pertaining to sexualharassment.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
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
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company's operations infuture during the year under review.
The members of the Company at their Annual General Meeting (AGM) held on 28thNovember 2017 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.
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 2019-2020.
Cost Audit is not applicable to your Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:
There have been no frauds reported by the auditors u/s 143(12).
AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
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 Directors
of the Company had appointed Ms. Pooja Ojha to undertake the Secretarial Audit of theCompany for the year ended 31st March2020 The Secretarial Audit Report in theForm MR-3 is attached as Annexure-VII.
The Secretarial Audit Report for the financial year ended 31.03.2020 contains thefollowing qualifications:
a. The Company do not have Chief Financial officer as required under section 203 of theCompanies Act 2013 read with Rule 8 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rule 2014.
b. The Company do not have Company Secretary as required under section 203 of theCompanies Act 2013 read with Rule 8 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rule 2014.
Management explanation to the above secretarial auditors' qualifications:
a. The Company has appointed Ms. Ruksana Sultana as the Chief Financial Officer of theCompany w.e.f. 19.04.2019. However due to personal reasons the Chief Financial officerhas resigned on 03.12.2019.and the Company has appointed Mr. Sridhar Krishna as ChiefFinancial Officer W.E.F 15.09.2020.
b. The Company Secretary Ms. Munmun Baid has resigned from the Company on 08.11.2019due to personal reasons and the Company has appointed Mr. Pratik Jain on 5thOct 2020 as Company Secretary and Compliance Officer.
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 ||2019-2020 ||2018-2019 |
|Foreign exchange earnings ||130.79 ||16396.24 |
|Foreign exchange outgo ||5465.93 ||14071.74 |
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 samecan be checked bymaking a request through e-mail at email@example.com between 15.12.2020 to19.12.2020.
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.
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 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 andAdministration) Rules 2014 is attached as Annexure II to this Report and isdisclosed on website of the Company at www.sankhya.net/investors.aspx.
Mr. Sridhar Krishna Chairman and Managing Director 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.
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.
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 and on behalf of the Board of Directors of Sankhya Infotech Limited
|Date: 9th Dec 2020 ||(Sridhar Krishna) |
|Place: Hyderabad ||Chairman & Managing Director DIN: 00089548 |