United States Securities and Exchange Commission
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the half-year ended September 30, 2016
Commission File Number 000-27663
SIFY TECHNOLOGIES LIMITED
(Translation of registrant’s name into
English)
Tidel Park, Second Floor
No. 4, Rajiv Gandhi Salai, Taramani
Chennai 600 113, India
(91) 44-2254-0770
(Address of principal executive office)
Indicate by check mark whether the
registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20F
þ
Form 40 F
¨
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (1). Yes
¨
No
þ
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (7). Yes
¨
No
þ
Table of Contents
SIFY TECHNOLOGIES LIMITED
FORM 6-K
For the half-year ended September 30, 2016
INDEX
Currency of Presentation and Certain Defined
Terms
Unless the context otherwise
requires, references in this report to “we,” “us,” the “Company,” “Sify” or “Satyam
Infoway” are to Sify Technologies Limited, a limited liability Company organized under the laws of the Republic of India.
References to “U.S.” or the “United States” are to the United States of America, its territories and its
possessions. References to “India” are to the Republic of India. In January 2003, we changed the name of our Company
from Satyam Infoway Limited to Sify Limited. In October 2007, we again changed our name from Sify Limited to Sify Technologies
Limited.
“
Sify”, “SifyMax.in,”, “Sify e-port
s
” and “Sify online”
are trademarks used by us for which we have already obtained registration certificates in India. All other trademarks or trade
names used in this report are the property of their respective owners. In this Report, references to “$,” “Dollars”
or “U.S. dollars” are to the legal currency of the United States, and references to “₹,”, “₹.”,
“rupees” or “Indian rupees” are to the legal currency of India . References to a particular “fiscal”
year are to our fiscal year ended March 31 of such year.
For your convenience, this
Report contains translations of some Indian rupee amounts into U.S. dollars which should not be construed as a representation that
those Indian rupee or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Indian rupees, as the case
may be, at any particular rate, the rate stated below, or at all. Except as otherwise stated in this Report, all translations from
Indian rupees to U.S. dollars contained in this Report have been based on the reference rate in the City of Mumbai on September
30, 2016 for cable transfers in Indian rupees as published by the Reserve Bank of India (RBI), which was ₹66.66 per $1.00.
Our financial statements
are presented in Indian rupees and prepared in accordance with English version of International Financial Reporting Standards as
issued by the International Accounting Standards Board, or IFRS. In this Report, any discrepancies in any table between totals
and the sums of the amounts listed are due to rounding.
Information contained in our websites, including
our corporate website,
www.sifycorp.com
, is not part of our Annual Report for the year ended March 31, 2016 or this Report.
Forward-looking Statements
In addition to historical information, this
Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended. The forward-looking statements contained herein are subject to risks and uncertainties
that could cause actual results to differ materially from those reflected in the forward-looking statements. For a discussion of
some of the risks and important factors that could affect the Company’s future results and financial condition, please see
the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” and our Annual Report on Form 20-F for the fiscal year ended March 31, 2016, filed with the Securities
and Exchange Commission (the “SEC”) on June 22, 2016.
The forward-looking statements contained herein
are identified by the use of terms and phrases such as “anticipate”, believe”, “could”, “estimate”,
“expect”, “intend”, “may”, “plan”, “objectives”, “outlook”,
“probably”, “project”, “will”, “seek”, “target” and similar terms and
phrases. Such forward-looking statements include, but are not limited to, statements concerning:
|
•
|
our expectations as to future revenue, margins, expenses and capital requirements;
|
|
•
|
our exposure to market risks, including the effect of foreign currency exchange rates and interest
rates on our financial results;
|
|
•
|
the effect of the international economic slowdown on our business;
|
|
•
|
our ability to generate and manage growth and to manage our international operations;
|
|
•
|
projections that our cash and cash equivalents, along with cash generated from operations will
be sufficient to meet certain of our obligations; and
|
|
•
|
the effect of future tax laws on our business.
|
You are cautioned not to place undue reliance
on these forward-looking statements, which reflect management’s analysis only as of the date of this Report. We undertake
no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise. In addition, you should carefully review the other information in this Report, our other periodic reports and other
documents filed with the SEC from time to time. Our filings with the SEC are available on its website at www.sec.gov.
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Financial Position
(In thousands of Rupees, except share data and
as otherwise stated)
|
|
Note
|
|
|
As at
|
|
|
As at
September 30,
2016
|
|
|
|
|
|
|
September 30,
2016
₹
|
|
|
March 31,
2016 *
₹
|
|
|
Convenience
translation into
US$
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
4
|
|
|
|
6,251,973
|
|
|
|
6,327,890
|
|
|
|
93,789
|
|
Intangible assets
|
|
|
5
|
|
|
|
576,172
|
|
|
|
605,646
|
|
|
|
8,643
|
|
Lease prepayments
|
|
|
7
|
|
|
|
896,454
|
|
|
|
904,201
|
|
|
|
13,448
|
|
Other assets
|
|
|
|
|
|
|
733,955
|
|
|
|
687,463
|
|
|
|
11,010
|
|
Other investments
|
|
|
|
|
|
|
1,710
|
|
|
|
1,710
|
|
|
|
26
|
|
Total non-current assets
|
|
|
|
|
|
|
8,460,264
|
|
|
|
8,526,910
|
|
|
|
126,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
985,719
|
|
|
|
741,432
|
|
|
|
14,787
|
|
Trade and other receivables, net
|
|
|
8
|
|
|
|
7,838,970
|
|
|
|
7,361,452
|
|
|
|
117,596
|
|
Prepayments for current assets
|
|
|
|
|
|
|
308,362
|
|
|
|
236,252
|
|
|
|
4,626
|
|
Restricted cash
|
|
|
6
|
|
|
|
291,778
|
|
|
|
345,328
|
|
|
|
4,377
|
|
Cash and cash equivalents
|
|
|
6
|
|
|
|
1,550,463
|
|
|
|
1,390,552
|
|
|
|
23,259
|
|
Total current assets
|
|
|
|
|
|
|
10,975,292
|
|
|
|
10,075,016
|
|
|
|
164,645
|
|
Total assets
|
|
|
|
|
|
|
19,435,556
|
|
|
|
18,601,926
|
|
|
|
291,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
1,423,125
|
|
|
|
1,423,125
|
|
|
|
21,349
|
|
Share premium
|
|
|
|
|
|
|
18,474,481
|
|
|
|
18,474,481
|
|
|
|
277,145
|
|
Share based payment reserve
|
|
|
|
|
|
|
292,780
|
|
|
|
287,901
|
|
|
|
4,392
|
|
Other components of equity
|
|
|
|
|
|
|
48,866
|
|
|
|
51,495
|
|
|
|
733
|
|
Accumulated deficit
|
|
|
|
|
|
|
(12,624,240
|
)
|
|
|
(12,736,171
|
)
|
|
|
(189,383
|
)
|
Equity attributable to equity holders of the Company
|
|
|
|
|
|
|
7,615,012
|
|
|
|
7,500,831
|
|
|
|
114,236
|
|
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Financial Position
(In thousands of Rupees, except share data and
as otherwise stated)
|
|
Note
|
|
|
As at
|
|
|
As at
September 30,
2016
|
|
|
|
|
|
|
September 30,
2016
Rs.
|
|
|
March 31,
2016*
Rs.
|
|
|
Convenience
translation into
US$
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease obligations, other than current instalments
|
|
|
|
|
|
|
233,335
|
|
|
|
395,693
|
|
|
|
3,500
|
|
Borrowings
|
|
|
|
|
|
|
821,871
|
|
|
|
995,412
|
|
|
|
12,329
|
|
Employee benefits
|
|
|
9
|
|
|
|
104,709
|
|
|
|
94,936
|
|
|
|
1,571
|
|
Other liabilities
|
|
|
|
|
|
|
632,935
|
|
|
|
586,711
|
|
|
|
9,495
|
|
Total non-current liabilities
|
|
|
|
|
|
|
1,792,850
|
|
|
|
2,072,752
|
|
|
|
26,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease obligations current instalments
|
|
|
|
|
|
|
527,630
|
|
|
|
557,618
|
|
|
|
7,915
|
|
Borrowings
|
|
|
|
|
|
|
2,530,971
|
|
|
|
1,852,225
|
|
|
|
37,968
|
|
Bank overdraft
|
|
|
6
|
|
|
|
698,026
|
|
|
|
719,767
|
|
|
|
10,471
|
|
Trade and other payables
|
|
|
|
|
|
|
4,994,164
|
|
|
|
4,801,583
|
|
|
|
74,921
|
|
Deferred income
|
|
|
|
|
|
|
1,276,903
|
|
|
|
1,097,150
|
|
|
|
19,155
|
|
Total current liabilities
|
|
|
|
|
|
|
10,027,694
|
|
|
|
9,028,343
|
|
|
|
150,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
|
|
11,820,544
|
|
|
|
11,101,095
|
|
|
|
177,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
|
|
|
|
|
19,435,556
|
|
|
|
18,601,926
|
|
|
|
291,561
|
|
The accompanying notes form an integral part
of these unaudited condensed consolidated interim financial statements
*
Derived
from the audited consolidated financial statements
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Income
(In thousands of Rupees, except share data and
as otherwise stated)
|
|
Note
|
|
|
Quarter ended
September 30,
|
|
|
Quarter ended
September
30, 2016
|
|
|
Half year ended
September 30,
|
|
|
Half year ended
September 30, 2016
|
|
|
|
|
|
|
2016
Rs.
|
|
|
2015
Rs.
|
|
|
Convenience
translation
into
US$
(In thousands)
|
|
|
2016
Rs.
|
|
|
2015
Rs.
|
|
|
Convenience
translation
into
US$
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
10
|
|
|
|
4,391,862
|
|
|
|
3,715,339
|
|
|
|
65,885
|
|
|
|
8,561,820
|
|
|
|
7,121,886
|
|
|
|
128,440
|
|
Cost of goods sold and services rendered
|
|
|
11
|
|
|
|
(2,787,413
|
)
|
|
|
(2,165,759
|
)
|
|
|
(41,816
|
)
|
|
|
(5,453,433
|
)
|
|
|
(4,168,665
|
)
|
|
|
(81,809
|
)
|
Other income
|
|
|
|
|
|
|
36,327
|
|
|
|
11,942
|
|
|
|
545
|
|
|
|
61,691
|
|
|
|
21,634
|
|
|
|
925
|
|
Selling, general and administrative expense
|
|
|
12
|
|
|
|
(969,996
|
)
|
|
|
(886,568
|
)
|
|
|
(14,551
|
)
|
|
|
(1,852,094
|
)
|
|
|
(1,706,487
|
)
|
|
|
(27,784
|
)
|
Depreciation and amortization
|
|
|
4&5
|
|
|
|
(431,965
|
)
|
|
|
(369,189
|
)
|
|
|
(6,480
|
)
|
|
|
(872,753
|
)
|
|
|
(744,805
|
)
|
|
|
(13,092
|
)
|
Profit from operating activities
|
|
|
|
|
|
|
238,815
|
|
|
|
305,765
|
|
|
|
3,583
|
|
|
|
445,231
|
|
|
|
523,563
|
|
|
|
6,680
|
|
Finance income
|
|
|
13
|
|
|
|
16,246
|
|
|
|
13,390
|
|
|
|
244
|
|
|
|
85,405
|
|
|
|
18,643
|
|
|
|
1,281
|
|
Finance expenses
|
|
|
13
|
|
|
|
(98,413
|
)
|
|
|
(185,892
|
)
|
|
|
(1,476
|
)
|
|
|
(248,963
|
)
|
|
|
(323,760
|
)
|
|
|
(3,735
|
)
|
Net finance expense
|
|
|
|
|
|
|
(82,167
|
)
|
|
|
(172,502
|
)
|
|
|
(1,232
|
)
|
|
|
(163,558
|
)
|
|
|
(305,117
|
)
|
|
|
(2,454
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
|
|
|
|
156,648
|
|
|
|
133,263
|
|
|
|
2,351
|
|
|
|
281,673
|
|
|
|
218,446
|
|
|
|
4,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
14
|
|
|
|
1.11
|
|
|
|
0.94
|
|
|
|
0.02
|
|
|
|
2.00
|
|
|
|
1.55
|
|
|
|
0.03
|
|
Diluted earnings per share
|
|
|
14
|
|
|
|
1.11
|
|
|
|
0.94
|
|
|
|
0.02
|
|
|
|
2.00
|
|
|
|
1.54
|
|
|
|
0.03
|
|
The accompanying notes form an integral part
of these unaudited condensed consolidated interim financial statements
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Comprehensive Income
(In thousands of Rupees, except share data and
as otherwise stated)
|
|
|
|
|
Quarter ended
September 30
|
|
|
Quarter ended
September 30, 2016
|
|
|
Half year ended
September 30
|
|
|
Half year ended
September 30, 2016
|
|
|
|
Note
|
|
|
2016
Rs.
|
|
|
2015
Rs.
|
|
|
Convenience
translation
into US$
(In thousands)
|
|
|
2016
Rs.
|
|
|
2015
Rs.
|
|
|
Convenience
translation
into US$
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
|
|
|
|
156,648
|
|
|
|
133,263
|
|
|
|
2,351
|
|
|
|
281,673
|
|
|
|
218,446
|
|
|
|
4,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement of defined benefit plans
|
|
|
9
|
|
|
|
(2,985
|
)
|
|
|
(3,316
|
)
|
|
|
(45
|
)
|
|
|
(3,173
|
)
|
|
|
1,926
|
|
|
|
(48
|
)
|
Items that will be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences of foreign operations
|
|
|
|
|
|
|
(3,944
|
)
|
|
|
7,053
|
|
|
|
(59
|
)
|
|
|
544
|
|
|
|
11,989
|
|
|
|
8
|
|
Other comprehensive income/(loss) for the period
|
|
|
|
|
|
|
(6,929
|
)
|
|
|
3,737
|
|
|
|
(104
|
)
|
|
|
(2,629
|
)
|
|
|
13,915
|
|
|
|
(40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
149,719
|
|
|
|
137,000
|
|
|
|
2,247
|
|
|
|
279,044
|
|
|
|
232,361
|
|
|
|
4,186
|
|
The accompanying notes form an integral part
of these unaudited condensed consolidated interim financial statements
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Changes in Equity
(In thousands of Rupees, except share data and
as otherwise stated)
For the half year ended September 30, 2016
Particulars
|
|
Share
capital
|
|
|
Share
premium
|
|
|
Share
based
payment
reserve
|
|
|
Other
components
of equity
|
|
|
Accumulated
deficit
|
|
|
Total
|
|
|
Non-
controlling
interest
|
|
|
Total
Equity
|
|
Balance at April 1, 2016
|
|
|
1,423,125
|
|
|
|
18,474,481
|
|
|
|
287,901
|
|
|
|
51,495
|
|
|
|
(12,736,171
|
)
|
|
|
7,500,831
|
|
|
|
-
|
|
|
|
7,500,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income/ (loss) for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,629
|
)
|
|
|
281,673
|
|
|
|
279,044
|
|
|
|
-
|
|
|
|
279,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payments
|
|
|
|
|
|
|
-
|
|
|
|
4,879
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,879
|
|
|
|
-
|
|
|
|
4,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners, recorded directly in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(169,742
|
)
|
|
|
(169,742
|
)
|
|
|
-
|
|
|
|
(169,742
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at September 30, 2016
|
|
|
1,423,125
|
|
|
|
18,474,481
|
|
|
|
292,780
|
|
|
|
48,866
|
|
|
|
(12,624,240
|
)
|
|
|
7,615,012
|
|
|
|
-
|
|
|
|
7,615,012
|
|
For the half year ended September 30,2015
Particulars
|
|
Share
capital
|
|
|
Share
premium
|
|
|
Share
based
payment
reserve
|
|
|
Other
components
of equity
|
|
|
Accumulated
deficit
|
|
|
Total
|
|
|
Non-
controlling
interest
|
|
|
Total
Equity
|
|
Balance at April
1, 2015
|
|
|
1,423,125
|
|
|
|
18,474,481
|
|
|
|
235,915
|
|
|
|
36,662
|
|
|
|
(13,004,882
|
)
|
|
|
7,165,301
|
|
|
|
-
|
|
|
|
7,165,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income/
(loss) for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,915
|
|
|
|
218,446
|
|
|
|
232,361
|
|
|
|
-
|
|
|
|
232,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payments
|
|
|
-
|
|
|
|
-
|
|
|
|
29,748
|
|
|
|
-
|
|
|
|
-
|
|
|
|
29,748
|
|
|
|
-
|
|
|
|
29,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners, recorded
directly in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid (including Corporate Dividend Tax)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(169,742
|
)
|
|
|
(169,742
|
)
|
|
|
-
|
|
|
|
(169,742
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at September 30, 2015
|
|
|
1,423,125
|
|
|
|
18,474,481
|
|
|
|
265,663
|
|
|
|
50,577
|
|
|
|
(12,956,178
|
)
|
|
|
7,257,668
|
|
|
|
-
|
|
|
|
7,257,668
|
|
The accompanying notes form an integral part
of these unaudited condensed consolidated interim financial statements.
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Cash Flows
(In thousands of Rupees, except share data and
as otherwise stated)
|
|
Half year ended September 30
|
|
|
September 30, 2016
|
|
|
|
2016
Rs.
|
|
|
2015
Rs.
|
|
|
Convenience
translation into
US$
(In thousands)
|
|
Cash flows from / (used in) operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
281,673
|
|
|
|
218,446
|
|
|
|
4,226
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
872,753
|
|
|
|
744,805
|
|
|
|
13,093
|
|
Loss/ (gain) on sale of property, plant and equipment
|
|
|
(240
|
)
|
|
|
(796
|
)
|
|
|
(4
|
)
|
Provision for doubtful receivables and advances
|
|
|
84,570
|
|
|
|
80,144
|
|
|
|
1,269
|
|
Stock compensation expense
|
|
|
4,879
|
|
|
|
29,748
|
|
|
|
73
|
|
Net finance expense / (income)
|
|
|
163,558
|
|
|
|
305,117
|
|
|
|
2,454
|
|
Unrealized (gain)/ loss on account of exchange differences
|
|
|
(8,679
|
)
|
|
|
37,981
|
|
|
|
(130
|
)
|
Amortisation of Leasehold Prepayments
|
|
|
7,747
|
|
|
|
7,184
|
|
|
|
116
|
|
|
|
|
1,406,261
|
|
|
|
1,422,629
|
|
|
|
21,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade and other receivables
|
|
|
(714,829
|
)
|
|
|
(327,048
|
)
|
|
|
(10,723
|
)
|
Change in inventories
|
|
|
(244,287
|
)
|
|
|
(7,515
|
)
|
|
|
(3,665
|
)
|
Change in other assets
|
|
|
(118,602
|
)
|
|
|
(72,538
|
)
|
|
|
(1,779
|
)
|
Change in trade and other payables
|
|
|
198,688
|
|
|
|
544,833
|
|
|
|
2,981
|
|
Change in employee benefits
|
|
|
16,743
|
|
|
|
11,908
|
|
|
|
251
|
|
Change in deferred revenue
|
|
|
222,179
|
|
|
|
160,183
|
|
|
|
3,333
|
|
|
|
|
766,153
|
|
|
|
1,732,452
|
|
|
|
11,495
|
|
Income taxes (paid)/refund received
|
|
|
140,312
|
|
|
|
(295,026
|
)
|
|
|
2,105
|
|
Net cash from operating activities
|
|
|
906,465
|
|
|
|
1,437,426
|
|
|
|
13,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from / (used in) investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
|
(608,477
|
)
|
|
|
(748,722
|
)
|
|
|
(9,128
|
)
|
Expenditure on intangible assets
|
|
|
(28,486
|
)
|
|
|
(18,946
|
)
|
|
|
(427
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
1,269
|
|
|
|
796
|
|
|
|
19
|
|
Finance income received
|
|
|
90,754
|
|
|
|
21,882
|
|
|
|
1,361
|
|
Net cash used in investing activities
|
|
|
(544,940
|
)
|
|
|
(744,990
|
)
|
|
|
(8,175
|
)
|
Sify Technologies Limited
Unaudited Condensed Consolidated Interim Statement
of Cash Flows
(In thousands of Rupees, except share data and
as otherwise stated)
|
|
Half year ended September 30
|
|
|
September 30, 2016
|
|
|
|
2016
Rs
|
|
|
2015
Rs
|
|
|
Convenience
translation into
US$
(In thousands)
|
|
Cash flows from / (used in) financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from / (repayment of) borrowings, net
|
|
|
522,988
|
|
|
|
590,110
|
|
|
|
7,846
|
|
Finance expenses paid
|
|
|
(231,900
|
)
|
|
|
(322,136
|
)
|
|
|
(3,479
|
)
|
Repayment of finance lease liabilities
|
|
|
(352,789
|
)
|
|
|
(402,235
|
)
|
|
|
(5,293
|
)
|
Payment of dividends (including corporate dividend tax)
|
|
|
(169,741
|
)
|
|
|
(169,741
|
)
|
|
|
(2,547
|
)
|
Net cash used in financing activities
|
|
|
(231,442
|
)
|
|
|
(304,002
|
)
|
|
|
(3,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase in cash and cash equivalents
|
|
|
130,083
|
|
|
|
388,434
|
|
|
|
1,952
|
|
Cash and cash equivalents at April 1
|
|
|
1,016,113
|
|
|
|
720,651
|
|
|
|
15,243
|
|
Effect of exchange fluctuations on cash held
|
|
|
(1,981
|
)
|
|
|
1,818
|
|
|
|
(30
|
)
|
Cash and cash equivalents at period end
|
|
|
1,144,215
|
|
|
|
1,110,903
|
|
|
|
17,165
|
|
Supplementary information
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property plant and equipment represented by finance lease obligations
|
|
|
160,443
|
|
|
|
170,293
|
|
|
|
2,407
|
|
The accompanying notes form an integral part
of these unaudited condensed consolidated interim financial statements
SIFY TECHNOLOGIES LIMITED
UNAUDITED CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(In thousands of Rupees,
except share, per share data and as stated otherwise)
Sify Technologies Limited, (‘Sify’
or ‘the Company’) formerly known as Sify Limited, is a leading internet services provider headquartered in Chennai,
India. These Unaudited Condensed Consolidated Interim Financial Statements as at and for the quarter and half year ended September
30, 2016 comprise the Company and its subsidiaries (Sify Technologies (Singapore) Pte Limited and Sify Technologies North America
Corporation (together referred to as the ‘Group’ and individually as ‘Group entities’). The Group is primarily
involved in providing services, such as Telecom services, Data Center Services, Cloud and Managed services, Technology Integration
services and Applications Integration services. Sify is listed on the NASDAQ Global Select market in the United States.
|
a.
|
Statement of compliance
|
The Unaudited Condensed Consolidated Interim
Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standard (IFRS),
IAS
34
Interim Financial Reporting
. They do not include all of the information required for full annual financial statements,
and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended March 31,
2016.
These Unaudited Condensed Consolidated Interim
Financial Statements have been approved for issue by the Board of Directors on October 19, 2016.
|
b.
|
Functional and presentation currency
|
Items included in the financial statements
of each Group entity are measured using the currency of the primary economic environment in which the entity operates (“the
functional currency”). Indian rupee is the functional currency of Sify. US dollar is the functional currency of Sify’s
foreign subsidiaries located in the US and Singapore.
The Unaudited Condensed Consolidated Interim
Financial Statements are presented in Indian Rupees which is the Group’s presentation currency. All financial information
presented in Indian Rupees has been rounded up to the nearest thousand except where otherwise indicated.
Convenience translation: Solely for the convenience
of the reader, the financial statements as of and for the quarter and half year ended September 30, 2016 have been translated into
United States dollars (neither the presentation currency nor the functional currency of the Group) based on the reference rate
in the City of Mumbai on September 30, 2016, for cable transfers in Indian rupees as published by the Reserve Bank of India which
was ₹ 66.66 per $1.00. No representation is made that the Indian rupee amounts have been, could have been or could be converted
into United States dollar at such a rate or at any other rate on September 30, 2016 or at any other date.
The preparation of these Unaudited Condensed
Consolidated Interim Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses during
the period. Accounting estimates could change from period to period. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period of
change and future periods, if the change affects both and, if material, their effects are disclosed in the notes to the financial
statements.
In preparing the Unaudited Condensed Consolidated
Interim Financial Statements, the significant judgements made by management in applying the Group’s accounting policies and
key sources of estimating uncertainties were the same as that were applied to the consolidated financial statements as at and for
the year ended March 31, 2016.
|
3.
|
Significant accounting policies
|
The accounting policies applied by
the
Group in these Unaudited Condensed Consolidated Interim Financial Statements are the same as those applied by the Group in
its consolidated financial statements as at and for the year ended March 31, 2016.
Basis of consolidation
The financial statements of the Group companies
are consolidated on a line-by-line basis. Intra-group balances and transactions, and any unrealized income and expenses arising
from intra-group transactions, are eliminated. These financial statements are prepared by applying uniform accounting policies
in use at the Group.
Control exists when the parent has power over
the entity, is exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect those
returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant
activities, those which significantly affect the entity's returns. Subsidiaries are consolidated from the date control commences
until the date control ceases.
Previously, control existed when the Group
had the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing
control, potential voting rights that were currently exercisable were also taken into account.
|
a.
|
Recent accounting pronouncements
|
(i) Standards
early adopted by the Group
IFRS 9 Financial Instruments:
In July 2014, the International
Accounting Standards Board issued the final version of IFRS 9, Financial Instruments. The standard reduces the complexity of the
current rules on financial instruments as mandated in IAS 39. IFRS 9 has fewer classification and measurement categories as compared
to IAS 39 and has eliminated the categories of held to maturity, available for sale and loans and receivables. Further it eliminates
the rule-based requirement of segregating embedded derivatives and tainting rules pertaining to held to maturity investments. For
an investment in an equity instrument which is not held for trading, IFRS 9 permits an irrevocable election, on initial recognition,
on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No
amount recognized in other comprehensive income would ever be reclassified to profit or loss. It requires the entity, which chooses
to measure a liability at fair value, to present the portion of the fair value change attributable to the entity’s own credit
risk in the other comprehensive income.
IFRS 9 replaces the ‘incurred
loss model’ in IAS 39 with an ‘expected credit loss’ model. The measurement uses a dual measurement approach,
under which the loss allowance is measured as either 12 month expected credit losses or lifetime expected credit losses. The standard
also introduces new Presentation and disclosure requirements.
The effective date for adoption
of IFRS 9 is annual periods beginning on or after January 1, 2018, though early adoption is permitted. The Group has early adopted
IFRS 9 in accordance with transitional provisions set out in the standard from fiscal year 2016 with April 1, 2015 being
the date of initial application.
(ii) New
Standards and interpretations not yet adopted
IFRS 15 Revenue from Contract
from Customers:
In May 2014, the International Accounting Standards Board (IASB) issued IFRS 15, Revenue from Contracts with
Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty
of revenue and cash flows arising from the entity’s contracts with customers. The standard permits the use of either the
retrospective or cumulative effect transition method. The effective date for adoption of IFRS 15 is annual periods beginning on
or after January 1, 2017, though early adoption is permitted. In September 2015, the IASB issued an amendment to IFRS 15, deferring
the adoption of the standard to periods beginning on or after January 1, 2018 instead of January 1, 2017.
The Group is evaluating the effect
of IFRS 15 on the consolidated financial statements including the transition method to be adopted and the related disclosures.
The group continues to evaluate the effect of the standard on ongoing financial reporting.
IFRS 16 Leases :
IFRS 16
on lease was issued on January 13, 2016 and is effective from the year January 1, 2019, though early adoption is permitted for
companies applying IFRS 15 Revenue from Contracts with Customers . The standard replaces all existing lease accounting requirements
and represents a significant change in accounting and reporting of leases, with more assets and liabilities to be reported on the
Statement of Financial Position and a different recognition of lease costs.
The Group is currently evaluating
the impact of the standard on the consolidated financial statements.
|
4.
|
Property, plant and equipment
|
The following
table presents the changes in property, plant and equipment during the half year ended September 30, 2016
(Rupees
in Thousands)
|
|
Cost
|
|
|
Accumulated depreciation
|
|
|
Carrying
amount
|
|
Particulars
|
|
As
at
April
01,
2016
|
|
|
Additions
|
|
|
Disposals
|
|
|
As
at
September 30,
2016
|
|
|
As at
April
1,
2016
|
|
|
Depreciation
for the period
|
|
|
Deletions
|
|
|
As
at
September 30,
2016
|
|
|
as
at
September 30,
2016
|
|
Building
|
|
|
2,301,987
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,301,987
|
|
|
|
475,256
|
|
|
|
41,091
|
|
|
|
-
|
|
|
|
516,347
|
|
|
|
1,785,640
|
|
Plant and machinery
|
|
|
10,137,059
|
|
|
|
437,298
|
|
|
|
13,107
|
|
|
|
10,561,250
|
|
|
|
6,610,485
|
|
|
|
638,316
|
|
|
|
12,115
|
|
|
|
7,236,686
|
|
|
|
3,324,564
|
|
Computer equipments
|
|
|
951,508
|
|
|
|
148,317
|
|
|
|
5,266
|
|
|
|
1,094,559
|
|
|
|
702,371
|
|
|
|
63,627
|
|
|
|
5,229
|
|
|
|
760,769
|
|
|
|
333,790
|
|
Office equipment
|
|
|
386,702
|
|
|
|
19,620
|
|
|
|
37
|
|
|
|
406,285
|
|
|
|
228,987
|
|
|
|
24,206
|
|
|
|
37
|
|
|
|
253,156
|
|
|
|
153,129
|
|
Furniture and fittings
|
|
|
1,028,880
|
|
|
|
15,643
|
|
|
|
2,151
|
|
|
|
1,042,372
|
|
|
|
661,001
|
|
|
|
47,553
|
|
|
|
2,151
|
|
|
|
706,403
|
|
|
|
335,969
|
|
Vehicles
|
|
|
2,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,456
|
|
|
|
2,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,456
|
|
|
|
-
|
|
Total
|
|
|
14,808,592
|
|
|
|
620,878
|
|
|
|
20,561
|
|
|
|
15,408,909
|
|
|
|
8,680,556
|
|
|
|
814,793
|
|
|
|
19,532
|
|
|
|
9,475,817
|
|
|
|
5,933,092
|
|
Add: Construction in progress
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
318,881
|
|
Total
|
|
|
14,808,592
|
|
|
|
620,878
|
|
|
|
20,561
|
|
|
|
15,408,909
|
|
|
|
8,680,556
|
|
|
|
814,793
|
|
|
|
19,532
|
|
|
|
9,475,817
|
|
|
|
6,251,973
|
|
The following
table presents the changes in property, plant and equipment during the year ended March 31, 2016
(Rupees
in Thousands)
|
|
Cost
|
|
|
Accumulated depreciation
|
|
|
Carrying
amount
|
|
Particulars
|
|
As
at
April 01,
2015
|
|
|
Additions
|
|
|
Disposals
|
|
|
As
at
March 31,
2016
|
|
|
As
at
April 1,
2015
|
|
|
Depreciation
for the year
|
|
|
Deletions
|
|
|
As
at
March 31,
2016
|
|
|
as
at
March 31,
2016
|
|
Building
|
|
|
1,993,085
|
|
|
|
308,902
|
|
|
|
-
|
|
|
|
2,301,987
|
|
|
|
401,073
|
|
|
|
74,183
|
|
|
|
-
|
|
|
|
475,256
|
|
|
|
1,826,731
|
|
Plant and machinery
|
|
|
8,340,520
|
|
|
|
1,801,093
|
|
|
|
4,554
|
|
|
|
10,137,059
|
|
|
|
5,374,508
|
|
|
|
1,240,531
|
|
|
|
4,554
|
|
|
|
6,610,485
|
|
|
|
3,526,574
|
|
Computer equipments
|
|
|
790,631
|
|
|
|
198,488
|
|
|
|
37,611
|
|
|
|
951,508
|
|
|
|
649,977
|
|
|
|
89,929
|
|
|
|
37,535
|
|
|
|
702,371
|
|
|
|
249,137
|
|
Office equipment
|
|
|
286,141
|
|
|
|
101,010
|
|
|
|
449
|
|
|
|
386,702
|
|
|
|
203,319
|
|
|
|
26,117
|
|
|
|
449
|
|
|
|
228,987
|
|
|
|
157,715
|
|
Furniture and fittings
|
|
|
755,409
|
|
|
|
273,864
|
|
|
|
393
|
|
|
|
1,028,880
|
|
|
|
591,561
|
|
|
|
69,833
|
|
|
|
393
|
|
|
|
661,001
|
|
|
|
367,879
|
|
Vehicles
|
|
|
2,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,456
|
|
|
|
2,456
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,456
|
|
|
|
-
|
|
Total
|
|
|
12,168,242
|
|
|
|
2,683,357
|
|
|
|
43,007
|
|
|
|
14,808,592
|
|
|
|
7,222,894
|
|
|
|
1,500,593
|
|
|
|
42,931
|
|
|
|
8,680,556
|
|
|
|
6,128,036
|
|
Add: Construction in progress
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
199,854
|
|
Total
|
|
|
12,168,242
|
|
|
|
2,683,357
|
|
|
|
43,007
|
|
|
|
14,808,592
|
|
|
|
7,222,894
|
|
|
|
1,500,593
|
|
|
|
42,931
|
|
|
|
8,680,556
|
|
|
|
6,327,890
|
|
Leased assets
The Group’s leased assets include certain
buildings, plant and machinery acquired under finance leases. As at September 30, 2016 the net carrying amount of buildings and
plant and machinery acquired under finance leases is ₹ 188,180 (March 31, 2016: ₹ 193,339) and
₹
992,571
(March 31, 2016: ₹ 1,113,026) respectively. During the half year ended September 30, 2016, the Group acquired leased assets
of ₹ 160,443 (March 31, 2016 : ₹ 510,783).
In case prepayments are made towards buildings
accounted for as finance leases, such prepayments are capitalized as ‘Leasehold Buildings’ (included in buildings)
on the commencement of the lease term under the head ‘Property, plant and equipment’ and depreciated in accordance
with the depreciation policy for similar owned assets.
Construction in progress
Amounts paid towards acquisition of property,
plant and equipment outstanding at each balance sheet date and the cost of property, plant and equipment that are not ready to
be put into use are disclosed under construction-in-progress.
Intangible assets comprise the following:
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Goodwill
|
|
|
14,595
|
|
|
|
14,595
|
|
Other intangible assets
|
|
|
561,577
|
|
|
|
591,051
|
|
|
|
|
576,172
|
|
|
|
605,646
|
|
(i) Goodwill
The following table presents the changes in goodwill
during the half year/year ended
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Balance at the beginning of the period
|
|
|
14,595
|
|
|
|
14,595
|
|
Net carrying amount of goodwill
|
|
|
14,595
|
|
|
|
14,595
|
|
The amount of goodwill as at September 30,
2016 and March 31, 2016 has been allocated to the Applications Integration Services segment.
(ii) Other intangibles
The following table presents the changes in
intangible assets during the half year ended September 30, 2016 and year ended March 31, 2016.
|
|
Bandwidth
Capacity
|
|
|
Software
|
|
|
License fees
|
|
|
Total
|
|
(A) Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at April 1, 2015
|
|
|
576,508
|
|
|
|
557,026
|
|
|
|
73,000
|
|
|
|
1,206,534
|
|
Acquisitions during the year
|
|
|
65,883
|
|
|
|
62,822
|
|
|
|
-
|
|
|
|
128,705
|
|
Disposals during the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance as at March 31, 2016
|
|
|
642,391
|
|
|
|
619,848
|
|
|
|
73,000
|
|
|
|
1,335,239
|
|
Acquisitions during the period
|
|
|
-
|
|
|
|
28,486
|
|
|
|
-
|
|
|
|
28,486
|
|
Disposals during the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance as at September 30, 2016
|
|
|
642,391
|
|
|
|
648,334
|
|
|
|
73,000
|
|
|
|
1,363,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(B) Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at April 1, 2015
|
|
|
140,591
|
|
|
|
483,097
|
|
|
|
23,056
|
|
|
|
646,744
|
|
Amortization for the year
|
|
|
50,407
|
|
|
|
44,387
|
|
|
|
2,650
|
|
|
|
97,444
|
|
Impairment loss on intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance as at March 31, 2016
|
|
|
190,998
|
|
|
|
527,484
|
|
|
|
25,706
|
|
|
|
744,188
|
|
Amortization for the period
|
|
|
28,198
|
|
|
|
28,437
|
|
|
|
1,325
|
|
|
|
57,960
|
|
Impairment loss on intangibles
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance as at September 30, 2016
|
|
|
219,196
|
|
|
|
555,921
|
|
|
|
27,031
|
|
|
|
802,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(C) Carrying amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at March 31, 2016
|
|
|
451,393
|
|
|
|
92,364
|
|
|
|
47,294
|
|
|
|
591,051
|
|
As at September 30, 2016
|
|
|
423,195
|
|
|
|
92,413
|
|
|
|
45,969
|
|
|
|
561,577
|
|
Intangible assets that were fully impaired/amortised
were removed from the block.
|
6.
|
Cash and cash equivalents
|
Cash and cash equivalents as at September 30,
2016 amounted to ₹ 1,550,463 (March 31, 2016: ₹ 1,390,552). This excludes cash-restricted of ₹ 291,778 (March
31, 2016: ₹ 345,328), representing deposits held under lien against working capital facilities availed and bank guarantees
given by the Group towards future performance obligations.
(a) Restricted cash
Non current
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
|
September 30, 2015
|
|
|
March 31, 2015
|
|
Against future performance obligation
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank deposits held under lien against borrowings / guarantees from banks / Government authorities
|
|
|
291,778
|
|
|
|
345,328
|
|
|
|
270,183
|
|
|
|
247,913
|
|
Total restricted cash
|
|
|
291,778
|
|
|
|
345,328
|
|
|
|
270,183
|
|
|
|
247,913
|
|
(b) Non restricted cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and bank balances
|
|
|
1,550,463
|
|
|
|
1,390,552
|
|
|
|
1,514,975
|
|
|
|
1,229,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash (a+b)
|
|
|
1,842,241
|
|
|
|
1,735,880
|
|
|
|
1,785,158
|
|
|
|
1,477,547
|
|
Bank overdraft used for cash management purposes
|
|
|
(698,026
|
)
|
|
|
(719,767
|
)
|
|
|
(674,255
|
)
|
|
|
(756,896
|
)
|
Less: Non current restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cash and cash equivalents for the statement of cash flows
|
|
|
1,144,215
|
|
|
|
1,016,113
|
|
|
|
1,110,903
|
|
|
|
720,651
|
|
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Towards land and buildings*
|
|
|
896,454
|
|
|
|
904,201
|
|
|
|
|
896,454
|
|
|
|
904,201
|
|
* Includes
₹
864,934 (March 31, 2016:
₹
870,184) paid for acquiring leasehold
rights of land for construction of Data centers. The prepayment towards land is amortized over the period of the lease on a straight
line basis. In respect of buildings under operating lease, prepayments are amortized over the lease term on a straight line basis.
|
8.
|
Trade and other receivables
|
Trade and other receivables comprise:
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
(i) Trade receivables, net
|
|
|
6,321,561
|
|
|
|
5,497,289
|
|
(ii) Other receivables including deposits
|
|
|
1,503,662
|
|
|
|
1,802,539
|
|
(iii) Construction contract related accruals
|
|
|
13,747
|
|
|
|
61,624
|
|
|
|
|
7,838,970
|
|
|
|
7,361,452
|
|
Trade receivables consist of:
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Other trade receivables
|
|
|
6,585,893
|
|
|
|
5,706,354
|
|
|
|
|
6,585,893
|
|
|
|
5,706,354
|
|
Less: Allowance for doubtful receivables
|
|
|
(264,332
|
)
|
|
|
(209,065
|
)
|
Balance at the end of half year/year
|
|
|
6,321,561
|
|
|
|
5,497,289
|
|
The activity in the allowance for doubtful accounts
receivable is given below:
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Balance at the beginning of the period
|
|
|
209,065
|
|
|
|
206,402
|
|
Add : Additional provision, net
|
|
|
82,238
|
|
|
|
182,161
|
|
Less : Bad debts written off
|
|
|
(26,971
|
)
|
|
|
(179,498
|
)
|
Balance at the end of half year/year
|
|
|
264,332
|
|
|
|
209,065
|
|
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Gratuity payable
|
|
|
69,926
|
|
|
|
56,212
|
|
Compensated absences
|
|
|
34,783
|
|
|
|
38,724
|
|
|
|
|
104,709
|
|
|
|
94,936
|
|
Gratuity cost
The components of gratuity cost recognized
in the income statement for the quarter and half year ended September 30, 2016 and 2015 consists of the following:
|
|
Quarter
ended
September
30, 2016
|
|
|
Quarter
ended
September
30, 2015
|
|
|
Half
year ended
September
30, 2016
|
|
|
Half
year ended
September
30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
4,270
|
|
|
|
3,889
|
|
|
|
8,467
|
|
|
|
7,778
|
|
Interest cost
|
|
|
1,718
|
|
|
|
1,491
|
|
|
|
3,387
|
|
|
|
3,002
|
|
Interest income
|
|
|
(666
|
)
|
|
|
(596
|
)
|
|
|
(1,313
|
)
|
|
|
(1,212
|
)
|
Net gratuity costs recognized in statement of income
|
|
|
5,322
|
|
|
|
4,784
|
|
|
|
10,541
|
|
|
|
9,568
|
|
Details of employee benefit obligation and
plan asset are as follows:
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Present value of projected benefit obligation at the end of half year/ year
|
|
|
101,375
|
|
|
|
91,801
|
|
Funded status of the plans
|
|
|
(31,449
|
)
|
|
|
(35,589
|
)
|
Recognized (asset) / liability
|
|
|
69,926
|
|
|
|
56,212
|
|
The following table set out the status of
the gratuity plan:
Change in defined benefit obligation
|
|
S
eptember 30, 2016
|
|
|
March 31, 2016
|
|
Projected benefit obligation at the beginning of half year/ year
|
|
|
91,801
|
|
|
|
79,038
|
|
Service cost
|
|
|
8,468
|
|
|
|
16,215
|
|
Interest cost
|
|
|
3,387
|
|
|
|
6,178
|
|
Remeasurements - Actuarial (gain) / loss
|
|
|
3,173
|
|
|
|
(1,325
|
)
|
Benefits paid
|
|
|
(5,454
|
)
|
|
|
(8,305
|
)
|
Projected benefit obligation at the end of half
year/ year
|
|
|
101,375
|
|
|
|
91,801
|
|
Change in plan assets
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Fair value of plan assets at the beginning of the period
|
|
|
35,589
|
|
|
|
33,135
|
|
Interest income
|
|
|
1,313
|
|
|
|
2,590
|
|
Remeasurements – return on plan assets excluding amounts included in interest income
|
|
|
-
|
|
|
|
66
|
|
Employer contributions
|
|
|
-
|
|
|
|
8,103
|
|
Benefits paid
|
|
|
(5,453
|
)
|
|
|
(8,305
|
)
|
Fair value of plan assets at the end of the period
|
|
|
31,449
|
|
|
|
35,589
|
|
Actuarial Assumptions at reporting date
:
|
|
As at
September 30,
2016
|
|
|
As at
March 31, 2016
|
|
Discount rate
|
|
|
6.85% P.a
|
|
|
|
7.50%
P.a
|
|
Long-term rate of compensation increase
|
|
|
7.00% P.a
|
|
|
|
7.00% P.a
|
|
Expected long term rate of return on plan assets
|
|
|
8.00% P.a
|
|
|
|
8.00% P.a
|
|
Average future working life
time
|
|
|
4.39
years
|
|
|
|
4.40
years
|
|
The Group assesses these assumptions with
the projected long-term plans of growth and prevalent industry standards.
Remeasurement of defined benefit plans
recognised in other comprehensive income
The amount gains and losses on Remeasurement
of defined benefit plans recognized directly in other comprehensive income for the half year ended September 30, 2016 and 2015
are as follows:
|
|
Half year ended
September
30, 2016
|
|
|
Half year ended
September
30, 2015
|
|
Gain or (loss)
on Remeasurement of defined benefit plans
|
|
|
(3,173
|
)
|
|
|
1,926
|
|
|
|
|
(3,173
|
)
|
|
|
1,926
|
|
Historical information
|
|
Half year ended
September
30, 2016
|
|
|
Half year ended
September
30, 2015
|
|
Experience adjustment on plan liabilities
- (loss)/gain
|
|
|
(163
|
)
|
|
|
(1,490
|
)
|
Impact of change in assumptions on plan liabilities
- (loss)/gain
|
|
|
(3,010
|
)
|
|
|
4,628
|
|
Experience adjustment on plan
assets - (loss)/gain
|
|
|
-
|
|
|
|
(1,212
|
)
|
|
|
|
(3,173
|
)
|
|
|
1,926
|
|
|
|
Quarter ended
|
|
|
Half year ended
|
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Rendering of services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
|
|
|
3,304,741
|
|
|
|
3,155,524
|
|
|
|
6,617,747
|
|
|
|
5,989,359
|
|
Installation service revenue
|
|
|
877,009
|
|
|
|
442,067
|
|
|
|
1,394,467
|
|
|
|
850,754
|
|
|
|
|
4,181,750
|
|
|
|
3,597,591
|
|
|
|
8,012,214
|
|
|
|
6,840,113
|
|
Sale of products
|
|
|
210,112
|
|
|
|
117,748
|
|
|
|
549,606
|
|
|
|
281,773
|
|
Total
|
|
|
4,391,862
|
|
|
|
3,715,339
|
|
|
|
8,561,820
|
|
|
|
7,121,886
|
|
|
11.
|
Cost of goods sold and services rendered
|
Cost of goods sold and services rendered information
is presented before any depreciation or amortization that is direct and attributable to revenue sources. The Group’s asset
base deployed in the business is not easily split into a component that is directly attributable to a business and a component
that is common / indirect to all the businesses. Since a gross profit number without depreciation and amortization does not necessarily
meet the objective of such a disclosure, the Group has not disclosed gross profit numbers but disclosed all expenses, direct and
indirect, in a homogenous group leading directly from revenue to operating income.
|
|
Quarter ended
|
|
|
Half year ended
|
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Salaries and wages
|
|
|
509,187
|
|
|
|
445,062
|
|
|
|
952,700
|
|
|
|
846,279
|
|
Contribution to provident fund and other funds
|
|
|
31,485
|
|
|
|
23,186
|
|
|
|
56,933
|
|
|
|
45,337
|
|
Staff welfare expenses
|
|
|
7,483
|
|
|
|
5,235
|
|
|
|
15,651
|
|
|
|
8,449
|
|
Employee Stock compensation expense
|
|
|
3,585
|
|
|
|
14,553
|
|
|
|
4,879
|
|
|
|
29,748
|
|
|
|
|
551,740
|
|
|
|
488,036
|
|
|
|
1,030,163
|
|
|
|
929,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Cost of goods sold and services rendered
|
|
|
233,287
|
|
|
|
225,474
|
|
|
|
439,409
|
|
|
|
425,313
|
|
Attributable to selling, general and administrative expenses
|
|
|
318,453
|
|
|
|
262,562
|
|
|
|
590,754
|
|
|
|
504,500
|
|
|
13.
|
Financial income and expense
|
|
|
Quarter ended
|
|
|
Half year ended
|
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Interest income on bank deposits
|
|
|
7,260
|
|
|
|
9,577
|
|
|
|
14,463
|
|
|
|
11,251
|
|
Others
|
|
|
8,986
|
|
|
|
3,813
|
|
|
|
70,942
|
|
|
|
7,392
|
|
Finance income
|
|
|
16,246
|
|
|
|
13,390
|
|
|
|
85,405
|
|
|
|
18,643
|
|
Interest expense on financial lease liabilities
|
|
|
23,416
|
|
|
|
32,603
|
|
|
|
49,783
|
|
|
|
68,394
|
|
Bank charges
|
|
|
19,237
|
|
|
|
34,077
|
|
|
|
42,137
|
|
|
|
63,334
|
|
Other interest
|
|
|
55,760
|
|
|
|
119,212
|
|
|
|
157,043
|
|
|
|
192,032
|
|
Finance expense
|
|
|
98,413
|
|
|
|
185,892
|
|
|
|
248,963
|
|
|
|
323,760
|
|
Net finance expense recognised in profit or loss
|
|
|
(82,167
|
)
|
|
|
(172,502
|
)
|
|
|
(163,558
|
)
|
|
|
(305,117
|
)
|
The calculation of basic earnings per share
for the quarter and half year ended September 30, 2016 is based on the earnings attributable to ordinary shareholders:
|
|
Quarter ended
|
|
|
Half year ended
|
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
Net profit – as reported
|
|
|
156,648
|
|
|
|
133,263
|
|
|
|
281,673
|
|
|
|
218,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares – Basic
|
|
|
141,030,787
|
|
|
|
141,030,787
|
|
|
|
141,030,787
|
|
|
|
141,030,787
|
|
Basic earnings per share
|
|
|
1.11
|
|
|
|
0.94
|
|
|
|
2.00
|
|
|
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares – Diluted
|
|
|
141,030,787
|
|
|
|
141,492,771
|
|
|
|
141,030,787
|
|
|
|
1,414,92,771
|
|
Diluted earnings per share
|
|
|
1.11
|
|
|
|
0.94
|
|
|
|
2.00
|
|
|
|
1.54
|
|
|
Note 1:
|
During
the year ended March 31, 2011, 125,000,000 ordinary shares were issued to the existing
promoter group on a private placement basis. As at September 30, 2016, these shares were
partly paid up to the extent of Rs.7.00 (March 31, 2016 : ₹ 7.00) per share.
|
The operating segments
of the Company are as follows:
Telecom services:
Consists of domestic data, international data, wholesale voice and network managed services;
Data Centre services
:
Consists
of co-location services ;
Cloud and managed services
:
Consists of IT infra services, IT transformation services, remote and onsite infrastructure management services and delivery
platforms;
Technology
integration services
:
Consists
of data centre build, network integration, end user computing and collaborative
tools and solutions;
Applications integration services:
Consists of application development and maintenance, application testing, information security, mobility solutions, eLearning,
portals, tools, process and automation.
The Chief Operating
Decision Maker (“CODM”), i.e, the Board of Directors and the senior management, evaluate the Group’s performance
and allocate resources to various strategic business units that are identified based on the products and services that they offer
and on the basis of the market served. The measure of profit / loss reviewed by the CODM is “Earnings/loss before interest,
taxes, depreciation and amortization” also referred to as “segment operating income / loss”. Revenue in relation
to segments is categorized based on items that are individually identifiable to that segment.
Bandwidth costs, which form a significant part
of the total expenses, are allocated to Network Services. Manpower costs of Technology resources rendering services to support
Infrastructure operations, Managed services and Application services, are allocated to specific operating segments. The Group
believes that the resulting allocations are reasonable.
Certain expenses, such as depreciation, technology
infrastructure and administrative overheads, which form a significant component of total expenses, are not allocable to specific
segments as the underlying services are used interchangeably. Management believes that it is not practical to provide segment
disclosure of these expenses and, accordingly, they are separately disclosed as “unallocated” and adjusted only against
the total income of the Group.
A significant part of the fixed assets used in
the Group’s business are not identifiable to any of the reportable segments and can be used interchangeably between segments.
As a result, the measures of segment assets and liabilities are not regularly reviewed by the CODM and hence disclosures relating
to segment assets and liabilities have not been provided.
The Group’s operating segment information
for the quarter ended September 30, 2016 and 2015 and half year ended September 30, 2016 and 2015, are presented below:
Quarter ended September 30, 2016
|
|
Telecom
Services
|
|
|
Datacenter
Services
|
|
|
Cloud and
Managed
Services
|
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
|
Total
|
|
Segment revenue
|
|
|
2,570,767
|
|
|
|
489,771
|
|
|
|
229,141
|
|
|
|
397,076
|
|
|
|
705,107
|
|
|
|
4,391,862
|
|
Allocated segment expenses
|
|
|
(1,996,870
|
)
|
|
|
(399,427
|
)
|
|
|
(215,081
|
)
|
|
|
(331,546
|
)
|
|
|
(587,914
|
)
|
|
|
(3,530,838
|
)
|
Segment operating income
|
|
|
573,897
|
|
|
|
90,344
|
|
|
|
14,060
|
|
|
|
65,530
|
|
|
|
117,193
|
|
|
|
861,024
|
|
Unallocated expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(226,709
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(431,965
|
)
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,465
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,246
|
|
Finance expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(98,413
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156,648
|
|
Half year ended September 30, 2016
|
|
Telecom
Services
|
|
|
Datacenter
Services
|
|
|
Cloud and
Managed
Services
|
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
|
Total
|
|
Segment revenue
|
|
|
5,105,843
|
|
|
|
931,238
|
|
|
|
471,357
|
|
|
|
949,705
|
|
|
|
1,103,677
|
|
|
|
8,561,820
|
|
Allocated segment expenses
|
|
|
(3,981,321
|
)
|
|
|
(733,537
|
)
|
|
|
(382,458
|
)
|
|
|
(796,567
|
)
|
|
|
(925,803
|
)
|
|
|
(6,819,686
|
)
|
Segment operating income
|
|
|
1,124,522
|
|
|
|
197,701
|
|
|
|
88,899
|
|
|
|
153,138
|
|
|
|
177,874
|
|
|
|
1,742,134
|
|
Unallocated expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(485,603
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(872,753
|
)
|
Other income / (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,453
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,405
|
|
Finance expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(248,963
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
281,673
|
|
Quarter ended September 30, 2015 (adjusted)
|
|
Telecom
Services
|
|
|
Datacenter
Services
|
|
|
Cloud and
Managed
Services
|
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
|
Total
|
|
Segment revenue
|
|
|
2,492,768
|
|
|
|
364,761
|
|
|
|
234,463
|
|
|
|
242,006
|
|
|
|
381,341
|
|
|
|
3,715,339
|
|
Allocated segment expenses
|
|
|
(1,862,954
|
)
|
|
|
(277,587
|
)
|
|
|
(202,929
|
)
|
|
|
(195,293
|
)
|
|
|
(264,674
|
)
|
|
|
(2,803,437
|
)
|
Segment operating income
|
|
|
629,814
|
|
|
|
87,174
|
|
|
|
31,534
|
|
|
|
46,713
|
|
|
|
116,667
|
|
|
|
911,902
|
|
Unallocated expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(248,890
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(369,189
|
)
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,942
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,390
|
|
Finance expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(185,892
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133,263
|
|
Half year ended September 30, 2015 (adjusted)
|
|
Telecom
Services
|
|
|
Datacenter
Services
|
|
|
Cloud and
Managed
Services
|
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
|
Total
|
|
Segment revenue
|
|
|
4,714,647
|
|
|
|
742,073
|
|
|
|
438,546
|
|
|
|
549,202
|
|
|
|
677,418
|
|
|
|
7,121,886
|
|
Allocated segment expenses
|
|
|
(3,557,184
|
)
|
|
|
(564,130
|
)
|
|
|
(341,925
|
)
|
|
|
(442,066
|
)
|
|
|
(514,240
|
)
|
|
|
(5,419,545
|
)
|
Segment operating income
|
|
|
1,157,463
|
|
|
|
177,943
|
|
|
|
96,621
|
|
|
|
107,136
|
|
|
|
163,178
|
|
|
|
1,702,341
|
|
Unallocated expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(455,607
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(744,805
|
)
|
Other income / (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,634
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,643
|
|
Finance expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(323,760
|
)
|
Profit for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
218,446
|
|
We have been historically including the results
of Digital Certification services under the Technology Integration Services segment. The Industry in which this product competes
has witnessed newer competitions, business models resulting in dynamic market changes. In order to leverage the versatility and
the organizational capability, the Chief Operations Decision Maker (CODM) has evaluated options of reorganizing this product into
Applications Integration Services segment with effect from April 1, 2016. This will enable the product to address customers across
segments, achieve better marketability, flexibility and scale. The corresponding revenue and costs of this product have been regrouped
under the respective segments. Consequently, the figures for the quarter and half year ended September 30, 2015 are adjusted accordingly.
The reclassification
of component of operating segments did not have any effect on reported consolidated operating income, income before income taxes,
net income or per share amounts. The following table provides the amounts reclassified for prior period.
|
I.
|
Revenue reclassifications
|
For the quarter ended September 30, 2015
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
As previously reported
|
|
|
389,319
|
|
|
|
234,028
|
|
Reclassification of Digital certification services
|
|
|
(147,313
|
)
|
|
|
147,313
|
|
Revised Segment revenue
|
|
|
242,006
|
|
|
|
381,341
|
|
For the half year ended September 30,
2015
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
As previously reported
|
|
|
769,270
|
|
|
|
457,350
|
|
Reclassification of Digital certification services
|
|
|
(220,068
|
)
|
|
|
220,068
|
|
Revised Segment revenue
|
|
|
549,202
|
|
|
|
677,418
|
|
|
II.
|
Operating costs reclassification
|
For the quarter ended September 30, 2015
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
As previously reported
|
|
|
274,276
|
|
|
|
185,691
|
|
Reclassification of Digital certification services
|
|
|
(78,983
|
)
|
|
|
78,983
|
|
Revised Segment Operating Cost
|
|
|
195,293
|
|
|
|
264,674
|
|
For the half year ended September 30,
2015
|
|
Technology
Integration
Services
|
|
|
Applications
Integration
Services
|
|
As previously reported
|
|
|
558,153
|
|
|
|
398,153
|
|
Reclassification of Digital certification services
|
|
|
(116,087
|
)
|
|
|
116,087
|
|
Revised Segment Operating Cost
|
|
|
442,066
|
|
|
|
514,240
|
|
Contracts pending to be executed
on capital account as at September 30, 2016 amounting to ₹ 889,791 (March 31, 2016 :₹ 558,249) .
Operating leases:
The Group
leases office buildings and other equipments under operating lease arrangements that are renewable on a periodic basis at the
option of both the lessor and the lessee. The schedule of future minimum rental payments in respect of operating leases is set
out below:
Non-cancellable operating lease
obligations
|
|
Total
|
|
|
Less
than 1
year
|
|
|
1-5 years
|
|
|
More than 5
years
|
|
As at September 30, 2016
|
|
|
1,152,108
|
|
|
|
105,069
|
|
|
|
470,188
|
|
|
|
576,851
|
|
As at March 31, 2016
|
|
|
1,201,886
|
|
|
|
99,558
|
|
|
|
462,045
|
|
|
|
640,283
|
|
|
a)
|
Proceedings before
Department of Telecommunications
|
|
·
|
On October 12, 2009 [as later clarified by the Department of Telecommunications
(‘DOT’)], DOT raised a demand on Sify Technologies for ₹ 14,000 after correcting the arithmetical error
in the assessment letter.
|
|
·
|
On February 26, 2010 DOT raised a demand on Sify Communications Ltd (erstwhile
subsidiary merged with Sify Technologies Limited) for ₹ 26,000.
|
The above demands were made by
the DoT on the premise that all amounts of income (whether direct or indirect) including certain items like other income, interest
on deposits, gain on foreign exchange fluctuation, profit on sale of assets & provision written back, that have got anything
to do with telecom operations of the Company or arise in connection with the Telecom business of the Company, are to be considered
as income for the purpose of calculation of the license fee. The Company has replied suitably on the above demand notices.
On a related matter, the service
providers had approached TDSAT (the ‘Tribunal’) on what items of income are liable for calculation of license fee
and what all items of income on which license fees are not liable to be paid. The Tribunal by its order dated April 23, 2015 held
that revenue from sale of scrap, treasury income etc are to be included as part of AGR. The Tribunal has also passed an order
asking DOT to levy at most nominal amount as token penalty with interest if permissible at the lower rates. The Company had approached
Honourable High Court of Madras (Court) in 2013 by filing a writ petition prohibiting Department of Telecommunications (DOT) from
levying license fee on non-licensed activities. An interim order was passed by the Court restraining DOT from recovering license
fee in respect of non- telecom activities for the writ petition filed in 2013.
|
(ii)
|
The present licence for ISP under
unified license issued by DOT on June 2, 2014 provides for payment of Licence fee on
pure Internet services. However, the company through Internet Service Providers Association
of India (ISPAI) challenged the said clause before TDSAT. TDSAT passed a stay order on
DOT from charging the licence fee on pure Internet services.
|
|
(iii)
|
The Company is party to additional
legal actions arising in the ordinary course of business. Based on the available information
as at September 30, 2016, the Company believes that it has adequate legal defenses for
these actions and that the ultimate outcome of these actions will not have a material
adverse effect. However in the event of adverse judgment in all these cases, the maximum
financial exposure would be ₹ 19,700 (March 31, 2016: ₹ 19,700)
|
The
following is a summary of significant transactions with related parties during the
half year
ended September 30, 2016 and September 30, 2015:
Transactions
|
|
Half year ended
September
30, 2016
|
|
|
Half year ended
September
30, 2015
|
|
Consultancy services received
|
|
|
120
|
|
|
|
120
|
|
Lease rentals paid (Refer notes below)
|
|
|
2,665
|
|
|
|
2,489
|
|
Dividend paid
|
|
|
116,511
|
|
|
|
116,511
|
|
Amount of outstanding balances
|
|
|
|
|
|
|
|
|
Advance lease rentals and refundable deposits made (Refer note below)
|
|
|
2,558
|
|
|
|
2,558
|
|
Oustanding balances [(Payables)/receivables]
|
|
|
(413
|
)
|
|
|
(373
|
)
|
Notes:
|
1.
|
During the year 2011 -12, the Company
had entered into a lease agreement with M/s Raju Vegesna Infotech and Industries Private
Limited, the holding Company, to lease the premises owned by it for a period of three
years effective February 1, 2012 on a rent of ₹ 75 (Rupees Seventy Five Thousand
Only) per month. Subsequently, the Company entered into an amendment agreement with effect
from April 1, 2013, providing for automatic renewal for a further period of two blocks
of 3 years with an escalation of 15% on the last paid rent after the end of every three
years.
|
|
2.
|
During the year 2011-12, the Company
had entered into a lease agreement with M/s Raju Vegesna Developers Private Limited,
a Company in which Mr Ananda Raju Vegesna, Executive Director of the Company and Mr Raju
Vegesna, Chief Executive Officer and Managing director of the Company exercise significant
influence, to lease the premises owned by it for a period of three years effective February
1, 2012 on a rent of ₹ 30 (Rupees Thirty Thousand Only) per month. Subsequently,
the Company entered into an amendment agreement with effect from April 1, 2013, providing
for the automatic renewal for further period of two blocks of 3 years with an escalation
of 15% on the last paid rent after the end of every three years.
|
|
3.
|
During the year 2010-11, the Company
had entered into a lease agreement with Ms Radhika Vegesna, daughter of Mr Anand Raju
Vegesna, Executive Director of the company, to lease the premises owned by her for a
period of three years effective June 1, 2010 on a rent of ₹ 294 (Rupees Two Lakhs
Ninety Four Thousand Only ) per month and payment of refundable security deposit of ₹
2,558 (Rupees Twenty Five Lakhs and Fifty Eight Thousand only). This arrangement will
automatically be renewed for a further period of two blocks of three years with all the
terms remaining unchanged.
|
|
19.
|
Financial Instruments
|
Financial instruments by category:
The carrying value and fair value of financial
instruments by each category as at September 30, 2016 were as follows:
Particulars
|
|
Note
|
|
|
Financial
assets/
liabilities at
amortised
costs
|
|
|
Financial
assets /
liabilities at
FVTPL
|
|
|
Financial
assets /
liabilities at
FVTOCI
|
|
|
Total
carrying
value
|
|
|
Total fair
value
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
6
|
|
|
|
1,842,241
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,842,241
|
|
|
|
1,842,241
|
|
Other assets
|
|
|
|
|
|
|
177,271
|
|
|
|
-
|
|
|
|
-
|
|
|
|
177,271
|
|
|
|
177,271
|
|
Trade receivables
|
|
|
8
|
|
|
|
6,321,561
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,321,561
|
|
|
|
6,321,561
|
|
Other receivables
|
|
|
|
|
|
|
143,670
|
|
|
|
-
|
|
|
|
-
|
|
|
|
143,670
|
|
|
|
143,670
|
|
Other investments
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,710
|
|
|
|
1,710
|
|
|
|
1,710
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdraft
|
|
|
6
|
|
|
|
698,026
|
|
|
|
-
|
|
|
|
-
|
|
|
|
698,026
|
|
|
|
698,026
|
|
Finance lease liabilities
|
|
|
|
|
|
|
760,965
|
|
|
|
-
|
|
|
|
-
|
|
|
|
760,965
|
|
|
|
760,965
|
|
Other liabilities
|
|
|
|
|
|
|
208,986
|
|
|
|
-
|
|
|
|
-
|
|
|
|
208,986
|
|
|
|
208,986
|
|
Borrowings from banks
|
|
|
|
|
|
|
2,374,035
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,374,035
|
|
|
|
2,374,035
|
|
Borrowings from others
|
|
|
|
|
|
|
978,807
|
|
|
|
-
|
|
|
|
-
|
|
|
|
978,807
|
|
|
|
978,807
|
|
Trade and other payables
|
|
|
|
|
|
|
4,803,374
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,803,374
|
|
|
|
4,803,374
|
|
Derivative financial liabilities
|
|
|
|
|
|
|
-
|
|
|
|
46,838
|
|
|
|
-
|
|
|
|
46,838
|
|
|
|
46,838
|
|
The carrying value and fair value of financial
instruments by each category as at March 31, 2016 were as follows:
Particulars
|
|
Note
|
|
|
Financial
assets/
liabilities
at
amortised
costs
|
|
|
Financial
assets /
liabilities at
FVTPL
|
|
|
Financial
assets /
liabilities
at
FVTOCI
|
|
|
Total
carrying
value
|
|
|
Total fair
value
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
6
|
|
|
|
1,735,880
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,735,880
|
|
|
|
1,735,880
|
|
Other assets
|
|
|
|
|
|
|
179,580
|
|
|
|
-
|
|
|
|
-
|
|
|
|
179,580
|
|
|
|
179,580
|
|
Trade receivables
|
|
|
8
|
|
|
|
5,497,289
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,497,289
|
|
|
|
5,497,289
|
|
Other receivables
|
|
|
|
|
|
|
161,551
|
|
|
|
-
|
|
|
|
-
|
|
|
|
161,551
|
|
|
|
161,551
|
|
Other investments
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,710
|
|
|
|
1,710
|
|
|
|
1,710
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdraft
|
|
|
6
|
|
|
|
719,767
|
|
|
|
-
|
|
|
|
-
|
|
|
|
719,767
|
|
|
|
719,767
|
|
Finance lease liabilities
|
|
|
|
|
|
|
953,311
|
|
|
|
-
|
|
|
|
-
|
|
|
|
953,311
|
|
|
|
953,311
|
|
Other liabilities
|
|
|
|
|
|
|
205,187
|
|
|
|
-
|
|
|
|
-
|
|
|
|
205,187
|
|
|
|
205,187
|
|
Borrowings from banks
|
|
|
|
|
|
|
2,219,216
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,219,216
|
|
|
|
2,219,216
|
|
Borrowings from others
|
|
|
|
|
|
|
628,421
|
|
|
|
-
|
|
|
|
-
|
|
|
|
628,421
|
|
|
|
628,421
|
|
Trade and other payables
|
|
|
|
|
|
|
4,655,605
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,655,605
|
|
|
|
4,655,605
|
|
Derivative financial liabilities
|
|
|
|
|
|
|
-
|
|
|
|
56,496
|
|
|
|
-
|
|
|
|
56,496
|
|
|
|
56,496
|
|
Fair value measurements:
The details
of assets and liabilities that are measured on fair value on recurring basis are given below:
|
|
Fair value as at September 30, 2016
|
|
|
Fair value as at March 31, 2016
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial assets – gain on outstanding forward contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,473
|
|
|
|
-
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities - loss on outstanding cross currency swaps
|
|
|
-
|
|
|
|
-
|
|
|
|
(25,559
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(33,247
|
)
|
Derivative financial liabilities - loss on outstanding interest rate swaps
|
|
|
-
|
|
|
|
-
|
|
|
|
(21,279
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(28,722
|
)
|
|
·
|
Level
1 – unadjusted quoted prices in active markets for identical assets and liabilities.
|
|
·
|
Level
2 – Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived
from prices).
|
|
·
|
Level
3 – unobservable inputs for the asset or liability
|
|
o
|
Loss
on cross currency swaps are valued using present value of cash flows from the swap contract
estimated using swap rates calculated from respective countries’ yield curves.
|
|
20.
|
Financial Risk Management
|
The Group has exposure to the following risks
from its use of financial instruments:
The Board of Directors has overall responsibility
for the establishment and oversight of the Group’s risk management framework. The Board of Directors have established a
risk management policy to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and
to monitor risks and adherence to limits. Risk management systems are reviewed periodically to reflect changes in market conditions
and the Group’s activities. The Group Audit Committee oversees how management monitors compliance with the Group’s
risk management policies and procedures, and reviews the risk management framework. The Group Audit Committee is assisted in its
oversight role by Internal Audit. Internal Audit undertakes reviews of risk management controls and procedures, the results of
which are reported to the Audit Committee.
Credit risk
: Credit risk is the risk
of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations
and arises principally from the Group’s trade receivables, treasury operations and other activities that are in the nature
of leases.
Trade and other receivables
The Group’s exposure to credit risk
is influenced mainly by the individual characteristics of each customer. Management considers that the demographics of the Group’s
customer base, including the default risk of the industry and country in which customers operate, has less of an influence on
credit risk. The group is not exposed to concentration of credit risk to any one single customer since the services are provided
to and products are sold to customers who are spread over a vast spectrum. Credit risk is managed through credit approvals, establishing
credit limits and continuously monitoring the credit worthiness of the customers to which the Company grants credit terms in the
normal course of the business.
Cash and cash equivalents and other investments
In the area of treasury operations, the Group
is presently exposed to counter-party risks relating to short term and medium term deposits placed with public-sector banks, and
also to investments made in mutual funds.
Guarantees
The Group’s policy is to provide financial
guarantees only to subsidiaries.
The Chief Financial Officer is responsible
for monitoring the counterparty credit risk, and has been vested with the authority to seek Board’s approval to hedge such
risks in case of need.
Liquidity risks
: Liquidity risk is
the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation. Typically the Group ensures that it has
sufficient cash on demand to meet expected operational expenses, servicing of financial obligations. In addition, the Group has
concluded arrangements with well reputed Banks, and has unused lines of credit that could be drawn upon should there be a need.
The Company is also in the process of negotiating additional facilities with Banks for funding its requirements.
Market risk:
Market risk is the risk
of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument.
The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other
market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial
instruments including foreign currency receivables and payables. The Group is exposed to market risk primarily related to foreign
exchange rate risk (currency risk), interest rate risk and the market value of its investments. Thus the Group’s exposure
to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign
currencies.
Currency risk
: The Group’s exposure
in USD, Euro and other foreign currency denominated transactions gives rise to Exchange Rate fluctuation risk. Group’s policy
in this regard incorporates:
|
·
|
Forecasting
inflows and outflows denominated in US$ for a twelve-month period
|
|
·
|
Estimating
the net-exposure in foreign currency, in terms of timing and amount
|
|
·
|
Determining
the extent to which exposure should be protected through one or more risk-mitigating
instruments to maintain the permissible limits of uncovered exposures.
|
|
·
|
Carrying
out a variance analysis between estimate and actual on an ongoing basis, and taking stop-loss
action when the adverse movements breaches the 5% barrier of deviation, subject to review
by Audit Committee.
|
|
21.
|
Issue of shares on a private placement
basis to the existing promoter group
|
On
August 4, 2010, the Board of Directors of the company approved the issuance, in a private placement, of upto an aggregate of 125,000,000
of the company’s equity shares, par value Rs.10 per share (“Equity shares”) at a discount compared to market
value of , for an aggregate purchase price of ₹ 4,000,000, to a group of investors affiliated with the company’s promoter
group, including entities affiliated with Mr Raju Vegesna, the company’s Chief Executive Officer and Managing Director and
Mr Ananda Raju Vegesna, Executive Director and brother of Mr Raju Vegesna (the “Offering”). The company’s shareholders
approved the terms of the Offering at the Company’s Annual General Meeting held on September 27, 2010.
On
October 22 2010, the company entered into a Subscription Agreement with Mr Ananda Raju Vegesna, acting as representative (the
“Representative”) of the purchasers in connection with the Offering. In pursuance of the Agreement, the company issued
and allotted 125,000,000 equity shares to M/s Raju Vegesna Infotech and Industries Private Limited (“RVIIPL”), a promoter
group company. In accordance with Indian law, the purchase price is to be paid at such time as determined by Board of Directors
of the company.
On
August 14, 2011, the company received a letter from RVIIPL expressing its intention to transfer the above partly paid shares to
its wholly owned subsidiary M/s Ramanand Core Investment Company Private limited (“RCICPL”). The company, on August
26, 2011, registered such transfer of partly paid shares in the name of RCICPL.
On
September 7, 2011, the parties entered into an amendment to the Subscription Agreement (the “Amendment”) extending
the validity of the agreement period to September 26, 2013. This Amendment provides the Board of Directors of the Company
with additional time to call upon the purchasers to pay the balance money, in accordance with the terms of the Subscription Agreement.
As
at September 30, 2016, these shares were partly paid to the extent of ₹ 7 per share. Until the full purchase price is paid
by the purchasers, the company retains a lien on the equity shares purchased in connection with the Offering. As at September
30, 2016, entities affiliated with our CEO, Chairman and Managing Director, Raju Vegesna, beneficially owned approximately 86.27%
of our outstanding equity shares, which includes the 125,000,000 shares (partly paid with proportionate voting rights) issued
in connection with the above Offering. Also, refer note 22 (ii) of the financial statements.
|
i.
|
Investment in Attala Systems LLC
|
The Board of Directors of the Company through
its US subsidiary, Sify Technologies North America Corporation (‘Sify NA’) approved an investment of US $ 1.5 million
in Attala Systems LLC (‘Attala’). Attala is incorporated in California, specializing in Cloud Solution incorporating
Storage, Networking and Monitoring. The above investment will give Sify NA 17.23% stake in the Preferred Shares at status of ‘Series
A’ of Attala. This will enable the Company to provide networking feasibility to Attala and the Company will have access
to the technology developed by Attala. The first tranche of US $ 0.75 million has been invested in October 2016 and the balance
US $ 0.75 million will be invested in two tranches.
|
ii.
|
Call money on shares issued to the existing promoter group
|
Out of the uncalled share capital of ₹ 1,200,000, the Board of Directors have made a call amounting
to ₹ 300,000 at their meeting held on October 19, 2016 and the said amount will be received by the Company by November 2016.
The balance of the proceeds from the allotment of the equity shares to our existing promoter group, of ₹ 900,000, will take
place in tranches as per the amended subscription agreement.
The following are the entities that comprise
the Group as at September 30, 2016 and March 31, 2016:
Particulars
|
|
Country
of incorporation
|
|
|
% of Ownership interest
|
|
Significant subsidiaries
|
|
|
|
|
September 30, 2016
|
|
|
March 31, 2016
|
|
Sify Technologies (Singapore) Pte. Ltd
|
|
|
Singapore
|
|
|
|
100
|
|
|
|
100
|
|
Sify Technologies North America Corporation
|
|
|
USA
|
|
|
|
100
|
|
|
|
100
|
|
Item 2
.
Information on the Company
Sify Business Model
Drawing from the Company’s Vision statement,
we endeavour to provide the entire eco-system of ICT services. In doing so, we have to accede to the demands of both the traditional
Telecom and IT markets.
The first few years of growth of the IT and
Telecom industries were driven primarily in garnering maximum market share and an enviable roster of blue chip clients. With changing
dynamics and demands of the market, the two industries have to find a middle ground to retain and expand the market. It was the
time of convergence and the perfect fertile ground for our services.
Until 2012, our primary strategy was to invest
in infrastructure and being ready before the market cycle demanded our services. Once we attained critical mass, we shifted focus
to packaging our products and practices as tangible offerings to the market.
In Sify 3.0, we have restructured our business
segments into 5 distinct lines of business namely:
Having invested heavily in building among
India’s best last mile network services, it was time to scale the utilization through cross alignment with traditional telecom
players who were looking to expand our markets to Tier II and Tier III cities and towns and also to IT players who wished to leverage
the cost benefits of relocating to Tier II towns.
We do this by leveraging our state-of-the
art last mile wireless connectivity and the dense spread of network. Enterprise customers who seek to utilise the network have
the choice of being connected to the Data Centre, of their choice or any one of our Tier III Data Centres. Today, this multi-mode,
multi-mesh network connects 36 of India’s Data Centres; a fact that endorses the quality of our offering and our network
presence
Our network, reaches over 1,300 cities and
towns with approximately 2600 Points of Presence.
Right from our first Data Centre at Vashi,
Mumbai in 2000, we have invested in the top of the line technologies across all our networks with every new data centre taking
the game forward. The Sify SDA (Sify Data Centre Architecture) 4.0 is an IP that has found acceptance in the several Data Centres
that we have built for our customers.
These DCs also offer a multitude of Value
Added services over the traditional notion of basic collocation and Opex driven storage solutions.
|
c)
|
Cloud and Managed services
|
The last few years saw the emergence of Cloud
or virtual storage as a tangible product offering. Several Emerging Enterprises saw the benefits of buying-space-as-you-go as
against investing in Capex loaded infrastructure. The advent of this business was the quality of high class networks and promise
to remotely store your data immaterial of where it was connected from and plugging into it when the enterprises chose to. This
eliminated the need for cumbersome server monitoring and the associated cost of ownership.
In order to offer the best-of-breed services,
we chose to tie up with the leaders in the business like Hp and VMware. Our hosting services are also SAP Gold certified giving
the much needed SLAs (Service Level Agreements) to our customers about the level of our offerings.
|
d)
|
Technology Integration services
|
The nearly two decades spent maturing into
India’s premier ICT player has led to building an enviable knowledge bank of integrating, monitoring, maintaining and upgrading
every facet of service as demanded by a quickly converging market.
Sify offers turnkey solutions to clients who
are new to both technology and technology refreshes. We do this by leveraging our homegrown expertise in design, implementation
and maintenance to deliver end-to-end managed IT services across datacenter, network and security.
As described, this business takes the knowledge
developed from building Network architecture, Unified Communication and Unified Access, Collaborative tools, Data Centre build,
Virtualization, LAN and WAN Architecture and End Point Security and offers them as a complete solution package to customers.
This business is also responsible for Sify
bringing in some of the biggest deals of the year, for grounds-up technology refresh for some of India’s biggest private
and Government clients.
|
e)
|
Applications Integration services
|
As with every industry major who chose to
offer IT and Managed services, Applications were also demanded by several of our clients. While we chose not to be a core Software
player, we do enable the integration of multiple technologies and platforms and the cross breeding of existing ones.
This way, the clients can slowly transition
the maturity cycle with their existing application before switching over to newer ones. That said on our services, some of our
home grown applications, like Forum and iTest have found favour with a large number of our clientele.
We are looking to strengthen our bouquet of
offerings in the years to come.
Strategy
Our vision statement is explicit on our strategy.
We are building a world in which our converged
ICT eco-system and our bring-it-on attitude will be the competitive advantage to our customers.
To build a converged ICT eco-system calls
for a multidisciplinary approach. While maintaining the tempo of investment in infrastructure, we will, in parallel, strengthen
our current offerings of services. The description below provides an explanation on this approach.
•
Cover
more of the country with our network, increase the bandwidth support and drive more customer usage.
Our network is based on
Internet Protocol, or IP, and we are the first Indian service provider to have made our network Multi-Protocol Label Switching
(MPLS) compliant. We are also the first IPv6 ready network having laid it down as early as 2000. In the fiscal year 2013-14, we
implemented the proprietary CloudCover to connect Data Centres across India with a multi-mode, multi-mesh network. This builds
redundancy at multiple levels across the network. This network connects 38 of India’s Data Centres including 6 of our own.
To ensure undisrupted high quality service and to achieve cost efficiencies, we have invested in a under sea cable consortium.
The capacity went live during the Q1 of 2012-13. We have also leased intercity links from multiple suppliers including BSNL, Bharti,
TATA, Railtel and Power Grid Corporation, such that each one of our nodes is accessible from at least two other nodes, if not
by two long distance operators. We believe that as the size and capacity of our network infrastructure grows, its structure and
national coverage will create economies of scale. Being vendor neutral, we are able to procure bandwidth in a cost effective manner.
In January 2014, we launched India’s truly Green Data Centre at Noida with an industry defining benchmark efficiency.
·
Increase
penetration in our existing markets by expanding awareness of the “Sify” brand name to capitalize on our first mover
advantage in India.
Over time, Sify as a brand has expanded it offerings from the retail broadband segment to the Enterprise
buyer in India. But as with every brand’s birth, our first offerings gave us the identity as India’s most aggressive
internet player. We built on those strengths and with time, have built a complete ecosystem of Enterprise offerings.
•
Create
pull with newer more efficient technology and hence draw more customers into the Sify fold.
In order to transition to being
an Enterprise player, we began by expanding our bouquet of services in line with market demand. A nascent retail broadband gave
rise to data storage and hence our first Data Centre was born; at Vashi Mumbai in 2000. As a brand, we have consciously aligned
with the best-of-breed technology and benchmarks. Hence, right from our first Data Centre, all our subsequent ones were also Tier
III compliant. Our managed services bouquet has been a mix of home grown applications and offerings through tie ups with industry
leaders like Hp, VMware, Akamai, SAP etc.
•
Expand
the bouquet of services and cater to an audience that does not mind paying a premium and hence realise better margins.
As
competition heats up in the IT and Telecom sector, there will be a squeeze on our margins for the traditional offerings. Hence
it is imperative to create a segment of premium paying customers who see value in the differential on their services. We will
also continuously expand our service offerings and expand into a broader geographical domain. We actively spread to Tier II and
III cities much before we had customers there. This helped us to demonstrate a robust working model of our services in geographically
challenged places as and when the demand arose.
•
Expand
our customer distribution channels through strategic alliances to take advantage of the sales and marketing capabilities of our
strategic partners.
Each of our business delivers a certain level of legitimacy when aligned with the industry leaders. Most
MNCs see this as a comfort factor and a reassurance of global standards that they have enjoyed. So, whether it is Telecom business
aligning with international carriers, our DC business being Tier III certified and assured by the best of the global standards,
our Managed services having tied up with leaders like HP, VMware, SAP, Hitachi etc or Applications Integration services or our
content delivery assurance with Akamai under our Technology Integration services ambit, the assurance is the same; global standards,
local deliverance. On the delivery front, this doubles our marketing strength while allowing for a cross selling of products and
services to both the partner’s audiences.
•
Pursue
selective strategic investments, alliances and acquisitions to expand our customer base, increase utilization of our network and
add new technologies to our service mix.
India's financial nerve centre, Mumbai has long been a focus of our expansion plans
given the concentration of Enterprise players. That, along with a stable administration and power supply, well developed suburbs,
and a native market was responsible for us launching our 6th Tier III DC at Rabale, near Navi Mumbai. All along, we have invested
ahead of the demand curve across all our services. That said, the focus has also been to add value by partnering with the best
of breed technology companies. Towards that, our hosting services are now SAP certified giving us the incentive/fillip to pitch
it to discerning Enterprise customers. Content delivery for Enterprise customers was underlined with our partnership with the
world leaders, Akamai. We will continue to pursue opportunities to grow both organically and inorganically, in our endeavor to
spread into newer geographies.
•
Expand
into international markets for providing managed network services.
We are now at a crucial phase in our growth. Over the years,
we have built a substantial knowledge house of services and they are ready to be delivered to clients beyond India’s borders.
We are actively pursuing an agenda of tying up with international IT majors and taking these strengths to customer worldwide,
starting with North America. Our inhouse IP services like eLearning are already being offered to multiple geographies in the US
and Europe.
Service Offerings
Telecom Service .
These primarily consist of network service which addresses the domestic connectivity needs of Indian enterprises and international
inward and outward connectivity needs of International Enterprises. We do this by leveraging our national Tier 1 IPv6 network
infrastructure. The services include a comprehensive range of Internet protocol based Virtual Private Network, offerings, including
intranets, extranets and remote access applications to both small and large corporate customers. There is a strong focus on industry
verticals such as IT/ITES (IT enabled services), banking and financial services industry (BFSI), Government, manufacturing, pharmaceutical
and FMCG. We were one of the first service providers in India to provide MPLS-enabled IPVPN’s on our entire network. We
have entered into a strategic partnership with leading Telcos for providing last mile connectivity to customers. Our entire network
is MPLS enabled with built in redundancy with world class design and service standards.
Our cable landing
station and our investment in a submarine cable consortium are our other assets that we extend to our International partners for
their international inward and outward connectivity needs. Our cable landing station currently lands 2 major submarine cables;
namely Gulf Bridge International (GBI) and the Middle Eastern and North African cable (MENA).
Our
connectivity clients can pick from a range of services; namely the following.
|
·
|
SecureConnect
(TM)
is our comprehensive offering of secure, reliable and scalable
IPVPN solutions that meet both mission- critical data networking and converged voice,
video and data connectivity needs. It offers a variety of intranet and extranet configurations
for connecting offices, remote sites, traveling employees and business partners, whether
in India or abroad. Our platform of services includes:
|
|
·
|
SiteConnect
(TM)
which offers site-to-site managed MPLS-enabled IPVPN solutions
for securely connecting regional and large branch offices within India to the corporate
Intranet.
|
|
·
|
GlobalSite
Connect
(TM)
, an international site-to-site managed MPLS-enabled IPVPN
solution, is used for securely connecting international branch offices to the corporate
offices. It provides connectivity anywhere in the world through Sify’s alliances
and partnerships with global overseas service providers such as Level 3, KDDI, and PCCW
Global to name a few.
|
|
·
|
ExpressConnect
(TM)
, which offers a premium range of high-performance Internet bandwidth
solutions for connecting regional offices, branch offices and remote locations to the
corporate network. These solutions complement our SiteConnect range of MPLS enabled IPVPN
solutions, provide high-speed bandwidth in those situations where basic connectivity
and cost are the top concerns.
|
|
·
|
RoamConnect
(TM)
, is our national and international remote access VPN, which is
used for securely connecting employees, while they are traveling, to the corporate intranet.
Roam Connect features “single number access” to SifyNet from anywhere in
the country and provides access from anywhere in the world through Sify’s alliances
with overseas service providers.
|
|
·
|
PartnerConnect
(TM)
is our remote access VPN offering, for providing secure and restricted
dial-up access to business partners such as dealers, distributors and suppliers to the
corporate extranet.
|
Our
suite of conferencing tools consist of Audio and Video solutions; most differentiating among being that the video solution in
partnership with a world leader, does not require a room conferencing solution thereby arming the modern enterprise with real
time data straight from the markets.
Data
Centre Services
. We operate 6 Tier III Data Centres of which three are located in Mumbai (Bombay), one each at Noida (Delhi),
Chennai (Madras) and Bengaluru, which are designed to act as reliable, secure and scalable facilities to host mission-critical
applications. We offer co-location services which allow customers to bring in their own rack-mountable servers and house them
in shared racks or hire complete racks, and even rent ‘secure cages’ at the hosting facility as per their application
requirements. We also offer a wide variety of managed hosting services, such as storage, back-up and restoration, performance
monitoring and reporting hardware and software procurement and configuration and network configuration.
Cloud
and Managed Services.
Our on-demand hosting (cloud) services offers end-customers with the best in class solutions to
Enterprises. We have joined the global program of two world majors and offer their suite of on-demand cloud services giving them
the option to “rent” software licenses on a monthly “pay as you go” basis. This model is aimed at helping
Indian companies, both large and small, to safely tap computing capacity inside and outside their firewalls to help ensure quality
of service for any application they want to run..
Our
Remote and Onsite Infrastructure Management services provides continuous proactive management and support of customer operating
systems, applications and database layers through deploying specialized monitoring tools and infrastructure experts to ensure
that our customers’ infrastructure is performing optimally.
Our
innovative SLA driven utility-based On-Demand storage service manages the complete lifecycle of enterprise information, from its
inception to its final disposal. The fully managed, utility based, On-Demand, scalable storage platform is powered by global major
in Data Systems. Sify's On-Demand storage service reduces the complexities of deploying and managing multiple storage tiers, and
lowers operational costs by automating management with flexible need based pricing.
Technology
Integration services:
Our myriad mix of solutions gives us the scope to band and extend any or all of these services
in multiple formats and scales for client who wish to rest their entire infrastructure with us. Clients get the benefit of our
accumulated knowledge base and technical expertise across all points of the ICT spectrum. In terms of cost, these translate into
better cost efficiencies. In terms of monitoring, the client interacts with a singular service provider saving them both implementation
and documentation efforts.
Applications
Integration services:
Our range of web-applications include sales force automation, supply chain management, intranet and
extranets, workflow engine and knowledge management systems.
Our Applications
Integration services operates two of India’s biggest online portals, www.sify.com and www.samachar.com, that function
as principal entry points and gateway for accessing the Internet by providing useful web-related services and links. We also offer
related content sites specifically tailored to Indian interests worldwide.
Sify.com
provides a gateway to the Internet by offering communication and search tools such as email, chat, travel, online portfolio management
and channels for personal finance, astrology, lifestyle, shopping, movies, sports and news.
The finance channel of Sify
http://sify.com/finance/
covers the entire spectrum of equity markets, business news, insurance, mutual funds, loans, SME news and a host of paid and
free financial services.
|
·
|
The
sports channel
http://sify.com/sports/
covers the entire gamut of
Indian and international sports with special focus on cricket.
|
|
·
|
We
also host WWE updates as a standalone service
http://wwe.sify.com/
for
users.
|
|
·
|
The
food channel
www.bawarchi.com
focuses on Indian recipes and cooking and
is especially popular among non-resident Indians (NRIs) audiences with over 90% of its
content being user generated
|
|
·
|
Our
NRI news portal,
www.samachar.com
focuses on Indian news and allows
NRIs to stay connected to India by aggregating news from across all popular newspapers
and other news portals. This portal provides a range of news in English and five Indian
languages. Apart from Samachar we have another India targeted news channel
http://sify.com/news
which offers national and international general, political and offbeat news.
|
|
·
|
Movies
channel on Sify
http://sify.com/movies
is one of the key channels
which offer updates from Bollywood/ Hollywood and all regional film industries. The content
includes movie reviews, industry news, video galleries, photo galleries, downloads (photos)
etc.
|
|
·
|
Games
channel of Sify
http://games.sify.com
offers multiple scoring and non scoring
games. Games include cricketing games, racing games, football specific games.
|
We
offer value-added services to organizations such as website design, development, content management, Online assessment tools,
search engine optimization, including domain name management, secure socket layer (SSL) certificate for websites, digital certification
services nd server space in required operating system and database. We provide state of the art messaging and collaboration services
and solutions such as e-mail servers, LAN mail solutions, anti-spam appliances, bulk mail services, instant messaging, and also
offer solutions and services to enable data & access security over the Internet. We also provide infrastructure-based services
on demand, including on-line testing engine and network management. On-line testing services include test management software,
required servers and proctored examination facilities at Sify’s franchisee points. On-line exam engine offered allows a
secure and flexible way of conducting examinations involving a wide range of question patterns.
Corporate Customers
Our base of corporate
customers spread across information technology enabled services (ITES), banking financial services and Insurance (BFSI), publishing,
retail, pharmaceuticals and manufacturing. The reorganisation of our business has helped us expand our customer base to over 5,000
customers to date. This is not inclusive of customers who have brought piece-meal services from us. A good number of these customers
have matured from our initial set of offerings like Network and Data centre services. With the launch of our cable landing station,
we are able to cater to international carriers as well as domestic voice and data players. Our alliance with world leaders across
our other services is giving us the opportunity to extend our services to customers of our alliance partners.
The Company does not currently
anticipate that it will serve markets in, or have any contacts with, Sudan, Iran or Syria, or any other countries which are designated
as state sponsors of terrorism by the U.S. Department of State. As of the date of this Report, the Company has not provided into
Iran, Sudan, or Syria, or any other countries which are designated as state sponsors of terrorism by the U.S. Department of State
directly or indirectly, any products, equipment, software, technology, information or support, and has no agreements, arrangements,
or other contacts with the governments of those countries or entities they control.
Customer Service and Technical Support
The implementation of the single UAN for all
Enterprise customers across India has centralised all customer enquiries to one point, thus enabling us to pour resources and
efforts into a single minded endeavour. We support both telephonic and email interactions from our clients and support for Enterprises
services is 24x7x365.
Sales and Marketing
From a business standpoint, we have 5 different
lines of business. But on the sales front, the entire team is trained to upsell and cross sell across the entire bandwidth of
services. We believe this is essential and imperative given the space for bundling of our services. The 270 person Sales team
caters to the demand of Enterprises and the growing SMB market.
Technology and Network Infrastructure
Geographic coverage:
Our network today
reaches more than 1,300 towns and cities and between them have more than 85,000 links. This network is completely owned giving
us complete control on the technology, traffic and speed over them. These points of presence, or primary nodes, reside at the
core of a larger Internet protocol network with a Star and meshed topology architecture thereby building in redundancy at every
point and translating into minimum or no downtime for customers.
Today we offer the following services to our
Enterprise and consumer customers using our network.
|
·
|
Internet
access services,
|
|
·
|
IP/
MPLS Virtual private networks,
|
|
·
|
Internet
based Voice services
|
Each point of presence contains data communications
equipment housed in a secure facility owned, leased or operated on an infrastructure co-location basis by our Company. The last
mile connecting to the customer can be a leased line, ISDN or point-to-multipoint radio link which we have licensed from the Wireless
Planning Commission. We also use certain frequency radios, which do not require an operating license, in some locations. Our larger
corporate customers access the point of presence directly through leased lines or wireless links.
Network Architecture
: We ensure network
reliability through several methods and have invested in proven technologies. We use routers to route traffic between nodes interconnected
using a high speed interface. Most of our applications and network verification servers are manufactured by IBM, Sun and Hewlett-Packard.
The primary nodes on the backbone network
are connected by multiple high-speed fiber optic lines that we lease from long distance operators. The secondary nodes are connected
by lower speed leased lines. A number of nodes are accessible from at least two other nodes, if not, by two long distance operators,
allowing us to reroute traffic in the event of failure on one route. We reduce our exposure to failures on the local loop by usually
locating our points of presence within range of service providers switching equipment and purchasing connectivity from multiple
providers. To further maximize our network uptime, we are almost completely connected on fiber optic cables to the switching points
of our service providers from our POPs.
In addition to a fundamental emphasis on reliability
and security, our network design philosophy has focused on compatibility, interoperability, scalability and quality of service.
We use Internet protocol with Multi Protocol Label Switching, or MPLS, to transmit data, thus ensuring that our network is completely
interoperable with other networks and systems and that we may port any application onto our network. The modular design of our
network is fully scalable, allowing us to expand without changing the network design or architecture.
Network Operations Centre:
We maintain
a network operation centre located in Chennai (Madras) and a backup facility in Mumbai (Bombay). The Chennai facility houses our
central network servers as well as our network staff who monitors network traffic, service quality and equipment at all our points
of presence to ensure a reliable Internet service. These operation centres are staffed 24-hours-a-day, seven-days-a-week. We have
backup power generators and software and hardware systems designed to prevent network downtime in the event of system failures.
In the future, we may add additional facilities to supplement or add redundancy to our current network monitoring capability.
Data Centre Infrastructure.
We operate
six tier III Internet Data Centres, three in Mumbai, one each at Chennai and Bangalore and the latest one at Noida near Delhi.
We offer managed hosting, security and infrastructure management services from these facilities. These data centres are completely
integrated with our IP / MPLS network which provides seamless connectivity for our customers from their premise to their applications
hosted in the Data Centres. The Data Centres conform to the tier III standards to cater to the security consideration of our customer
servers. We intend to invest in additional Data Centres, and are currently building a world class data centre at Rabale in Mumbai.
Competition
Given our wide spread of services, our competition
is also long and varied. As the markets in India for corporate network/data services, Internet access services and online content
develop and expand, we will continue to see the entry of newer competitors and those with deeper pockets.
Individually, we will see competition intensify
from established players like Reliance, TATA Communications and Bharti for Telecom services, Ctrl S, Reliance and Net Magic for
Data Centres, proprietary leaders like IBM and localized players like Ramco for Cloud services, traditional software majors like
Infosys, HP, Wipro and TCS for Applications Integration services and large entities like Reliance and TCS for our Technology Integration
services.
Item 3. Management’s Discussion and
Analysis of Financial Condition and Results
of Operations.
The following discussion of the financial
condition and results of
operations of our Company should be read in conjunction with the Unaudited Condensed
Consolidated
Interim Financial Statements and the related condensed notes included
elsewhere in this report and the audited financial
statements and the related
notes contained in our Annual Report on Form 20-F for the fiscal year ended
March 31,
2016. This discussion contains forward-looking statements that
involve risks and uncertainties. For additional information
regarding these
risks and uncertainties, please see the section in our Annual report captioned “Risk
Factors.”
Overview
We are among the largest integrated ICT Solutions
and Services companies in India, offering end-to-end solutions with a comprehensive range of products delivered over a common
telecom data network infrastructure reaching more than 1,300 cities and towns in India. This telecom network also connects 38
Data Centres across India including Sify’s 6 Tier III Data Centres across the cities of Chennai, Mumbai, Delhi and Bengaluru
and customer data centres.
In late 2012, we reorganised our Business
to enable scale, flexibility and the ability to cross pollinate our business across multiple verticals. The focus of the business
shifted to Solutions and Services from a hitherto infrastructure focus. This, we call Sify 3.0.
After the re- organization along service lines,
a significant part of the our revenue is derived from Enterprise Services, comprising Telecom services, Data Centre services,
Cloud and Managed services, Applications Integration services and Technology Integration services. Sify also provides services
that cater to the burgeoning demands of the SMB community, much of it on its Cloud services platform.
The Core service in the
portfolio is the Telecom Services which is also among the most mature, tracing its legacy back to earlier years as India’s
first Private Internet Service Provider. The slower pace of use of private computers led a midway diverge to build networks that
could be used by large Enterprises for their business needs. The early start has helped us to leverage the market potential; we
are today India’s leading network provider offering the highest wireless endpoints and an equal number of wired terminations.
Forecasting the explosive
growth that the telecom market will see, we were the first in the country to offer an IPv6 ready network; a fact underscored by
the Telecom policy of 2012. This network reaches around 1,300 towns and cities and gives a prospect of approximately 2600 points
of presence.
The focus of the Telecom Services is on the
following lines:-
|
§
|
India Data Business
– Addressing the Data Communication needs of Large and Emerging
Enterprises in India across each of their distributed points of business. We do this by leveraging our network span across
1,300 towns and cities.
|
|
§
|
Global Network Business
– Addressing the connectivity needs of Enterprises and
Carriers to connect in and out of India. Our partnerships with multiple international carriers provides for a seamless integration
into and out of the India network.
|
|
§
|
Wholesale Voice
– Addressing the ‘India termination’ and several
other countries for Hubbing. Our cable landing station is our strategic investment to address this business need and currently
facilitates three international cables servicing the Middle East and a majority of Europe. Investments into strategic global
assets will continue to address the opportunity in-and-out of India.
|
We are among the earliest to invest in the
Data Centre landscape in the country with our first Data Centre in Vashi, Mumbai in the year 2000. Even in the early days of the
IT revolutions, we set very high benchmarks with each of our subsequent data being Tier III compliant. We currently have 6 Tier
III Data Centres across various geographical locations in India. This business offers services such as co-location, regular backup,
server load balancing, remote backup; Managed Services like Messaging, shared Hosting, network and security; Storage and Virtualization
and Managed Voice services to all resident Enterprises.
|
c)
|
Cloud and Managed services
|
The Data explosion witnessed by the country
opened up many opportunities and challenges. This has driven Indian Enterprises towards asset light solutions aiming at lower
Total Cost of Ownership (TCO). Foremost among them were for Managed services, Data Security and cloud services. Cloud services
was a product of the market demand from Enterprises who sought to de-focus themselves from operating cumbersome IT infrastructure
and moving towards an Opex based computing practice. Today, this practice follows both a collaborative and standalone approach
offering Cloud services from industry leaders like HP and VMware, and also through home grown solutions.
This business provides On-Demand, anywhere,
Flexible, Multi-tenant and Dedicated storage solutions, Public, Private and Hybrid cloud platforms and IaaS, Paas and DR as services.
We are also the only company offering Cloud Delivery solutions on a home grown tool with an objective of reducing the TCO offering
value to customers, on a completely automated platform called Cloudinfinit.
|
d)
|
Technology Integration services
|
Strategic investment of time and focus over
a decade to build India’s premier ICT network has resulted in an admirable knowledge base of products and technologies.
With Sify 3.0, we chose to package this into a knowledge offering to the market and thus, emergence of Technology Integration
services. Technology Integration Services (TIS) combines Sify’s IT capabilities with its core telecom and Data Centre products
to provide a converged turn-key ICT solution to the customer.
TIS leverages Sify’s homegrown expertise
in design, implementation and maintenance to deliver end-to-end managed IT services across datacenter, network and security.
Major focuses are as follows:
|
•
|
Service
Desks and Command Centers
|
|
•
|
Voice
and Video Conferencing
|
|
•
|
Unified
Communication and Unified Access
|
|
•
|
Campus/LAN/Data
Centre Networking
|
|
•
|
Enterprise
and End Point Security
|
|
e)
|
Applications Integration services
|
The third layer of the Sify business is the
Applications Integration services. Aligning to the market opportunity and expectations from our customers on high end value chain
services, Sify’s in house team of application developers have designed and developed a full suite of applications to ride
on top of our network infrastructure. Some of these have been trailblazers like the Supply Chain management application, Forum
and the online assessment tool, iTest. We had invested early on, in the sunrise business eLearning recognizing the demand of Enterprises
to take forward a uniform training platform to all branches and subsidiaries.
Today, this business caters to various verticals
with offerings like Talent management, and automated platform that enables multi city, multiple point recruitments and test platform,
Sales and Distribution platform, eLearning platform primarily for Enterprises outside of India for local and Internet based training,
Web solutions like portals and a SAP integration practice.
There are numerous risks and challenges affecting
the business. These risks and challenges are discussed in detail in the section entitled 'Risk Factors' in our Annual Report on
Form 20-F for the year ended March 31, 2016 and elsewhere in this Report.
Revenues
Telecom Services
These
primarily include revenue from connectivity services, NLD/ILD services and to a lesser extent, revenues from the installation
of the connectivity link. In certain cases, these elements are sold as a package consisting of all or some of the elements. We
sell hardware and software purchased from third party vendors to our high value corporate clients. Our connectivity services include
IPVPN services, Internet connectivity, last mile connectivity (predominantly through wireless). We provide these services for
a fixed period of time at a fixed rate regardless of usage, with the rate for the services determined based on the type of service
and capacity provided, scope of the engagement and the Service Level Agreement, or SLA. We provide NLD (National Long Distance)
and ILD (International Long Distance) services and carry voice traffic for Inter-connect Operators. Revenue is recognized based
upon metered call units of voice traffic terminated on our network.
Data Center services
Revenue from Data Centre
services include, revenue from co-location of space, racks, caged racks and on usage of power from large contracts. The contracts
are mainly fixed rate for a period of time based on the space or the racks used and usage revenue is based on consumption of power
on large contracts.
Cloud and Managed Services
Revenue from Cloud
and Managed services, are primarily from “ Cloud and On demand storage”, “ Domestic managed services and “International
managed services”. Contracts from Cloud and on demand storage , are primarily fixed and for a period of time. Revenues from
Domestic and International manage services, comprises of value added services, operations and maintenance of projects and from
remote infrastructure management. Contracts from this segment are fixed and could also be based on Time and Material (T&M).
Technology Integration
Service (TIS)
Revenues
from TIS comprises of DC build services and Security services. Contracts under TIS are based on completion of projects and could
also be based on T & M.
Applications Integration
Services
Revenue
from Applications Integration Services (Apps SI) comprises of Online Assessment, Web development, supply chain solutions, content
management and from sale of Digital certificates. Contracts are primarily fixed in nature for a period of time and also could
be based on T & M.
Expenses
Cost of goods sold
and services rendered
Telecom Services
Cost of goods sold and
services rendered for the corporate network/data services division consists of telecommunications costs necessary to provide services
and cost of goods in respect of communication hardware and security services sold, commission paid to franchisees and cable television
operators, the cost of voice termination for voice and VoIP services and other direct costs. Telecommunications costs include
the costs of international bandwidth procured from TELCOs and are required for access to the Internet, providing local telephone
lines to our points of presence, the costs of using third-party networks pursuant to service agreements, leased line costs and
costs towards spectrum fees payable to the Wireless Planning Commission or WPC for provision of spectrum to enable connectivity
to be provided on the wireless mode for the last mile. Other costs include cost incurred towards our Annual Maintenance Contract
(AMC), the cost of installation in connectivity business and the costs incurred in providing Hosting services. In addition, the
Government of India levies an annual license fee of 8% of the adjusted gross revenue generated from IP-VPN services and Voice
services under the NLD/ILD license.
Data Centre Services
Cost
of goods sold and services rendered for the Data Centre services consists of cost of electrical power consumed , cost of rental
servers offered to customers and cost of licences used to provide services.
Cloud and Managed
Services
Cost
of goods sold and services rendered for the Cloud and Managed services consists of cost of licences in providing services, cost
of billable resources in case of International Managed services, Third party professionals engaged in providing services, associate
costs of the delivery teams and cost of operations of DC build BOT projects.
Technology Integration
Services
Cost
of goods sold and services rendered consists of cost of hardware and software supplied for DC build projects, cost of security
hardware and software supplied and cost of hardware and software procured for System integration projects .
Applications Integration
Services
Cost
of goods sold and services rendered consists of professionals charges payable to domain specialists and subject matter experts,
cost of billable associates of e-learning business, cost of digital certificates and platform usage, cost of operating in third
party facility for online assessment including invigilator costs and cost of procuring and managing content for the websites and
other direct costs for the revenue streams.
Selling, general and administrative expenses
Selling, general and administrative
expenses consists of salaries and commissions for sales and marketing personnel, salaries and related costs for executive, financial
and administrative personnel, sales, marketing, advertising and other brand building costs, travel costs, and occupancy and overhead
costs.
Depreciation and amortization
We depreciate our tangible
assets on a straight-line basis over the useful life of assets, ranging from three to eight years and, in the case of buildings,
28 years. Undersea cable capacity is amortised over a period of 12 years and other intangible assets with finite lives are amortised
over three to five years.
Impairment
The carrying amounts of
the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount
is estimated. For goodwill, the recoverable amount is estimated each year at December 31.
The recoverable amount
of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets
that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units
that are expected to benefit from the synergies of the combination. Corporate assets for the purpose of impairment testing are
allocated to the cash generating units on a reasonable and consistent basis.
An impairment loss is
recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment
losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first
to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets
in the unit or group of units on a
pro rata basis.
Inventories
Inventories comprising traded hardware and
software are measured at the lower of cost (determined using first-in first-out principle) and net realizable value. Net realizable
value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Deferred tax
Deferred tax is recognized using the balance
sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the
initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit or loss, and differences relating to investments in subsidiaries and associates to the extent that it is probable
that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences
arising on the initial recognition of goodwill, as the same is not deductible for tax purposes. Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted
or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
Deferred taxation arising on investments in
subsidiaries and associates is recognized except where the Group is able to control the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable future. Deferred taxation arising on the temporary
differences arising out of undistributed earnings of the equity method accounted investee is recorded based on the management's
intention. If the intention is to realize the undistributed earnings through sale, deferred tax is measured at the capital gains
tax rates that are expected to be applied to temporary differences when they reverse. However, when the intention is to realize
the undistributed earnings through dividend, the Group’s share of the income and expenses of the equity method accounted
investee is recorded in the statement of income, after considering any taxes on dividend payable by the equity method accounted
investee and no deferred tax is set up in the Group's books as the tax liability is not with the group.
Results of Operations
The following table sets forth certain financial
information as a percentage of revenues:
|
|
Quarter ended
September
|
|
|
half year ended
September
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
|
Revenues
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Cost of goods sold and services rendered
|
|
|
63
|
|
|
|
58
|
|
|
|
64
|
|
|
|
59
|
|
Other income/(expense)
|
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
22
|
|
|
|
23
|
|
|
|
22
|
|
|
|
24
|
|
Depreciation and amortization expenses
|
|
|
10
|
|
|
|
10
|
|
|
|
10
|
|
|
|
10
|
|
Profit from operating activities
|
|
|
5
|
|
|
|
8
|
|
|
|
5
|
|
|
|
7
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
1
|
|
Finance expenses
|
|
|
2
|
|
|
|
5
|
|
|
|
3
|
|
|
|
5
|
|
Net finance income/(expense)
|
|
|
(2
|
)
|
|
|
(5
|
)
|
|
|
(2
|
)
|
|
|
(4
|
)
|
Net profit for the year
|
|
|
4
|
|
|
|
4
|
|
|
|
3
|
|
|
|
3
|
|
The company has re-grouped the revenue and
costs associated with digital certification services from Technology Integration Services to Applications Integration Services
from April 1, 2016. Consequently, the revenue and costs associated are re-grouped for the comparative periods presented in this
Report. Refer Note 15 of the financial statements.
Results of quarter ended September 30,
2016 compared to quarter ended September 30, 2015
The growth in our revenues in fiscal 2016
from fiscal 2015 is given below:
(Rupees in million)
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Revenues
|
|
|
4,392
|
|
|
|
3,715
|
|
|
|
677
|
|
|
|
18
|
%
|
We have achieved a Revenue of ₹ 4,392
Million ($ 66 Million), an increase in revenue of ₹ 677 Millions ($ 10 Millions) over same quarter previous year. The increase
is primarily contributed by Technology Integration Services, supported by growth in Applications Integration services, Data Centre
services and Telecom Services.
The revenue by operating segments is as follows:
(Rupees in million)
|
|
Revenue
|
|
|
Percentage of revenue
|
|
|
|
|
|
|
Quarter ended
September 2016
|
|
|
Quarter ended
September 2015
|
|
|
Quarter ended
September 2016
|
|
|
Quarter ended
September 2015
|
|
|
Growth
|
|
Telecom Services
|
|
|
2,571
|
|
|
|
2,493
|
|
|
|
59
|
%
|
|
|
67
|
%
|
|
|
3
|
%
|
Data Centre Services
|
|
|
490
|
|
|
|
365
|
|
|
|
11
|
%
|
|
|
10
|
%
|
|
|
34
|
%
|
Cloud and Managed Services
|
|
|
229
|
|
|
|
234
|
|
|
|
5
|
%
|
|
|
6
|
%
|
|
|
(2
|
)%
|
Technology Integration
Services
|
|
|
397
|
|
|
|
242
|
|
|
|
9
|
%
|
|
|
7
|
%
|
|
|
64
|
%
|
Applications Services
|
|
|
705
|
|
|
|
381
|
|
|
|
16
|
%
|
|
|
10
|
%
|
|
|
85
|
%
|
Total
|
|
|
4,392
|
|
|
|
3,715
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
Revenue from Telecom Services has increased
by
₹
78 Million ($1.17 Million) contributed by Data services
₹
283 Million ($4.25 Million) and offset by decrease in
voice services by
₹
205 Million ($3.08 Million). Revenue
increase of
₹
283 Million ($4.25 Million) from Data Services
is on account of increase in number of customer links. Revenue from voice services decreased by
₹
205
Million ($3.08 Million) on account of lesser realisation and minutes.
Revenue from Data Centre services has increased
by
₹
125 Million ($1.9 Million) on account of higher capacity
utilisation.
Revenue from Cloud and Managed Services has
decreased by
₹
5 Million ($0.08 Million) where increase in
domestic services by
₹
10 Million ($0.15 Million) was offset
by decrease in infrastructure managed services revenue by
₹
15
Million ($0.23 Million).
Revenue from Technology Integration services
has increased by
₹
155 Million ($2.33 Million). This is
on account of increase in projects in Systems Integration and Security services.
Revenue from Applications Integration Services
has increased by
₹
324 Million ($4.86Million), primarily
on account of increase in application services by
₹
395
Million ($ 5.92 Million) due to execution of a large online examination project, which was partially offset by decrease of
₹
47
Million ($0.71 Million) in e-Learning business and
₹
12 Million
($0.18 Million) in digital certification services on account of decrease in customer engagements. Revenue from Portal business
and other business decreased by
₹
12 Million ($0.18 Million).
Other income
The change in other income is as follows:
(Rupees
in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
36
|
|
|
|
12
|
|
|
|
24
|
|
|
|
200
|
%
|
Increase in other income is on account of
increase in other miscellaneous and rental income.
Cost of goods sold and services rendered
(COGS)
Our cost of goods sold and services rendered
is set forth in the following table:
(Rupees
in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Telecom services
|
|
|
1,642
|
|
|
|
1,514
|
|
|
|
128
|
|
|
|
8
|
%
|
Data Centre Services
|
|
|
249
|
|
|
|
197
|
|
|
|
52
|
|
|
|
26
|
%
|
Cloud and Managed Services
|
|
|
119
|
|
|
|
90
|
|
|
|
29
|
|
|
|
32
|
%
|
Technology Integration Services
|
|
|
277
|
|
|
|
152
|
|
|
|
125
|
|
|
|
82
|
%
|
Applications Integration Services
|
|
|
500
|
|
|
|
213
|
|
|
|
287
|
|
|
|
135
|
%
|
Total
|
|
|
2,787
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
The cost of goods sold increased by 29% on
overall basis, the movement in COGS is explained in detail below:
(Rupees
in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Network Costs
|
|
|
1,318
|
|
|
|
1,302
|
|
|
|
16
|
|
|
|
1
|
%
|
Revenue share
|
|
|
134
|
|
|
|
116
|
|
|
|
18
|
|
|
|
16
|
%
|
Cost of goods sold
|
|
|
354
|
|
|
|
215
|
|
|
|
139
|
|
|
|
65
|
%
|
Power costs
|
|
|
233
|
|
|
|
194
|
|
|
|
39
|
|
|
|
20
|
%
|
Direct Resources costs
|
|
|
234
|
|
|
|
233
|
|
|
|
1
|
|
|
|
-
|
|
Others
|
|
|
514
|
|
|
|
106
|
|
|
|
408
|
|
|
|
385
|
%
|
Total
|
|
|
2,787
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
Network cost comprises cost of Bandwidth leased
out from TELCOS, Inter connect charges and IP termination costs payable to carriers. Bandwidth costs increased by
₹
90 Million ($ 1.34 Million) due to capacity upgradation and newer links, Inter Connect charges reduced by
₹
72 Million ($ 1.08 Million) on account of reduction in minutes and rates.
Revenue share cost comprises of Revenue share
payable to DOT on ILD, NLD and other services. Increase in Revenue share is on account increase in revenue from licensed services.
The increase in Cost of Hardware and Software
is on account of higher number of System integration projects and related hardware opportunities during the quarter.
Power costs comprises of electricity cost
incurred in our data center. Increase in the cost is on account of more usage.
Direct resources costs comprises of (i) the
cost of resources deployed on the Network Infrastructure Delivery and resources involved in delivery of application services (ii)
cost of billable resources associated with the e Learning and Infrastructure Managed services. Resource costs has remained flat
compared to previous period.
Other Direct costs, comprises of Link implementation
and maintenance charges for the Telecom services, Direct cost of Application services, digital certificate platform , content
costs , delivery costs of application services, subject matter experts for international business. The increase in Other Direct
costs is due to increase in (i)
₹
53 Million ($0.80 Million)
in Cloud & Managed services due to higher usage, (ii)
₹
295
Million ($ 4.43 Million) on account of increase in number of online assessment services conducted during the period,
₹
62
Million ($ 0.93 Million) on account of increase in costs of Link implementation and maintenance charges in Telecom Services.
We are continuously seeking cost efficiencies
and process optimization to maximize the return.
Selling, General and Administrative expenses
Selling, General and Administrative expenses
of the Company are set forth as follows:
(Rupees in million)
|
|
|
Quarter ended
September 30,
2016
|
|
|
Quarter ended
September 30,
2015
|
|
|
Change
|
|
|
Change (%)
|
|
Operating Expenses
|
|
|
263
|
|
|
|
240
|
|
|
|
23
|
|
|
|
10
|
%
|
Selling & Marketing Expenses
|
|
|
35
|
|
|
|
43
|
|
|
|
(8
|
)
|
|
|
-19
|
%
|
Associate Expenses
|
|
|
383
|
|
|
|
333
|
|
|
|
50
|
|
|
|
15
|
%
|
Other Indirect Expenses
|
|
|
273
|
|
|
|
214
|
|
|
|
59
|
|
|
|
28
|
%
|
Provision for doubtful debts and advances
|
|
|
44
|
|
|
|
40
|
|
|
|
4
|
|
|
|
10
|
%
|
Forex (gain) / loss
|
|
|
(29
|
)
|
|
|
17
|
|
|
|
(46
|
)
|
|
|
|
|
Total
|
|
|
969
|
|
|
|
887
|
|
|
|
|
|
|
|
|
|
Operating expenses have increased by 10%,
on account of higher implementation cost on network expansion for large projects and also on account of increase in Operating
and maintenance cost of Data centers.
Selling and Marketing costs consist of, selling
commission payable to sales partners, discounts payable to customers, incentive to salesmen and marketing and promotion costs.
Selling & Marketing cost has decreased on account of decrease in advertisement costs and decrease in channel partner commission.
Associate expenses, consists of the annual
cost of the employees who are part of the Sales and marketing function, Business development, General management and support services.
Associate expenses increased due to increase in number of associates recruited during the period and also on account of pay revision.
Other Indirect expense consist of cost of
facilities, electricity charges incurred on facilities, travel cost, Legal charges, professional charges, communication and others.
Increase in other indirect costs is on account of one time higher statutory levy incurred during the same period previous year.
Provision for Doubtful debts consists of the
charge on account of the provisions created during the year against doubtful debtors. The marginal increase in Provision for Doubtful
debts are on account of prudent provisioning of debtors.
Depreciation and amortization
Depreciation and amortization is set forth
in the table below:
(Rupees in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Depreciation and amortization
|
|
|
432
|
|
|
|
369
|
|
|
|
63
|
|
|
|
17
|
%
|
As a percentage of carrying value
|
|
|
6
|
%
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
As the business is continuing to expand, the
amount of depreciation is increasing on account of contructing and deploying new facilities by the Company. Increase in depreciation
is on account of commissioning of new data center at Rabale during fiscal 2016 and field assets deployment for large projects.
Profit from operating activities
(Rupees in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Operating profit
|
|
|
239
|
|
|
|
306
|
|
|
|
(67
|
)
|
|
|
-22
|
%
|
As a percentage of revenue
|
|
|
5
|
%
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
Decrease in operating profit is on account
of increase in operating costs during the current period. The Company is taking steps to decrease the costs with revenue mix and
scaling.
Finance income/expense
(Rupees in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Finance Income
|
|
|
16
|
|
|
|
13
|
|
|
|
3
|
|
|
|
23
|
%
|
Finance expense
|
|
|
(98
|
)
|
|
|
(186
|
)
|
|
|
88
|
|
|
|
-47
|
%
|
Net finance expense
|
|
|
(82
|
)
|
|
|
(173
|
)
|
|
|
91
|
|
|
|
-53
|
%
|
The increase in finance income is majorly
due to interest on income tax refund received during the current period. The decrease in finance expenses is on account of gain
on mark to market valuation of interest rate swaps amounting to
₹
6.8 million ($ 0.1 million) recognised during current period, compared to mark to market loss of
₹
34.2 million ($ 0.51 million) in corresponding quarter of previous year. Also, during previous period higher interest cost
amounting to
₹
35.7 million ($ 0.54 million) was on account
of adverse foreign exchange movement.
Net Profit
(Rupees in million)
|
|
|
Quarter ended
September 30, 2016
|
|
|
Quarter ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Net Profit
|
|
|
157
|
|
|
|
133
|
|
|
|
24
|
|
|
|
18
|
%
|
As a percentage of revenue
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
The increase is on account of increase in
margin arising from incremental revenue and decrease in finance expenses which was offset by increase in operating costs during
the current period.
Results of half year ended September 30,
2016 compared to half year ended September 30, 2015
Revenues
The growth in our revenues in fiscal 2016
from fiscal 2015 is given below
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Revenues
|
|
|
8,562
|
|
|
|
7,122
|
|
|
|
1,440
|
|
|
|
20
|
%
|
We have achieved a Revenue of
₹
8,562 Million ($128.44 Million), an increase of
₹
1,440 Million ($21.60 Million) over same quarter previous year. The increase is primarily contributed by Technology Integration
Services, supported by growth in Applications Integration services, Data Centre services and Telecom Services.
The revenue by operating segments is as
follows:
(Rupees in million)
|
|
|
|
|
|
|
Revenue
|
|
|
Percentage of revenue
|
|
|
|
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Growth
|
|
Telecom Services
|
|
|
5,106
|
|
|
|
4,715
|
|
|
|
60
|
%
|
|
|
66
|
%
|
|
|
8
|
%
|
Data Centre Services
|
|
|
931
|
|
|
|
742
|
|
|
|
11
|
%
|
|
|
10
|
%
|
|
|
25
|
%
|
Cloud and Managed Services
|
|
|
471
|
|
|
|
439
|
|
|
|
6
|
%
|
|
|
6
|
%
|
|
|
7
|
%
|
Technology Integration Services
|
|
|
950
|
|
|
|
549
|
|
|
|
11
|
%
|
|
|
8
|
%
|
|
|
73
|
%
|
Applications Integration Services
|
|
|
1,104
|
|
|
|
677
|
|
|
|
13
|
%
|
|
|
10
|
%
|
|
|
63
|
%
|
Total
|
|
|
8,562
|
|
|
|
7,122
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
Revenue from Telecom Services has increased
by
₹
391 Million ($5.9 Million) contributed by Data services
₹
502 Million ($7.53 Million) and offset by voice services
by
₹
111 Million ($1.66 Million). Revenue increase of
₹
502 Million ($7.53 Million) from Data Services is on account of increase in number of customer links. Revenue from voice
services decreased by
₹
111 Million ($1.66 Million) on account
of lesser realisation and minutes.
Revenue from Data Centre services has increased
by
₹
189 Million ($2.8 Million) on account of higher capacity
utilisation.
Revenue from Cloud and Managed Services has
increased by
₹
32 Million ($0.5 Million) where domestic services
increased by
₹
25 Million ($0.38 Million) and infrastructure
managed services revenue increased by
₹
7 Million ($0.11
Million).
Revenue from Technology Integration services
has increased by
₹
401 Million ($6 Million). This is on
account of increase in projects in Systems Integration and Security services.
Revenue from Applications Integration Services
has increased by
₹
427 Million ($6.4Million), primarily
on account of increase in application services by
₹
460
Million ($ 6.90 Million) due to execution of a large online examination project, which was partially offset by decrease of
₹
32
Million ($0.48 Million) in e-Learning business and
₹
20
Million ($0.30 Million) in digital certification services on account of decrease in customer engagements. Revenue from Portal
business and other business increased by
₹
18 Million ($0.27
Million).
Other income
The change in other income is as follows:
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
62
|
|
|
|
22
|
|
|
|
40
|
|
|
|
181
|
%
|
Increase in other income is on account of
increase in other miscellaneous and rental income.
Cost of goods sold and services rendered
(COGS)
Our cost of goods sold and services rendered
is set forth in the following table:
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Telecom services
|
|
|
3,276
|
|
|
|
2,901
|
|
|
|
375
|
|
|
|
13
|
%
|
Data Centre Services
|
|
|
501
|
|
|
|
377
|
|
|
|
124
|
|
|
|
33
|
%
|
Cloud and Managed Services
|
|
|
198
|
|
|
|
157
|
|
|
|
41
|
|
|
|
26
|
%
|
Technology Integration Services
|
|
|
716
|
|
|
|
342
|
|
|
|
374
|
|
|
|
109
|
%
|
Applications Integration Services
|
|
|
762
|
|
|
|
392
|
|
|
|
370
|
|
|
|
94
|
%
|
Total
|
|
|
5,453
|
|
|
|
4,169
|
|
|
|
|
|
|
|
|
|
The cost of goods sold has increased by 30%
on overall basis, the movement in COGS is explained in detail below:
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Network Costs
|
|
|
2,708
|
|
|
|
2,501
|
|
|
|
207
|
|
|
|
8
|
%
|
Revenue share
|
|
|
256
|
|
|
|
223
|
|
|
|
33
|
|
|
|
15
|
%
|
Cost of goods sold
|
|
|
871
|
|
|
|
432
|
|
|
|
439
|
|
|
|
102
|
%
|
Power costs
|
|
|
476
|
|
|
|
359
|
|
|
|
117
|
|
|
|
33
|
%
|
Direct Resources costs
|
|
|
440
|
|
|
|
432
|
|
|
|
8
|
|
|
|
2
|
%
|
Others
|
|
|
702
|
|
|
|
222
|
|
|
|
480
|
|
|
|
217
|
%
|
Total
|
|
|
5,453
|
|
|
|
4,169
|
|
|
|
|
|
|
|
|
|
Network cost comprises of cost of Bandwidth
leased out from TELCOS, Inter connect charges and IP termination costs payable to carriers. Bandwidth costs increased by
₹
192 Million ($ 2.88 Million) due to capacity upgradation and newer links, Inter Connect charges increased marginally by
₹
15 Million ($ 0.22 Million) on account of reduction in
minutes and rates.
Revenue share cost comprises of Revenue share
payable to DOT on ILD, NLD and other services. Increase in Revenue share is on account increase in revenue from licensed services.
The increase in Cost of Hardware and Software
is on account of higher number of System integration projects and related hardware opportunities during the quarter.
Power costs comprises of electricity cost
incurred in our data center. Increase in the cost is on account of more usage.
Direct resources costs comprises of (i) the
cost of resources deployed on the Network Infrastructure Delivery and resources involved in delivery of application services (ii)
cost of billable resources associated with the e Learning and Infrastructure Managed services. Resource costs has remained flat
compared to previous period.
Other Direct costs, comprises of Link implementation
and maintenance charges for the Telecom services, Direct cost of Application services, digital certificate platform , content
costs , delivery costs of application services, subject matter experts for international business. The increase in Other Direct
costs is due to increase in (i)
₹
79 Million ($1.18 Million)
in Cloud & Managed services due to higher usage, (ii)
₹
333
Million ($ 5.00 Million) on account of increase in number of online assessment services conducted during the period,
₹
85
Million ($ 1.28 Million) on account of increase in costs of Link implementation and maintenance charges in Telecom Services.
We are continuously in the path of achieving
cost efficiencies and process optimization to maximize the return.
Selling, General and Administrative expenses
Selling, General and Administrative expenses
of the Company are set forth as follows:
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
Change (%)
|
|
Operating Expenses
|
|
|
478
|
|
|
|
471
|
|
|
|
7
|
|
|
|
1
|
%
|
Selling & Marketing Expenses
|
|
|
61
|
|
|
|
76
|
|
|
|
(15
|
)
|
|
|
-20
|
%
|
Associate Expenses
|
|
|
720
|
|
|
|
629
|
|
|
|
91
|
|
|
|
14
|
%
|
Other Indirect Expenses
|
|
|
525
|
|
|
|
447
|
|
|
|
78
|
|
|
|
17
|
%
|
Provision for doubtful debts and advances
|
|
|
84
|
|
|
|
80
|
|
|
|
4
|
|
|
|
5
|
%
|
Forex (gain) / loss
|
|
|
(16
|
)
|
|
|
4
|
|
|
|
(20
|
)
|
|
|
|
|
Total
|
|
|
1,852
|
|
|
|
1,707
|
|
|
|
|
|
|
|
|
|
Operating expenses have increased by 1%, on
account of higher implementation cost on network expansion for large projects and also on account of increase in Operating and
maintenance cost of Data centers.
Selling and Marketing costs consist of, selling
commission payable to sales partners, discounts payable to customers , incentive to salesmen and marketing and promotion costs.
Selling & Marketing cost has decreased on account of decrease in advertisement costs and decrease in channel partner commission.
Associate expenses, consists of the annual
cost of the employees who are part of the Sales and marketing function, Business development, General management and support services.
Associate expenses increased due to increase in number of associates recruited during the period and also on account of pay revision.
Other Indirect expense consist of , cost of
Facilities , electricity charges incurred on facilities, travel cost , Legal charges , professional charges, communication and
others. Increase in other indirect costs is on account of one time higher statutory levy incurred during the same period previous
year.
Provision for Doubtful debts consists of the
charge on account of the provisions created during the year against doubtful debtors. The marginal increase in Provision for Doubtful
debts are on account of prudent provisioning of debtors.
Depreciation and amortization
Depreciation and amortization is set forth
in the table below:
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Depreciation and amortization
|
|
|
873
|
|
|
|
745
|
|
|
|
128
|
|
|
|
17
|
%
|
As a percentage of carrying value
|
|
|
13
|
%
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
As the business is continuing to expand, the
amount of depreciation is increasing on account of contructing and deploying new facilities by the Company. Increase in depreciation
is on account of commissioning of new data center at Rabale during fiscal 2016 and field assets deployment for large projects.
Profit from operating activities
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Operating profit
|
|
|
445
|
|
|
|
524
|
|
|
|
(79
|
)
|
|
|
(15
|
)%
|
As a percentage of revenue
|
|
|
5
|
%
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
Decrease in operating profit is on account
of increase in operating costs during the current period. The Company is taking steps to decrease the costs with revenue mix and
scaling.
Finance income/expense
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Finance Income
|
|
|
85
|
|
|
|
18
|
|
|
|
67
|
|
|
|
372
|
%
|
Finance expense
|
|
|
(249
|
)
|
|
|
(324
|
)
|
|
|
75
|
|
|
|
(23
|
)%
|
Net finance expense
|
|
|
(164
|
)
|
|
|
(306
|
)
|
|
|
142
|
|
|
|
(46
|
)%
|
The increase in finance income is majorly
due to interest on income tax refund received during the current period. The decrease in finance expenses is on account of gain
on mark to market valuation of interest rate swaps amounting to
₹
7.3 million ($ 0.1 million) recognised during current period, compared to mark to market loss of
₹
34.2 million ($ 0.51 million) in corresponding period of previous year. Also, during current period interest cost amounting
to
₹
28.4 million ($ 0.42 million) was on account of adverse
foreign currency movement compared to
₹
52 million ($ 0.78
million) during previous period.
Net Profit
(Rupees in million)
|
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Change
|
|
|
% Change
|
|
Net Profit
|
|
|
282
|
|
|
|
218
|
|
|
|
64
|
|
|
|
29
|
%
|
As a percentage of revenue
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
The increase is on account of increase in
margin arising from incremental revenue and decrease in finance expenses which was offset by increase in operating costs during
the current period.
Liquidity and Capital Resources
We have financed our operations largely through
cash generated from operations, equity issuance and bank borrowings. Our liquidity requirements are for meeting working capital
needs and capital expenditure required to upgrade and maintain our existing infrastructure.
The following table summarises our cash flows
for periods presented:
|
|
Half year ended
September 30, 2016
|
|
|
Half year ended
September 30, 2015
|
|
|
Half year ended
September 30, 2016
|
|
|
|
₹ In million
|
|
|
₹ in million
|
|
|
US $ in million
|
|
Net cash from / (used in) operating activities
|
|
|
906
|
|
|
|
1,437
|
|
|
|
13
|
|
Net cash from / (used in) investing activities
|
|
|
(545
|
)
|
|
|
(745
|
)
|
|
|
(8
|
)
|
Net cash from / (used in) financing activities
|
|
|
(231
|
)
|
|
|
(304
|
)
|
|
|
(3
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
-
|
|
Net increase / (decrease) in cash and cash equivalents
|
|
|
130
|
|
|
|
388
|
|
|
|
2
|
|
As at September 30, 2016 and 2015 we had working
capital of ₹ 948 million and ₹ 1,047 million which includes cash and cash equivalents of ₹ 1,144 million and
₹ 1,111 million respectively. Our working capital net of cash and cash equivalents is ₹ 196 million (negative) and
₹ 64 million (negative) as at September 30, 2016 and 2015. We believe that cash from operations, existing lines of credit
and capital availability from promotor group, we have sufficient resources to meet our liquidity requirements.
Our short term borrowings to finance working
capital requirements are primarily financed by cash credit facilities with banks. Borrowings for capital expenditures are financed
through capital leases and long term loans. We have foreign currency demand loans and cross currency swap for our term loan in
Indian Rupee, which carry lower interest rates compared to Indian Rupee loans, but are subject to exchange fluctuations, due to
which there could be an adverse impact on cash outflows.
On October 22 2010, the company entered into
a subscription agreement with Mr Ananda Raju Vegesna, acting as representative (the “Representative”) of the purchasers
in connection with the offering. Pursuant to the terms of this subscription agreement, the company issued and allotted 125,000,000
equity shares to an entity affiliated and controlled by Mr. Raju Vegesna, our CEO, Chairman and Managing Director. In accordance
with Indian law, the purchase price is to be paid at such time as determined by Board of Directors of the company. During the
fiscal year 2014, the Company has received an aggregate of ₹ 300 million, in connection with this private placement, resulting
in an aggregate of ₹ 2,800 million received to date. Although all 125,000,000 shares are deemed issued and outstanding,
the unpaid portion of the equity shares issued pursuant to the subscription agreement do not have any voting rights and are not
entitled to dividends, if declared. As of the date of this Report, Mr. Vegesna has paid for 70% of the shares of the subscription
.
From out of the uncalled amount of
₹ 1,200 million, the Board of Directors have made a call amounting to ₹
300 million at their meeting held in October 2016 and the said amount will be received by the Company by November 2016. The balance
of the proceeds from the allotment of the equity shares to our promoter group, of ₹ 900 million, will take place in tranches
as per the amended subscription agreement and the Board of Directors assessment from time to time of the Company’s capital
requirements, with respect to both timing and amount.
We have borrowings of ₹ 4,812
million as of September 30, 2016 out of which ₹ 3,757 million will be repaid within a period of 12 months. Interest
outflow on existing borrowings for next year is expected to be ₹ 335 million. We have utilized working capital facility
of ₹ 1,748 million out of limit of ₹ 1,750 million as on September 30, 2016. We have unutilized funded limit of
₹2 million as on September 30, 2016.
Our ongoing working capital requirements are
significantly affected by the profitability of our operations and we continue to periodically evaluate existing and new sources
of liquidity and financing. We are taking steps to improve the cash position to meet our currently known requirements at least
over the next twelve months. In light of the highly dynamic nature of our business, however, we cannot assure you that our capital
requirements and sources will not change significantly in the future.
Cash and cash equivalents
:
Cash and cash equivalents comprise of ₹
1,259 million, ₹ 1,283 million, in bank accounts and ₹ 582 million, ₹ 501 million in the form of bank deposits
as of September 30, 2016 and 2015, respectively, out of which cash deposits in the form of margin money is restricted for use
by us amounting to ₹ 292 million, ₹ 270 million. Balances in foreign currency amount to ₹462 million, ₹86
million as of September 30, 2016 and 2015, respectively.
Net cash generated from
operating activities for the half year ended September 30, 2016 was ₹906 million ($ 13.6 million), ₹ 531 million ($
8 million) lower than previous period. This is mainly attributable to increase in trade and other receivables of ₹715 million
($ 10.7 million), and increase in inventories of ₹244 million ($ 3.7 million). The increase is partially offset by increase
in trade and other payables of ₹ 198 million ($ 2.9 million).
Net cash generated from
operating activities for the half year ended September 30, 2015 was ₹1,437 million ($ 21.9 million). This is mainly attributable
to increase in trade and other payables by ₹544 million ($ 8.27 million), and increase in deferred revenue of ₹160
million ($ 2.43 million) on account of increase in progress billing in long term projects. The increase is partially offset by
increase in trade and other receivables by ₹ 327 million ($ 4.97 million), increase in other assets by ₹72 million
($ 1.1 million).
Net cash used in investing
activities for the half year ended September 30, 2016 was ₹545 million ($ 8.18 million) primarily on account of additional
expenditure on property, plant and equipment amounting to ₹ 608 million ($ 9.12 million). Also, expenditure on intangibles
amounted to ₹28 million ($ 0.43 million). The increase was partly offset by increase in finance income by ₹91 million
($1.36 million).
Net cash used in investing activities for
the half year ended September 30, 2015 was ₹745 million ($ 11.33 million) primarily on account of additional expenditure
on data centre in Rabale. Also expenditure on intangibles amounted to ₹19 million ($ 0.29 million). The increase was partly
offset by increase in finance income by ₹22 million ($0.33 million).
Net cash used in financing activities for
half year ended September 30, 2016 was ₹231 million ($ 3.47 million). The increase is mainly due to repayment of lease liabilities
of ₹353 million ($ 5.2 million), also finance expenses amounting to ₹232 million ($ 3.5 million) and dividend of ₹170
million ($ 2.5 million) was paid during the period. The increase is partly offset by increase in borrowing by ₹523 million
($ 7.8 million).
Net cash used in financing activities for
half year ended September 30, 2015 was ₹304 million ($ 4.6 million). The increase is mainly due to repayment of lease liabilities
of ₹402 million ($ 6.1 million), also increase in finance expenses by ₹322 million ($ 4.9 million). Also dividend
of ₹170 million ($ 2.6 million) was paid during the period. The increase is partly offset by increase in borrowing by ₹590
million ($ 8.9 million).
Tax Matters
(a) Income tax matters
The statutory corporate income tax rate and
the surcharge thereon are subject to change in line with the changes announced in the Union Budget each year. For fiscal year
2016, the corporate income tax rate is 30%, subject to a surcharge of 12% where the taxable total income exceeds ₹ 10 crores
and education cess of 2 % and 1% secondary and higher education cess, resulting in an effective tax rate of 34.61%. We cannot
assure you that the current income tax rate will remain unchanged in the future. We also cannot assure you that the surcharge
will be in effect for a limited period of time or that additional surcharges will not be levied by the Government of India. Until
April 1, 2002, dividends declared, distributed or paid by an Indian corporation were subject to a dividend tax of 10.2%, including
the applicable surcharge for fiscal 2002, of the total amount of the dividend declared, distributed or paid. This tax is not paid
by shareholders nor is it a withholding requirement, but rather it is a direct tax payable by the corporation before distribution
of a dividend. Effective April 1, 2002, Indian companies were no longer to be taxed on declared dividends. The Finance Act, 2003
proposed that after April 1, 2003, dividend income will be exempt from tax for shareholders and those domestic companies will
be liable to pay a dividend distribution tax at the rate of 12.5% plus a surcharge and education cess at the time of the distribution.
The Finance Act 2014 has increased the rate of dividend distribution tax to 15% plus applicable surcharge and education cess resulting
in an effective rate of 20.358%.
Provisions of the
Income Tax Act have been amended effective April 1, 2016 for determination of place of effective management (POEM) of a Company.
Accordingly, Section 6(3) was amended to provide that a Company is said to be resident in India in any financial year if it is
an Indian Company or its POEM in that year is in India. POEM has been defined to mean a place where key management and commercial
decisions that are necessary for the conduct of the business of an entity as a whole are, in substance, made. The effective date
of these amendments have been postponed to fiscal year commencing April 2017.
(b) Service tax matters
Effective June 1, 2016, the service tax rate
has been increased from 14.50% to 15%, which includes Krishi Kalyan Cess of 0.5% levied by Finance Act 2016.
Off-Balance Sheet Arrangement
We have not entered into any off balance sheet
arrangement other than contractual obligations such as operating lease arrangements disclosed below as defined by SEC final rule
67 (FR-67) “Disclosures in Management’s Discussion and Analysis” about off balance sheet arrangements and aggregate
contractual obligations.
Contractual obligations
Set forth below are our contractual obligations
as at September 30, 2016:
Payments due by period (₹ 000s)
|
Contractual obligations
|
|
Total
|
|
|
Less
than 1 year
|
|
|
1-3 years
|
|
|
3-5 years
|
|
|
More
than 5 years
|
|
Long term debt obligations
|
|
|
2,102,663
|
|
|
|
1,209,477
|
|
|
|
719,893
|
|
|
|
173,293
|
|
|
|
-
|
|
Short term borrowings
|
|
|
2,140,719
|
|
|
|
2,140,719
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Finance lease obligations
|
|
|
851,815
|
|
|
|
584,083
|
|
|
|
216,238
|
|
|
|
51,494
|
|
|
|
-
|
|
Non-cancellable operating lease obligations
|
|
|
1,152,108
|
|
|
|
105,069
|
|
|
|
224,716
|
|
|
|
245,472
|
|
|
|
576,851
|
|
Purchase obligations
|
|
|
889,791
|
|
|
|
889,791
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Item 4. Quantitative And Qualitative Disclosures
About Market Risk
General
Market risk is the risk of loss of future
earnings, to fair values or to future cash flows that may result from a change in the price of a financial instrument. The value
of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity
prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all
market risk sensitive financial instruments including investments, foreign currency receivables, payables and debt. Our exposure
to market risk is a function of our investment and borrowing activities and our revenue generating activities in foreign currency.
The objective of market risk management is to avoid excessive exposure of our earnings and equity to loss.
Please see Note 36 to the financial statements
included in our Annual Report on Form 20-F for the year ended March 31, 2016.
Risk Management Procedures
We manage market risk through a corporate
treasury department, which evaluates and exercises independent control over the entire process of market risk management. Our
corporate treasury department recommends risk management objectives and policies which are approved by senior management and our
Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign
currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies on a daily basis.
Recent Accounting Pronouncements
|
(i)
|
IFRS 15 Revenue from Contract
from Customers:
In May 2014, the International Accounting Standards Board (IASB)
issued IFRS 15, Revenue from Contracts with Customers. The core principle of the new
standard is that an entity should recognize revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. Further the
new standard requires enhanced disclosures about the nature, amount, timing and uncertainty
of revenue and cash flows arising from the entity’s contracts with customers. The
standard permits the use of either the retrospective or cumulative effect transition
method. The effective date for adoption of IFRS 15 is annual periods beginning on or
after January 1, 2017, though early adoption is permitted. In September 2015, the IASB
issued an amendment to IFRS 15, deferring the adoption of the standard to periods beginning
on or after January 1, 2018 instead of January 1, 2017.
|
The Group is evaluating the effect
of IFRS 15 on the consolidated financial statements including the transition method to be adopted and the related disclosures.
The group continues to evaluate the effect of the standard on ongoing financial reporting.
|
(ii)
|
IFRS 16 Leases :
IFRS 16
on lease was issued on January 13, 2016 and is effective from the year January 1, 2019,
though early adoption is permitted for companies applying IFRS 15 Revenue from Contracts
with Customers . The standard replaces all existing lease accounting requirements and
represents a significant change in accounting and reporting of leases, with more assets
and liabilities to be reported on the Statement of Financial Position and a different
recognition of lease costs.
|
The Group is currently evaluating
the impact of the standard on the consolidated financial statements.
Critical accounting policies
The accounting policies applied by
the
group in these Unaudited Condensed Consolidated Interim Financial Statements are the same as those applied by the Group in its
Consolidated Financial Statements as at and for the year ended March 31 2016 except as disclosed in Note 3.a in unaudited condensed
consolidated interim financial statements included with this Report. The changes did not have any material impact on the Company.
Item 5. Controls and Procedures
Disclosure Controls and Procedures
As at September 30, 2016, our management,
with the participation of our chief executive officer and chief financial officer, has carried out an evaluation of the effectiveness
of our disclosure controls and procedures. The term “disclosure controls and procedures” means controls and other
procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities
and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934,
as amended, is accumulated and communicated to management, including our chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding our required disclosure. In designing and evaluating our disclosure controls
and procedures, management recognizes that any controls and procedures, no matter how well conceived and operated, can only provide
reasonable assurance that the objectives of the disclosure controls and procedures are met.
Based on their evaluation, our Chief Executive
Officer and Chief Financial Officer have concluded that, as of September 30, 2016, our disclosure controls and procedures were
effective to provide reasonable assurance that the information required to be disclosed in filings and submissions under the Exchange
Act is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms, and that
material information related to us is accumulated and communicated to management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions about required disclosure.
Changes in internal control over financial
reporting
During the half year ended September 30, 2016,
there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
Part II. Other Information
Item 1. Legal Proceedings
The company is subject to legal proceedings
and claims, which have arisen in the ordinary course of its business. These legal actions, when ultimately concluded and determined,
will not, in the opinion of management, have a material effect on the results of operations or the financial position of the Company.
See Note 17 of notes to Unaudited Condensed
Consolidated Interim Financial Statements in Part I above and Note 33 of the financial statements included in our Annual Report
on Form 20-F for the year ended March 31, 2016.
Item 1A. Risk Factors
For information regarding factors that could
affect the Company’s results of operations, financial condition and liquidity, see the risk factors discussion set forth
in Item 1A of our Annual Report on Form 20-F for the fiscal year ended March 31, 2016 and the information under “Forward-Looking
Statements” included in this Report. There have been no material changes to our Risk Factors from those disclosed in our
Annual Report on Form 20-F for the fiscal year ended March 31, 2016.
Item 2. Unregistered Sale of Equity Securities
and Use of Proceeds
None.
Items 3. Defaults upon Senior Securities
None.
Item 4. Mine safety Disclosure
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
Signatures
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: November 3, 2016
|
SIFY TECHNOLOGIES LIMITED
|
|
|
|
|
|
By:
|
/s/ MP Vijay Kumar
|
|
|
Name:
|
MP Vijay Kumar
|
|
|
Title:
|
Chief Financial Officer
|
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