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RESOLUTION PROFESSIONAL REPORT

To the Members,

SANKHYA INFOTECH LIMITED

The Resolution Professional takes pleasure in presenting the 24th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2021.

FINANCIAL RESULTS:

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

(Rs.In Lakhs)

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

REVIEW OF OPERATIONS:

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

• Total Revenue for the current year is Nil

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

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

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

The Companys current year financial summary and highlights are mentioned in the Management Discussion and Analysis Report annexed to this report.

STATUS OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP):

The present situation is summarized as follows:

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

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

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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

As per the financial statements for FY20-21, which indicates that the company incurred a net loss of Rs. (750.63) lakhs during the year ended March 31st, 2021 and, as of that date the Companys current liabilities exceeded its current assets by Rs. 3,725.46 lakhs.

The events and conditions as set below, indicate that a material uncertainty exists that may cast significant doubt on the companys ability to continue as a going concern.

1. Substantial increase in losses.

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

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

4. Negative working capital.

5. Overdue working capital loans from IDBI Bank Ltd.

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

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

DIVIDEND

As the Company has reported losses for the last two financial years your Directors have not recommended payment of Dividend for the Financial Year 2020-21.

TRANSFER TO RESERVE

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

AUTHORISED SHARE CAPITAL

The Authorized Share Capital of the Company stands at Rs.20,00,00,000/-(Rupees Twenty Crores Only) divided into 2,00,00,000 (Two Crores Only) Equity Shares of Rs.10/- (Rupees Ten Only) each.

PAIDUP SHARE CAPITAL

The Paid Up share Capital of the Company stands at Rs.14,59,70,570/-(Rupees Fourteen Crores Fifty Nine Lakhs Seventy Thousand and Five Hundred and Seventy Only) divided into 1,45,97,057(One Crore Forty Five Lakhs Ninety Seven Thousand Fifty Seven Only) Equity Shares of Rs.10/- (Rupees Ten Only) each.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. The Company has complied with the applicable provisions of Companies Act, 2013 and rules framed there under in respect of section 186 of the Companies Act, 2013.

DEPOSITS

The Company has neither accepted nor renewed any deposits from public within the meaning of Section 76 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Resolution Professionals Report.

DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL UPTO COMMENCEMENT OF CIRP

None of the directors of the company are disqualified under the provisions of the Companies Act, 2013(Act) or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All Independent Directors have provided confirmations as contemplated under section 149(7) of the Act up to commencement of CIRP. After initiation of CIRP the powers of the board stood suspended.

Mr. Sridhar Krishna has been appointed as Chief Financial Officer w.e.f. 15.09.2020; Mr. Pratik Jain has been appointed as the Company Secretary and Compliance Officer of the Company w.e.f. 05.10.2020 and Pratik Jain resigned as Company Secretary and Compliance Officer w.e.f. 05.04.2021; and Mr. Partha Saradhi Pudhota (Vacation of office u/s 167 on 30.06.2021). Mrs. Dipti S Pacholi has been appointed as Company Secretary and Compliance Officer w.e.f. 01.11.2021

Except above, there was no change in the Composition of the Board and in the Key Managerial Personnel.

GOVERNANCE GUIDELINES

The Company has adopted Governance Guidelines or code of conduct on Board, Independent Director, Key Managerial Personnel or senior managerial personnel. The Governance Guidelines or code of conduct cover aspects related to role of the Board diversity, definition of independence and duties of independent Directors, Code of Conduct, Moral, ethics and principles to be followed.

COMMITTEES OF THE BOARD UPTO COMMENCEMENT OF CIRP

Pursuant to requirement under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board of Directors has constituted various committees such as Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committees and Corporate Social Responsibility Committee. The details of Composition and terms of reference of these committees that were up to commencement of CIRP are mentioned in the Corporate Governance Report.

NOMINATION, REMUNERATION AND PERFORMANCE EVALUATION POLICY

The requisite details as required by Section 134(3), Section 178(3) & (4) of the Companies Act, 2013 and Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report.

Up to initiation of CIRP, the board of directors has carried out an annual evaluation of its own performance, board committees, Independent Directors, Chairperson and Managing Director and Non-Executive and Non-independent Directors pursuant to the provisions of the schedule IV of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

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

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

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

FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

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

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER 149 (6) OF THE COMPANIES ACT, 2013

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report as required under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report and give detail of the overview, industry structure and developments, operational performance of its various business segments and is attached as Annexure - III.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

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

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

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

TRANSACTIONS WITH RELATED PARTIES

The requisite details as required by Section 134 & 188 of the Companies Act, 2013 and Regulation 23 & 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report. The policy for related party transactions is available on the website of the Company at www.sankhya.net/policies.

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

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

BOARD AND COMMITTEE MEETINGS

During the financial year 2020-21, Six Board Meetings were held. The details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Section 173(1) of the Companies Act, 2013 and Regulation 17(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

RESOLUTION PROFESSIONALS RESPONSIBILITY STATEMENT:

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

a. in the preparation of the annual accounts for the year ended 31stMarch 2021, has followed the applicable accounting standards along with proper explanation relating to material departures;

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

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

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

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

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

CHANGE IN NATURE OF BUSINESS

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

DISCLOSURE PERTAINING TO SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has always believed in providing a safe and harassment free workplace for every individual working in premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

During the Financial year ended 31st March,2021 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment.

VIGIL MECHANISM:

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

The requisite details as required by Section 177 of the Companies Act, 2013 and Regulation 22 & 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Corporate Governance Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

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

AUDIT OBSERVATIONS:

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

AUDITORS:

Statutory Auditors:

The members of the Company at their Annual General Meeting (AGM) held on 28th November, 2017 have appointed M/s. Ravi Rajan & Co., Chartered Accountants (ICAI Firm Registration Number 009073N), as statutory auditors of the Company to hold office until the conclusion of 25th Annual General Meeting of the Company to be held in the year 2022 which was subject to ratification as per the provisions of Companies Act, 2013.

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

Internal Auditors:

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

Cost Audit:

Cost Audit is not applicable to your Company.

Secretarial Auditors:

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

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

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

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

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

d. As mandated under Secretarial Standards and various provisions of the Companies Act, 2013, the Company has failed to provide sufficient information as regards to circulation of minutes of the various Board Meetings/ Committee meetings held during the year under review.

MANAGEMENT EXPLANATION TO THE ABOVE SECRETARIAL AUDITORS QUALIFICATIONS:

a. The Company has appointed Mr. Sridhar Krishna as Chief Financial Officer on 15/09/2020.

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

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

d. The company didnt have a full time Company Secretary for the continuous period under review and neither there were any employee (except the office of Company Secretary for limited period), owing to which, the company was tardy in maintaining and at some instances in retrieving the circulation of minutes sent to the Directors whereas the company has adhered to the other compliances in reporting the same duly to BSE/ROC/making newspaper advertisements where ever mandated and as may be applicable. Although, no Directors has raised any objection for the same and were continuously attending the meetings and has taken or record the minutes circulated, except for the director Mr. Partha Saradhi Pudhota, who continuously abstained himself from attending the meetings for the FY 2020-21.

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

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are as follows:

A. Conservation of energy

Your Company is not engaged in any manufacturing activity and thus its operations are not energy intensive. However, adequate measures are always taken to ensure optimum utilization and maximum possibility of saving of energy.

B. Technology absorption

Your Company has not undertaken any research and development activity for any manufacturing activity nor was any specific technology obtained from any external sources which needs to be absorbed and adopted.

Research and Development (R & D):

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

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

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

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

3. Future plan of Action:

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

C. Foreign exchange earnings and outgo

The foreign exchange earned in terms of actual inflows during the year and the foreign exchange outgo during the year in terms of actual outflows:

(Rs. in Lakhs)

Particulars 2020-2021 2019-2020
Foreign exchange Earnings Nil 130.79
Foreign exchange Outgo Nil 5,465.93

PARTICULARS OF REMUNERATION:

The information relating to remuneration of Directors and details of the ratio of the remuneration of each Director to the median employees remuneration and other details as required pursuant to section 197(12) of the Act read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - VI.

In accordance with Section 136 of the Companies Act, 2013 the same can be checked by making a request through e-mail at comp.officer@sankhya.net between 14.11.2021 to 18.11.2021.

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

BOARD POLICIES:

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

EXTRACT OF ANNUAL RETURN:

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

CEO/CFO CERTIFICATION:

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

RISK MANAGEMENT POLICY:

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

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

EMPLOYEE RELATIONS:

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

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

The Company has complied with the requirements about code of conduct for Board members and Senior Management Personnel.

APPRECIATION:

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

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