BOARD'S REPORT To the Members, The Directors have pleasure in presenting before you the 18th Annual Report of the Company together with the Audited Statements of Accounts on standalone & consolidated basis for the year ended 31st March, 2015 BUSINESS OPERATIONS: The total revenue of the Company for the financial year under review on consolidated basis was Rs.18,198.46 Lakhs as against Rs.14,528.82 lakhs. The net profit was Rs.146.18 lakhs for the financial year as against the net profit of Rs. 88.81 lakhs for the previous year. OUT LOOK: Over the past three years, your company has been showing low profitability due to shifting of offshore jobs to onsite. The company experienced stress on margins in the past two years and due to the combined effect of low margins, lack of adequate working capital the company has experienced stress on margins. Annual Report of FYE'14 mentioned of the company's efforts to bring the onsite jobs back to India. The company has the pleasure to share that it is now reversing the trend and positive impact on profitability can be seen from the first quarter of FYE'16. Your company has an excellent order book and has renewed contracts with all the major customers. Your company projects that it would be able to return to good profitability and with steady growth. DIVIDEND: The Board of Directors are confident that with their efforts to strive hard to maximize the shareholders returns, the company would be able to declare dividend in the near future. SUBSIDIARY COMPANIES The Financial Details of the Subsidiary companies as well as the extent of holding therein are provided in a separate section of the Annual Report at Annexure 1: Under section 212(8) of the Companies Act, 1956 the ministry of Corporate Affairs has exempted from attaching a copy of the Balance sheet, Profit and loss accounts and Notes thereof, Director's Report and Auditors Report of the subsidiary companies and other documents required to be attached under section 212(1) of the act to the balance sheet of the company, Accordingly the said documents are not attached with the Balance Sheet of the Company. The Annual Accounts of the subsidiary Companies are available for inspection by any member/investor and the Company will make available these documents/details upon request by any member of the company or its subsidiaries interested in obtaining the same. However the data of the subsidiaries has been furnished along with the statement pursuant to section 212 of the Companies Act, 1956 forming part of the Annual Report. Further pursuant to Accounting Standard (AS)-21 issued by the Institute of Chartered Accountants of India, your company has presented the Consolidated Financial Statements which include financial information relating to its subsidiaries and forms part of the Annual Report. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of the Accounting Standards 21, issued by the institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors' Report thereon forms part of the Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT: The Management Discussion and Analysis as required under clause 49(VIII)(D) of the Listing Agreement forms a part of this Report. CORPORATE GOVERNANCE A Separate section titled "Report on Corporate Governance" along with the Auditors' Certificate on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms a part of this report. EXTRACT OF ANNUAL RETURN: As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report. DIRECTORS AND KEY MANANGERIAL PERSONNEL: During the year, Ms. Nalini Nadupalli was appointed as an Additional Director. Now the Board proposes to appoint her as a Director of the Company. Notice has been received from a Member proposing candidature of the Director namely Mr. Nadupalli Sridhar for the office of Director of the Company. In the opinion of the Board, she fulfils the conditions specified in the Companies Act, 2013 and the Rules made there under for appointment as Director of the Company. In line with the requirements of the Companies Act, 2013, it is therefore proposed to appoint a new additional director in the promoter category, as Director on the Board. A brief profile of the proposed Director, including nature of her expertise, is provided in the Annual Report. Mr. N. Sridhar will retire by rotation at the ensuing Annual General Meeting in terms of Section 152 and any other applicable provisions of the Companies act, 2013 and being eligible offers himself for re-appointment. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS The Company has received a declaration from Mr. ANAND CHERUKUPALU and Mr. VENKATESWARA RAO KRISHNA MURTHY JUJHVARAPU, Independent directors of the company to the effect that they are meeting the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013 and are annexed herewith. VIGIL MECHANISM: Vigil Mechanism Policy has been established by the Company for directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company. DIRECTOR'S RESPONSIBILITY STATEMENT: In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) The Directors had prepared the annual accounts on a going concern basis; and (e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. AUDITORS AND AUDITORS REPORT Your Company has decided to appoint M/s. Komandoor & Co., Chartered accountants as statutory Auditors for the current Financial Year 2015-16. The Board of Directors records its deepest appreciation to M/S T.R. Chadha & Co for the excellent services they have rendered during the previous two years. INTERNAL AUDIT: The Company has adequate internal audit control mechanism at all levels of the organisation. SECRETARIAL AUDIT: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of managerial personnel) Rules 2014, Mr. K. Bhima Sankara Rao, Practicing Company Secretary has conducted Secretarial Audit of the Company for the FY 2014-15. The Secretarial Audit Report for the FY 2014-15 is annexed hereto and forms part of this Annual report. The following observations has made by the Secretarial Auditor during his audit. i. The Company has not been regular in depositing its undisputed statutory dues in respect of Provident Fund, Employee State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authorities in India during the year. ii. The Company has created provision for TDS but the same has not been remitting with the Income Tax Department. The company has been fulfilling its obligations irregularly due to cash flow issues and low working capital availability. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: A. Conservation of Energy: Your Company's operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment. B. Technology Absorption: Your Company has not undertaken any research and development activity for any manufacturing activity nor was any specific technology obtained from any external sources which needs to be absorbed or adapted. C. Foreign Exchange Earnings and Out Go: Foreign Exchange Earnings : Rs. 17899.72 Lacs Foreign Exchange Outgo : Rs. 15714.60 Lacs PUBLIC DEPOSITS: Your Company has not accepted any deposits falling within the meaning of Sec. 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014, during the financial year under review. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS: Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board. INSURANCE: The properties and assets of your Company are adequately insured. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Details of loans, guarantees or investments made under section 186 of the companies Act, 2013 are given in the note to the financial statements. RISK MANAGEMENT POLICY: Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk management process. CORPORATE SOCIAL RESPONSIBILITY: It is not applicable as it does meet the criteria mentioned as per the company's act 2013. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with the promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. DISCLOSURE ABOUT COST AUDIT: Cost Audit is not applicable to your Company. LISTING WITH STOCK EXCHANGES: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE limited where the Company's Shares are listed. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION: Directors are happy to report that your Company is compliant with the Corporate Governance requirements as per Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance and Management Discussion and Analysis together with a certificate from the Statutory Auditor confirming compliance is set out in the Annexure forming part of this report. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required. SECRETARIAL STANDARDS EVENT BASED DISCLOSURES During the year under review, the Company has not taken up any of the following activities: 1. Issue of sweat equity share: NA 2. Issue of shares with differential rights: NA 3. Issue of shares under employee's stock option scheme: NA 4. Disclosure on purchase by company or giving of loans by it for purchase of its shares: NA 5. Buy back shares: NA 6. Disclosure about revision: NA 7. Preferential Allotment of Shares: NA EMPLOYEE RELATIONS: Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company. None of the employees is drawing Rs. 5,00,000/- and above per month or Rs.60,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013. The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of sexual harassment complaints received and disposed during the calendar year. • No. of complaints received : Nil • No. of complaints disposed off : Nil ACKNOWLEDGEMENTS: Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company like SEBI, BSE, NSE, MCX, NSDL, CDSL, Canara Bank, HDFC Bank etc. for their continued support for the growth of the Company. By order of the Governing Board For Sankhya Infotech Limited N.Sridhar Chairman & Managing Director Place : Hyderabad Date : 29.08.2015 |