<SEC-DOCUMENT>0001193125-12-241711.txt : 20120719
<SEC-HEADER>0001193125-12-241711.hdr.sgml : 20120719
<ACCEPTANCE-DATETIME>20120521160008
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ACCESSION NUMBER:		0001193125-12-241711
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120521

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SIFY TECHNOLOGIES LTD
		CENTRAL INDEX KEY:			0001094324
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		TIDEL PARK, 2ND FLOOR
		STREET 2:		NO. 4, CANAL BANK ROAD, TARAMANI
		CITY:			CHENNAI 600 113
		STATE:			K7
		ZIP:			0
		BUSINESS PHONE:		91 44 2254 0770

	MAIL ADDRESS:	
		STREET 1:		TIDEL PARK, 2ND FLOOR
		STREET 2:		NO. 4, CANAL BANK ROAD, TARAMANI
		CITY:			CHENNAI 600 113
		STATE:			K7
		ZIP:			0

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SIFY LTD
		DATE OF NAME CHANGE:	20030113

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SATYAM INFOWAY LTD
		DATE OF NAME CHANGE:	19990901
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>VIA EDGAR </I></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">May 21, 2012 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Division of Corporation Finance </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Securities and Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">100 F
Street, N.E. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington D.C. 20549 </FONT></P>
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<TD VALIGN="bottom" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention:</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mr. Patrick Gilmore</FONT></TD></TR>


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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accounting Branch Chief</FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Re:</B></FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Sify Technologies Limited</B></FONT></TD></TR>


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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 20-F for the Fiscal Year Ended March 31, 2011</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Filed October 13, 2011</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 6-K Furnished October 26, 2011</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 6-K Furnished January 30, 2012</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 6-K Furnished March 22, 2012</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 6-K Furnished April 25, 2012</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>File No. 000-27663</B></FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Mr. Gilmore, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">This letter is submitted on behalf of Sify Technologies Limited (the &#147;Company&#148; or &#147;we&#148;) in response to the comments of the staff of the Division of Corporation Finance of the
Securities and Exchange Commission (the &#147;Staff&#148;), as set forth in your letter (the &#147;Comment Letter&#148;) to M P Vijay Kumar dated May 7, 2012 with the respect to the Company&#146;s Annual Report on Form 20-F for the fiscal year ended
March 31, 2011 (the &#147;Annual Report&#148;), the Form 6-K furnished on October 26, 2011, Form 6-K furnished on January 30, 2012, Form 6-K furnished on March 22, 2012 and Form 6-K furnished on April 25, 2012. For reference purposes, the text of
your letter has been reproduced herein with our responses below each numbered comment. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 20-F for the Fiscal Year Ended March 31, 2011
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item 18. Financial Statements </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Note 3. Significant accounting policies </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>n. Revenue</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>(ii) Internet access services, page 119</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Comment 1: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note that your response to
prior comment 4 focuses exclusively on the provision of bandwidth and the revenue recognition related to the consumption of bandwidth, i.e., usage charges for access to the internet through the sale of cybercaf&eacute; cards. However, it does not
include any details related to the other subsequent services you provide. Please describe more specifically the type of services you provide in connection with backend support, the authentication/usage engine and the billing and collection system.
Additionally, confirm whether there are specific fees charged for these services, separate from the initial non-refundable franchise fee, and how and over what period you recognize the related revenue. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Response 1: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Company, along with provisioning of bandwidth on a recurring basis, renders other services on an integrated basis, including backend support, authentication/usage engine and the billing and collection
system to the franchisees. In such services, the Company, through application software, helps the franchisee to keep online track of the usage of Sify cybercaf&eacute; cards by the customers and also helps in authenticating the customer log-ins at
different Cyber cafes. Such services to the franchisees are billed and recorded as deferred revenue when the customer purchases the card and revenue is recognised over the period of provisioning of such services (i.e. when the bandwidth is used by
the customers). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We respectfully submit to the Staff that the total initial non-refundable aggregate fees recognised during the year ended
March 31, 2011 is not a material source of revenue to the Company and approximates only 0.16% of the total fiscal year revenue of the Company. Further, the revenue from the subsequent services in the form of usage charges are also not material and
represented 1.3% of the total revenue for the year ended March 31, 2011. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Form 6-K Furnished March 22, 2012</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Item 2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operation</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Liquidity and Capital Resources, page 34</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Comment 2: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note your response to
prior comment 6. Please tell us what consideration you have given to paragraphs 42 through 50 of IAS 32. As part of your response, discuss how both criteria in paragraph 42 will be met for the receivables and payables that you intend to offset in
connection with your customers/vendors both based in and outside India. Please let us know if there have been any updates since your last response. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Response 2: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Per Para 42 of IAS 32, <I>A financial asset and a financial liability shall be
offset and the net amount presented in the statement of financial position when, and only when, an entity:</I> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>(a)
</I><I>currently has a legal enforceable right to set off the recognized amounts; and</I> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>(b) intends either to settle on a
net basis, or to realize the asset and settle the liability simultaneously.</I> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Even though the Company has intention and is continually
evaluating options to settle such receivable and payables on a net basis, the contract with these customers / vendors does not give the Company any legal right to do so. Further in case of customers / vendors located outside India, the approval of
the regulatory authority, viz., Reserve Bank of India (&#145;RBI&#146;) is required for such set-off as per the Indian foreign Exchange Regulations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Further per Para 46 of IAS 32, <I>An intention by one or both parties to settle on a net basis without the legal right to do so is not sufficient to justify offsetting because the rights and obligations
associated with the individual financials asset and financial liability remain unaltered.</I> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As the Company has not obtained RBI clearance
in case of customers / vendors located outside India and no legal right to the Company for offsetting from the contracts entered into with these customers / vendors, the receivables and payables are disclosed on a gross basis. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company still awaits the approval of RBI in case of customers/vendors located outside India. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Form 6-K Furnished April 25, 2012</U> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Comment 3: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note that in your
reconciliation you continue to present your non-GAAP measure, &#147;EBIDTA,&#148; before your GAAP measure, profit/(loss) for the period, as calculated under IFRS. Please consider revising your presentation in order to give the GAAP measure greater
prominence by presenting your consolidated income statements as presented under IFRS and separately presenting your reconciliation of EBIDTA to your most directly comparable financial measure as presented under IFRS (i.e., profit/(loss) for the
period). Please confirm that you will revise your presentation in future filings. Refer to Item 100(a)(1) and (2) of Regulation G. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Response 3: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We confirm that in our
future filings we will present a reconciliation of &#147;EBIDTA&#148; to the profit or loss for the period and also give a greater prominence for the GAAP measure. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If you have any questions regarding the above clarifications, please feel free to contact the undersigned at +91 44 2254 0770, ext. 2111. </FONT></P>
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<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ M P Vijay Kumar</FONT></P></TD></TR>


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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">M P Vijay Kumar</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sify Technologies Limited</FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chennai</FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">India</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">**** </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>

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