Sanra Anua Report 06-07

8/8/2019 Sanra Anua Report 06-07

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BOARD OF DIRECTORS

SECRETARY

AUDITORS

BANKERS

REGISTERED OFFICE

CORPORATE OFFICE

REGISTRARS

Mr.SANJAY BHARDWAJMrs. UMA KARTHIKEYANMr. RAJEEV AGARWAL

Mr.K.RAJAGOPALMr. R SIVA SHANKARAN

V. SIVASUBRAMANIAN

M/s. R.RAVINDRAN & ASSOCIATESChartered AccountantsChennai

ICICI BANK LTDHDFC BANK LTD

BCO, Whispering Heights,132, St.Mary's RoadAlwarpet, Chennai 600 018.

41D, North Phase,Thiru-Vi-Ka Industrial Estate,Ekkattuthangal, Chennai 600 097E-Mail : [email protected]

Web site : www.sanrasoft.com

GNSA INVESTOR SERVICES (P) LTDGR Mansion, Ist Floor,No.11, Srinivasan Road,T Nagar,Chennai 600 017

1Think New Media, Think Sanra


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CONTENTS

Letter to Shareholders from the Board 3

Highlights of Performance 4

Management Discussion and Analysis 6

Directors Report 13

Report on Corporate Governance 16

Auditors Report 30

Balance Sheet 35

Profit & Loss Account 36

Schedules to Accounts 37

Cash Flow Statement 45

Think New Media, Think Sanra


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LETTER TO SHAREHOLDERS FROM THE BOARD

Dear Shareholders,

Building Blocks

Awards & Projects

Infrastructure

Promoters

The Road Ahead

It gives us great pleasure in communicating with you at the end of this eventful and successfulfinancial year.

You would be happy to note that during the year your company has achieved the followingmilestones:

Revocation of suspension in the trading of the shares of the Company at the Bombay StockExchange.Restructuring the main line of business from software to Animation, Gaming and activities relating to

new media technologies , an area which your company is confident that it is the way to the future.Synergising and adding thrust to the new line of business of the company with the acquisition of M/s

Pixaalaya Studios Private Limited, a company in the business of Animation for the past 5 years andwith a pool of highly skilled creative talent.An in principle approval for raising of funds through GDRs to the extent of 27.5 Million USD

Your Company is the First company in the world to create 3D anaglyph content for broadcast. Thecontent Mayavi produced by GV Films and telecasted in JAYA TV was recently nominated for theprestigious Global TV Drama Awards for the year 2007 at Seoul Korea under special prize Category.

Considering the excellent delivery potential of Your Company, GV Films has given the opportunityfor the co-production of a full Length 90 Minute 3D Animation Movie which is scheduled to be released byApril 2008. Our team will create the entire content for this movie from the conceptualization to the postproduction.

Your company has entered a new place of business for its production activities with a state of ArtAnimation studio in Chennai. Our team size has increased manifold with a pool of creative talents with the

experience of the best International animation projects with them.

Your Company has initiated efforts to start Animation & Gaming Training called Sanra MediaKnowledge Center to impart highest quality education in the field and to bridge the ever increasing gapof skilled professionals in this field. As a part of its efforts to strengthen the training, your Company has signedan MOU with the University of Portsmouth, UK, an university, which has advanced courses in the field ofAnimation and Gaming.

During the year , our promoters Mr. N S Baskar , Mrs. Lalitha Baskar and Mrs. Ratna Santhanam haveentered into a agreement for sale of their stake in Sanra to M/s Eyelight Events and Promotions PrivateLimited, a company engaged in media activities.

We believe our efforts will enhance the Shareholder value of the Company further in the nearfuture.

Your Company with its team of talents looks ahead to enter into the next phase of growth andplacing itself as a global entity in the field of new media technologies. The Board and the employees arelooking forward the challenges of this task before us

We thank you for placing the faith in the Company. We look forward to continued support fromyou to steer the company to great heights.

On behalf of the boardFor Sanra Software Limited

Place: Chennai Uma KarthikeyanDate: 23rd August 2007 Whole-Time Director



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HIGHLIGHTS OF PERFORMANCE

KEY FINANCIALS FOR THE LAST THREE YEARS

Particulars 2006-07

(12 months period)2004-06

(18 months period)

2003-04

(15 months period)

Total Income 25.81 25.76 14.02

PBDIT 17.46 5.44 11.11

Profit Before Tax 6.07 4.39 9.85

Profit After Tax (PAT) 3.47 2.37 9.85

Cash Profits( PAT + Depreciation +Amortisation)

16.80 5.64 12.39

Net Fixed Assets 40.08 41.06 41.61

Net Current Assets 17.83 14.37 18.56

Miscellaneous Expenditure 7.81 9.76 2.33

Total Capital Employed 65.72 65.19 62.50

Equity Share Capital 60.50 60.50 60.50

Share Premium 1.00 1.00 1.00

Profit & Loss A/c 2.78 2.89 0.52

Net Worth 64.28 64.39 62.02

Loan funds - - 0.48

Deffered Tax Liability 1.45 0.81 -

Total Capital Employed 65.72 65.19 62.50

Amt (Rs.) Amt (Rs.) Amt (Rs.)

Dividend Per share # 0.50 - -

Book Value Per Share ## 10.62 10.64 10.25

Earnings per Share ### 0.57 0.39 1.63

Market Price per Share #### 13.11 #### ####

(Rs. In Millions)

Notes

# Dividend declared by Board

## Networth/ No. of Equity Shares

### PAT / No. of Equity Shares

#### Market Price at BSE as on date of Balance Sheet. As the trading was suspended during the previous two

years, no information is given on the same.



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Our new facility at Chennai

BUSINESS HIGHLIGHTS


Press Conference with GV Films Limited and University of Portsmouth

Inauguration of Sanra Media knowledge center

by the British High Commissioner Ian Mason

Signing of MOU with University of Portsmouth

in the presence of the British High Commissioner


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6 Think New Media, Think Sanra

OurTeam

Oursecrettosuccess


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BUSINESS OVERVIEWYour Company has identified the new Media Industry as the way to the future. Identifying

the potential in the Industry, The Company has acquired the business 3D/2D/Visual business from

M/s Pix Aalaya Studios Private Limited through business transfer agreement. During the year, The

company provided technical support to M/s G V Films Limited for production of India's First 3 D

Serial in Indian Television Mayavi . The entire visual effects and Computer graphics for viewing

in the 3D Anaglyphs format was provided by your Company. This serial has been telecasted inJAYA TV, a leading Tamil channel. This serial is also being currently telecasted in KAIRALI, a

Malayalam leading TV channel and is expected to be telecasted in other languages in the near

future. You Company has received appreciation from GV Films for providing the technical

support. The serial has also given GV Films the opportunity of being nominated for the Global TV

Drama Awards to be held in Seoul for a special Prize.

Considering our excellent creative potential, GV Films has now tied up with your Company for

the entire animation of their 3D full length Animation Movie OM MURUGA scheduled to bereleased in 2008.


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BUSINESS MODEL

ANIMATION

The future of the Indian Entertainment Industry looks very positive and the concept 3D

Animation is fast catching with the Public and we expect excellent opportunities in this field.

Your Company operates in the following divisions:

Animation

GamingMedia Technologies

Media Knowledge Center

A brief overview of the business model of your Company in the above divisions is as under :

Your Company shall focus in its inherent creative capabilities to build excellent quality

products for the Domestic Market. The horizons of the Indian Entertainment sector space is fast

expanding and the use of Hi-end technology has brought new synergies to overall businesses

perspective in the entertainment arena. Your Company has identified the potential of the

domestic market and intends to target at products with Indian Values, traditions and story telling

capabilities . Your company intends to bring flash products in this arena for which there is a huge

demand.

Your Company shall also be looking at co-production deals with Indian & International

Studies for developing high quality 3D Full Length Movies. It is estimated that as per Nasscom

report on Animation and Gaming 2007, the total share of animated movie in the total

entertainment arena shall increase from 18% currently to around 28% in 2010.

In the service sector, your Company shall be developing high quality content for

International Clients.

Products

Service


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GAMINGIn the Gaming arena, your Company would be

focusing on development of Animation Art Asset for

International Game Developers.


MEDIA TECHNOLOGYYour Company's Media Technology Division, will cater

to the need of the new media in terms of working for new

formats and distribution mechanism and will offer

comprehensive solutions for the new media gadgets.

Your Company has developed 'Pixstream', an

exclusive product that offers A-Z solutions for streaming any

content securely across the globe.

MEDIA KNOWLEDGE CENTER

Sanra Media Knowledge center will provide

training in the field of Animation & Gaming. Sanra

with its creative pool of talent shall impart

production-oriented training with the blend of thelatest technology.


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NASSCOM report mentions that the Animation Industry has the potential to generate

approximately 34,000 jobs by 2010. However it also mentions that the number of professionals

joining the industry will be lower than this figure . This scenario, they feel will be due to many

factors such as lack of proper training institutes, lack of proper trainers , awareness about the

industry, accredited courses etc.

The inherent characteristic of this industry is the lack of skilled talent., Sanra intends to

bridge its resource gap by imparting high quality education in this field . You Company has

already signed an Memorandum of Understanding with the University of Portsmouth, UK to bring

in synergies in the filed of animation and gaming education.

In addition to sourcing its in house talents for production, You Company intends to

develop the Media Knowledge Center as an independent Profit Center in the year to come.

The Company has made a Profit of Rs. 174.63 Lacs for the year and the profit after taxes

and depreciation amounted to Rs. 34.74 Lacs. The net profit is arrived at after provisioning of Rs.26.03 Lacs towards Taxation, Rs.113.86 Lacs towards depreciation.

The company, has amended its main objects of its Memorandum of Association by

adding two new clauses relating to Animation Field by way of a Postal Ballot. The field of

Animation has got enormous growth prospects in respect of revenue earning. In line with the

above amendment the company acquired the Animation Business relating to M/s Pix Aalaya

Studios Private Limited, which is leading company in the Animation Industry. The Company also

provided technical support and special effects to the Serial 'Mayavi' produced by M/s GV Films

Limited which is the first television serial made using 3 D Animation.

During the year, with the efforts of the Management and the team, the Shares of the

Company were revoked from Suspension on the trading on the shares of the Company at the

Bombay Stock Exchange with effect from July 14th , 2006.

The Management will bring in more funds for overall growth of the Company and in order

to implement the above Members approval was sought for increase in Authorised Capital to Rs.

75,00,00,000/- and also for Raising of Funds by issue of Global Depository Receipts amounting to

US$ 27.50 Million and Rs.30 Crores though the other instruments like Rights Issue/Preferential Issues

etc. The proposals were duly approved by the members unanimously in their extraordinary

general meeting held on 2nd January 2007.

During the year under review the existing promoters of the Company Viz., Mr. N S Baskar,

Mrs. Lalitha Baskar and Mrs. Ratna Santhanam has entered a share purchase agreement with

M/s Eyelight Events and Promotions (India) Private Limited (Acquirer) for sale of their entire

shareholding of 26,26,200 shares comprising of 43.41% of the total paid up capital of the

Company. Consequent to the above a Public Announcement was also made on behalf of the

Acquirer by M/s Vivro Financial Services Private Limited, Ahmedabad to the Members of the

Company with an offer to acquire 12,10,000 shares @ Rs.15/- per share in compliance with

Regulations 10 and 12 as required under the Securities & Exchange Board of India (Substantial

Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto.

OPERATIONS OVERVIEW:

PROMOTERS



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THREATS, RISKS & CONCERNS

INTERNAL CONTROL SYSTEMS:

FINANCIAL PERFORMANCE:

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

CAUTIONARY STATEMENT:

Competition

Scarcity of Human Capital

Capital Intensive and technology obsolence

As the industry is poised for a stage of exponential growth, a lot of Companies areentering this arena and the cost efficient competitors are increasing. Also in the global scenario,there is a huge advent of animation and gaming companies in China, Korea, Philippines and

Singapore. These Countries also have a huge cost advantage like India. Over and above that,the Government in such countries is actively supporting the growth of the Media Industry byintroduction of subsidies and initiation of several schemes to support Animation Companies.

This is a inherent problem with this industry. The skill required here has to be combination of

creativity and synergising of technology to bring the best results. There are very few trainingcenters providing training which cater to the needs of the Industry. Also there is a lack of anyorganized channel of education and awareness as relating to the potential of this industry.

This Industry is very capital intensive and typically requires high-end systems and storageequipment and proper infrastructure planning. Also the methods, softwares used in this field are

dynamically changing and the advent of new technology, techniques and upgrades seem tobe very fast. It poses a continuing challenge to companies in this Industry to adapt to newertechnologies and also for the personnel to get trained and use these effectively.

The Company has an adequate systems and internal controls to safeguard the assets ofthe company; and to ensure maintenance of proper accounting records. Audit Committeeperiodically reviews the functioning of the entire system.

During the year under review the operating profit of the company increased fromRs.54.35 lakhs for the eighteen months period ended 31st March 2006 to Rs.174.63 lakhs for the

year ended 31st March 2007. The net profit of the company for the financial year ended 31stMarch 2007 is Rs.34.74 lakhs after providing Rs.113.86 lakhs towards depreciation and 19.66 lakhstowards current tax and Rs.6.39 lakhs towards deferred tax. The net profit % on revenues amountsto 13.46% approximately. In view of the encouraging scenario the Directors are also pleased torecommend dividend of Rs.0.50 per equity shares (i.e. 5%) for the this financial year 2006-2007,

The Company makes efforts to ensure that employees are provided with a congenialwork atmosphere. Facilities are equipped with state of-the-art hardware, software andcommunication equipment apart from periodic recreational facilities to motivate the team.Continuously improving the quality of people through training in skill development, as well aspersonality development. Management places great emphasis on continuously improving the

work environment and ambience to nurture innovation and creativity.

Statement in this report on Management Discussion and Analysis describing theCompany's objective, projections, estimates, predictions and expectations may be 'forwardlooking statements' within the meaning of applicable laws and regulations. These statementsare based on certain assumptions and expectation of future events. Actual results could,however, differ materially from those expressed or implied. The Company, Directors &Management assumes no responsibility with regards to the forward-looking statements hereinwhich may change on the basis of subsequent developments, information or events.





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DIRECTORS' REPORTThe Directors are pleased to present their Eleventh Annual Report on the working of your

company along with the audited Balance Sheet and the Profit and Loss Account for the period

ended 31st March 2007.

The financial highlights are set out below:

Particulars 2004 06 2006 2007

Revenue 257.65 256.37

Profit before Interest Depreciation and

Tax

54.35 174.63

Interest & Finance Charges Nil Nil

Depreciation 10.40 113.86

Provision for Tax 12.13 19.66

Deferred Tax 8.11 6.39

Net Profit for the year 23.71 34.74

Accumulated Profit Brought forward fromBalance Sheet

5.20 28.91

Total Distributable profit 28.91 63.65

Dividend Nil 30.25

Dividend Tax NIL 3.02

Profit Carried over to the Balance Sheet 28.91 30.38

(Rs. In Lakhs)

OPERATIONS & FUTURE PROSPECTS:

DIRECTORS' RESPONSIBILITY STATEMENT

The annexed Management Discussion and Analysis forms a part of this report and covers,

amongst other matters, the performance of the Company during the financial year under

review as well as its future prospects.

Pursuant to the directors' responsibility statement setting out the compliance with the

accounting and financial reporting requirements specified under Section 217(2AA) of the

companies Amendment Act, 2000, in respect of the financial statements the Directors confirm

that:

1. Profit and Loss Account for the period ended 31st March 2007 have been prepared on a

going concern basis and in the preparation of the financial statements the generally

accepted accounting standards issued by the institute of Chartered Accountants of India

have been followed:

2. Appropriate accounting policies have been selected and applied consistently and

judgments and estimates that are reasonable and prudent have been made as so to give a

true and fair view of the state of affairs of the company as at the end of the financial year

and of the Profit of the company for that period:

3. Proper and sufficient care has been taken in the maintenance of adequate accounting

records in accordance with the provisions of the companies Act 1956 for safeguarding the

assets of the company and for preventing and detecting fraud and other irregularities



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DIVIDEND

DIRECTORS

CORPORATE GOVERNANCE

AUDITORS

COMPANY SECRETARY

AUDIT COMMITTEE:

REMUNERATION COMMITTEE

REVOCATION OF SUSPENSION

Your Directors are pleased to recommend dividend of Rs.0.50 per equity shares (i.e. 5%)

for the this financial year 2006-2007, The total cash outgo towards the payment of dividend will

be Rs. 33.27 lakhs for consideration and approval of the members.

Mr. N S Baskar who was Chairman and Managing Director of the Company resigned

from the post and also from the directorship of the Company with effect from 4th September,

2006. Mrs. Lalitha Baskar Director of the company resigned from the Board with effect from 12th

May 2006.

The contributions made by Mr. N S Baskar and Mrs. Lalitha Baskar to the deliberations of

the Board have been invaluable. The Board places on record its deep appreciation for their

advice and guidance during their tenure as Directors of the Company.

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Report onCorporate Governance along with the Auditor's Report is enclosed.

The auditors, M/s. R Ravindran & Associates, Chartered Accountants have expressed

their willingness to continue in office, if appointed. They have furnished to the Company a

certificate of their eligibility for appointment as auditors, pursuant to section 224 (1B) of the

Companies Act, 1956. The Board of Directors recommend to the members to appoint them as

auditors and fix their remuneration.

The Company has appointed Shri V Sivasubramanian as Company Secretary with effect

from 10th November, 2006 as required under Section 383A of the Companies Act.

The Audit committee constituted by the Board of Directors consists of three Directors Viz.1. Mr.Rajeev Agarwal Chairman2. Mr.K Rajagopal Member 3. Mrs. Uma Karthikeyan Member

Mr Rajeev Agarwal and Mr K Rajagopal are independent Non-Executive Directors and

Mrs Uma Karthikeyan is the executive director of the company. The constitution of the Audit

Committee also meets the requirements of Sec.292A of the Companies Act 1956 as introducedby the Companies (Amendment) Act 2000. The terms of reference specified by the Board to the

Audit Committee are as per clause 49 of the Listing Agreement.

The remuneration committee has been constituted for performing inter alia the

role/various functions as set out under clause 49 of the listing agreement with the Stock

Exchanges and also in pursuance to the amendments made to Schedule XIII to the Companies

Act, 1956.

Your Directors are please to announce that the company's scrip, which was placed

under suspension by the Bombay Stock Exchange (BSE) for quite some time, was revoked witheffect from 14th July 2006.



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DEPOSITORY SYSTEM

STATUTORY CERTIFICATIONS

PARTICULARS OF EMPLOYEES

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS

AND OUTGO

ACKNOWLEDGMENT

As per SEBI's directive Equity Shares of your company is now compulsorily traded in

dematerialised form. In this connection your company has signed an agreement with NSDL &

CDSL for dematerialisation of its equity shares. As of date Equity Shares representing about

75.37% of the Shares Capital have been dematerialised. The company has appointed M/s.

GNSA Investors Services Private Limited as Registrars for the purpose of electronic connectivity

for effecting dematerialisation of shares.

1. A Certificate from the auditors of the Company regarding compliance of conditions

of Corporate Governance as stipulated under Clause 49 of the Listing Agreement

has been attached to this Report.

2. Secretarial Audit and Share-transfer audit has been conducted as per the conditions

of listing agreement.

No employee is in receipt of remuneration in excess of the limits prescribed under Section

217 (2A) of the Companies Act, 1956.

The Company does not carry on any manufacturing activities and accordingly the

provision to furnish information as per Section 217 (1)(e) of the Companies Act, 1956, read with

the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988,

particulars relating to Conservation of energy, Research and Development and Technology

Absorption is not applicable.

During the year under review there were no foreign exchange earning and out go for the

Company

The directors thank the Company's customers and also appreciate the support

extended by the employees and the shareholders of the company during the year under

review.

On behalf of the board

For Sanra Software LimitedPlace: Chennai Uma KarthikeyanDate: 23rd August 2007 Whole-Time Director



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REPORT ON CORPORATE GOVERNANCESanra Software Limited is complying with the mandatory requirements of the code of

Corporate Governance introduced by the SEBI and incorporated in Clause 49 of the Listing

Agreement in all material respect. Sanra Software Limited aims to create profitable

Developments with Enduring Value, Distinguishing characteristics leading to high customer

satisfaction with full compliance to building standards, Rules and Regulations. The Basic

philosophy of the company towards Corporate Governance is to protect and enhance the

long-term value of all the stakeholders shareholders, clients, creditors and employees. The

Company is committed to achieve these objectives within regulatory framework through

transparency in dealings.

Sanra Software Limited has five Directors and no new directors were appointed during

the year 2006-2007.

The board of Sanra Software Limited currently consists of 5 directors, of whom 2 areexecutive directors and 3 are non-executive directors. All the three non-executive directors are

independent. According to Clause 49, if the chairman is an executive, at least half of the board

should consist of non-executive, independent directors. This provision is met at Sanra Software

Limited.

As on 31st March 2007, the Company had five members on the Board. Mr. Sanjay

Bhardwaj and Mrs Uma Karthikeyan are executive directors and other three directors Viz., Mr

Rajeev Agarwal, Mr K Rajagopal and Mr R Sivashankaran are independent and non-executive

directors. The board has no institutional nominee directors.

The Composition of Board, attendance of each Director at the Board Meetings held

during the year under review as well as in the last Annual General Meting and number of other

Directorship/ Committee memberships held by them are as follows:-

Board of Directors

Composition


Name of the Director Designation

and Category

Attendance

of Board

Meeting

Attendance

of Last AGM

Number of

directorships

held in the

other Indian

Companies

Number of

Board

committee

membership

held in other

companies

Mr N S Baskar, (Chairman

& Managing Director) (Up

to 4t h September, 2006)

Executive 5 Yes Nil Nil

Mrs Laitha Baskar, (Up to

12th May 2006)

Non-

Executive

2 No Nil Nil

Mr Sanjay Bhardwaj Executive 11 Yes Nil Nil

Mrs Uma Karthikeyan Executive 11 Yes 1 1

Mr Rajeev Agarwal Non-

Executive

Independent

11 Yes Nil Nil

Mr K Rajagopal Non-

Executive

Independent

11 Yes Nil Nil

Mr R Siv ashankaran Non-

ExecutiveIndependent

11 Yes Nil Nil


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Mr N S Baskar who was Chairman and Managing Director of the Company resigned from

the post and also from the directorship of the Company with effect from 4th September, 2006.

Mrs Lalitha Baskar Director of the company resigned from the Board with effect from 12th May

2006.

Further the Board of Directors would like to inform the members that none of the directorsare disqualified to act as directors of this company or any other public company under Section

274(1)(g) and other applicable provisions of the Companies Act, 1956.

The requisite information as prescribed under Clause 49 of the Listing Agreement is

placed before the Board from time to time and is generally provided as part of the Agenda

papers of the Board Meeting and /or is placed at the table during the course of the meeting.

The Board of Directors met Eleven (11) times on 5th April, 2006 7th April 2006, 12th May

2006, 14th July 2006, 4th September 2006, 14th September 2006, 31st October 2006, 7th

December 2006, 16th January 2007, 19th February 2007 and 19th March 2007 and in respect of

which meetings proper notices were given and the proceedings were properly recorded and

signed, in the Minutes Book maintained for the purpose. The gap between any two meetings has

been less than four months-thus complying with the Clause 49 requirement.

The board of Sanra Software Limited is presented with all the relevant information well in

advance before each meeting on various matters affecting the working of the company, as

well as those that require deliberation at the highest level. Directors have separate and

independent access to senior management at all times.

In addition to items, which are required to be placed before the board for its noting

and/or approval under the statutes or regulations, information is also provided for the periodicreview/information on various items, such as:

Sales, operations, investments and financial performanceFinancial resultsStaff matters, including senior appointments and extensionsLabour matters and human resource issuesLegal proceedings by or against the companyLegal compliance reportsShare transfer and demat complianceDonations and other significant matters

Table showing the number of outside directorships and committee positions held by the

directors of Sanra Software Limited is given below:

Board Procedures

Information Supplied to the Board

Outside directorships and memberships of board committees

Name of the Director In Listed

Companies

In Un Listed Public

Companies

As Chairman/member of Board

Committees of Listed Companies

Mr Sanjay Bhardwaj 0 0 0

Mrs Uma Karthikeyan 1 0 1

Mr Rajeev Agarwal 0 0 0

Mr K Rajagopal 0 0 0

Mr R Sivashankaran 0 0 0

Outside directorships/ committee positions as on 31 March 2007



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AUDIT COMMITTEE

Constitution and composition

Terms of reference

Attendance and Procedure

Section 292A of the Companies Act, 1956 is applicable to the company.

Sanra Software Limited set up its audit committee in 2003. Since then, the company hasbeen reviewing and making appropriate changes in the composition and working of the

committee from time to time to bring about greater effectiveness and to comply with various

requirements under the Companies Act, 1956 as well as Clause 49 of the listing agreement. The

current audit committee consists of the following directors:

1. Mr Rajeev Agarwal Non-Executive &Independent Director - Chairman2. Mr K Rajagopal Non-Executive & Independent Director Member3. Mrs Uma Karthikeyan Executive Director Member

Two third of the members including Chairman of the audit committee are independent,

non-executive directors and all the members of the Audit committee are "financially literate"and have a strong financial and accounting background and can be considered as having

accounting or related financial management expertise.

The composition, procedures, powers and role/functions of the audit committee

constituted by the company comply with the requirements of Clause 49 of the Listing

Agreement.

The terms of reference of the Audit Committee included the following:

Overseeing the company's financial reporting process and the disclosure of its financial

information.Recommending appointment and removal of the external auditor, fixing of audit fees and

approving payments for any other service.Reviewing with management the quarterly, half yearly and annual financial statement with

primary focus on accounting policies and practices, compliance with accounting

standards, any related party transaction and stock exchange and legal requirements

concerning financial statements.Reviewing adequacy of internal control systems in order to have the effective use and

safeguard of resources and compliance with statutes polices and procedures and ensure

compliance of internal control systems and reviewing the company's financial and risk

management policies.Reviewing reports furnished by the Statutory Auditors and ensuring suitable follow up

thereon.The un-audited/ audited financial results of the Company are also specifically reviewed by

the Audit Committee before these are submitted to the Board for approval. Minutes of each

audit Committee meetings are placed before the Board for information.

The Committee has met four times during the year (i.e) 14th July 2006, 31st October 2006,

16th January 2007 and 19th March 2007 and in respect of which meetings proper notices were

given and the proceedings were properly recorded and signed, in the Minutes Book maintained

for the purpose. All the Members Viz., Mr Rajeev Agarwal, Mr K Rajagopal and Mrs Uma

Karthikeyan were present in each of the four meetings. The gap between any two meetings has

been less than four months-thus complying with the Clause 49 requirement.



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The meetings were scheduled well in advance. In addition to the members of the audit

committee, these meetings were attended by the heads of finance and internal audit functions,

the statutory auditors of the company and those executives of the company who were

considered necessary for providing inputs to the committee. The company secretary acted as

the secretary to the audit committee.

The remuneration committee presently consisting of the following directors:

1. Mr Sanjay Bhardwaj Executive Director Chairman2. Mr K Rajagopal Member Non-Executive Independent Director3. Mr R Sivashankaran Member Non-Executive Independent Director.

During the year under review the committee met once on 7th April 2006 to fix

remuneration for Mr Sanjay Bhardwaj and Mrs Uma Karthikeyan Executive Directors and

submitted their recommendation to the Board for their consideration.

No remuneration was paid to the non-executive independent director during the year

2006-2007 and they have also waived the payment of sitting fees.

The remuneration policy is directed towards rewarding performance. It is aimed at

attracting and retaining high caliber management talent by valuing their performance on the

basis of their contribution during the year, considering the prevailing internal & external business

environment at the same time giving weight age to the prevailing competitive market

practices. The amount paid to the Executive Directors is as per the approval of the Members in

their general meeting.

None of the whole time directors were paid remuneration during the year 2006-2007.

The Investors Grievance Committee of the Board oversees share transfers and monitor

investors grievances such as complaints on transfer of shares, non receipt of balance sheet, non

receipt of declared dividends etc., and redressal thereof, within the purview of the guidelines

setout in the listing agreement.

The Committee previously consisted of the following Board Members viz Mr. N S Baskar,

Mr. Siva Shankaran and Mr. K Rajgopal . Consequent to resignation of Mr N S Baskar from the

Board of Directors the same was reconstituted.

The committee presently consisting of following Board Members Viz.,

1. Mr K Rajagopal Chairman Non-Executive Independent Director2. Mr R Sivashankaran Member Non-Executive Director3. Mrs Uma Karthikeyan Member Executive Director

Mr V Sivasubramanian Company Secretary of the Company is the Secretary of the above

committee.

Remuneration Committee

Non-Executive Independent Directors:

Executive Directors

Share Transfer and Investor's Grievance Committee

Composition and Attendance

Remuneration Policy



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23/50

Committee positions

Mr Rajeev Agarwal

Directorships in other limited company

Committee positions

Communication to Shareholders

General Body Meetings

Mr Sanjay Bhardwaj does not hold committee positions in any of the companies.

Mr Rajeev Agarwal aged 49 years is a Chartered Accountant by profession. He is a highly

successful; practicing Chartered Accountant and has many software companies in his clientele

Nil

Mr Rajeev Agarwal is the Chairman of the Audit Committee of Sanra Software Limited.

He does not hold committee positions in any other companies.

Quarterly and annual financial results are published in Trinity Mirror and Makkal Kural.

These are not sent individually to the Share Holders. It also displays official news releases,

management discussion analysis and financial results in the website

The last three Annual General Meeting held as follows: -

Year Date Time Venue

2002-2003 19th December

2003

12 Noon Mangayakarasi Magalir Mandram,

No.3, 11th Cross Street, Shastri Nagar,

Adayar, Chennai 600 020

2003-2004 17th December

2004

10.30 A.M Mangayakarasi Magalir Mandram,

No.3, 11th Cross Street, Shastri Nagar,Adayar, Chennai 600 020

2004-2006 12th May 2006 11.00 A.M 3 S V Salai, Rajhasthan Jain Samaj, NewNo.131, Old No.66, Thyegaraya Road,

Pondy Bazar, T Nagar, Chennai 600 017

All the resolutions including the special resolutions as set out in the respective notices

were passed by the shareholders.

An Extra Ordinary General Meeting was held on 2nd January, 2007 at 3 S V Salai,

Rajhasthan Jain Samaj, New No.131, Old No.66, Thyegaraya Road, Pondy Bazar, T Nagar,

Chennai 600 017 and all the Six Special Resolutions as set out in the notice were passed by the

shareholders unanimously.

A special resolution for amending the Memorandum of Association and Articles of the

Association of the Company was put to vote through postal ballot, during the year under review.

The above resolutions were passed unanimously and all the shareholders participated in the said

Postal Ballot gave assent to the Special Resolution.

There were no instances of non-compliance by the Company on any matter related to

capital markets during the last three years. Hence there was no penalty, strictures imposed by

SEBI/ Stock Exchange or any other statutory/local authorities against the Company. However

the Bombay Stock Exchange has placed the scrip of the company under suspension till July 2006

and the same was revoked with effect from 14th July 2006.

Disclosures

Details of non-compliances with regard to Capital Market.



24/50

Material disclosure and compliance

Related Party Transactions

Report on corporate governance

Means of Communication to Shareholders

Related Party Transactions are defined as transaction of the company of material

nature, with its Promoters, Directors or management, the subsidiaries or relatives etc. that may

have potential conflict with the interest of the Company at large. The company has no suchtransactions during the year 2006-2007.

The Board has laid down procedures to inform it of the company's risk assessment and

minimization procedures. These would be periodically reviewed to ensure that executive

management controls risk through means of a properly defined framework

This chapter, read together with the information given in the chapters titled

Management Discussion and Analysis constitute the compliance report on corporate

governance during 2006-07.

The above report was adopted by the Board of Directors at their meeting held on 19th

March 2007.

The quarterly, half-yearly and annual results are published in English language in TRINITY

MIRROR and Tamil language in MAKKAL KURAL. These results are promptly submitted to the

Stock Exchanges to enable them display the same on their website.The domain name of the Company's website is www.sanrasoft.com where general

information about the company is available.The Management Discussion and Analysis report forms part of the Annual Report.



25/50

SHAREHOLDERS' INFORMATION

General Shareholder Information

1 Annual General Meeting The Eleventh Annual General Meeting has been

convened at 10.00 am on Friday the 28thSeptember 2007 at Hotel New Woodland,

Radhkrishnan Salai, Chennai - 6000042 Date of Book Closure 26th September 2007 to 28th September 2007 (Both

Days Inclusive)3 Financial Calendar Financial Reporting for the Quarter Ended

Qr ended June 2006 July 2006

Qr ended Sep 2006 October 2006

Qr ended Dec 2006 January 2007

Qr ended March 2007-

Not Considered and Audited results are published in

June 2007.

4 Registrar and TransferAgents

M/s. GNSA Investor Services Private LtdGR Mansion, 1st Floor, Srinivasan Road

Pondy Bazar, T Nagar

Chennai 600 017. Tel. 044 42121428/29.

Fax: 044 - .

e.mail: [email protected]

5 Share Capital Details Authorised 7,50,00,000 equity shares of Rs.10/ each

Paid Up 60,50,000 equity shares of Rs.10/- each

6 Listing of Companys Shares i) The Stock Exchange, Mumbai

Phiroze Jeejeebhoy Towers

Dalal Street, Mumbai-400 001

ii) The Madras Stock Exchange LimitedP.B. No. 183, No. 11, Second Line Beach

Chennai-600 001

7 Registered Office BC-O, Whispering Heights, 132, St. Marys Road,

Alwarpet,

Chennai 600 018

Share Price MovementsThe Company has paid the listing fees to the Stock Exchanges for the year 2007-2008.

International Securities Identification Number (ISIN) for CDSL & NSDL

- INE 889C01014

There is no trading for the period under review on Madras Stock Exchange.

The suspension of trading of shares was revoked by the Bombay Stock Exchange Limited

with effect from 14th July 2006 and market price details are as follows:



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Bombay Stock Exchange Limited, MumbaiMonth

High Low

July 2006 5.22 3.41

August 2006 14.95 5.48

September 2006 16.47 10.99October 2006 17.60 13.21

November 2006 15.78 11.25

December 2006 15.54 11.79

January 2007 20.65 13.90

February 2007 18.21 14.40

March 2007 15.25 12.00

BSE Sensex V/s Sanra Share Price

0

2000

4000

6000

8000

10000

12000

14000

16000

Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07

Months

BSE

Sensex

0

2

4

6

8

10

12

14

16

18

Sanra

SharePrice

BSE Sensex Sanra Share Price

The Chart below shows the comparison of the BSE Sensex and Sanra Share Prices.

Dematerialisation of equity sharesThe trading in the Company's Equity Shares on the Stock Exchanges have to be

compulsorily settled in the electronic form by all investors. The Company has entered into

tripartite agreement along with the registrar and Share Transfer Agents of the Company with two

depositories viz., National Securities Depository Limited (NSDL) and Central Depository Services

(India) Limited (CDSL). The Equity Shares of the Company have been admitted for

dematerialisation by these depositories with the International Securities Identification Number

(ISIN)- INE 889C01014

As on 31st March 2007, 45,59,605 out of total 60,50,000 Equity Shares of the Company

Equity Shares representing 75.37% of total shares have been dematerialised.

Particulars No. Of Shares Percentage

CDSL 5,07,335 8.39

NSDL 40,52,270 66.98

PHYSICAL 14,90,395 24.63



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Nomination Facility

Share Transfer System

Communication

The Companies Act, 1956 and the Rules prescribed there under provides for nomination

of shares. The shareholders can now nominate a person with whom the shares shall vest in the

event of death of the shareholders. The nomination can be made only by individuals holding

shares of the company either in sole name or jointly with another (not exceeding one joint

holder). The nominee shall be individual. In the case of nominee being a minor he/she may be

represented by his/her natural guardian or a court appointed guardian. The transfer of shares in

favour of a nominee shall be a valid discharge by the company against the legal heirs. The

nomination shall stand rescinded upon transfer of shares. The nomination by a shareholder can

be changed or cancelled at any time by giving due notice and upon execution of a fresh

nomination form.

Share Transfers will normally be registered and returned within 30 days from the date of

receipt of correct documents. Investors complaints/grievances not resolved within 15 days

should be addressed to the Managing Director for redressal.

All share transfers should be forwarded to the Registrars & Share Transfer Agents of the

Company. All communications should be forwarded to the Registered Office of the Company

marked to the attention of the Managing Director.

DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH 2007.

Shareholding of

nominal value of

Shareholders Shareholding

Rs. Number % to Total Nos. In Rs. % to Total Amount

[1] [2] [3] [4] [5]

Up to 5000 5440 86.05 12215530 20.19

5001 to 10000 502 7.94 4297240 7.10

10001 to 20000 203 3.21 3051770 5.04

20001 to 30000 63 1.00 1638900 2.71

30001 to 40000 32 0.51 1148520 1.90

40001 to 50000 27 0.43 1284000 2.12

50001 to 100000 22 0.35 1646200 2.72100001 and above 32 0.51 35217840 58.22

TOTAL 6321 100.00 60500000 100.00



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PATTERN OF EQUITY SHAREHOLDING AS ON 31ST MARCH 2007

As a

percentag

e of (A+B)

As a

percentag

e of

(A+B+C)

(A) Shareholding of Promoter and Promoter

Group

-1 Indian

(a) Individuals/ Hindu Undivided Family 3 2626200 2584900 43.41 43.41

(b) Central Government / State Government(s)

(c ) Bodies Corporate

(d) Financial Institutions/ Banks

(e) Any Other (specify)

Sub-Total(A)(1) 3 2626200 2584900 43.41 43.41-2 Foreign

(a) Individuals (Non Resident Individuals/

Foreign Individuals

(b) Bodies Corporate

(c ) Institutions

(d) Any Other (specify)

Sub-Total(A)(2) 0 0 0 0 0

Total Shareholding of Promoter and Promoter

Group (A) = (A)(1)+(A)+(2)

3 2626200 2584900 43.41 43.41

(B) Public shareholding

-1 Institutions

(a) Mutual Funds/ UTI

(b) Financial Institutions/ Banks

(c ) Central Government / State Government(s)

(d) Venture Capital Funds

(e) Insurance Companies

(f) Foreign Institutional Investors

(g) Foreign Venture Capital investors

(h) Any Other (specify)

Sub-Total (B)+(1) 0 0 0 0 0

-2 Non-institutions

(a) Bodies Corporate 102 218621 214721 3.61 3.61

(b) Individuals

i. Individual shareholders holding nominal

share capital up to Rs.1.lakh.

6175 2402305 1129910 39.71 39.71

ii. Individual shareholders holding nominal

share capital in excess of Rs.1 lakh.

25 780484 623984 12.9 12.9

(c ) Any Other (Non Resident Indians) 16 22390 6090 0.37 0.37

Sub-Total (B)+(2) 6318 3423800 1974705 56.59 56.59

Total Public Shareholding (B)=(B)(1)+(B)(2) 6318 3423800 1974705 56.59 56.59

TOTAL (A) + (B) 6321 6050000 4559605 100 100

(C ) Shares held by custodians and against

which Depository Receipts have been issued

GRAND TOTAL (A) + (B) + (C ) 6321 6050000 4559605 100 100

Category of shareholdercategory

code

Scip Code : Quarter ended : 31-03-2007

Total shareholding as

a percentage of totalnumber of shares

Number of

shareholders

Total

number ofshares

Number of shares

hold indematerialized

form

(I)(a) Statement showing Shareholding Pattern

Name of the Company : SANRA SOFTWARE LIMITED





29/50

Declaration by Chief Executive Officer (CEO)

Certificate by Chief Executive Officer (CEO)

I, Sukumar Subramanian, Chief Executive Officer of Sanra Software Limited hereby

declare that all the board members and senior managerial personnel have affirmed for the year

ended 31 March 2007 compliance with the code of conduct of the company laid down for

them.

Sukumar SubramanianChief Executive Officer,Chennai: 23rd August, 2007

I, Sukumar Subramanian, Chief Executive Officer of Sanra Software Limited hereby certify

1. That I have reviewed the financial statements and the cash flow statement for the year

ended 31 March 2007 and that to the best of my knowledge and belief,

?These statements do not contain any materially untrue statement nor omit any material

fact nor contain statements that might be misleading, and?These statements presents a true and fair view of the company's affairs and are in

compliance with the existing accounting standards, applicable laws and regulations.

2. That there are, to the best of my knowledge and belief, no transactions entered into by the

company during the year, which are fraudulent, illegal or volatile of the company's code of

conduct.

3. That I accept responsibility for establishing and maintaining internal controls, I have

evaluated the effectiveness of the internal control systems of the company and I have

disclosed to the auditors and the audit committee, deficiencies in the design or operation of

internal controls, if any, of which I was aware and the steps that we have taken or propose to

take to rectify the identified deficiencies and

4. That I have informed the auditors and the audit committee of:

?Significant changes in internal control during the year;?

Significant changes in accounting policies during the year and that the same havebeen disclosed in the notes to the financial statements, and?Instances of significant fraud of which I have become aware and the involvement

therein, if any, of the management or an employee having a significant role in the

company's internal control system.

Sukumar SubramanianChief Executive Officer

Chennai: 23rd August 2007 Sanra Software Limited



30/50

AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE

We have examined the compliance of conditions of Corporate Governance by Sanra

Software Limited for the year ended 31st March 2007 as stipulated in Clause 49 of the Listing

Agreement of the said Company with the Stock Exchanges.

The Compliance of conditions of Corporate Governance is the responsibility of the

Management. Our examination was limited to procedures and implementation thereof,

adopted by the Company for ensuring the compliance of Corporate Governance as stipulated

in the above mentioned listing agreement.

In our opinion and to the best of our information and according to the explanations

given to us, we certify that the Company has complied with the conditions of Corporate

Governance as stipulated in the above mentioned listing agreement.

We further state that such compliance is neither an assurance as to the future viability ofthe company nor the efficiency for effectiveness with which the management has conduced

the affairs of the company.

Place :Chennai for R.RAVINDRAN & ASSOCIATESDate : 29th June 2007 CHARTERED ACCOUNTANTS

R.RAVINDRANProprietorMembership No 23829



31/50

AUDITORS REPORT

To

The Shareholders of Sanra Software Limited, Chennai.

1. We have audited the attached Balance sheet of SANRA SOFTWARE LIMITED, as at 31st

March, 2007 and the Profit and Loss Account and Cash Flow Statement for the year ended

on that date annexed thereto. These financial statements are the responsibility of the

company's management. Our responsibility is to express an opinion on these financial

statements based on our Audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in

India. Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. An

audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used

significant estimates made by the management, as well as evaluating the overall financial

statements presentation. We believe that our audit provides a reasonable basis for our

opinion.

3. As required by the Companies (Auditor's report) Order, 2003, issued by the Central

Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956,

we enclose in the Annexure a statement on the mattes specified in paragraphs 4 and 5 of

the said Order.

4. Further to our comments in Annexure referred to above, we report that

I. We have obtained all the information and explanations, which to the best of our

knowledge and belief were necessary for the purposes of our audit.

II. In our opinion, proper books of accounts as required by law have been kept by the

Company so far as appears from our examination of those books.

III. The Balance sheet and Profit and Loss account and Cash flow Statement dealt with by

this report are in agreement with the Books of Accounts.

IV. In our opinion, the Balance Sheet, Profit & Loss account and Cash flow Statement dealt

with by this report comply with the accounting standard referred to in sub-section (3C) ofSection 21 of the Companies Act, 1956.

V. On the basis of written representations received from the Directors as on 31st March

2007 and taken on record by the Board of Directors, we report that none of the Directors

is disqualified as on 31st Mar, 2007 from being appointed as a Director in terms of clause

(g) of sub-section (1) of Section 274 of the Companies Act, 1956.

VI. Subject to the foregoing, in our opinion and to the best of our information and according

to the explanations given to us, the said accounts give the information required by the

Companies Act, 1956, in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India.



32/50


33/50

ANNEXURE TO THE AUDITOR'S REPORTS REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN

DATE

a) The company is maintaining Fixed Assets Register. This has been updated as on the date of

the Balance sheet. We have been informed by the Management that fixed assets were

physically verified by them during the year at reasonable intervals. We are informed that

no material discrepancies were noticed on such verification.

b) The fixed assets of the company have not been revalued during the year..

c) We are informed by the Management that no inventory is held by them as on the Balance

Sheet date.

d) The Company has not taken loans, secured or unsecured from companies firms or other

parties listed in the register maintained under section 301 of the Companies Act, 1956, or

from the Companies under the same management as defined under section 370(1B) of

the Companies Act, 1956, where the rate of interest and other terms and conditions areprima facie prejudicial to the interests of the Company.

e) The Company has not granted any loans, secured or unsecured during the year secured or

unsecured to Companies, Firms or other parties listed in the Register maintained under

Section 301 or to the Companies under the same management as defined under section

370(1B) of the Companies Act, 1956, where the rate of interest and other terms and

conditions are prima facie prejudicial to the interests of the Company.

f) Based on the information and explanation given to us we are of the opinion that the

Company has not granted any loans or advances in the nature of loans.

g) Based on our review of the internal control procedures of the company, we are of the

opinion that it is adequate and commensurate with the size and nature of its business for

the purposes of stores, Raw materials including components, plant and machinery,

equipments and other assets and for the sale of goods.

h) There were no transactions of purchase of goods and materials and sale of goods and

materials and services made in pursuance of contracts or arrangements entered in the

registered in the register maintained under section 301 of the Companies Act, 1956 and

aggregating during the year to Rs.50,000 or more in respect of each party at prices which

are unreasonable having regard to the prevailing market prices for such goods, materials

or services or at which transactions for similar goods or services that have been made withother parties.

i) Based on our review of the procedures adopted by the company, we are of the opinion

that the company has reasonable procedures for determining the unserviceable or

damaged stores, raw materials or finished goods and made adequate provisions for the

loss in the books of accounts as at the Balance sheet date.

j) The Company has not accepted any deposits from the public.

k) The Company has no by-products generated during the current year. We are of the

opinion that the company maintains reasonable records for the disposal of scrap.



34/50


35/50

AUDITOR'S CERTIFICATE

We have examined the cash flow statement of Sanra Software Limited for the period of

fifteen months ended March 31, 2007. The Statement has been prepared by the company in

accordance with the requirements of Clause 32 of the Listing Agreements entered into with the

Stock Exchanges and is based on and agreement with the Corresponding Profit and Loss

Account and the Balance sheet of the Company covered by our report of 29th June 2007 to the

Members of the Company.

Place : Chennai For R.RAVINDRAN & ASSOCIATESDate : 29.06.2007 Chartered Accountants

R.RAVINDRANProprietorMembership No 23829



36/50


37/50

31-Mar-07 31-Mar-06

SCHEDULE

Income Rs. Rs.

Sales 10 2 56 36 769 2 57 65 533

Other Income 11 1 75 000 -

2 58 11 769 2 57 65 533

Expenditure

Cost of Material Consumed 12 3 18 700 -

Salaries & Wages 36 98 424 10 88 540

Administrative Expenses 13 39 43 924 45 05 771

Selling & Market Promotion Expenses 14 3 89 160 1 46 49 573

Loss on sale of assets 86 037Depreciation / Amortisation 3 1 13 86 151 10 40 197

1 97 36 358 2 13 70 118

Profit Before tax 60 75 411 43 95 415

Provision for Tax

Current Tax 19 42 344 12 00 000

Deffered Tax 6 39 412 8 11 434

Fringe Benefit Tax 22 522 13 000

Profit After tax 34 71 133 23 70 981

Accumulated Balance of Profit / Loss B/f 28 91 740 5 20 759

Proposed Dividend & dividend tax 35 83 113

Balance Carried over to Balance Sheet 27 79 761 28 91 740

Earning Per Share (Basic & Diluted) 1.00 0.73

Notes to Accounts 15

As per our Report of Even Date attached

For R Ravindran & Associates

Chartered Accountants

R Ravindran

Proprietor

Chennai, 29.06.2007

Director

Uma Karthikeyan

SANRA SOFTWARE LIMITED

PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH 2007

Sanjay Bhardwaj

Director

V. Siva Subramanian

Company Secretary



38/50


31-Mar-07 31-Mar-06

Schedule 1Share Capital (Rs.) (Rs.)

Authorised Share Capital

1,05,00,000 Equity Shares of Rs. 10/- each 10 50 00 000 10 50 00 000

Issued and Subscribed Capital

60,50,000 Equity Shares of Rs. 10/- each 6 05 00 000 6 05 00 000

Paid up Capital

60,50,000 Equity Shares of Rs. 10/- each 6 05 00 000 6 05 00 000

6 05 00 000 6 05 00 000

Schedule 2

Reserves & Surplus

Share Premium Account 10 00 000 10 00 000

Balance in Profit & Loss Account 27 79 761 28 91 740

Schedule 4

Inventories

(Values certified by the management)

Finished Goods - 3 18 700

- 3 18 700


SCHEDULES FORMING PART OF THE ACCOUNTS


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38

ThinkNew

Media,ThinkSanra

Schedule 3 Fixed assets

Fixed Assets

Gross Block Net Block

Description At Cost Additions Deletions Original Accumulated Depreciation Accumulated as at as at

of the as on during the during the Cost as on Depreciation for the Depn uptoAsset 01.04.2006 period period 31-Mar-07 01.04.2006 Period 31-Mar-07 31-Mar-06 31-Mar-07

Assets subject to

depreciation

1. Plant & Machinery 3,692,213 735,550 - 4,427,763 3,438,786 538,815 3,977,601 253,427 450,162

2. Office Equipments 993,556 - - 993,556 395,124 138,204 533,328 598,432 460,228

3. Computer &

Accessories

- 5,635,785 - 5,635,785 538,177 538,177 - 5,097,608

4. Furniture & Fixtures 1,025,868 333,050 - 1,358,918 395,838 200,335 596,173 630,030 762,745

- -

Assets subject to

amortisation

- -

5. Goodwill - 3,698,405 - 3,698,405 - 739,681 739,681 - 2,958,724

6. Software

(Developed)

46,154,694 - - 46,154,694 6,569,983 9,230,939 15,800,922 39,584,711 30,353,772

51,866,331 10,402,790 62,269,121 10,799,731 11,386,151 22,185,882 41,066,600 40,083,239


Depreciation / amortisation


40/50

31-Mar -07 31-Mar -06

Schedule 5

Sundry Debtors (Rs.) (Rs.)

(Unsecured considered good at for which theCompany holds no secuity other than Debtor's

personal security)

Debts due for more than six months 1 93 92 295 4 49 919

Other Debts 20 39 843 1 57 21 890

2 14 32 138 1 61 71 809

Schedule 6

Cash and Bank Bal ances:

Cash in Hand 3 272 1 065

Bank balance with Scheduled Banks 11 22 747 79 495

in Current Account

11 26 019 80 560

Schedule 7

Loans, Advances & Deposits

(Unsecured, Considered good)

Deposits with Government Authorities 5 428 5 428

Other Deposits 5 300 5 300Rent deposit 7 50 000 -

Advances Recoverable in Cash / Kind 19 67 977 3 29 951

Advance Income Tax - 5 00 000

27 28 705 8 40 679

Schedule 8

Current Liabil ities & Provisions

a)Current Liabilities

i) Sundry Creditors

- Creditors for Capital Goods 1 63 462 5 18 145- Creditors for Purchases 27 795 27 795

- Creditors for Expenses 9 45 507 5 79 870

- Creditors for Others 1 73 785 1 73 785

ii) Other Current Liabilities 5 84 419 5 16 862

18 94 968 18 16 457

b)Statutory Dues 4 941 19 207

Provision for Taxation

I T AY 2007-08 19 42 344 12 00 000

FBT AY 2007-08 22 522 -

Dividend payable 35 83 113 -

74 47 887 30 35 664




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40

SANRA SOFTWARE LIMITED 31-Mar-07 31-Mar-06

Schedule 9 (Rs.) (Rs.)

Miscellaneous Expenditure

Public issue Expenses

Deferred Revenue Expenditure 78 08 393 97 60 491

78 08 393 97 60 491

Schedule 10

Sales

Animation 1 76 16 669 -

Software sales 8,020,100 2 57 65 533

2 56 36 769 2 57 65 533

Schedule 11

Stock Differencial

Closing stock of Finished Goods - 3 18 700Less: Opening Stock of Finished Goods 3 18 700 3 18 700

(318,700)

Schedule 12

Cost of Materials Consumed

Opening Stocks 3 18 700 -

Add: Purchases

Closing StockConsumption 3 18 700 -

(to the extent not written off or adjusted)



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SANRA SOFTWARE LIMITED 31-Mar-07 31-Mar-06

Schedule 13 (Rs.) (Rs.)

Administrative Expenses

Rent, Rates & Taxes 3 50 000 97 495

Telephone Expenses 1 70 785 66 650

Travelling & Conveyance

Employees 60 063 1 02 570

Others - 7 83 911

Deferred Revenue Expenses Write Off 19 52 098 3 06 999

Preliminary & Public issue expenses written off 19 21 985

Printing Stationary 86 843 1 24 109

Office Maintenance Charges 48 094 1 77 833

Electricity Charges 1 28 516 81 949

Repairs & Maintenance 65 008 56 582Audit Fee 1 40 372 1 18 670

Staff Welfare Expenses 52 388 14 413

Hire Charges - 57 338

Bank Charges - 3 090

Courier Charges - 17 680

Donations & Gifts - 1 317

Legal Expenses - 63 200

Professional Charges 2 86 482 1 72 512

Registrations & Renewals 3 52 870 3 15 631

Interest on ncome tax 63 016 -

Security charges 52 433 -

Miscel laneous Expenses 85 314 20 179

Others 49 642 1 657

39 43 924 45 05 771

Schedule 14

Selli ng & Market Promotion Expenses

Internet Services - 1 35 247

Market Promotion Expenses 25 171 1 80 102

Baddebts written off - 1 32 31 057

Travelling Expenses 1 95 318 -

Commission Brokerage - 2 26 485Sales Incentives - 3 18 662

Packing Materials - NIL

Discount

Entertainment Expenses 1 001 40 502

Advertisement & Operating 1 67 670 5 17 518

3 89 160 1 46 49 573



43/50

SCHEDULE 15

NOTES ON ACCOUNTS

The Financial statements have been prepared on the historical cost convention on accrual

basis to comply in all materials respects with the mandatory Accounting Standards issued by the

Institute of Chartered Accountants of India and the relevant provisions of the Companies Act,

1956.

Fixed assets are stated at historical cost after reducing accumulated depreciation until the

date of the Balance Sheet. In Accordance with AS10, Direct costs are capitalized until the assets

are ready for use and include financing costs relating to borrowing attributable to acquisition.

All expenditure incurred on development of Application Software Products including

salaries, rent, power and other relevant overheads are capitalized.

Expenditure incurred on test marketing the product and making known the existence and

features of the product are capitalized.. This will include initial promotion expenses such as

advertisement, market promotion, travel, telephone, Printing & Stationery etc.

Realizations from test marketing and establishing the product are treated as income.

Depreciation on Fixed Assets has been provided on written down value basis as per

Schedule XIV of the companies Act, 1956 and charged half yearly.

i) In respect of goodwill and software products, amortization is provided in accordance

with AS26, on the basis of expected economic life as estimated by the company.

The company did not carry any finished goods inventory as at the Balance Sheet.

i. The Company shall provide for Gratuity and Leave Salary as and when it arises.ii. The Company's contribution to Provident Fund is recognized on accrual basis.

The company had accumulated in the earlier years as the R & D expenses on software as

deferred revenue expenses ( grouped under Miscellaneous Expenses Assets ) for future set off. A

portion of such expenditure is written off in the current year.

i. A provision is made for income tax annually based on the tax liability computed after

considering tax allowances and exemptions.

ii. Deferred tax is provided on all temporary differences at the balance sheet date

between the tax base of assets and liabilities and their carrying amounts for financial

reporting purposes. Deferred tax liability is measured at current rate of Tax.

1) Significant Accounting Policies:

a. Basis of Preparation:

b. Fixed Assets

c. Depreciation & Amortisation

d. Inventories

e. Retirement Benefits

f. Deferred revenue expenditure

g. Income Tax



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11. There are no dues above Rs.1 lakh and outstanding for more than 30 days to Small Scale

Industries.

12. The Earnings per share have been computed on the following :

Profit considered for calculations of Rs. 34,71,642

Basic and diluted earnings per share

Number of equity shares considered for calculation

Of diluted earnings per share 605,00,000

Add : Effect of diluted equity shares Nil

Number of equity shares considered for

calculation of diluted earnings per share 605,00,000

13. The company identifies software as the Business segment.

14. Contingent Liabilities not provided for :

i. Income Tax matters under appeal Rs. 56,81,456 /-(Previous year 56,81,456/-)

ii. Others Nil(Previous year Nil).

15. Previous year's figures have been re-grouped wherever necessary.

16. Cash flow statement is enclosed.

As per our Report of Even Date Attached

For R.RAVINDRAN ASSOCIATESCHARTERED ACCOUNTANT

Mrs. Uma Karthikeyan Mr. Sanjay Bhardwaj R.RAVINDRANDirector Director Proprietor

Membership No 23829

Date : 29h June 2007Place: Chennai



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CASH FLOW STATEMENT FOR THE PERIOD ENDED 31.03.2007

Rs in Lakhs Rs in Lakhs

2006-07 2004-06

A. Cash flow from operating Activities

Profit for the year 60.75 43.95

Adjustments for

Depreciation 113.86 10.40

Miscellaneous expenses w/o 19.52 20.79

Interest Expenses - Nil

Loss on sale of assets - 0.86

Bad debts w/o - 132.31

Operating Income before working Capital Changes 194.14 208.32

Adjustments for

Deferred revenue Expenditure -

Increase / decrease in Trade and other recivables (52.60) (105.96)Increase / decrease in Loans & Advances (18.88) (2.74)

Increase / decrease in Inventory 3.19 Nil

Increase / decrease in Trade paybles (11.36) 5.18

Cash inflow from operations 114.48 104.80

Interest Paid 0.00 0.00

Net cash from Operations (A) 114.48 104.80

B. Cash Flow from Investing Activities

Purchase of Fixed Assets (104.03) (10.68)

Deferred revenue Expenditure - (93.51)

Proceeds from the sale of Fixed Assets - 4.88

Net Cash used in Ivesting Activities (B) (104.03) (99.32)

C. Cash flow from Financing Activites

Repayment of Finance Lease Liabilities - (4.88)

Net Cash from Financing Activites ( C ) - (4.88)

Net Cash increase in cash and cash equivalents during the year 10.45 0.61

Cash and Cash equivalents at the beginning of the year 0.81 0.22

Cash and Cash equivalents at the end of the year 11.26 0.81

As per our Report of Even Date attachedFor R Ravindran & Associates Uma Karthikeyan

Chartered Accountants Director

R Ravindran V. Siva Subramanian Sanjay Bhardwaj

Proprietor Company Secretary Director

Membership No 23829

Chennai, 29.06.2007



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Sanra Software Limited

Documents

Sanra Anua Report 06-07