ANNUAL REPORT 2012-1311. Balance sheet 18 12. Profit and Loss Account 19 13. Cash flow statement 20...

innovations for a Smart future

ANNUAL REPORT 2012-13SANKHYA INFOTECH LIMITED

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16th ANNUAL REPORT

2012-13

SANKHYA INFOTECH LIMITEDREGD. OFFICE: #405 NSIC BUSINESS PARK,ECIL PO HYDERABAD, AP, INDIA 500062PHONE +91-403-024-6300FAX: +91-402-713-6343EMAIL: [email protected]: WWW.SANKHYA.NET


innovations for a Smart future 2

CONTENTS Sl.No Particulars Page No

1. Company Information 3

2. Notice 4

3. Financial Data and Analysis 5

4. Director’s Report 6 – 7

5. Annexure – 1 Subsidiary Companies Details 7

6. Annexure – 2 Management Discussion and Analysis 8

7 Annexure – 3 Report on Corporate Governance 8

8. Annexure – 4 CEO’s Declaration 14

9. Annexure – 5 Auditor’s Certificate on Corporate Governance 14

10. Auditors’ Report on Financial Statements 15-17

11. Balance sheet 18

12. Profit and Loss Account 19

13. Cash flow statement 20

14. Significant Accounting Policies and Notes on Accounts 21-30

15. Notes to Financial Statements 31-33

16. Balance Sheet Abstract and Company’s General Business Profile 34

17. Auditors’ Report on Consolidated Financial Statements 35-36

18. Consolidated Balance Sheet 37

19. Consolidated Profit and Loss Account 38

20. Consolidated Cash Flow Statement 39

21. Significant Account Policies and Notes to Consolidated Accounts 40-54

22. Attendance Slip and Proxy form 55



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To be a global leader in providing innovative and cost effective simulation and training technologysolutions for the business prosperity and pride ownership of our customers.

BOARD OF DIRECTORSMr. N Sridhar : Chairman & Managing DirectorMr. N Srinivas : Vice ChairmanMs. M Kavita Prasad : Independent DirectorCA. C. Anand : Independent Director

OUR TEAMMr. A. Sreenivasa Kumar (Head Global Services Sales)

Mr. BSS Srinivasa Rao (Head of R & D & CTO)Brig. Vinay Sagar (Head Simulation & Virtual Training)

Ms. Ruksana (Head of Finance & Accounts)Ms. Srividya Jayaraman (Head of Human Resource Development)

STATUTORY AUDITORS

M/s. P. Murali & CoChartered Accountants

6-3-655/2/3Somajiguda

Hyderabad - 500 082, INDIA

BANKERSIDBI Bank Ltd

Main Branch, HYDERABAD

REGISTRARS & TRANSFER AGENTSCANBANK COMPUTER SERVICES LTD.JP ROYALE, 1st FLOOR, #218, 2nd Main,

Sampige Road, (Near 14th Cross),Malleswaram, Benguluru – 560003

Tel: 91 – 80 – 23469661/62, 23469664/65Fax: 91 – 80 – 23469667/668

Email: [email protected]: www.canbankrta.com

COMPANY INFORMATIONOUR VISION



NOTICENotice is hereby given that the 16th Annual General Meetingof the Members of SANKHYA INFOTECH LIMITED will beheld on Saturday 28th-Sept-2013 at 11.00 A.M at its regd officeat 405, NSIC EMDBP Building ECIL Hyderabad-500062 totransact the following business.Ordinary Business1. To receive, consider and adopt the Balance Sheet as at

31st March 2013 and Profit & Loss Account for the yearended on that date together with Schedules thereto andthe Reports of Board of Directors’ and Auditors’ thereon.

2. To appoint a Director in place of Ms. M.Kavitha Prasad,who retires by rotation, and being eligible offers herselffor re-appointment.

3. To appoint M/s. T.R. Chadha & Co. Chartered Accountantsas Statutory Auditors of the Company to and fix theirremuneration and in this regard to consider and ifthought fit, to pass, with or without modifications(s), thefollowing resolution as an Ordinary resolution:

“RESOLVED THAT M/s. T.R. Chadha & Co. CharteredAccountants, be and hereby appointed as Auditors of theCompany, to hold office till the conclusion of the nextannual general meeting of the company on suchremuneration as shall be fixed by the Board of Directors.

NOTES:1. A MEMBER ENTITLED TO ATTEND AND VOTE AT

THE ANNUAL GENERAL MEETING IS ENTITLED TOAPPOINT A PROXY OR PROXIES, TO ATTEND ANDVOTE ON POLL, INSTEAD OF HIMSELF AND THEPROXY NEED NOT BE A MEMBER OF THE COMPANY.

The instrument appointing proxy should, however, bedeposited at the registered office of the Company not laterthan 48 hours before the scheduled commencement of themeeting.

2. Corporate members are requested to send a duly certifiedcopy of the Board Resolution authorizing theirrepresentative to attend and vote at the Annual GeneralMeeting.

3. The Register of Members and Share Transfer Books of theCompany will be closed from 21st Sept 2013 to 28th Sept2013 (both days inclusive).

Members are requested to intimate immediately anychange in their address to the Share Transfer AgentsAddress: M/s. Canbank Computer Services Ltd.,(A Subsidiary of Canara Bank), JP Royale, 1st Floor,#218, 2nd Main Sampige Road, (Near 14th Cross),Malleswaram, BENGULURU – 560003.Tel: +91 802 3469661 / 62, 2349664/65

Fax: +91 802 3469667 /68 and in case their shares are heldin dematerialized form, this information should be passedon to their respective Depository Participants without anydelay.

4. Members / Proxies are requested to bring the Attendanceslip duly filled in

5. Members holding shares in electronic form are herebyinformed that bank particulars registered against theirrespective depository accounts will be used by theCompany for payment of dividend. The Company or itsRegistrars cannot act on any request received directly fromthe Members holding shares in electronic form for anychange of bank particulars or bank mandates. Suchchanges are to be advised only to the DepositoryParticipant of the Members.

6. We wish to inform you that our Company shares havealready been admitted in both M/s National SecuritiesDepository Ltd (NSDL) and Central Depository ServicesIndia Ltd (CDSL) for the purpose of holding and tradingof the shares in electronic mode.The ISIN allotted to M/sSankhya Infotech Limited is INE877A01013. Memberswho are holding shares in physical form are advised intheir own interest to immediately apply forDematerialization of their shares to hold the same in anelectronic form,In order to dematerialize your shares andconvert them into the electronic form, you are requestedto open a Beneficiary Account with a DepositoryParticipant (DP) and submit a dematerialization requestalong with the original share certificate(s) to a DP withwhom you open a Beneficiary Account. The DP in turnwill send your share certificate(s) to M/s. CanbankComputer Services Ltd., (A Subsidiary of Canara Bank),JP Royale, 1st Floor, # 218, 2nd Main Sampige Road, (Near14th Cross), Malleswaram, BENGULURU – 560003. Tel:+91802 3469661/62, 2349664/65 Fax:+91 802 3469667/68for dematerialization of shares. Thereafter, you willreceive a confirmation from the DP that the shares havebeen dematerialized and held in the electronic form,subject to meeting the entire statutory requirement forconversion from physical mode to the electronic mode.Further, as a part of green initiative in the CorporateGovernance, the Ministry of Corporate Affairs, vide itsCircular No. 17/2011 dated 21st April 2011 has permittedservice of notices and documents in electronic mode.Hence, members are requested to register their E-mail ID’swith the Company’s Registrar and Transfer Agent as perthe details given hereunder.For further clarification, if any, please feel free to write toour Registrar & Share Transfer Agent at the followingaddress:

CANBANK COMPUTER SERVICES LTD.,Unit: M/s. Sankhya Infotech Ltd

J P ROYALE, 1ST FLOOR, # 218, 2nd Main,Sampige Road, ( Near 14th Cross ) ,Malleswaram, Benguluru – 560 003.

Tel : 91-80-23469661 / 62, 23469664/ 65Fax : 91-80-23469667 / 668

Email Id : [email protected] URL: www.canbankrta.com

By Order of the Board N Sridhar

Chairman & Managing Director

Dated: 29th May, 2013

Hyderabad



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( in Lakhs) ( in Lakhs)Comparative Income Statement

Particulars Actuals Actuals Actuals

FY 2010-11 FY 2011-12 FY 2012-13 Revenues 5,212 7,654 10,571 Growth % of Revenue 28 47 38 Employee Cost 2,551 5,000 6,493 % of sales 49 65 61 Other Expenses 1,191 1,905 2,855 % of sales 23 25 27 EBITDA 1,470 749 1,223 EBITDA Margin% 28 10 12 Depreciation 304 346 480 PBIT 1,166 403 743 Interest Expenses 391 298 401 PBT from Operations 774 105 342 Other Non Operating Income 9 49 (330)

PBT from Operations 784 154 12 PBT Margin% 15 2 0 Provision for Tax 156 81 6 PAT 627 73 6 Adj for Extraordinary items 11 - -

Adjusted PAT 616 73 6 Net profit Margin% 12 1 0

Comparative Balance Sheet Particulars Actuals Actuals Actuals

FY 2010-11 FY 2011-12 FY 2012-13 Share Capital 850 1,125 1,125 Reserves 4,920 5,683 5,689 Share application money allotment 402 - -

Shareholders fund 6,172 6,807 6,813 Debt 2,063 775 950 Other liabilities 1,288 2,695 2,792 Total Capital Employed 9,522 10,277 10,555 Non current Assets Fixed Assets Tangible 86 78 65 Intangible 3,379 4,247 4,368 Net Fixed Assets/Net Block after accumulated dep 3,464 4,325 4,434

Capital work in progress 633 696 696 Non- current Investments 58 58 58 Long Term Loans and Advances 630 598 605

1,322 1,352 1,359 Current Assets Debtors 2,290 3,404 3,980 Cash & Bank Balances 152 265 23 Other Current Assets 2,294 836 755 Short term loans and advances 0 95 4

Total Assets 9,522 10,277 10,555

( in Lakhs)Comparative Cash Flow statement

Particulars Actuals Actuals Actuals

FY 2010-11 FY 2011-12 FY 2012-13 Cash flow from operations Profit after tax 616.08 73.31 6.05 Depreciation 303.68 345.97 479.89 Interest expenses 391.48 298.34 385.02 OP profit before WC changes 1,311.25 717.62 870.96

Working capital adjustment 339.75 (260.67) (464.21) Cash from operations 1,651.00 456.95 406.74 Cash flow from investing Capex (1,380.94) (1,206.58) (588.56) CWIP (101.00) (62.69) - Investment - - Cash from investment (1,481.94) (1,269.27) (588.56) Cash flow from financing Interest paid (391.48) (298.34) (385.02) Other financing 357.68 1,223.60 324.67 Cash from financing activities (33.81) 925.27 (60.35) Opening Cash & cash equivalents 16.94 152.19 265.14

Net cash increase/Dec 135.25 112.94 (242.16) Closing cash & Cash Equivalents 152.19 265.14 22.97

Comparative Key Ratios Particulars Actuals Actuals Actuals

FY 2010-11 FY 2011-12 FY 2012-13

Margin Ratios (%)

EBIDTA Margin 28.20 9.79 11.57

PBIT Margin 22.37 5.27 7.03

PBT Margin 15.03 2.01 0.11

PAT Margin 11.82 0.96 0.06 Growth Ratios (%)

Revenues 27.80 47.82 38.11

EBITDA 67.69 -49.03 26.29

Net profit 125.15 -88.1 -91.75 Return R at ios (%)

ROCE 15.43 7.29 11.59

ROIC 13.79 6.50 11.53 Reported EPS 7.25 0.65 0.05

Solvency Ratios

Total Debt/Equity% 0.4 0.3 0.4

FINANCIAL DATA AND ANALYSIS



DIRECTOR’S REPORT

Dear Shareholders,Your directors are pleased to present 16th Annual Report andAudited accounts for the financial year ending 2012-13. Thecurrent year has seen a strong growth in terms of topline with38% growth in sales, however, margins were stressed due tocontinued onsite costs, and write-off recommended by theauditors to a tune of Rs.2.77 crores.

( in Lakhs)

FINANCIAL HIGHLIGHTS 2012–13 2011–12

Income from Operations 10571.08 7654.03

Other Income –52.84 49.49

Total Income 10518.24 7703.52

Total Expenditure 9625.17 6895.27

Earnings before Depreciation, Interest & Tax 893.07 808.25

Depreciation 479.89 345.97

Interest 401.09 308.08

Profit Before Tax 12.09 154.2

Provision for Tax including (FBT) 2.30 30.85

Other Provisions 3.74 50.03

Profit after Tax 6.05 73.31

Earnings Per Share 0.05 0.65

BUSINESS OPERATIONSYour company embarked on services sales as planned last yearand the results have been good. The company has won a largeWorld Bank contract against stiff international competition.The company has expanded its business in the bankingindustry by winning contracts from Union Bank and AndhraBank. Today nearly, 52% of all bank employees of the countryuse your company’s online learning systems.Your company has strengthened simulation business byadding non-defense customers, especially in the area oftransportation, energy, manufacturing and medicalsimulation. Defense related business simulation has alsoexpanded and the company has been able to add newcustomers in both overseas and domestic market.OUTLOOKYour company continues to serve major airframemanufacturers around the globe, and with the worst situationsfor airline industry ending the company foresees majorexpansion in this area.Your company’s collaboration with IT majors such as IBM,Microsoft to expand its operations in BFSI and educationsector is likely to add tremendous opportunity in the future.PREFERENTIAL ALLOTMENTThe board during its meeting held on 11-02-2013 has approvedto issue 14,75,400 shares on preferential basis to the promotersas per the rules and regulations under SEBI(DIP)guidelines.Subsequently this issue has not been taken up for furtherprocess due to prevailing market conditions.SUBSIDAIRY COMAPNIESThe financial details of the subsidiary companies as well asthe extent of holding therein are provided in a separate sectionof the Annual Report at Annexure 1:

Under section 212(8) of the Companies Act, 1956 the ministryof Corporate Affairs has exempted from attaching a copy ofthe Balance Sheet, Profit and loss accounts and schedulesthereof, Director’s Report and Auditors Report of thesubsidiary companies and other documents required to beattached under section 212(1) of the act to the balance sheetof the company. Accordingly the said documents are notattached with the Balance Sheet of the Company. The AnnualAccounts of the subsidiary Companies are available forinspection by any member / investor and the Company willmake available these documents / details upon request byany member of the Company or its subsidiaries interested inobtaining the same. However the data of the subsidiaries hasbeen furnished along with the statement pursuant to Section212 of the Companies Act, 1956 forming part of the AnnualReport. Further pursuant to Accounting Standard (AS)-21issued by the Institute of Chartered Accountants of India, yourcompany has presented the Consolidated Financial Statementswhich include financial information relating to its subsidiariesand forms part of the Annual Report.CONSOLIDATED FINANCIAL STATEMENTSThe Consolidated Financial Statements have been preparedby your Company in accordance with the requirements of theAccounting Standards 21, 23 & 27 issued by the Institute ofChartered Accountants of India. The Audited ConsolidatedFinancial Statements together with Auditors’ Report thereonforms part of the Annual Report.DEPOSITSThe Company has not accepted any Deposits from the Publicduring the year pursuant to Section 58A of the CompaniesAct, 1956.DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 217(2AA) of the Companies Act, 1956,with respect to the Directors’ Responsibility Statement, it ishereby confirmed that:1. In the preparation of Annual Accounts, the applicable

Accounting Standards have been followed and that thereare no material departures from the same.

2. Directors have selected the appropriate AccountingPolicies and applied consistently and have madejudgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs ofthe Company as at 31st March 2013, and of the profit ofthe Company for that period.

3. Proper and suffic ient care has been taken for themaintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities.

4. The Annual Accounts have been prepared on a goingconcern basis.

THE BOARD OF DIRECTORSMrs.Kavita Prasad is retiring by rotation at the AGM and isoffering herself for re-appointment.AUDITORSYour company proposed to appoint M/s T.R. Chadha & Co.,Chartered Accountants, for the current financial year. Theboard records its deepest appreciation to M/s.P.Murali & Co.for the excellent services they have rendered during theprevious four years. As a prudent practice, the company hasbeen rotating Auditors every 4 years. The same was done inthe previous occasions also.



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CONSERVATION OF ENERGY & ABSORPTION.I. Conservation of energy your company’s operations

are software oriented and not energy intensive.Adequate measures are taken to conserve energywherever possible.

MANAGEMENT DISCUSSION & ANALYSIS Pursuant to the provision of clause 49 of the listingagreement, a report on Management Discussion &Analysis is enclosed as Annexure 2 to this report.CMD’s DECLARATIONPursuant to the provision of clause 49(I)(D)(ii) of theListing Agreement, a declaration by the Chairman &Managing Director of the company declaring that allthe members of the Board and the senior Managementpersonnel of the company have affirmed compliancewith the code of conduct of the company, is enclosedas Annexure 3 of this report.CORPORATE GOVERNANCEAs per clause 49 of the listing agreement with the stockexchanges, a separate report on Corporate Governanceis enclosed as Annexure 4 forming part of the AnnualReportA certificate from a firm of Chartered Accountant inwhole time practice confirming compliance with theconditions of Corporate Governance as stipulated underclause 49 of the Listing Agreement is annexed to thisreport as Annexure 5.

PARTICULARS OF EMPLOYEES“No Employee of the company was in receipt ofremuneration during the financial year 2012-13 in excessof the sum prescribed under section 217(2A) of thecompanies Act, 1956 read with the companies(Particulars of Employees) Rule, 1975.”INDUSTRIAL RELATIONSYour company enjoys cordial employee relations,marked by empowerment and delegation.ACKNOWLEDGEMENTSYour Directors gratefully acknowledge the unstintedsupport extended by the esteemed Customers, Bankersand Institutions.Your Directors also are pleased to record theirappreciation for the services rendered by the employeesat all levels in bringing about a better performance.Your directors express thanks to the Company’sShareholders, and the Investors for their sustainedconfidence in the Management of the Company.

By Order of the BoardPlace: Hyderabad N SridharDate : 29th May, 2013 Chairman & Managing Director

Annexure: 1 (Amount in )Sl. No Particulars 1 2 3

1 Name of Subsidiary Sankhya SARL, France

Mahasena Information Technologies (India) Private

Limited (MITPL)

Sankhya US Corporation

2 Financial year end 31st March, 2013 31st March, 2013 31st March, 2013

3 Extent of interest of the Holding Company in the capital of the Subsidiary.

100% 100% 100%

4

Date from which it became a subsidiary 13th April 2005 01st May 2006 17th August 2006

5

Net aggregate amount of Subsidiary’s profit or loss not dealt with in the Holding Company’s accounts.

Current year (42700) (561) (57550)

Previous year (71140) (6618) (56250)

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Net aggregate of the Subsidiary’s profit less losses dealt with in the Holding Company’s Accounts:

Current year Nil Nil Nil Previous year Nil Nil Nil



Annexure: 2MANAGEMENT’s DISCUSSION & ANALYSIS

BUSINESS OUTLOOK

The financial statements have been prepared in compliancewith the requirements of the Companies Act, 1956, guidelinesissued by SEBI, and Indian GAAP. There is a rapid change inthe business conditions for Software Industry during the pastone year. Many organizations are recognizing the potentialof eLearning, and are putting best methods and practices forimplementing eLearning solutions.

Your company is proud to share that its eLearning solutionsare used by nearly more than 50% of all bank employees ofthe nation. Nearly 500,000 users in BFSI segment alone useyour company’s eLearning applications.

With a rich repository of over 9,000 hours of coursewarecovering a wide spectrum of industry, your company haslarge intangible assets of courseware.

Every industry is demanding highly skilled professionals.Corporations therefore paying special attention towardsincreasing skills and knowledge of their employees. Yourcompany has therefore an ever-expanding businessopportunity both in product and services segment.

AWARDS & RECONGNITIONS

Your company has registered the first overseas sales for itssimulation product and has successfully implemented theAdvance Weapons Training System for an overseas Armyrequirement.

RISK

Your company is majorly operating in government entitieswhere payments are not received on time thus posing a riskof cash crunch in many cases.

Global uncertainty in Europe also poses risk since yourcompany’s operations are in France.

The vast fluctuation in the foreign currency mainly Dollarposes risk on foreign currency earnings.

COMPETITION

Your Company’s software products and solutions have beenrecognised as one of the best training software available todayby many renowned agencies. These products are servingworld’s top fortune 500 companies since years and willcontinue to do the same. The R&D staffs at your companyare dedicated to continuously enhance the capabilities ofsoftware and fulfil the global demands. Your company is alsounder developing phase of new software solutions that willprovide new benchmarks in the field of e-learning andsimulation.

INTERNAL CONTROLS

The Company has adequate internal control mechanism atall levels of the organisation.

HUMAN RESOURCES

Your company has added several highly qualifiedprofessionals who have worked in prestigious organisationaround the world. The Board conveys its sincere appreciationfor the excellent efforts put in by the employees despite thechallenges faced by the Company.

Annexure: 3REPORT ON CORPORATE GOVERNANCE

(A) COMPANY’S PHILOSOPHY ON CODE OFGOVERNANCE

At Sankhya, corporate governance practices are based on theprinciples of integrity, transparency, fairness, independentmonitoring and adequate disclosure of the state of affairs ofthe company. Adoption of such governance practise ensuresaccountability of the person in charge of the Company at thehighest levels and benefits not just the investors, but also theCompany’s customers, creditors, employees and society atlarge. It is the Company’s philosophy and strong belief thatadhering to such high level of corporate governance practicesgo a long way in establishing the credibility of the Companyand creates significant long term value for its stakeholders.The company’s activities are carried out in accordance withgood corporate practices and the company is constantlystriving to better them and adopt the best practices. It is firmlybelieved that good corporate governance practices wouldensure efficient conduct of the affairs of the company and helpthe company, achieve its goal of maximising value for all itsstakeholders. The Company maintains highest business ethicsand complies with all statutory and regulatory requirements.In India , Corporate Governance standards for l istedcompanies are regulated by Securities and Exchange boardof India through clause 49 of the listing agreement of the StockExchange. The Company is in compliance with all therequirements of the corporate governance code as enshrinedin Clause 49 of the listing agreement. All the relevantstandards have been fully adhered to.(B) BOARD OF DIRECTORS The company is managed by the Board of Directors, whoformulates strategies, policies and reviews its performanceperiodically and manages the business of the company. TheBoard of Directors of the Company promotes the success ofthe company for the benefit of its members as a whole adirector regards in fulfilling the duty to promote success. Thedirectors monitors the likely consequences of any decision inthe long term in the interest of the company’s employees,suppliers, customers, shareholders and other to foster thecompany’s business relationships with them and impact ofthe company’s operations on the community and theenvironment with the desirability of the company maintain areputation for high standards of business conduct, and theneed to act fairly as between members of a company.Mr. N Sridhar CMD of the Company and Mr. N. Srinivas,Vice-Chairman of the Company, Executive Directors of theCompany, are fully dedicated to ensure growth of thecompany.COMPOSITION OF THE BOARDThe composition of the Board is conformity with Clause 49 ofthe listing Agreement, as amended from time to time. Thecompany is a promoter and the number of Non-ExecutiveIndependent Director is more than one-half of the totalnumber of Directors.Currently, the Company’s Board comprises of five Directorsincluding the Managing Director. The Chairman is anExecutive Director and is a professional Director in hisindividual capacity. There are three Independent,Non-Executive Directors and professionals, with expertise andexperience in their individual allied fields.FOUR (4) Board Meetings were held during the year 2012-13(i.e., from 1st April, 2012 to 31st March, 2013) (1) 30th May, 2012(2) 30th August, 2012 (3) 10th Nov, 2012 (4) 11th Feb, 2013.



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Notes:

(i) The directorships held by the directors, as mentionedabove do not include the directorships held in foreigncompanies and companies under Section-25 of theCompanies Act, 1956.

(ii) The committees considered for the purpose are thoseprescribed under Clause 49(I)(C)(ii) of the List ingAgreement(s) viz. audit committee and shareholders/investors grievance committee of public limitedcompanies and private limited companies which arepublic limited companies in terms of section 3(1)(iv)(c) ofthe Companies Act, 1956

(iii) Except Mr. N. Sridhar and Mr. N. Srinivas, who arerelatives (Mr. N. Sridhar is Brother of Mr. N. Srinivas)and promoter directors, none of the directors are relativesof any other director.

BOARD PROCEDURE

A detailed agenda folder is sent to each Director in advanceof Board and Committee Meetings. To enable the Board todischarge its responsibilities effectively, The ManagingDirector apprises the Board at every meeting of the overallperformance of the Company. A detailed functional report isalso placed at Board Meetings.

The Board reviews strategy and business plans, annualoperating and capital expenditure budgets, investment andexposure limits, compliance reports of all laws applicable tothe Company, as well as steps taken by the Company to rectifyinstances of non-compliances, if any. The Board also reviewsmajor legal issues, minutes of the Board Meetings of theCompany’s subsidiary companies, significant transactions andarrangements entered into by the subsidiary companies,adoption of financial results, transactions pertaining topurchase or disposal of properties, major accountingprovisions and write-offs, corporate restructuring, minutes ofmeetings of the Audit and other Committees of the Board,and information on recruitment of officers just below theBoard level, including the Company Secretary and theCompliance Officer.

The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorshipsand Committee Chairmanships/Memberships held by them in other companies are given herein below:

Name & Designation Category

No of Meetings

held during the Last

Financial Year

No of Meetings attended

Attendance at the Last Annual General Meeting held on

29.09.2012

No of Directorships in other public

companies

No of Committee positions held in other public Companies @

Chairman Member Chairman Member

N SRIDHAR Chairman &

Managing Director WTD 4 3 YES NIL NIL NIL NIL

N SRINIVAS Vice –Chairman WTD 4 4 YES NIL NIL NIL NIL

KAVITA PRASAD Director NED-I 4 3 NO NIL 5 1 1

MAHESH BHANDARI *

Director NED-I 4 0 NO NIL NIL NIL NIL

C.ANAND Director NED-I 4 4 NO NIL NIL NIL NIL

NED–Non Executive Director, WTD–Whole Time Director, NED-I–Non Executive Director– Independent.PROMOTERS AND BOARD OF DIRECTORS PROFILEMr. N. Sridhar, Chairman and Managing Director :Technocrat business man with a Master’s degree in ComputerScience and 28 years of experience in the Software Industry,Mr. Sridhar has been one of the founding members of SankhyaInfoTech Ltd.Mr. N. Srinivas, Vice Chairman: He is one of the foundingmembers of Sankhya with a Master’s degree in Commerceand a professional qualification of ICWA, and an overallexperience 30 years industry of which 26 years in the SoftwareIndustry.Independent Board of Directors:Ms. Kavita Prasad(Director in HBL): She is a Graduate inCommerce from Osmania University and Postgraduatediploma holder in computer application. She became adirector in HBL Limited in the year 1995. She has been lookingafter the exports Market and Finance of the HBL PowerSystems Limited, presently servicing as Whole Time Director.CA. C Anand: He holds a Bachelor Degree from OsmaniaUniversity. He is a practicing Chartered Accountant for thelast 21 years with extensive experience in the fields of Audit,Taxation and Finance.CODE OF CONDUCTThe Company has established a Code of Conduct for its BoardMembers and Senior Management personnel. The Code ofConduct for the Board Members and Senior Managementpersonnel is posted on the Company’s Websitewww.sankhya.net. The Board Members and SeniorManagement personnel have complied with the same.(C) AUDIT COMMITTEEThe Board of Directors of the Company has re- constitutedthe Audit Committee on 1st October 2010. The Terms ofreference of the Audit Committee covers the matters specifiedfor Audit Committees under clause 49 of the Listing agreementand also as required under Section 292A of the CompaniesAct, 1956.The Audit Committee comprises of the followingmembers1 CA.C.Anand - Independent Director & Chairman2. Ms.Kavita Prasad - Independent Director & Member3. Mr. N. Srinivas - MemberThe Statutory Auditors are also the invitee to the meetings.During the year under review (i.e., from 1st April, 2012 to 31st

March, 2013), the Committee met 4 times on 30 th May2012,30th Aug, 2012, Nov 10th, 2012 & 11th Feb, 2013.



All the Members of the Committee possess strong accountingand financial management knowledge. The terms of referenceof this Committee are very wide. Besides having access to allthe required information from within the Company, theCommittee can obtain external professional advice wheneverrequired. The Committee acts as a link between the StatutoryAuditors and the Board of Directors of the Company. It isauthorized to select and establish accounting policies, reviewreports of the Statutory Auditors and meet with them todiscuss their findings, suggestions and other related matters.The Committee is empowered to inter alia review theremuneration payable to the Statutory Auditors and torecommend a change in Auditors, if felt necessary. It is alsoempowered to review Financial Statements and investmentsof unlisted subsidiary companies, Management Discussion &Analysis, material individual transactions with related partiesnot in normal course of business or which are not on an arm’slength basis. Generally all items listed in Clause 49 II (D) ofthe Listing Agreement are covered in the terms of reference.The Audit Committee has been granted powers as prescribedunder Clause 49 II (C). The Meetings of the Audit Committeeare also attended by the Chairman & Managing Director.

SUBSIDIARY COMPANIES

The Company has following subsidiaries:

1. Sankhya SARL, France.

2. Sankhya US Corporation, USA;

3. Mahasena Info Technologies (India) Private Limited

The Audit Committee reviews the financial statements of theSubsidiaries M/s Sankhya SARL, France, M/s Sankhya USCorporation and M/s Mahasena Info Technologies (India) PvtLtd.

(D)REMUNERATION COMMITTEE REMUNERATIONPOLICY

While deciding on the remuneration for Directors, the Board,and Remuneration Committee (Committee) considers theperformance of the Company, the current trends in industry,the qualification of the appointee(s), their experience, pastperformance and other relevant factors. The Board /Committee regularly keep track of the market trends in termsof compensation levels and practices in relevant industriesthrough participation in structured surveys. This informationis used to review the Company’s remuneration policies.

The Company pays remuneration by way of salary, benefits,perquisites and allowances (fixed component) to its ManagingDirector and Executive Directors. Annual increments aredecided by the Remuneration Committee within the salaryscale approved by the Members and are effective April 1, eachyear. The Remuneration Committee decides on thecommission payable to the Managing Director and theExecutive Directors out of the profits for the financial yearand within the ceilings prescribed under the Companies Act,1956, based on the performance of the Company as well asthat of the Managing Director and each Executive Director.

During the year, 2012-13, the Company paid Sitting Fees ofRupees seventy thousand only to its Non-Executive Directorsfor attending meetings of the Board and meetings ofCommittees of the Board. The Company also reimburses theout-of-pocket expenses incurred by the Directors for attendingmeetings.

COMPOSITION OF REMUNERATION COMMITEE

The Company reconstituted the Remuneration Committee on1st October 2010 consisting of the following Independent Non-Executive Directors:

i. CA. C.Anand- Chairman

ii. Ms. Kavita Prasad - Member

Details of Remuneration paid to all the Directors during the year 2012-13 (Amount in )

Name & Designation Category Salary Allowance / Perquisites Commission Total

Mr. N SRIDHAR Chairman & Managing

Director WTD 36,00,000 -- -- 36,00,000

Mr. N SRINIVAS Vice –Chairman WTD 36,00,000 -- -- 36,00,000



11

For Non-Executive Directors:Sitting fee is paid to all Non – Executive Directors.

(Amount in )

Name Amount Ms.Kavita Prasad 30,000 CA.C.Anand 40,000 Total 70,000

(E) SHAREHOLDERS / INVESTORS GREIVANCE COMMITTETERMS OF REFERENCEThe Committee, inter alia, approves issue of duplicate certificates and oversees and reviews all matters connectedwith transfer of securities of the Company. The Committee also looks into redressal of shareholders’/ investors‘complaints related to transfer of shares, non-receipt of Balance Sheet, non- receipt of declared dividend, etc. TheCommittee oversees performance of the Registrar and Transfer Agents of the Company and recommends measuresfor overall improvement in the quality of investor services.COMPOSITION, MEETINGS AND ATTENDANCEIn compliance with the Listing Agreement requirements and provisions of the Companies Act, 1956, the Companyhas constituted an Investor Grievance Committee consisting of majority of Non-Executive Independent Directors.Committee consists of three members comprising of:

Name Designation & Category Ms. Kavita Prasad Independent Director & Member

Mr. N Srinivas Director & Member Mr. N Sridhar Director & Member

During the year, no complaint was received from the shareholder. As on 31st March, 2013, there are no pendinggrievances of the shareholder or investors.(F) GENERAL BODY MEETINGSThe particulars of the Annual General Meetings of the Company for the last three financial years are asfollows:

Financial Year Location Date of AGM Time of

AGM held 2011-12 Registered office NSIC Hyderabad 29th -Sept-2012 11:00 AM 2010-11 Registered office NSIC Hyderabad 30th-Sept-2011 11:00 AM 2009-10 TajTri-Star Hotel, Secunderabad 30th-Sept-2010 10:00 AM

(F) DISCLOSURES

Disclosures of transactions with Related Parties

There were no materially significant related partytransactions made by the Company with its Promoters,Directors or relatives or the Management, theirsubsidiaries etc., which have potential conflict with theinterests of the Company at large. The Register ofContracts containing the transactions in which Directorsare interested, if any, is placed before the Board at everyBoard Meeting for approval. Transactions with relatedparties are disclosed in Notes to the Accounts in theAnnual Report.

Disclosure of Accounting Treatment in preparationof Financial Statements

The Company has followed the guidelines ofAccounting Standards laid down by The Institute ofChartered Accountants of India (ICAI) and theCompanies (Accounting Standards) Rules, 2006 inpreparation of its financial statements.

Details of non-compliance with regard to Capital Market

There were no instances of non-compliances by the Companyon any matter related to capital markets. The Company hascomplied with the requirements of listing agreement as wellas the regulations and guidelines prescribed by the Securitiesand Exchange Board of India (SEBI). The Company has paidlisting fees to the stock exchanges and annual custodial feesto the depositories for the financial year 2012-13 in terms ofClause 38 of listing agreement. There were no penaltiesimposed nor strictures passed on the Company by the StockExchanges, SEBI or any other statutory authority on anymatter related to capital markets, during last three years.

SECRETARIAL AUDIT FOR RECONCILIATION OFCAPITAL.

A qualified practicing Company Secretary carried outquarterly Secretarial Audit to reconcile the total admittedcapital with National Securities Depositary Limited (NSDL)and Central Depositary Services (India) Limited and the totalissued and listed capital. The audit confirmed that the totalissued / paid up capital was in agreement with the aggregateof the total number of shares in physical form and the totalnumber of dematerialized shares held with NSDL and CDSL.



MEANS OF COMMUNICATIONa. The Quarterly, Half yearly un-audited financial results are generally published in widely circulating national and

local newspapers. These results are also published in the website of the Company www.sankhya.net and sent to stockexchanges.

b. The Management Discussion & Analysis Report forms part of this Annual Report.(F) GENERAL SHAREHOLDERS INFORMATION

Annual General Meeting Day, Date and Time Saturday, 28th Sept, 2013 11 AM

Venue NSIC Building, Near Radhika Theatre, ECIL Post, Hyderabad

Financial Calendar 1. First Quarter results 2nd Week of August, 2013 2. Half yearly results Last Week of October, 2013 3. Third Quarter results 1st Week of February, 2013 4. Last Quarter results / Results for the year Ending 31st March 2014

Last Week of May, 2014 (audited)

5. Book Closure Date (Both days inclusive) From 21-09-2013 to 28-09-2013

6. Listing of Equity shares on Bombay Stock Exchange Limited (BSE) Stock Exchanges and Stock Scrip Id: SANKHYAIN Code Stock Code: 532972

Listing fees has been paid to Bombay Stock Exchange for the financial year 2012-137. Demat ISIN for NSDL & CDSL : INE877A01013

a) 10,979,762 Equity shares, representing 97.64 % of the total Equity Capital are held in dematerializedform as on 31st March 2013.

b) Market price data (High /Low) on BSE during the each month

Month Open Price

High Price

Low Price

Close Price

No. of Shares

Total Turnover

(Rs.)

* Spread ( .)

H-L C-O

Apr 12 13.75 14.90 12.50 13.38 24,390 3,27,837 2.40 –0.37 May 12 13.25 14.15 11.00 12.50 39,336 4,76,199 3.15 –0.75

Jun 12 11.90 14.09 10.35 12.20 56,866 6,81,546 3.74 0.30

Jul 12 11.21 14.00 11.20 12.44 47,076 5,80,063 2.80 1.23

Aug 12 11.60 13.30 10.65 11.46 49,713 5,56,399 2.65 –0.14

Sep 12 11.80 13.70 10.62 12.00 46,214 5,39,807 3.08 0.20

Oct 12 12.75 16.00 11.60 11.70 3,98,886 53,88,873 4.40 –1.05

Nov 12 11.87 12.50 10.36 10.75 71,661 8,17,661 2.14 –1.12

Dec 12 11.50 11.90 9.78 10.55 1,41,388 15,18,526 2.12 –0.95

Jan 13 10.95 11.00 9.02 9.54 2,69,309 26,68,206 1.98 –1.41

Feb 13 9.11 10.68 7.99 8.34 1,58,087 14,36,767 2.69 –0.77

Mar 13 8.60 8.88 6.56 7.59 65,645 4,70,100 2.32 –1.01

Registrar & Share Transfer Agent:CANBANK COMPUTER SERVICES LTD.,Unit: M/s. Sankhya Infotech LtdJ P ROYALE, 1ST FLOOR, # 218, 2nd Main,Sampige Road, (Near 14th Cross),Malleswaram,Benguluru – 560 003.Tel: 91-80-23469661 / 62, 23469664 / 65Fax: 91-80-23469667 / 668Email Id: [email protected]: www.canbankrta.com



13

Share Transfer System:Presently the share transfers which are received in physical form are processed by the Registrar andShare Transfer Agent and approved by the Compliance Officer and the share certificates are returnedwithin 15 days from the date of lodgment, subject to the transfer instruments being valid and completein all respects.

Shareholding Pattern of the Company as on March 31, 2013 was as follows:-

Category % age of total Capital

Promoters Holding 37.68 Non-Promoter Holding

Corporate Bodies 23.76 Indian Public 36.54 NRIs/ OCBs 0.31

Clearing Member 0.02 HUF 1.69

TOTAL 100

Dematerialization of shares and liquidityThe shares of the Company are in compulsory demat segment and are available for trading in thedepositary systems of both NSDL & CDSL. As on March 31, 2013 97% of the shares are in thedematerialized form. Consequent to the listing of Company’s equity shares at BSE there has been regulartrading at BSE in the Company’s scrip.

Unclaimed DividendsDividend History & transfer of Unclaimed Dividend to Investor Education & Protection Fund (IEPF)

(Amount in )

Sl. No

Financial year

Interim / Final

Date of declaration Ra

te o

f di

vide

nd Dividend

amount Excluding

Tax

Dividend distribution

Tax (Rs. Crs)

Amount remaining unclaimed

as on 31.03.2011

Due date of transfer to

IEPF

1 2006-07 Final 28-09-2007 10% 99,44,156 14,4,151 3,13,227.00 28-09-2014 2 2007-08 Final 29-12-2008 12% 1,02,00,006 17,33,491 2,40,184.80 29-12-2015

For and on behalf of the Board of Directors

Place: Hyderabad Mr. N. SridharDated: 29th May, 2013 Chairman & Managing Director



Annexure – 4CEO’s Declaration

I, N. Sridhar, Chairman & Managing Director do hereby declare that pursuant to the provisions ofclause 49(I)(D)(ii) of listing Agreement, all the members of the Board and senior Management Personnelof the Company have furnished there affirmation with the Code of Conduct of the Company.

Place: Hyderabad Mr. N. SridharDated: 29th May, 2013 Chairman & Managing Director_________________________________________________________________________________________

Annexure – 5

Certificate on compliance of Corporate Governance

To

The Members,

Sankhya Infotech Limited

Hyderabad

We have read the report of the Board of Directors on Corporate Governance and have examinedthe relevant records relating to compliance condition of corporate governance of M/s SankhyaInfotech Limited (“the company”) for the year ended 31st March, 2013 as stipulated in clause 49of the listing agreement of the said company with the Stock Exchanges.

The compliance of the conditions of the Corporate Governance is the responsibility of themanagement. Our examination, conducted in the manner described in the Guidance note onCertification of Corporate governance” issued by the Institute of Chartered Accountants of Indiawas limited to procedures and implementation thereof adopted by the company for ensuringcompliance with the conditions of Corporate Governance. Our examination was neither an auditnor was it conducted to express an opinion on the financial statements of the company.

In our opinion and to the best of our information and explanations given to us and on the basis ofour examination described above, the company has complied with the conditions of CorporateGovernance as stipulated in clause 49 the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of thecompany nor the efficiency or effectiveness with which the management has conducted the affairsof the company.

For M/s P. Murali & Co

Chartered Accountants

Pace: Hyderabad P Murali Mohana Rao

Date: 29-05-2013 Partner

Membership No. 23412



15

INDEPENDENT AUDITOR’S REPORTToThe Members ofSankhya Infotech LimitedReport on the Financial Statements:We have audited the accompanying financialstatements of Sankhya Infotech Limited “theCompany”, which comprise the Balance Sheet asat March 31,2013, and the Statement of Profit andLoss and Cash Flow Statement for the year ended,and a summary of significant accounting policiesand other explanatory information.Management’s Responsibility for the FinancialStatements:Management is responsible for the preparation ofthese financial statements that give a true and fairview of the financial position, financialperformance and cash flows of the Company inaccordance with the Accounting Standardsreferred to in sub-section (3C) of section 211 of theCompanies Act, 1956 (“the Act”). Thisresponsibility includes the design, implementationand maintenance of internal control relevant to thepreparation and presentation of the financialstatements that give a true and fair view and arefree from material misstatement, whether due tofraud or error.Auditor’s Responsibility:Our responsibility is to express an opinion on thesefinancial statements based on our audit. Weconducted our audit in accordance with theStandards on Auditing issued by the Institute ofChartered Accountants of India. Those Standardsrequire that we comply with ethical requirementsand plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free from material misstatement.An audit involves performing procedures to obtainaudit evidence about the amounts and disclosuresin the financial statements. The procedures selecteddepend on the auditor’s judgment, including theassessment of the risks of material misstatementof the financial statements, whether due to fraudor error. In making those risk assessments, the auditorconsiders internal control relevant to theCompany’s preparation and fair presentation ofthe financial statements in order to design auditprocedures that are appropriate in thecircumstances. An audit also includes evaluatingthe appropriateness of accounting policies usedand the reasonableness of the accounting estimatesmade by management, as well as evaluating theoverall presentation of the financial statements.We believe that the audit evidence we haveobtained is sufficient and appropriate to providea basis for our audit opinion.

Opinion:In our opinion and to the best of our informationand according to the explanations given to us, thefinancial statements give the information requiredby the Act in the manner so required and give atrue and fair view in conformity with theaccounting principles generally accepted in India:(a) In the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2013;(b) In the case of the Profit and Loss Account, ofthe Profit for the year ended on that date; and(c) In the case of the Cash Flow Statement, of thecash flows for the year ended on that date.Report on Other Legal and RegulatoryRequirements:1. As required by the Companies (Auditor’s

Report) Order, 2003 (“the Order”) issued by theCentral Government of India in terms of sub-section (4A)of section 227 of the Act, we give inthe Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, wereport that:

a) We have obtained all the information andexplanations which to the best of ourknowledge and belief were necessary for thepurpose of our audit;

b) In our opinion proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books and proper returnsadequate for the purposes of our audit havebeen received from branches not visited by us

c) The Balance Sheet, Statement of Profit and Loss,and Cash Flow Statement dealt with by thisReport are in agreement with the books ofaccount and with the returns received frombranches not visited by us

d) In our opinion, the Balance Sheet, Statement ofProfit and Loss, and Cash Flow Statementcomply with the Accounting Standards referredto in sub section(3C) of section 211 of theCompanies Act, 1956;

e) On the basis of written representations receivedfrom the directors as on March 31, 2013, andtaken on record by the Board of Directors, noneof the directors is disqualified as on March 31,2013, from being appointed as a director interms of clause (g) of sub-section (1) of section274 of the Companies Act, 1956.

For P.Murali& Co.,Chartered Accountants

Firm’s Registration Number: 007257S

(P.Murali Mohana Rao) Partner

Membership Number: 023412

Place : HyderabadDate :29-05-2013



ANNEXURE TO THE AUDITORS’ REPORTI. (a) The Company has maintained proper

records showing full particulars includingquantitative details and situation of FixedAssets.

(b) As explained to us, the fixed assets havebeen physically verified by the managementat reasonable intervals and no materialdiscrepancies between the book records andthe physical inventory have been noticed onsuch verification.

(c) The Company has not disposed offsubstantial part of the Fixed Assets duringthe year.

II. The Company does not have any inventory.Accordingly, the provisions of clause 4(ii) of theorder are not applicable.

III.(a) The Company has not granted any loans,secured or unsecured to Companies, Firmsor other parties covered in the registermaintained under section 301 of theCompanies Act, 1956.

(b) As the Company has not granted anyloans, the Clause of whether the rate ofinterest & other terms and conditions onwhich loans have been granted to partieslisted in the register maintained underSection 301 prejudicial to the interest ofcompany, is not applicable.

(c) As no loans are granted by company, theclause of receipt of interest & principalamount from parties , is not applicable tothe company.

(d)No loans have been granted to Companies,Firms and other parties listed in theregister U/s 301 of the Companies Act,1956. Hence, overdue amount of morethan rupees one Lakh does not ariseand the clause is not applicable.

(e) The Company has not taken any loans,secured or unsecured from Companies,Firms or other Parties covered in the registermaintained U/s301 of the Companies Act,1956.

(f) As the Company has not taken any loans,the clause of whether the rate of interest andother terms and conditions on which loanshave been taken from parties listed in theregister maintained under section 301 isprejudicial to the interest of company, is notapplicable.

(g) As no loans are taken by the company, theclause of repayment of interest and principalamount to parties is not applicable to thecompany.

IV. In our opinion and according to the informationand explanations given to us, there aregenerally adequate internal control systemscommensurate with the size of the companyand the nature of its business with regard topurchase of inventory and fixed assets and forsale of goods and services. There is nocontinuing failure by the company to correctany major weaknesses in internal control.

V. (a) In our opinion and according to theinformation and explanation given to us ,since no contracts or arrangements referredto in section 301 of the Companies Act, 1956have been made by the company in respectof any party in the financial year, the entryin the register U/s.301 of the CompaniesAct, 1956 does not arise.

(b) According to the information andexplanations given to us, as no suchcontracts or arrangements made by thecompany, the applicability of the clause ofcharging the reasonable price having regardto the prevailing market prices at therelevant time does not arise.

VI.The Company has not accepted any depositsfrom the public and hence the applicability ofthe clause of directives issued by the ReserveBank of India and provisions of section 58A,58AA or any other relevant provisions of theAct and the rules framed there under does notarise.

VII.In our opinion, the company is having internalaudit system, commensurate with its size andnature of its business.

VIII.In respect of the Company, the CentralGovernment has not prescribed maintenance ofcost records under clause (d) of Subsection (i)of 209 of the Companies Act 1956.

IX.(a)The Company is generally regular indepositing statutory dues including PF, ESI,Income Tax, Cess, and any other statutory dueswith the appropriate authorities. However, asat the end of last financial year there were someamounts outstanding which were due for morethan 6 months from the date they becamepayable. The following are the details:



17

Nature of due Amount Rs. Income Tax Payable 1,43,52,397

TDS Payable 70,67,957

(b) According to the information and explanationsgiven to us, the following dues have not beendeposited by the Company on account ofdisputes.

Name of the Statute

Assessment Year Amount Rs. Forum where

dispute is Pending Income Tax 2010-11 1,00,42,800 Appeal Income Tax 2009-10 90,84,488 Appeal

X.The Company has been registered for a periodof not less than 5 years, and the company hasno accumulated losses at the end of the financialyear and the company has not incurred anycash losses during the financial year and in theimmediately preceding financial year also.

XI. According to information and explanationsgiven to us, the company has not defaulted inrepayment of dues to financial Institutions orBanks.

XII. According to the information and explanationsgiven to us, the Company has not granted anyloans or advances on the basis of security byway of pledge of shares, debentures and othersecurities and hence the applicability of theclause regarding maintenance of adequatedocuments in respect of loans does not arise.

XIII. The Company is not covered by the provisionsof special statute applicable to Chit Fund inrespect of Nidhi/Mutual Benefit Fund/Societies.

XIV.According to the information andexplanations given to us, the company is notdealing or trading in Shares, Securities,Debentures and other investments and hencethe provisions of clause 4(xiv) of the Companies(Auditor’s Report) Order 2003, are notapplicable to the Company.

XV. According to the information and explanationsgiven to us, the Company has not given anyguarantee for loans taken by others from Banksor Financial Institutions, and hence theapplicability of this clause regarding terms andconditions which are prejudicial to the interestof the company does not arise.

XVI.According to the information andexplanations given to us, the Term Loansobtained by the company were applied for thepurpose for which such loans were obtained bythe Company.

XVII. On the basis of our examination of the booksand accounts and according to the informationand explanations given to us, in our opinionthe funds raised on short term basis have notbeen used for Long term investment andviceversa.

XVIII.According to the information andexplanations given to us, the Company has notmade any preferential allotment of shares toparties and companies covered in the registermaintained under Section 301 of the CompaniesAct, 1956 and hence the applicability of theclause regarding the price at which shares havebeen issued and whether the same is prejudicialto the interest of the Company does not arise.

XIX.According to the information and explanationsgiven to us, the company does not have anydebentures and hence the applicability of theclause regarding the creation of security orcharge in respect of debentures issued does notarise.

XX. According to information and explanationsgiven to us, the company has not raised moneyby way of public issues during the year, hencethe clause regarding the disclosure by themanagement on the end use of money raisedby public issue is not applicable.

XXI.According to the information and explanationsgiven to us, no fraud on or by the Companyhas been noticed or reported during the yearunder audit.

For P. Murali & Co.,Chartered Accountants

Firm Registration Number:007257S

P. Murali Mohana RaoPartner

Membership no. 23412Place: HyderabadDate : 29-05-2013



As on 31/03/2013 As on 31/03/2012Rs Rs

I. EQUITY AND LIABILITIES

(1) Shareholder's Funds(a) Share Capital 1 112,452,050 112,452,050 (b) Reserves and Surplus 2 568,855,199 568,250,050

(2) Share Application Money Pending Allotment

(3) Non-Current Liabilities(a) Long-Term Borrowings 3 88,806,748 72,462,184 (b) Defferred Tax Liabilities (Net) 4 5,376,365 5,002,719 (c ) Long Term Provisions 5 850,000 550,000

(4) Current Liabilities(a) Short-Term Borrowings 6 216,122,050 200,000,000 (b) Trade Payables 7 35,375,395 35,689,716 (c) Other Current Liabilities 8 27,676,842 33,288,110

Total 1,055,514,649 1,027,694,829 II.Assets(1) Non-Current Assets(a) Fixed Assets (i) Tangible Assets 9 & 10 6,539,795 7,827,296 (ii) Intangible Assets 9 & 10 436,816,089 424,661,738 (iii) Capital Work-in-Progress 69,590,329 69,590,329 (b) Non-Current Investments 11 5,844,527 5,844,527 (c) Long Term Loans and Advances 12 60,459,195 59,774,391

(2) Current Assets(a) Trade Receivables 13 398,025,466 340,434,122 (b) Cash and Cash Equivalents 14 2,297,341 26,513,677 (c) Short-Term Loans and Advances 15 397,904 9,490,131 (d) Other Current Assets 16 75,544,003 83,558,618

Total 1,055,514,649 1,027,694,829 Significant Accounting Policies & the Accompanying Notes are an Integral Part of the Financial Statements

AS PER OUR REPORT OF EVEN DATE

For P.Murali & Co., For SANKHYA INFOTECH LIMITEDChartered AccountantsFirm Registration Number: 007257S

N SrinivasP.Murali Mohana Rao Vice Chairman PartnerMembershi Number. 023412

Place : Hyderabad Company SecretaryDate : 29-05-2013


N Sridhar

SANKHYA INFOTECH LIMITED

Particulars Note No

Balance Sheet as at 31st March, 2013

#405, NSIC EMDBP BUILDING, ECIL POST HYDERABAD -500062 INDIA



19

Year Ended 31/03/2013


Rs Rs

Revenue From Operations 17 1,057,107,636 765,402,894 Other Income 18 (5,283,774) 4,948,802

Total Revenue 1,051,823,862 770,351,696 Expenses:Employee Benefit Expense 19 596,500,021 445,435,131 Other Operating Expenses 20 52,497,000 44,213,425 Administrative Expenses 21 137,595,040 92,947,057 Financial Costs 22 40,108,775 30,808,487 Depreciation and Amortization Expense 9 & 10 47,988,776 34,596,838 Other Expenses 23 175,925,040 106,931,681

Total Expenses 1,050,614,652 754,932,619

Profit Before Exceptional and Extraordinary Items and Tax 1,209,210 15,419,076 Extraordinary Items - - Profit Before Tax 1,209,210 15,419,076 Tax Expense: (1) Current tax (MAT) 230,415 3,085,010 (2) Deferred tax 373,646 5,002,719 Profit/(Loss) for the period 605,149 7,331,347 Earning Per Equity Share: (1) Basic 0.05 0.65 (2) Diluted 0.05 0.65 Significant Accounting Policies & the accompanying Notes are an Integral Part of the Financial Statements


For P.Murali & Co., For SANKHYA INFOTECH LIMITEDChartered AccountantsFirm Registration Number: 007257S

N Srinivas

Vice Chairman

P.Murali Mohana Rao PartnerMembershi Number. 023412

Company SecretaryPlace : HyderabadDate : 29-05-2013


Profit and Loss statement for the year ended 31st March, 2013

Particulars Note No


N SridharChairman & Managing

Director



Cash Flow Statement for the Year Ended 31st March, 2013 Amount In Rs.

ParticularsYear Ended

31- March-2013Year Ended

31- March-2012A. CASH FROM OPERATING ACTIVITIESNet Profit/(Loss) Before Tax 1,209,210 15,419,076 Adjustment for:Depreciation 47,988,776 34,596,838 Interest Expenses 9,446,743 19,216,057 Operating Profit Before Working Capital Changes 58,644,729 69,231,972 Adjustment for:Decrease/(Increase) in Trade Receivables (57,591,344) (111,413,950) Decrease/(Increase) in Short Term Loans & Advances 9,092,227 (9,476,631) Decrease/ (Increase) in Other Current Assets 8,014,615 145,850,473 Increase/(Decrease) in Short term Borrowings 16,122,050 200,000,000 Increase/(Decrease) in Trade Payables (314,321) (66,420,496) Increase/(Decrease) in Other Current Liabilities (5,841,683) 4,092,368 Increase/(Decrease in Long term provision 300,000 - Decrease/(Inrease) in Long Term Loans & Advances (684,804) 3,213,434 Net Cash Flow from Operating Activities A 27,741,468 235,077,170

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (58,855,625) (120,658,236) Increase in Capital Work in process - (6,268,769) (Increase) / Decrease in Investments - - Net Cash from/(Used) in Investing Activities B (58,855,625) (126,927,005)

C. CASH FLOW FROM FINANCING ACTIVITIESIncrease in Equity Share Capital - 27,452,000Increase/(Decrease) in Long term borrowings 16,344,564 (133,817,227) Increase/(Decrease) in Capital Reserve - 8,403,073 Increase/(Decrease) in Share Warrants Application Money - (40,154,412) Increase/(Decrease) in equity share premium - 60,476,756 Interest Paid (9,446,743) (19,216,057) Net Cash from/(Used) in Financing Activities C 6,897,821 (96,855,867) Net increase in Cash and Cash Equivalents ( A+B+C ) (24,216,336) 11,294,297 Opening Cash and Cash Equivalents 26,513,678 15,219,381 Closing Cash and Cash Equivalents 2,297,341 26,513,678

As per our report of even datefor M/s.P. Murali & CoChartered Accountants N. Sridhar N Srinivas

Vice ChairmanP. Murali Mohana RaoPartnerMembership No.: 23412

Place: Hyderabad Company SecretaryDate: 29-05-2013

SANKHYA INFOTECH LIMITED#405, NSIC EMDBP BUILDING, ECIL POST HYDERABAD -500062 INDIA




21

Significant Accounting Policies1. Basis of preparation of financial statements:

The financial statements have been prepared tocomply in all material respects in with the IndianGenerally Accepted Accounting Principles (IGAAP)in India under the historical cost basis. IGAAPcomprises mandatory accounting standards asspecified in Companies Accounting StandardsRules, 2006, relevant guidelines issued by SecuritiesExchange Board of India, and relevant provisionsof Companies Act, 1956 as issued from time to time..The financial statements are prepared under thehistorical cost convention and accrual basis and inaccordance with the Generally Accepted AccountingPrinciples in India and the requirements of theCompanies Act 1956.

2. Use of estimatesThe preparation of the financial statements inconformity with Generally Accepted AccountingPractices requires Management to make estimatesand assumptions that affect the reported Assets andLiabilities and disclosures relating to contingentassets and liabilities as at the date of the FinancialStatements and reported amounts of Income andExpenses during the period. Although theseestimates are based upon management’s bestknowledge of current events and actions, actualresults could differ from these estimates.

3. Revenue recognitionRevenue is recognized to the extent that it isprobable that the economic benefits will flow to theCompany and the revenue can reliably be measured.Revenue from Services:

* Time and material contracts – Revenues arerecognized on the basis of time spent duly approvedby the respective customers.

* Fixed price contracts – Revenues are recognized onthe basis of approval received from the respectivecustomers in accordance with the “Percentage ofCompletion” method.

* Internal timesheets or timesheets submitted byvendors for time and material contracts and for fixedprice contracts based upon assessment of work done.Unbilled revenue recognized is subsequently billedto customers after receipt of approval.Other Income - In other income such as income frominterest is recognized using the time proportionmethod, based on rates implicit in the transaction.Significant Accounting Policies

1. ExpenditureAll software development and services purchasedare charged to cost of revenue in at which they wereinitially recorded during the year, or reported inprevious financial statements, are recognized asincome or as expenses in the year in which they arisethe year of acquisition. Provisions are made for allknown losses and liabilities. Where ever applicableleave encashment liability is provided on the basisof actuarial valuation.

2. Fixed assets, intangible assets and Capital workin progress.Fixed assets are stated at cost less accumulateddepreciation. Direct costs are capitalized until fixedassets are ready for use. “Cost means” cost ofbringing the asset to its working condition for itsintended use. Fixed assets are capitalized as perthe statement issued by the Institute of CharteredAccountants of India. Capital work in progresscomprises of the expenditure incurred in the processof developing the intangible assets for the time beingand the assets are not yet ready for their intendeduse as at the date of Balance sheet.An intangible asset is recognized, when it isprobable that the future economic benefitsattributable to the assets will flow to the enterpriseand where its cost can be reliably measured. Thecompany frequently expends resources, and incursliabilities, on the acquisition, development,maintenance and enhancement of intangibleresources such as scientific or technical knowledge,design and implementation of new process orsystems, license, intellectual property, marketknowledge and trademarks in order to makesoftware’s and brands. Intangible assets arerecorded as per AS26 of IGAAP.

3. DepreciationDepreciation on fixed assets is applied on the writtendown value method by following the ratesprescribed in Schedule XIV of the Companies Act,1956. Depreciation on addition to fixed assets isprovided on pro-rata basis from the date the assetsare put to use. Depreciation on sale/deduction fromfixed assets is provided for upto the date of sale,deduction, discardment as the case may be.Individual low cost assets (acquired for less thanRs.5000/-) are entirely depreciated in the year ofacquisition.Intangible assets are amortized as per AS 26 of IAS.The useful life of all the intangible assets has beenreassessed and the same is amortized at 10% WDVfrom the current year. The assets in the developmentstage are amortized only after the first sale is made.The intangible assets which are treated as “not fullydeveloped” and only after the first sale is madedepreciation are provided as per the AS 26 of IAS.As the company has registered sale for theseproducts and billing would commence in the nextfinancial year depreciation of these products wouldcommence from FY 2011-12 and without significanteffect on profitability.Significant Accounting Policies

1. Unbilled Revenue:The work in progress is the unbilled amount for thecontracts that are in execution stage and the clientdeliverables are either in testing phase orcertification/ acceptance stage, Therefore revenueis not recognized.



2. InvestmentsInvestments in wholly owned subsidiary are at cost.

3. Research and developmentCapital Expenditure incurred on research anddevelopment is depreciated over the estimatedlife of related assets and the revenueexpenditure is expensed as incurred.

4. Employee BenefitsProvident fund:Employees receive benefits from a providentfund. The contributions to the Provident Fundare made as per the Employee Provident FundAct as amended from time to time.Compensated absences:The employees of the Company are entitled tocompensate absence. The employees can carry-forward a portion of the unutilized accruedcompensated absence and utilize it in futureperiods or receive cash compensation atretirement or termination of employment forthe unutilized accrued compensated absence.The Company records an obligation forcompensated absences in the period in whichthe employee renders the services that increasethis entitlement. The Company measures theexpected cost of compensated absence as theadditional amount that the Company expectsto pay as a result of the unused entitlement thathas accumulated at the balance sheet date. Longterm compensated absences is accrued basedon actuarial valuation at the balance sheet datecarried out by an independent actuary.Gratuity:The contributions to Gratuity are made inaccordance with the Payment of Gratuity Act,1972, and for this the Company is using fundmanaged by the Life Insurance Corporation ofIndia (LIC).

5. Foreign currency transactions InitialRecognitionForeign currency transactions are recorded in thereporting currency, by applying to the foreigncurrency amount the exchange rate betweenthe reporting currency and the foreign currencyat the date of transaction.ConversionForeign currency monetary items are reportedusing the closing rate. Non-monetary itemswhich are carried in terms of historical costdenominated in a foreign currency are reportedusing the exchange rate at the date of thetransaction; and non-monetary items which arecarried at fair value or other similar valuationdenominated in a foreign currency are reportedusing the exchange rates that existed when thevalues were determined.

Exchange DifferencesExchange differences arising on the settlement ofmonetary items at rates difference from those atwhich they were initially recorded during theyear, or reported in previous financial expensesin the year in which they arise.Exchange Contracts not intended for tradingor speculation purposesThe premium or discount arising at the inceptionof forward exchange contracts is amortized asexpense or income over the life of the contract.Exchange differences on such contracts arerecognized in the statement of profit and loss inthe year in which the exchange rates change. Anyprofit or loss arising on cancellation orrenewal of forward exchange contract isrecognized as income or as expense for the year.Translation of foreign branchThe financial statements of an integral foreignoperation are translated as if the transactions ofthe foreign operation have been those of thecompany itself.

6. Income TaxProvision for Income Tax, comprising current taxand deferred tax, is made on the basis of theresults of the year.In Accordance with Accounting Standard 22Accounting for Taxes on Income, issued by theInstitute of Chartered Accountants of India, thedeferred tax for timing differences between thebook and the tax profits for the year is accountedfor using the tax rates and laws that have beenenacted or substantively enacted as of thebalance sheet date.Deferred tax assets arising from temporarytiming differences are recognized to the extentthere is a reasonable certainty that the assets canbe realized in the future.

7. Earnings per shareBasic earnings per share are calculated bydividing the net profit or loss for the periodattributable to equity shareholders by theweighted average number of equity sharesoutstanding during the year.

8. Cash flow statementCash flows are reported taking the indirectmethod, wherein net profit before tax is adjustedfor the transactions of non-cash nature and othersor other accruals of past or future receipts and /or payments. The cash flows from regular revenuegenerating, investing and financing activities ofthe company are segregated.



23

Notes to Financial Statements for the year ended 31-03-2013

As on 31/03/2013 As on 31/03/2012Rs Rs

a Share Capital ( For each class of capital ) (a) Authorised Current Year - No. of Shares : 1,50,00,000 150,000,000 Previous Year - No. of Shares : 1,50,00,000 150,000,000 (b) Issued Current Year - No. of Shares : 1,12,45,205 112,452,050 Previous Year - No. of Shares : 1,12,45,205 112,452,050 (c) Subscribed & Fully Paid Up Current Year - No. of Shares : 1,12,45,205 112,452,050 Previous Year - No. of Shares : 1,12,45,205 112,452,050 (d) Subscribed & not fully paid up (e) Par value per share Rs. 10

Total Equity Share capital 112,452,050 112,452,050

b Forfeited Shares Amount - -

c A Reconcilation of the Number of Shares Outstanding at the Beginning and at the end of the Reporting Period:

Equity Shares of Rs.10Each, Fully paid up :At the Beginning 11,245,205 8,500,005 Issued During the year - Cash Issue - 2,745,200 Forfeited / Bought Back During the Year - - At the End 11,245,205 11,245,205

d Details of Shareholder Holding more than 5% Shares of the Company:

Equity Shares of Rs. 10 each Held By Srinivas N - No. Of Shares (C.Y ) 820953, ( P.Y) 820953 7.30% 7.30% Sridhar N - No. Of Shares (C.Y ) 762152, ( P.Y) 762152 6.78% 6.78% Parvatha Vardhani N - No. Of Shares (C.Y ) 854600, ( P.Y) 854600 7.60% 7.60% Gayatri N - No. Of Shares (C.Y ) 776109, ( P.Y) 776109 6.90% 6.90% HBL - No. Of Shares (C.Y ) 2060482, ( P.Y) 840482 18.32% 18.32%

As on 31/03/2013 As on 31/03/2012Rs Rs

I RESERVES AND SURPLUSa) Capital reserve

As at the commencement of the year 8,403,073 - Add: Additions during the year - 8,403,073

8,403,073 8,403,073 b) Securities Premium Reserve

As at the commencement of the year 152,188,406 91,711,650 Add: Additions during the year - 60,476,756

152,188,406 152,188,406 c) General Reserves

As at the commencement of the year 3,739,921 3,739,921 3,739,921 3,739,921

d) Surpuls : Opening Balance - Profit and Loss Account 403,918,650 396,587,303 Add: Transfer from Profit & Loss Account 605,149 7,331,347

404,523,799 403,918,650

Total Reserves and Surplus 568,855,199 568,250,050


NOTE NO. 1 : SHARE CAPITAL

S.NO. Particulars

Number of Shares

% of Share Holding

S. No. Particulars

NOTE NO. 2 : RESERVES AND SURPLUS




As on 31/03/2013 As on 31/03/2012Rs Rs

I Long Term Borrowings a) Term Loans: From Banks: Secured - Refer Note No. 3(i) 33,750,000 12,367,926 From Other Parties: Secured - Refer Note No. 3(ii) 18,758,959 20,000,000

b) Loans and Advances From Related Parties Unsecured - Refer Note No. 3(iii) 36,297,789 40,094,258 Name of the PartyNote No.3(i): The term loan was taken from IDBI Bank Ltd which was secured by first charge on Fixed Assets of the Company and Second Charge on all current assets of the Company, Mortgage of land belongs to Mrs. Parvat Vardhini which is situated at Yadaram Village, Medchal and and pledge of share belonging to promoter Director in favour of IDBI Bank Ltd, Branch Hyderabad and it is further secured by personal guarantee of Promoter Director.

Note No.3(ii): The Loan was taken from Merlin Holdings Limited which was secured by pledge of share belonging to promoter Directors.

Note No 3(iii) : The unsecured loan is taken from the shareholders of the company & others

Total Long Term Borrowings 88,806,748 72,462,184

As on 31/03/2013 As on 31/03/2012Rs Rs

I Opening Deferred tax Liability 5,002,719 - Add:Deferred Tax Liability for the Year 12,594,323 15,237,127

Gross Deferred tax Asset 17,597,042 15,237,127 Opening Deferred Tax Asset - - Depreciation Loss (12,220,677) (10,234,408)

Gross Deferred tax Asset (12,220,677) (10,234,408)

Deferred Tax Liability/ ( Asset ) - Net 5,376,365 5,002,719

As on 31/03/2013 As on 31/03/2012Rs Rs

I Gratuity payable 850,000 550,000

Total Long Term Provisions 850,000 550,000

NOTE NO. 5 : LONG TERM PROVISIONS.


S. No.

NOTE NO.3 : LONG TERM BORROWINGS

S.No. Particulars

Particulars

NOTE NO. 4 : DEFERRED TAX LIABILITY ( NET )

S. No. Particulars



25

Notes to Consolidated Financial Statements for the year ended 31-03-2013

As at 31-Mar-13 As at 31-Mar-12Rs Rs

I Short Term Borrowings a) Loans Repayable on Demand: From Banks Secured - Refer Note No. 6(i) 216,122,050 200,000,000

Note No.6(i): The Working capital loan was taken from IDBI Bank Ltd which was secured by first charge on All current assets of the Company and Second charge on all fixed Assets of the Company, Mortgage of land belongs to Mrs. Parvat Vardhini which is situated at Yadaram Village, Medchal and and pledge of share belonging to promoter Director in favour of IDBI Bank Ltd, Branch Hyderabad and it is further secured by personal guarantee of Promoter Director.

Total Short Term Borrowings 216,122,050 200,000,000


I a) Trade Payables 35,505,077 35,722,263

Total Trade Payables 35,505,077 35,722,263


Statutory LiabilitiesProvision for Income Tax 14,352,397 15,742,244 Service Tax Payable 3,764,983 913,010 TDS Payable 7,634,262 7,394,116 ESI Payable 18,999 12,606 PF Payable 160,084 186,248 PT Payable 18,230 18,970 MAT Payable 230,415 2,134,034 Unclaimed Dividend 552,412 552,412 Other ProvisionsIDBI cash credit Interest Payable - 2,447,520 IDBI Term loan Interest Payable - 110,246 IDBI Term loan repayment (partly) - 3,750,000 Works Contract tax 1,059,888 -

Total Other Current Liabilites 27,791,671 33,261,406


Particulars

Particulars

NOTE NO. 7 : TRADE PAYABLES

NOTE NO. 6 : SHORT TERM BORROWINGS.

S. No.

S. No.

NOTE NO. 8 : OTHER CURRENT LIABILITES

S. No.

Particulars



27


As on 31/03/2013 As on 31/03/2012Rs Rs

I Non- Current Investments1) Investment in Subsidiaries a) Equity Shares -Sankhya Sarl, France and 100% of holding 172,920 172,920 -Sankhya US Corporation, US and 100% of holding 4,671,607 4,671,607 -Mahasena Info Technologies (India) Pvt Ltd, and 100% of holding 1,000,000 1,000,000

Total Non - Current Investments 5,844,527 5,844,527

As on 31/03/2013 As on 31/03/2012Rs Rs

I Long - Term Loans and Advances:a) Capital Advanceb) Security Deposit Secured - Refer Note 12(i) 6,408,204 5,723,399 c) Loans and Advances to Related Parties Unsecured (advance to Sankhya US (wos) 54,050,991 54,050,992

Note No 12(i): EMD is provided for the various projects, and fixed deposit were kept with Central Excise, Electricity Department

Total Long Term Loans & Advances 60,459,195 59,774,391

As on 31/03/2013 As on 31/03/2012Rs Rs

I Outstanding for a Period of Morethan 6 months From the Date they are Due for Payment

Unsecured, Considered Good(More than 6 Months) 29,272,957 63,156,687 Others

Unsecured, Considered Good(Less than 6 Months) 368,752,509 277,277,435

Total Trade Receivables 398,025,466 340,434,122


NOTE NO. 11 : NON- CURRENT INVESTMENTS

S. No. Particulars

NOTE NO. 12 : LONG TERM LOANS AND ADVANCES

S. No. Particulars

NOTE NO. 13 : TRADE RECEIVABLES

S. No. Particulars




As on 31/03/2013 As on 31/03/2012

Rs RsI Cash and Cash Eqivalents :

a) Balances with Banks : 1) On Current Accounts 1,742,969 25,932,305 2) Un Paid Dividend Account 552,412 552,412 b) Cash on Hand 1,960 28,961

Total Cash and Cash Equivalents 2,297,341 26,513,677

As on 31/03/2013 As on 31/03/2012

Rs RsI Short -Term Loans and Advances:

a) Other Loans and Advances Secured Advance for Expenditure 397,904 9,490,131

Total Short Term Loans & Advances 397,904 9,490,131

As on 31/03/2013 As on 31/03/2012

Rs Rs1 Unbilled Reveune 74,523,344 83,400,617 2 Advance Taxes 772,628 - 3 Other current assets 63,945 - 4 Prepaid Expences - 62,595 5 Interest Accrued 108,116 53,250 6 Vat (Refund) 75,970 42,156

Total Other Current Assets 75,544,003 83,558,618

NOTE NO. 15 : SHORT TERM LOANS AND ADVANCES

S. No. Particulars

NOTE NO.16 : OTHER CURRENT ASSETS

S. No. Particulars

NOTE NO. 14 : CASH AND BANK BALANCES

S. No. Particulars




29




Rs RsI Revenue from operations

(a) Sale of Services 1,057,107,636 765,402,894 Domestic Income 32,038,956 22,069,772 Export Income 1,025,068,679 743,333,121

Total Revenue From Operations 1,057,107,636 765,402,894



Rs RsI (a) Interest Income 538,401 1,087,464

(b) Net Gain/Loss on Sale of Investments - (412,107.00) (c) Other Non-Operating Income - - (d) Net gain/loss on foreign currency translation and transaction (5,822,175) 4,273,445

Total Other Income (5,283,774) 4,948,802



Rs RsI (a) Salaries & Wages 595,073,912 444,397,825

(b) Contribution to Provident & Other Funds 1,240,562 881,760 (c) Staff Welfare Expenses 185,547 155,546

Total Employee Benefit Expenses 596,500,021 445,435,131

S. No. Particulars


ParticularsS. No.

NOTE NO. 18 : OTHER INCOME

S. No. Particulars

NOTE NO. 17 : REVENUE FROM OPERATIONS

NOTE NO. 19 : EMLOYEE BENEFIT EXPENSES






Rs RsI (a) Consumption of Stores & Spares 9,169,764 9,921,809

(b) Power & Fuel 2,674,315 1,766,478 (c) Rent 9,488,037 6,959,642 (d) Computer Repairs & Maintenance 20,402,595 16,758,710 (e) Insurance 3,114,382 3,390,071 (f) Rates & Taxes 5,439,070 5,178,367 (g)Miscellaneous Expenditure 2,208,837 238,348

Total Other Expenses 52,497,000 44,213,425



Rs RsI (a) Telephone, Postage and Others 3,296,118 2,867,652

(b) Business Promotion Expenses 37,070,910 25,542,212 (c) Conveyance 9,718,070 5,792,039 (d) Office Maintenance 8,156,806 7,336,343 (e) Printing & Stationery Expenses 3,690,830 2,156,336 (f) Managerial Remuneration 7,200,000 7,218,720 (g) Consultancy Charges 68,048,605 41,830,780 (h) Director Sitting Fee 70,000 100,000 (h) Payment to Auditors: (i) As Auditor 160,000 100,000 (ii) For Reimbursement of expenses 183,701 2,976

Total Administrative Expenses 137,595,040 92,947,057

S. No. Particulars

NOTE NO. 20 : OTHER OPERATING EXPENSES

Particulars

NOTE NO. 21 : ADMINSTRATIVE EXPENSES

S. No.




31




Rs RsI (a) Interest Expenses :

- Interest on Cash Credit 28,418,778 8,283,045 - Interest on Term Loan 4,933,776 465,777 - Interest on Unsecured Loan 4,512,967 18,750,280 - Loan processing Charges 636,208 2,334,475 - Bank charges 1,607,046 974,910

Total Finance Cost 40,108,775 30,808,487



Rs Rs

I (a) Staff Recruitment & Training Expenditure 8,917,148 5,472,624 (b) Advertisement 4,919,850 2,617,712 (c) Communication charges 5,054,433 5,902,737 (d) AGM expenses 15,600 5,935 (e) Books & Periodicals 229,836 156,107 (f) Membership & Subcriptions 835,834 853,980 (g) Other expenses 203,293 - (h) Travel Expenditure 46,620,060 42,469,558 (i) Research & Development Expenses 76,547,841 49,453,028 (j)Annual maintainance charges 4,871,639 - (k)Bad Debts written off 27,709,506 -

Total Other expenses 175,925,040 106,931,681

S. No. Particulars

NOTE NO.23 : OTHER EXPENSES

S. No. Particulars

NOTE NO. 22 : FINANCE COST




NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31, 201324. Investments

Investments in wholly owned subsidiary are at cost. No fresh Investments are made during the financialyear 2012-13.

25. Foreign TravelThe foreign travel includes Director’s travel amounting to Rs. 5, 60, 728/–

26. Directors Remuneration(Amount In .)

Particulars 31-Mar -2013 31-Mar -2012 Salary including Allowances

Chairman Managing Director & CEO 36,00,000 36,09,360 Director 36,00,000 36,09,360

Note: As the future liability for gratuity and leave encashment is provided on an actuarial basis for theCompany as a whole, the amount pertaining to the Directors is not ascertained and therefore notincluded above.

27. Earnings per Share(Amount In .)

Particulars 31-Mar -2013 31-Mar -2012 Net Profit for the year 6,05,149 73,31,347

Weighted average No of shares outstanding during the year 1,12,45,205 1,12,45,205

Earnings per share (Rs.) 0.05 0.65 Nominal Value of the Share (Rs.) 10 10

28. Related Party Disclosuresa) Related Parties

Sl.No Name Relationship 1 SANKHYA SARL, France Wholly Owned Subsidiary 2 SANKHYA US Corporation Wholly Owned Subsidiary

3 Mahasena Info Technologies

(India) Pvt Ltd Wholly Owned Subsidiary

4 Sri. N. Sridhar Chairman & Managing Director

5 Sri. N.Srinivas Vice Chairman b) Transactions with Related Parties Subsidiary companies

(Amount in .)

Sl. No Name Outstanding as on 31-Mar -2013

Outstanding as on 31-Mar -2012

1 SANKHYA SARL, France (Investment) 1,72,920 1,72,920

2 SANKHYA US Corporation

(Investment) 46,71,607 46,71,607

Advance for Expenses 5,40,50,991 5,40,50,991

3 Mahasena Info Technologies (India) Pvt Ltd- Investment 10,00,000 10,00,000

4 Mahasena Info Technologies (India) Pvt Ltd- Sales 1,79,995 -

c) Key Managerial Personnel (Amount .)

Sl. No Name 31-Mar -2013 31-Mar -2012

1 Sri. N. Sridhar (Remuneration) 36,00,000 36,09,360

2 Sri.N.Srinivas (Remuneration) 36,00,000 36,09,360



33

29. Micro, Small and Medium Enterprise.There are no Micro, Small and Medium Enterprise, to whom the Company owes dues, which areoutstanding at the Balance Sheet date, computed on unit wise basis.

30. Research and developmentCapital Expenditure incurred on research and development is depreciated over the estimated life ofrelated assets and the revenue expenditure is expensed as incurred.The company has in – House Research & Development Centre involved in developmental activitiesfor new products in the fields of Simulation and Training. Details of Capital & Revenue Expenditureincurred are as detailed below.

Sl.No EXPENDITURE (Rs. ) 2012-13 2011-12 A Revenue

Employee cost Rent

Electricity

– 7,49,43,744

9,63,468 6,40,629

– 4,83,25,152

7,13,676 4,14200

Total 7,65,47,841 4,94,53,028

31. Write offThe Company has made a total write off of Rs. of the invoices raised on The Institute of CharteredAccountants of India amounting to Rs 277.09 Lakhs.

32. Balance ConfirmationBalances as appearing under Unsecured Loans, Sundry Debtors, Loans and advances are as per theconfirmations received from the respective heads of account holders.

32. Unclaimed DividendThe Company has an amount of Rs.5.52Lakhs representing unclaimed Dividend

(Amount in )

Sl. No

Financial year

Interim / Final

Date of declaration

Rate of dividend

Dividend amount

Excluding Tax


Tax

Amount remaining

unclaimed as on 31.03.2013

1 2006-07 Final 28-09-2007 10% 99,44,156 14,4,151 3,12,227 2 2007-08 Final 29-12-2008 12% 1,02,00,006 17,33,491 2,40,185

33. Segment ReportingThe company’s operations relate to providing IT services, delivered to customers globally operating intransportation segment. Income and expenses which are direct in nature in relation to segments iscategorized based on items that are identifiable individually to that segment, rest are categorized inrelation to the associated turnover of the segment.Expenses such as Depreciation and Interest, which form a significant component of total expenses, arenot specifically allocable to specific segment as the underlying services are used interchange

34. Segment Information:The Company has identified two reporting segments at standalone level viz., Software Services & Software Products.

Segments have been identified and reported taking into account nature of products and services the differingrisks, returns and the internal business reporting systems. Accounting policies adopted for segment reportingare in line with Accounting Policy of the company and are in accordance with the AS-17.



Primary Segment Information : (Amount in .)

Sl. No. Particulars Software Services Software Products Total

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 1 REVENUE

External Turnover

1,057,107,636 764,505,894 - 897 ,000.00 1,057,107,636 765,402,894

Inter Segment Turnover NIL NIL NIL NIL NIL NIL TOTAL REVENUE 1,057,107,636 764,505,894 - 897 ,000.00 1,057,107,636 765,402,894 2 RESULTS

Operating Profit

40,779,584 45,140,100 - - 40,779,584 45,140,100

Interest Expenses 40,108,775

30,808,487 - - 40,108,775 30,808,487

Interest Income 538,401

1,087,464

- - 538,401 1,087,464

3 Profit Before Tax 1,209,210

15,419,076 - - 1,209,210 15,419,076

Current Tax

230,415 3,085,010 - - 230,415 3,085,010

Deferred Tax

373,646 5,002,719 - - 373,646 5,002,719

Profit after Tax 605,149

7,331,347 - - 605,149 7,331,347

OTHER INFO 4 Segment Assets NIL NIL NIL NIL NIL NIL Unallocated Corporate Assets NIL NIL NIL NIL 443,355,884 432489034 Total Assets NIL NIL NIL NIL 443,355,884 432,489,034 5 Segment Liabilities NIL NIL NIL NIL NIL NIL

Unallocated Corporate Liabiliti es

NIL NIL NIL NIL 374,207,400 346,992,749

Total Liabilities NIL NIL NIL NIL 374,207,400 346,992,749 6 Capital Employed NIL NIL NIL NIL 776,340,362 758,717,003 7 Capital Expenditure–Net NIL NIL NIL NIL 512,946,213 502,079,363 8 Depreciation NIL NIL NIL NIL 47,988,776 34,596,838

9 Non Cash Exp. Other than Depreciation

NIL NIL NIL NIL 0.00 0.00

35. Regrouping & Rounding offThe previous year’s figures have been reclassified and regrouped, wherever necessary to confirm theCurrent Year classification and to confirm to the relevant laws. Paise have been rounded off to thenearest rupee.As per our report of even date For and on behalf of the BoardFor P.Murali & Co

Chartered Accountants

P. Murali Mohana Rao N. Sridhar N. SrinivasPartner Chairman & Managing Director. Vice ChairmanMembership No.23412

Place: HyderabadDate: 29th -May-2013



35

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE.

I Registration Details Registration No: 01-45306 State Code 01 Balance Sheet Date: 31st March 2013

II Capital Raised During the Year [Amount in Rs] Public Issue Nil Preferential Issue Nil Rights Issue Nil Bonus Issue Nil Private Placement Nil Rights Issue Nil

Bonus Issue Nil Private Placement Nil

III Position of Modification and deployment of Funds

Total Assets 1,055,514,649 Total Liabilities 1,055,514,649

Sources of Funds Paid Up Capital 112,452,050

Share application Money Nil Secured Loans 268,631,009 Reserves & Surplus 568,855,199

Application of Funds Net Fixed Assets 443,355,884 Miscellaneous Expenditure Nil

IV Performance of the Company Turnover 1,051,823,862 Profit / Loss Before Tax 1,209,210 Earnings per share in Rs ( Annualized) 0.05 Dividend Nil

V Generic Name of the Three Principel Products / Services of the Company (As per monetary terms) Item Code (ITC Code) Nil

As per our report of even date For and on behalf of the Board For P.Murail & Co., of M/s. Sankhya Infotech ltd.

The accompanying Notes are an integral part of the Financial Statements

P.Murali Mohana Rao N.Sridhar N.Srinivas Partner Chairman & Vice Chairman Membership No.: 23412 Managing Director

Place: Hyderabad Date: 29th-May-2013



INDEPENDENT AUDITOR’S REPORT

To the Board of Directors of Sankhya Infotech Limited

Report on Consolidated Financial Statements:

We have audited the accompanying consolidated financial statements of Sankhya Infotech Limited(“the Company”) and its subsidiaries (collectively referred to as “Sankhya Group”), which comprisethe consolidated Balance Sheet as at March 31, 2013, and the consolidated Statement of Profit and Lossand the consolidated Cash Flow Statement for the year then ended, and a summary of significantaccounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements:

Management is responsible for the preparation of these consolidated financial statements that give atrue and fair view of the consolidated financial position, consolidated financial performance andconsolidated cash flows of the Company in accordance with accounting principles generally acceptedin India. This responsibility includes the design, implementation and maintenance of internal controlrelevant to the preparation and presentation of the consolidated financials. As there is no reporting on‘Other Legal and Regulatory Requirements’, there is no necessity of including the heading ‘Report onthe Financial Statements’ above the introductory paragraph statements that give a true and fair viewand are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute ofChartered Accountants of India. Those Standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the consolidated financialstatements are free from material misstatement. An audit involves performing procedures to obtainaudit evidence about the amounts and disclosures in the consolidated financial statements. Theprocedures selected depend on the auditor’s judgment, including the assessment of the risks of materialmisstatement of the consolidated financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the Company’s preparation andpresentation of the consolidated financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accounting estimates madeby management, as well as evaluating the overall presentation of the consolidated financial statements.

We did not audit the financial statements of its below mentioned list of foreign subsidiaries whose totalrevenue amounting to Rs. Nil and total assets amounting to Rs. 329.31 lakhs was considered for thepurpose of financial statements. These financial statements have been audited by other auditors whosereports have been furnished to us for the purpose of consolidation and our opinion in so far as it relatesto the amounts included in respect of the subsidiaries are based solely on reports of the other auditors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

The following are the details of subsidiaries whose financial statements were audited by the otherauditors.

1 Sankhya Us Corporation USA Wholly owned Foreign Subsidiary 2 Sankhya Sarl France France Wholly owned Foreign Subsidiary



37

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, theconsolidated financial statements give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(a) In the case of the consolidated Balance Sheet, of the state of affairs of the Sankhya Group as at March31, 2013;

(b) In the case of the consolidated Profit and Loss Account, of the profit for the year ended on that date;and

(c) In the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on thatdate.

For P.Murali & Co.,Chartered Accountants

Firm’s Registration Number: 007257S

P. Murali Mohana Rao Partner

Membership Number: 023412Place: HyderabadDate : 29th May, 2013




I. EQUITY AND LIABILITIES(1) Shareholder's Funds(a) Share Capital 1 112,452,050 112,452,050 (b) Reserves and Surplus 2 542,838,356 542,300,783 (2) Share Application Money Pending Allotment - - (3) Non-Current Liabilities(a) Long-Term Borrowings 3 88,806,748 72,462,184 (b) Defferred Tax Liabilities (Net) 4 5,318,860 4,959,240 (c) Long Term Provisions 5 850,000 550,000 (4) Current Liabilities(a) Short-Term Borrowings 6 216,122,050 200,000,000 (b) Trade Payables 7 35,505,077 35,722,263 (c) Other Current Liabilities 8 27,791,671 33,261,406

Total 1,029,684,812 1,001,707,926 II.Assets(1) Non-Current Assets(a) Fixed Assets (i) Tangible Assets 9 6,539,795 7,827,403 (ii) Intangible Assets 10 436,816,089 424,661,738 (iii) Capital Work-in-Progress 69,590,329 69,590,329 (b) Non-Current Investments - - (c) Long Term Loans and Advances 11 6,408,204 5,723,399 (2) Current Assets(a) Trade Receivables 12 398,025,466 340,434,122 (b) Cash and Cash Equivalents 13 2,458,011 26,584,823 (c) Short-Term Loans and Advances 14 34,079,253 43,139,450 (d) Other Current Assets 15 75,767,666 83,746,662

Total 1,029,684,812 1,001,707,926 Significant Accounting Policies & the Accompanying Notes are an Integral Part of the Financial Statements


For P.Murali & Co., For. SANKHYA INFOTECH LIMITEDChartered AccountantsFirm Registration Number: 007257S

N Sridhar N SrinivasChairman & Vice Chairman

P.Murali Mohana Rao Managing Director PartnerMembership Number. 023412

Company SecretaryPlace : HyderabadDate : 29-05-2013


Particulars Note No

Consolidated Balance Sheet as at 31st March, 2013




39

Year Ended 31-Mar-13

Year Ended 31-Mar-12

Rs Rs

Revenue From Operations 16 1,057,287,631 765,402,894 Other Income 17 (5,283,774) 4,948,802

Total Revenue 1,052,003,857 770,351,696 Expenses:Employee Benefit Expense 18 596,500,021 445,435,131 Other Operating Expenses 19 52,658,000 44,213,425 Administrative Expenses 20 137,706,290 93,073,165 Financial Costs 21 40,117,331 30,816,387 Depreciation and Amortization Expense 9 & 10 47,988,776 34,596,838 Other Expenses 22 175,925,040 106,931,681

Total Expenses 1,050,895,458 755,066,627 Profit Before Exceptional and Extraordinary Items and Tax 1,108,399 15,285,068 Extraordinary ItemsProfit Before Tax 1,108,399 15,285,068 Tax Expense: (1) Current Tax 211,205 3,058,198 (2) Deferred tax 359,620 4,959,240 Profit/(Loss) for the Period 537,573 7,267,630 Earning Per Equity Share: (1) Basic 0.05 0.65 (2) Diluted 0.05 0.65 Significant Accounting Policies & the accompanying Notes are an Integral Part of the Financial Statements


For P.Murali & Co., For SANKHYA INFOTECH LIMITEDChartered AccountantsFirm Registration Number: 007257S N Sridhar

Chairman &Managing Director

P.Murali Mohana Rao N Srinivas Partner Vice Chairman Membership Number. 023412

Place : Hyderabad Company SecretaryDate : 29-05-2013


Consolidated Profit and Loss statement for the year ended 31st March, 2013

Particulars Note No




Consolidated Cash Flow Statement for the Year Ended 31st March, 2013 Amount In Rs.

ParticularsYear Ended

31- March-2013Year Ended

31- March-2012A. CASH FROM OPERATING ACTIVITIESNet Profit/(Loss) Before Tax 1,108,399 15,285,068 Adjustment for: - Depreciation 47,988,776 34,596,838 Interest Expenses 9,446,743 19,216,057 Operating Profit Before Working Capital Changes 58,543,918 69,097,964 Adjustment for:Decrease/(Increase) in Trade Receivables (57,591,344) (111,413,950) Decrease/(Increase) in Short Term Loans & Advances 9,060,197 (9,244,557) Decrease/ (Increase) in Other Current Assets 7,978,996 145,767,546 Increase/(Decrease) in Short term Borrowings 16,122,050 200,000,000 Increase/(Decrease) in Trade Payables (217,186) (66,647,425) Increase/(Decrease) in Other Current Liabilities (5,680,834) 4,092,475 Increase/(Decrease in Long term provision 300,000 - Decrease/(Inrease) in Long Term Loans & Advances (684,805) 3,296,357 Net Cash Flow from Operating Activities A 27,830,991 234,948,410

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (58,855,625) (120,658,343) Increase in Capital Work in process - (6,268,769) (Increase) / Decrease in Investments - Net Cash from/(Used) in Investing Activities B (58,855,625) (126,927,112)

C. CASH FLOW FROM FINANCING ACTIVITIESIncrease in Equity Share Capital - 27,452,000Increase/(Decrease) in Long term borrowings 16,344,564 (133,817,227) Increase/(Decrease) in Capital Reserve - 8,403,073 Increase/(Decrease) in Share Warrants Application Money - (40,154,412) Increase/(Decrease) in equity share premium - 60,476,756 Interest Paid (9,446,743) (19,216,057) Net Cash from/(Used) in Financing Activities C 6,897,821 (96,855,868) Net increase in Cash and Cash Equivalents ( A+B+C ) (24,126,812) 11,165,430 Opening Cash and Cash Equivalents 26,584,823 15,419,393 Closing Cash and Cash Equivalents 2,458,011 26,584,823

As per our report of even datefor M/s.P. Murali & CoChartered Accountants N. Sridhar N Srinivas

Vice ChairmanP. Murali Mohana RaoPartnerMembership No.: 23412

Place: Hyderabad Company SecretaryDate: 29-05-2013

SANKHYA INFOTECH LIMITED#405, NSIC EMDBP BUILDING, ECIL POST HYDERABAD -500062 INDIA




41

SIGNIFICANT ACCOUNTING POLICIES TO CONSOLIDATED FINANCIAL STATEMENTS

1) Basis of preparation of consolidated Financial Statements :

a. The consolidated Financial Statements are prepared in accordance with accounting Standards(AS21) on consolidated financial statements.

b. Accounts are prepared on the historical cost basis and on the principles of a going concern

c. Accounting policies not specifically referred to otherwise are consistent and in consonance withgenerally accepted accounting principles

2) Principles of Consolidation

a. The Financial Statements of Sankhya Infotech Ltd and its subsidiaries are consolidated on a line–by-line basis by adding together the book values of like items of assets, liabilities and income &expenses.

b. The Financial statements of Sankhya Infotech Ltd and its subsidiaries are consolidated usinguniform accounting policies for like transactions.

c. The consolidated financial statements relate to Sankhya Infotech Limited, the holding companyand its wholly owned subsidiaries (the Group). The consolidation of the Financial Statements ofthe Company with its subsidiaries has been prepared in accordance with the requirements ofAccounting Standard (AS21) ‘Consolidated Financial Statements’. The financial statements ofthe parent and its subsidiaries are combined on a line by line and intra group balances, intragroup transactions and unrealized profits or losses are fully eliminated.

d. In case of foreign subsidiaries, revenue items are consolidated at the rate as mentioned above. AllAssets and Liabilities are converted at the rates prevailing at the end of the year. Exchange gains/ losses arising on conversion are charged to Profit & Loss account under Gain/Loss on ForeignExchange fluctuations.

e. The financial statements of the subsidiaries used in the consolidation are drawn in accordancewith the prevailing local laws of the respective countries upto the same reporting date as that ofSankhya Infotech Ltd i.e. year ended March 31, 2013.

f. The subsidiary companies considered in the consolidated financial statements are:-

Sl. No Name of the Company Country of Incorporation

% of holding

1. Sankhya US Corp U.S.A 100% 2. Sankhya SARL FRANCE 100%

3. Mahasena Info Technologies (India) Pvt Ltd INDIA 100%




3) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Companyand the revenue can reliably be measured.

Revenue from Services:

* Time and material contracts – Revenues are recognized on the basis of time spent duly approvedby the respective customers.

* Fixed price contracts – Revenues are recognized on the basis of approval received from therespective customers in accordance with the “Percentage of Completion” method.

* Internal timesheets or timesheets submitted by vendors for time and material contracts andfor fixed price contracts based upon assessment of work done. Unbilled revenue recognizedis subsequently billed to customers after receipt of approval.

* Other Income - In other income such as income from interest is recognized using the timeproportion method, based on rates implicit in the transaction.

4) Expenditure

All software development and services purchased are charged to cost of revenue in at which theywere initially recorded during the year, or reported in previous financial statements, are recognizedas income or as expenses in the year in which they arise the year of acquisition. Provisions are madefor all known losses and liabilities. Where ever applicable leave encashment liability is provided onthe basis of actuarial valuation.

5) Fixed assets, intangible assets and Capital work in progress.

Fixed assets are stated at cost less accumulated depreciation. Direct costs are capitalized untilfixed assets are ready for use. “Cost means” cost of bringing the asset to its working condition for itsintended use. Fixed assets are capitalized as per the statement issued by the Institute of CharteredAccountants of India. Capital work in progress comprises of the expenditure incurred in the process ofdeveloping the intangible assets for the time being and the assets are not yet ready for their intended useas at the date of Balance sheet.

An intangible asset is recognized, when it is probable that the future economic benefits attributable to theassets will flow to the enterprise and where its cost can be reliably measured. The company frequentlyexpends resources, and incurs liabilities, on the acquisition, development, maintenance and enhancementof intangible resources such as scientific or technical knowledge, design and implementation of newprocess or systems, license, intellectual property, market knowledge and trademarks in order to makesoftware’s and brands. Intangible assets are recorded as per AS26 of IGAAP.



43


6) Depreciation

Depreciation on fixed assets is applied on the written down value method by following the ratesprescribed in Schedule XIV of the Companies Act, 1956. Depreciation on addition to fixed assets isprovided on pro-rata basis from the date the assets are put to use. Depreciation on sale/deductionfrom fixed assets is provided for upto the date of sale, deduction, discardment as the case may be.Individual low cost assets (acquired for less than Rs.5000/-) are entirely depreciated in the year ofacquisition.

7) Unbilled Revenue:

The work in progress is the unbilled amount for the contracts that are in execution stage and the clientdeliverables are either in testing phase or certification/ acceptance stage, Therefore revenue is notrecognized.

8) Investments

Investments in wholly owned subsidiary are at cost.

9) Research and development

Capital Expenditure incurred on research and development is depreciated over the estimated life ofrelated assets and the revenue expenditure is expensed as incurred.

10)Employee Benefits

Provident fund:Employees receive benefits from a provident fund. The contributions to the Provident Fund aremade as per the Employee Provident Fund Act as amended from time to time.

Compensated absences:

The employees of the Company are entitled to compensate absence. The employees can carry-forwarda portion of the unutilized accrued compensated absence and utilize it in future periods or receivecash compensation at retirement or termination of employment for the unutilized accruedcompensated absence. The Company records an obligation for compensated absences in the periodin which the employee renders the services that increase this entitlement. The Company measuresthe expected cost of compensated absence as the additional amount that the Company expects topay as a result of the unused entitlement that has accumulated at the balance sheet date. Long termcompensated absences is accrued based on actuarial valuation at the balance sheet date carried outby an independent actuary.


Gratuity:The contributions to Gratuity are made in accordance with the Payment of Gratuity Act, 1972, andfor this the Company is using fund managed by the Life Insurance Corporation of India (LIC).

11) Foreign currency transactions Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreigncurrency amount the exchange rate between the reporting currency and the foreign currency at thedate of transaction.



Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items whichare carried in terms of historical cost denominated in a foreign currency are reported using theexchange rate at the date of the transaction; and non-monetary items which are carried at fair value orother similar valuation denominated in a foreign currency are reported using the exchange rates thatexisted when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items at rates difference from those at whichthey were initially recorded during the year, or reported in previous financial expenses in the year inwhich they arise.

Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortized as expenseor income over the life of the contract. Exchange differences on such contracts are recognized in thestatement of profit and loss in the year in which the exchange rates change. Any profit or loss arisingon cancellation or renewal of forward exchange contract is recognized as income or as expense forthe year.

Translation of foreign branch

The financial statements of an integral foreign operation are translated as if the transactions of theforeign operation have been those of the company itself.


12)Income Tax

Provision for Income Tax, comprising current tax and deferred tax, is made on the basis of the results ofthe year.

In Accordance with Accounting Standard 22 Accounting for Taxes on Income, issued by the Instituteof Chartered Accountants of India, the deferred tax for timing differences between the book and thetax profits for the year is accounted for using the tax rates and laws that have been enacted orsubstantively enacted as of the balance sheet date.

Deferred tax assets arising from temporary timing differences are recognized to the extent there isa reasonable certainty that the assets can be realized in the future.

13)Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributableto equity shareholders by the weighted average number of equity shares outstanding during theyear.

14)Cash flow statement

Cash flows are reported taking the indirect method, wherein net profit before tax is adjusted for thetransactions of non-cash nature and others or other accruals of past or future receipts and / or payments.The cash flows from regular revenue generating, investing and financing activities of the company aresegregated.



45

As at 31-March-2013 As at 31-March-2012Rs Rs

a Equity Share Capital (a) Authorised Current Year - No of Shares - 1,50,00,000 150,000,000 Previous Year - No of Shares - 1,50,00,000 150,000,000 (b) Issued Current Year - No of Shares - 1,12,45,205 112,452,050 Previous Year - No of Shares - 1,12,45,205 112,452,050 (c) Subscribed & Fully Paid Up Current Year - No of Shares - 1,12,45,205 112,452,050 Previous Year - No of Shares - 1,12,45,205 112,452,050 (d) Subscribed & not fully paid up - (e) Par value per share Rs. 10

Total Equity Share capital 112,452,050 112,452,050

b Forfeited Shares Amount - -

c A Reconcilation of the Number of Shares Outstanding at the Beginning and at the end of the Reporting Period:Equity Shares of Rs.10Each, Fully paid up :At the Beginning 11,245,205 8,500,005 Issued During the year - Cash Issue - 2,745,200 Forfeited / Bought Back During the Year - At the End 11,245,205 11,245,205

dDetails of Shareholder Holding more than 5% Shares of the Company:

Equity Shares of Rs. 10 each Held By1) Srinivas N - No. Of Shares (C.Y ) 820953, ( P.Y) 820953

7.30% 7.30%

2) Sridhar N - No. Of Shares (C.Y ) 762152, ( P.Y) 762152

6.78% 6.78%

3) Parvatha Vardhani N - No. Of Shares (C.Y ) 854600, ( P.Y) -854600

7.60% 7.60%

4) Gayatri N - No. Of Shares (C.Y ) 776109 , ( P.Y) - 776109

6.90% 6.90%

5) HBL - No. Of Shares (C.Y ) 2060482 , ( P.Y) 840482

18.32% 18.32%


I RESERVES AND SURPLUSa) Capital Reserve As at the commencement of the year 8,403,073 - Add: Additions during the year - 8,403,073

Sub Total 8,403,073 8,403,073 b) Securities Premium Reserve As at the commencement of the year 152,188,406 91,711,650 Add: Additions during the year - 60,476,756

Sub Total 152,188,406 152,188,406 c) General Reserves As at the commencement of the year 3,739,921 3,739,921

Sub Total 3,739,921 3,739,921 d) Surpuls : Opening Balance - Profit and Loss Account 377,969,383 370,701,753 Add: Transfer from Profit & Loss Account 537,573 7,267,630

Sub Total 378,506,956 377,969,383

Total Reserves and Surplus 542,838,356 542,300,783


S. No. Particulars

NOTE NO. 2 : RESERVES AND SURPLUS

% of Share Holding

Number of Shares


ParticularsS.NO.

NOTE NO. 1 : SHARE CAPITAL





I Long Term Borrings a) Term Loans: From Banks: Secured - Refer Note No.3(i) 33,750,000 12,367,926 From Other Parties: Secured - Refer Note No. 3(ii) 18,758,959 20,000,000

b) Loans and Advances From Related Parties - Un Secured: - Refere Note No 3(iii) 36,297,789 40,094,258

Note No.3(i): The term loan was taken from IDBI Bank Ltd which was secured by first charge on Fixed Assets of the Company and Second Charge on all current assets of the Company, Mortgage of land belongs to Mrs. Parvat Vardhini which is situated at Yadaram Village, Medchal and and pledge of share belonging to promoter Director in favour of IDBI Bank Ltd, Branch Hyderabad and it is further secured by personal guarantee of Promoter Director.

Note No.3(ii): The Loan was taken from Merlin Holdings Limited which was secured by pledge of share belonging to promoter Directors.

Note No 3(iii) : The unsecured loan is taken from the shareholders of the company & others

Total Long Term Borrowings 88,806,748 72,462,184


I Opening Deferred tax Liability 4,959,240 - Add:Deferred Tax Liability for the Year 13,223,553 15,237,127

Gross Deferred tax Asset 18,182,793 15,237,127 Opening Deferred Tax Asset - - Depreciation Loss (12,863,933) (10,277,887)

Gross Deferred tax Asset (12,863,933) (10,277,887)

Deferred Tax Liability/ ( Asset ) - Net 5,318,860 4,959,240


I a) Provision for Gratuity 850,000 550,000

Total Long Term Provisions 850,000 550,000


NOTE NO. 4 : DEFERRED TAX LIABILITY

S. No.

Particulars

Particulars

NOTE NO. 5 : LONG TERM PROVISIONS

S. No. Particulars

S.No.

NOTE NO. 3 : LONG TERM BORROWINGS



47



I Short Term Borrowings a) Loans Repayable on Demand: From Banks Secured - Refer Note No. 6(i) 216,122,050 200,000,000

Note No.6(i): The Working capital loan was taken from IDBI Bank Ltd which was secured by first charge on All current assets of the Company and Second charge on all fixed Assets of the Company, Mortgage of land belongs to Mrs. Parvat Vardhini which is situated at Yadaram Village, Medchal and and pledge of share belonging to promoter Director in favour of IDBI Bank Ltd, Branch Hyderabad and it is further secured by personal guarantee of Promoter Director.

Total Short Term Borrowings 216,122,050 200,000,000


I a) Trade Payables 35,505,077 35,722,263

Total Trade Payables 35,505,077 35,722,263


Statutory LiabilitiesProvision for Income Tax 14,352,397 15,742,244 Service Tax Payable 3,764,983 913,010 TDS Payable 7,634,262 7,394,116 ESI Payable 18,999 12,606 PF Payable 160,084 186,248 PT Payable 18,230 18,970 MAT Payable 230,415 2,134,034 Unclaimed Dividend 552,412 552,412 Other ProvisionsIDBI cash credit Interest Payable - 2,447,520 IDBI Term loan Interest Payable - 110,246 IDBI Term loan repayment (partly) - 3,750,000 Works Contract tax 1,059,888 -

Total Other Current Liabilites 27,791,671 33,261,406


Particulars

Particulars

NOTE NO. 7 : TRADE PAYABLES

NOTE NO. 6 : SHORT TERM BORROWINGS.

S. No.

S. No.

NOTE NO. 8 : OTHER CURRENT LIABILITES

S. No.

Particulars



49


As at 31-Mar-13 As at 31-Mar-12

Rs RsI Long - Term Loans and Advances:

a) Capital Advance - - b) Security Deposit Secured - Refer Note No. 11(i) 6,408,204 5,723,399 c) Loans and Advances to Related Parties - -

Note No. 11(i): EMD is provided for the various projects, and fixed deposit were kept with Central Excise, Electricity Department.

Total Long Term Loans & Advances 6,408,204 5,723,399

NOTE NO. 11 : LONG TERM LOANS AND ADVANCES

ParticularsS. No.



I Outstanding for a Period From the Date they are Due for PaymentUnsecured, Considered Good(More than 6 Months) 29,272,957 63,156,687

OthersUnsecured, Considered Good(Less than 6 Months) 368,752,509 277,277,435

Total Trade Receivables 398,025,466 340,434,122


I Cash and Cash Eqivalents :a) Balances with Banks : 1) On Current Accounts 1,742,969 26,003,451 2) Un Paid Dividend Account 552,412 552,412 b) Cash on Hand 162,630 28,961

Total Cash and Cash Equivalents 2,458,011 26,584,823


I Short -Term Loans and Advances:a) Other Loans and Advances Secured Advance for Expenditure 34,079,253 43,139,450

Total Short Term Loans & Advances 34,079,253 43,139,450

S. No.

S. No. Particulars

NOTE NO. 13 : CASH AND BANK BALANCES

NOTE NO. 14 : SHORT TERM LOANS AND ADVANCES

Particulars

ParticularsS. No.

NOTE NO. 12 : TRADE RECEIVABLES



34,079,253 43,139,450


1 Unbilled Reveune 74,523,344 83,400,617 2 Advance Taxes 790,628 - 3 Other current assets 63,945 - 4 Prepaid Expences - 62,595 5 Interest Accrued 108,116 53,250 6 Vat (Refund) 75,970 42,156 7 Misc Expenditure not written off 205,663 188,044

Total Other Current Assets 75,767,666 83,746,662

NOTE NO.15 : OTHER CURRENT ASSETS

S. No. Particulars

Year Ended Year Ended

31-Mar-13 31-Mar-12I Revenue from Operations

(a) Sale of Services 1,057,287,631 765,402,894 Domestic Income 32,218,951 22,069,772 Export Income 1,025,068,679 743,333,121

Total Revenue From Operations 1,057,287,631 765,402,894

Year Ended Year Ended31-Mar-13 31-Mar-12

I (a) Interest Income 538401 1087464(b) Net Gain/Loss on Sale of Investments - -412107(c) Net gain/loss on foreign currency translation and transaction -5822175 4273445

Total Other Income (5,283,774) 4,948,802


I (a) Salaries & Wages 595073912 444397825(b) Contribution to Provident & Other Funds 1240562 881760(c) Staff Welfare Expenses 185547 155546

- - Total Employee Benefit Expenses 596,500,021 445,435,131

NOTE NO. 18 : EMLOYEE BENEFIT EXPENSES

S. No. Particulars

ParticularsS. No.

NOTE NO. 17 : OTHER INCOME

S. No. Particulars

NOTE NO. 16 : REVENUE FROM OPERATIONS



51

Total Employee Benefit Expenses 596,500,021 445,435,131


I (a) Consumption of Stores & Spares 9,330,764 9,921,809 (b) Power & Fuel 2,674,315 1,766,478 (c) Rent 9,488,037 6,959,642 (d) Computer Repairs & Maintenance 20,402,595 16,758,710 (e) Insurance 3,114,382 3,390,071 (f) Rates & Taxes 5,439,070 5,178,367 (g)Miscellaneous Expenditure 2,208,837 238,348

Total Other Operating Expenses 52,658,000 44,213,425

S. No. Particulars

NOTE NO. 19 : OTHER OPERATING EXPENSES



I (a) Telephone, Postage and Others 3,387,868 2,867,652 (b) Business Promotion Expenses 37,070,910 25,542,212 (c) Conveyance 9,737,570 5,792,039 (d) Office Maintenance 8,156,806 7,336,343 (e) Printing & Stationery Expenses 3,690,830 2,156,336 (f) Managerial Remuneration 7,200,000 7,218,720 (g) Consultancy Charges 68,048,605 41,830,780 (h) Director Sitting Fee 70,000 100,000 (i) Payment to Auditors: (i) As Auditor 160,000 160,000 (ii) For Reimbursement of expenses 183,701 69,084

Total Administrative Expenses 137,706,290 93,073,165


I (a) Interest Expenses : - Interest on Cash Credit 28,418,778 8,283,045 - Interest on Term Loan 4,933,776 465,777 - Interest on Unsecured Loan 4,512,967 18,750,280 - Loan processing Charges 636,208 2,334,475 - Bank charges 1,615,602 982,810

Total Finance Cost 40,117,331 30,816,387

Particulars

NOTE NO. 20 : ADMINSTRATIVE EXPENSES

S. No. Particulars

NOTE NO. 21 : FINANCE COST

S. No.




I (a) Staff Recruitment & Training Expenditure 8,917,148 5,472,624 (b) Advertisement 4,919,850 2,617,712 (c) Communication charges 5,054,433 5,902,737 (d) AGM expenses 15,600 5,935 (e) Books & Periodicals 229,836 156,107 (f) Membership & Subcriptions 835,834 853,980 (g) Other expenses 203,293 - (h) Travel Expenditure 46,620,060 42,469,558 (i) Research & Development Expenses 76,547,841 49,453,028 (j)Annual maintainance charges 4,871,639 - (k)Bad Debts written off 27,709,506 -

Total Other expenses 175,925,040 106,931,681

S. No. Particulars

NOTE NO.22 : OTHER EXPENSES

Notes to Consolidated Financial Statement for the Year Ended March 31, 201336. Investments

Investments in wholly owned subsidiary are at cost. No fresh Investments are made during the financialyear 2012-13.

37. Foreign TravelThe foreign travel includes Director’s travel amounting to Rs. 5,60,728/-

38. Directors Remuneration(Amount in )

Particulars 31-Mar -2013 31-Mar -2012

Salary including Allowances

Chairman Managing Director & CEO 36,00,000 36,09,360

Director 36,00,000 36,09,360 Note: As the future liability for gratuity and leave encashment is provided on an actuarial basis for theCompany as a whole, the amount pertaining to the Directors is not ascertained and therefore not includedabove.

39. Earnings per Share(Amount in )

Particulars 31-Mar -2013 31-Mar -2012 Net Profit for the year 5,37,573 72,67,630

Weighted average No of shares outstanding during the year 1,12,45,205 1,12,45,205

Earnings per share (Rs.) 0.05 0.65 Nominal Value of the Share (Rs.) 10 10

Notes to Consolidated Financial Statement for the Year Ended March 31, 201340. Related Party Disclosures

a) Related PartiesSl.No Name Relationship

1 SANKHYA SARL, France Wholly Owned Subsidiary 2 SANKHYA US Corporation Wholly Owned Subsidiary 3 Mahasena Info Technologies (India) Pvt Ltd Wholly Owned Subsidiary 4 Sri. N.Sridhar Chairman & Managing Director 5 Sri. N.Srinivas Director



53

b) Transactions with Related Parties Subsidiary companies(Amount in )

Sl. No Name Outstanding as on 31-Mar -2013

Outstanding as on 31-Mar -2012

1 SANKHYA SARL, France (Investment) 1,72,920 1,72,920

2 SANKHYA US Corporation (Investment) 46,71,607 46,71,607 Advance for Expenses 5,40,50,991 5,40,50,991

3 Mahasena Info Technologies (India) Pvt Ltd- Investment 10,00,000 10,00,000

4 Mahasena Info Technologies (India) Pvt Ltd- Sales 1,79,995 -

41. Micro, Small and Medium Enterprise.There are no Micro, Small and Medium Enterprise, to whom the Company owes dues, which areoutstanding at the Balance Sheet date, computed on unit wise basis.Notes to Consolidated Financial Statement for the Year Ended March 31, 2013

42. Research and developmentCapital Expenditure incurred on research and development is depreciated over the estimated life ofrelated assets and the revenue expenditure is expensed as incurred.The company has in – House Research & Development Centre involved in developmental activitiesfor new products in the fields of Simulation and Training. Details of Capital & Revenue Expenditureincurred are as detailed below.

Sl.No EXPENDITURE (Rs. ) 2012-13 2011-12 A Revenue

Employee cost Rent Electricity

- 7,49,43,744

9,63,468 6,40,629

- 4,83,25,152

7,13,676 4,14,200

Total 7,65,47,841 4,94,53,028 43. Write off

The Company has made a total write off of Rs. of the invoices raised on The Institute of CharteredAccountants of India amounting to Rs 277.09 Lakhs.

44. Balance ConfirmationBalances as appearing under Unsecured Loans, Sundry Debtors, Loans and advances are as per theconfirmations received from the respective heads of account holders.

45. Unclaimed DividendThe Company has an amount of Rs.5.52 Lakhs representing unclaimed Dividend. The details are asmentioned below:

(Amount in )

Sl. No

Financial year

Interim / Final

Date of declaration

Rate of dividend

Dividend amount

Excluding Tax


Tax

Amount remaining

unclaimed as on 31.03.2013

1 2006-07 Final 28-09-2007 10% 99,44,156 14,4,151 3,12,227 2 2007-08 Final 29-12-2008 12% 1,02,00,006 17,33,491 2,40,185

Notes to Consolidated Financial Statement for the Year Ended March 31, 201346. Segment Reporting

The company’s operations relate to providing IT services, delivered to customers globally operating intransportation segment. Income and expenses which are direct in nature in relation to segments iscategorized based on items that are identifiable individually to that segment, rest are categorized inrelation to the associated turnover of the segment.Expenses such as Depreciation and Interest, which form a significant component of total expenses, arenot specifically allocable to specific segment as the underlying services are used interchangeably.



Segment Information:The Company has identified two reporting segments at consolidated level viz., Software Services& Software Products. Segments have been identified and reported taking into account nature ofproducts and services the differing risks, returns and the internal business reporting systems.Accounting policies adopted for segment reporting are in line with Accounting Policy of thecompany and are in accordance with the AS-17.

Primary Segment Information : (Amount in )

Sl. No. Particulars Software Services Software Products Total

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

1 REVENUE

External Turnover 1,057,287,631 764,505,894 - 897,000.00 1,057,287,631 765,402,894

Inter Segment Turnover NIL NIL NIL NIL NIL NIL

TOTAL REVENUE 1,057,287,631 764,505,894 - 897,000.00 1,057,287,631 765,402,894

2 RESULTS

Operating Profit 40,687,329 45,013,992 - - 40,687,329 45,013,992

Interest Expenses 40,117,331 30,816,387 - - 40,117,331 30,816,387

Interest Income 538,401 1,087,464 - - 538,40 1 1,087,464

3 Profit Before Tax 1 ,108,399 15,285,068 - - 1,108,399 15,285,068

Current Tax 211,205 3,058,198 - - 211,205 3,058,198

Deferred Tax 359,620 4,959,240 - - 359,620 4,959,240

Profit afte r Tax 537,573 7,267,630 - - 537,573 7,267,630

OTHER INFO

4 Segment Assets NIL NIL NIL NIL NIL NIL

Unallocated Corporate Assets NIL NIL NIL NIL 443,355,884 432,489,141

Total Assets NIL NIL NIL NIL 443,355,884 432,489,141

5 Segment Liabilities NIL NIL NIL NIL NIL NIL

Unallocated Corporate Liabilities NIL NIL NIL NIL 374,394,406 346,995,093

Total Liabilities NIL NIL NIL NIL 374,394,406 346,995,093

6 Capital Em ployed NIL NIL NIL NIL 75,02,66,014 73,27,24,256

7 Capital Expenditure–Net NIL NIL NIL NIL 512,946,213 502,079,470

8 Depreciation NIL NIL NIL NIL 47,988,776 34,596,838

9 Non Cash Exp. Other than Depreciation

NIL NIL NIL NIL 0.00 0.00

47. Regrouping & Rounding offThe previous year’s figures have been reclassified and regrouped, wherever necessary to confirm theCurrent Year classification and to confirm to the relevant laws. Paisa have been rounded off to thenearest rupee.

As per our report of even date

For P.Murali & Co., For and on behalf of the BoardChartered Accountants Sankhya Infotech LimitedFirm Registration Number: 007257S

P. Murali Mohana Rao N.Sridhar N.SrinivasPartner Chairman & Managing Director Vice ChairmanMembership No.23412

Company SecretaryPlace: HyderabadDate: 29th May 2013



55

Sl.No Particulars SANKHYA

SARL FRANCE

SANKHYA US CORPORATION,

USA

MAHASENA INFORMATION

TECHNOLOGIES INDIA PVT LTD

SANKHYA CONSOLIDATED

31-Mar-2013 31-Mar-2013 31-Mar-2013 31-Mar-2013 a) i) ii)

Capital Share Application money Loan Fund

1.73 5.16 41.56

541.51

10.00 1124.52

b) Reserves 5428.38 c) Total Assets 1.73 587.23 10.00 10296.84 d) Total Liabilities 1.73 587.23 10.00 10296.84 e) Details of Investments

(Except incase of investment in subsidiaries)

f) Turnover - - - 10520.04 g) Profit Before Taxation - - - 11.08 h) Provision for taxation - - - 5.70 i) Other Provision - - - - j) Prior period expenses - - - - k) Profit after Taxation - - - 5.38 l) Proposed Dividend. - - - -



ATTENDANCE SLIP


Regd Office: Module 405, NSIC, BUSINESS PARK, ECIL PO, HYDERABAD 500062

(PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL)

Joint shareholders may obtain additional slip at the venue of the meeting.

DP. ID* Master Folio No.

Client ID* No. of Shares

NAME AND ADRESS OF SHAREHOLDER

No of share(s) Held

I hereby record my presence at the 16th ANNUAL GENERAL MEETING of the Company held on 28 th

September, 2013 at 11.AM, NSIC Bldg, ECIL PO, Hyderabad-500062.

Signature of the Share holder or Proxy

*Applicable for investors holding shares in dematerialized form

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

PROXY FORM


Regd Office: Module 405, NSIC, EMDBP BLDG, ECIL PO, HYDERABAD 500062

DP. ID* Master Folio No.

Client ID* No. of Shares

I/We ________________________________________________________________________________________ of_______________________ being a member / members of Sankhya Infotech Ltd herebyappoint _____________________________________________________________________________ of___________________________________ or failing him ____________________________ of__________________________________ as my / our proxy to vote for me/us and on my/our behalf at the16th ANNUAL GENERAL MEETING to be held on 28 th September,2013 at 11.am, NSIC Bldg, ECIL PO,Hyderabad-500062 or at any adjournment thereof.

Signed this ________________day of ___________2013.

* Applicable for investors holding shares in dematerialized form.

Note:

i. The proxy in order to be effective should be duly stamped, completed and signed and must be depositedat the registered office of the Company not less than 48 hours before the time for holding the aforesaidmeeting. The Proxy need not be a member of the company.

ii. Members holding shares under more than one folio may use photocopy of the proxy form for other folios.The company shall provide additional forms on request.



57

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ANNUAL REPORT 2012-1311. Balance sheet 18 12. Profit and Loss Account 19 13. Cash flow statement 20...

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