Directors Report of AGS Infotech Ltd.

Mar 31, 2011

The Directors have pleasure in presenting the Fourteenth Annual Report of the Company for the financial year ended 31st March, 2011.

FINANCIAL RESULTS:

The performance of the Company for the financial year ended 31st March, 2011 is summarized below:

(Rs. in Lakhs)

2010-11 2009-2010

Income 3119.32 2974.59

Work in Progress ****** ******

Expenses 2615.30 2597.83

Bad Debts Written Off ****** ******

Misc Exp Written Off ****** ******

Profit Before Interest and Depreciation 504.01 376.76

Depreciation 182.28 70.85

Interest and Finance Charges 66.19 56.98

Profit Before Tax 255.54 248.93

Profit After Tax 153.25 148.48

OPERATIONS:

As can be seen from the above, the company made a turnover of Rs.3119.32 Lakhs during the year as against Rs. 2974.59 lakhs during the previous year registering growth of a 4.86%. The net profit of the company has increased from Rs.148.48 lakhs to Rs153.25 lakhs, registering growth of 3.21%. The management has reoriented its strategies in the line of business and has inducted new director on the board with talent and good contacts in the industry. The management is hopeful of confident of earning more and more profits in the current year and in the years ahead.

INDIAN & GLOBAL ECONOMY:

We are witnessing a reverse trend in innovation and the emerging economies making an impact on business in the advanced markets.

The global economy seems to be recovering after the recent economic shock. The global economies including Indian economy are expected to continue to sustain themselves in the short-term, as the effect of stimulus programs is yet to bear fruit and tax cuts are working their way through the system in 2010. Due to the strong position of liquidity in the market, large corporations now have access to capital in the corporate credit markets and the innovation hub markets; growth momentum is the order of the day in emerging economies like India despite of global financial crisis.

In order to keep up the economic growth during times of the worst recession, government authorities in India have announced the stimulus packages to bolster economic growth. To finance the stimulus packages, the Indian government has raised over $100 billion over the last four quarters. The country's public debt, according to the Reserve Bank of Indian (RBI), has zoomed to more than 50% of the total GDP.

FUTURE OUTLOOK:

Your Company has plans to diversify in to non-conventional energy activities and with the overall sectorial growth indices forecast future growth of your company.

DIVIDEND:

Your directors express their inability to recommend any dividend for the financial year 2010-2011.

INCREASE IN AUTHORIZED AND PAID-UP EQUITY CAPITAL:

During the year under review there is no changes in the Authorized Equity share capital of your company. The paid-up Equity capital of your company is 1,24,48,100 Equity shares of Rs.10/- each.

CHANGE OF REGISTRAR AND TRANSFER AGENTS:

There is no changes in the Company's Registrar and Share Transfer agents: Venture Capital and Corporate Investments Pvt. Limited 12-10-167, Bharatnagar, Hyderabad-500018. Phone: [phone].

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

LISTING:

The Equity Shares of your company are listed on The Bombay Stock Exchange Limited.

DIRECTORS:

In accordance with the Companies Act, 1956 read with Articles of Association of the company the Director Mr. G Dhananjaya Reddy and Mr. R Venkatesh retires by rotation and is eligible for reappointment.

Your Board recommends the re-appointment of the Director above.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certifies and confirms that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the Annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

A. Conservation of Energy

Adequate measures have been taken to reduce energy consumption, wherever possible. Total energy consumption and energy consumption per unit of production is not applicable as company is not included in the industries specified in the schedule

B. Technology Absorption

1. Research and Development (R&D : Nil

2. Technology absorption, adoption and innovation : Nil

C. Foreign Exchange Earnings and Out Go

Foreign Exchange Earnings : nil (Current year)

Rs . 98,58,252/- (PY) Foreign Exchange Outgo : Nil (Current year )

: Nil (Previous year)

PARTICULARS OF EMPLOYEES

As the Company is not having any employee during the year under review which attracts provisions of Section 217 (2A) of the Companies Act, 1956, the disclosures required to be made under the said section.

CODE OF CONDUCT

The Code has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them.

AUDITORS

M/s Hariharan & Associates., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible have expressed their willingness for re-appointment. Your directors propose the appointment of M/s Hariharan & Associates, Chartered Accountants, as statutory auditors to hold office until the conclusion of the next Annual General Meeting of the company.

CORPORATE GOVERNANCE

As a listed company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, Forms part of this Report as Annexure.

ACKNOWLEDGEMENTS

Your directors would like to express their grateful appreciation for assistance and co-operation received from clients, banks, investors, Government, other statutory authorities and all others associated with the company. Your directors also wish to place on record their deep sense of appreciation for the excellent contribution made by the employees at all levels, which enabled the company to achieve sustained growth in the operational performance during the year under review.

Declaration by Managing Director of affirmation by Directors and senior Management personnel of compliance with the code of conduct

The shareholders

I, M Manivannan, Managing Director of the Company do hereby declare that the Directors and Senior Management of the Company have exercised their authority and powers and discharged their duties and functions in accordance with the requirements of the code of conduct as prescribed by the company and have adhered to the provisions of the same.

For and on behalf of the Board of Directors

M/s. AGS Infotech Limited;

Sd/-

Place: Hyderabad M Manivannan

Date: 15.06.2011 Managing Director

---

Mar 31, 2010

The Directors have pleasure in presenting the Fourteenth Annual Report of the Company for the financial year ended 31st March, 2010.

FINANCIAL RESULTS:

The performance of the Company for the financial year ended 31st March, 2010 is summarized below:

(Rs. in lakhs)

2009-2010 2008-09

Income 2974.59 1573.82

Work in Progress - -

Expenses 2597.83 1407.54

Bad Debts Written Off - -

Misc Exp Written Off - -

Profit Before Interest and 376.76 166.28 Depreciation

Depreciation 70.85 42.81

Interest and Finance Charges 56.98 _

Profit Before Tax 248.93 123.47

Profit After Tax 148.48 96.64

OPERATIONS:

As can be seen from the above, the company made a turnover of Rs.2974.59 Lakhs during the year as against Rs. 1573.82 lakhs during the previous year registering growth of a 89%. The net profit of the company has increased from Rs.96.64 lakhs to Rs.148.48 lakhs, registering growth of 54%. The management has reoriented its strategies in the line of business and has inducted new director on the board with talent and good contacts in the industry. The management is hopeful of confident of earning more and more profits in the current year and in the years ahead.

Indian & Global Economy:

We are witnessing a reverse trend in innovation and the emerging economies making an impact on business in the advanced markets.

The global economy seems to be recovering after the recent economic shock. The global economies including Indian economy are expected to continue to sustain themselves in the short-term, as the effect of stimulus programs is yet to bear fruit and tax cuts are working their way through the system in 2010. Due to the strong position of liquidity in the market, large corporations now have access to capital in the corporate credit markets and the innovation hub markets; growth momentum is the order of the day in emerging economies like India despite of global financial crisis.

In order to keep up the economic growth during times of the worst recession, government authorities in India have announced the stimulus packages to bolster economic growth. To finance the stimulus packages, the Indian government has raised over $100 billion over the last four quarters. The country's public debt, according to the Reserve Bank of Indian (RBI), has zoomed to more than 50%.

The GDP of India was expected to reach 7.2% as estimated by RBI but the economy surpassed the figure and reported a 7.4% growth for the year ended 2010.

FUTURE OUTLOOK:

Your Company has plans to diversify in to non-conventional energy activities and with the overall sectoral growth indices forecast future growth of your company.

DIVIDEND:

Your directors express their inability to recommend any dividend for the financial year 2009-2010.

INCREASE IN AUTHORIZED AND PAID-UP EQUITY CAPITAL:

During the year under review the Authorized Equity share capital of your company increased from Rs. 6,00,00,000 (Rupees Six Crores only) divided into 60,00,000 (Sixty lakhs only) Equity shares of Rs. 10/- (Rupees ten only) each to Rs.14,00,00,000 (Fourteen Crores only) divided into 1,40,00,000 (One crore and forty lakhs only) equity shares of Rs. 10/- (Ten only) .

The paid-up Equity capital of your company is 1,24,48,100 Equity shares of Rs.10/- each.

SHIFTING OF REGISTERED OFFICE: &

During the year under review the company registered office is shifted within city limits of Hyderabad from:

503, Harmony Heights, 7-1-67, DK Road,

Ameerpet, Hyderabad -

Andhra Pradesh-500016 .

To:

#3rd floor ,302, Sahiti Arcade, Behind police station,

S.R.Nagar, Hyderabad

Andhra Pradesh-500038.

CHANGE OF REGISTRAR AND TRANSFER AGENTS:

The Company appointed M/s Venture Capital and Corporate Investments Pvt. Limited as its Registrar and Share Transfer Agents since the old RTA, Ikon Visions (P) Limited is non existing. The address of the new RTA is given below:

Venture Capital and Corporate Investments Pvt. Limited

12-10-167, Bharatnagar

Hyderabad-500018

Ph: 040-23818475/476

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

LISTING:

The Equity Shares of your company are listed on The Bangalore Stock Exchange Limited .

DIRECTORS:

In accordance with the Companies Act, 1956 read with Articles of Association of the company the Director Mr. S.Nagaraju retires by rotation and is eligible for reappointment.

Your Board recommends the re-appointment of the Director above.

Ms. Sudheer.S was appointed as an additional Director by the Board of Directors w.e.f 15.01.2010 .According to the provisions of Section 260 of the Companies Act, 1956, he holds office upto the date of the ensuing Annual General Meeting. As required under Section 257 of the Companies Act, 1956 the Company has received a notice from a Member signifying his intention to propose the appointment of Mr.Sudheer.S as a director.

The Board is also being strengthened by the induction of Mr.Sudheer.S as a Director, details of which are available in the accompanied notice of the Annual General Meeting subject to the approval of the members of the Company at the ensuing Annual General Meeting

Brief profile of the Directors is given in the Corporate Governance Report attached to this Report

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certifies and confirms that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the Annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

A. Conservation of Energy

Adequate measures have been taken to reduce energy consumption, wherever possible. Total energy consumption and energy consumption per unit of production is not applicable as company is not included in the industries specified in the schedule

B. Technology Absorption

1. Research and Development (R&D) : : Nil

2. Technology absorption, adoption and innovation : Nil

PARTICULARS OF EMPLOYEES

As the Company is not having any employee during the year under review which attracts provisions of Section 217 (2A) of the Companies Act, 1956, the disclosures required to be made under the said section.

CODE OF CONDUCT

The Code has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them.

AUDITORS

M/s Hariharan & Associates., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible have expressed their willingness for re-appointment. Your directors propose the appointment of M/s Hariharan & Associates, Chartered Accountants, as statutory auditors to hold office until the conclusion of the next Annual General Meeting of the company.

CORPORATE GOVERNANCE

As a listed company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, Forms part of this Report as Annexure.

ACKNOWLEDGEMENTS

Your directors would like to express their grateful appreciation for assistance and co-operation received from clients, banks, investors, Government, other statutory authorities and all others associated with the company. Your directors also wish to place on record their deep sense of appreciation for the excellent contribution made by the employees at all levels, which enabled the company to achieve sustained growth in the operational performance during the year under review.

Declaration by Managing Director of affirmation by Directors and senior Management personnel of compliance with the code of conduct

The shareholders

I, M. Manivannan, Managing Director of the Company do hereby declare that the Directors and senior management of the Company have exercised their authority and powers and discharged their duties and functions in accordance with the requirements of the code of conduct as prescribed by the company and have adhered to the provisions of the same.

For and on behalf of the Board of Directors

M/s. AGS Infotech Limited

Sd/-

Place: Hyderabad M Manivanan

Date: 15.06.2010 Managing Director

---

Mar 31, 2009

The Directors have pleasure in presenting their 13th Annual Report together with the audited statement of accounts for the year ended 31st March 2009.

REVIEW OF OPERATIONS:

The summary of operations during the year are given below:

(Rupees in Lacs)

2008-09 2007-08

Income 1573.82 1002.58

Work in Progress - -

Expenses 1407.54 884.66

Bad Debts Written Off - -

Misc Exp Written Off - -

Profit Before Interest and 166.28 866.53 Depreciation

Depreciation 42.81 22.21

Interest and Finance Charges

Profit Before Tax 123.47 95.71

Profit After Tax 196.64 71.76

REVIEW OF PERFORMANCE:

As can be seen from the above, the company made a turnover of Rs.1573.83 lacs during the year as against Rs.1002.59 lacs during the previous year registering the growth of 57%. The net profit of the company has increased from Rs 71.76 lacs to Rs 96.64 lacs, registering the growth of 35 %. The management has reoriented its strategies in the line of business and has inducted new directors on the board with talent and good contacts in the industry. The management is hopeful of confident of earning more and more profits in the current year and in the years ahead.

Term Loan:

The Company has no Secured Term Loan or unsecured Loan outstanding at the end of FY 2008-09.

CONSERVATION OF ENERGY:

The Company not being a manufacturing Company, inclusion of particulars regarding conservation of energy is not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

There is foreign exchange earnings of Rs Nil during the year and out go is Rs Nil lacs.

PARTICULARS OF EMPLOYEES:

Your Company has not employed any person drawing salary more than Rs.2,00,000/- per month or Rs. 24,00,000/- per year. Hence particulars under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is Nil.

AUDITORS:

M/s. Hariharan & Associates, Chartered Accountants, Bangalore, Auditors of the Company retires at the ensuing Annual General Meeting and have given their willingness to be the auditor of the company. Board will decide the remuneration of the auditors at its meeting separately.

Audit remark: Regarding qualifications made by the auditors, the notes are self- explanatory.

1. Number of Board meetings held during the financial year 2008-09 and dates:

i) 31st July, 2008

ii) 6th Sep, 2008

iii)29th Sep, 2008

iv) 31st Oct, 2008

v) 22nd Dec 2008

vi) 30th Jan, 2009

2. Audit Committee:

During the financial year, audit committee met four times on the following dates:

1. 30th April, 2008

2. 31st July, 2008

3. 29th October, 2008

4. 29th January, 2009

Role & responsibilities:

Internal Audit

a. Reviewing the adequacy of internal control systems with the management, external and internal auditors.

b. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

c. Reviewing and discussing with internal auditors and management on significant issues/ findings arising from the internal audit reports and follow up thereon.

d. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

External Audit

e. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services.

f. Discussion with external auditors before the audit commences about nature and scope of audit.

g. Post-audit discussion with external auditors to ascertain any area of concern. Review of performance of the external auditors.

General

h. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

i. Reviewing with management the annual financial statements before submission to the Board, focusing primarily on

- Any changes in accounting policies and practices.

- Major accounting entries based on exercise of judgment by management.

- Qualifications in draft audit report.

- Significant adjustments arising out of audit.

- The going concern assumption.

- Compliance with accounting standards.

- Compliance with stock exchange and legal requirements concerning

financial statements.

- Any related party transactions.

j. Reviewing with the management, external and internal auditors, adequacy of internal control systems.

k. Reviewing the Company's financial and risk management policies.

I. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

m. Identifying and reporting of the potential risk factors with necessary remedial measures, if any.

In addition to the above, the Audit Committee will undertake such other duties as the Board of Directors delegates to it, and will report, at least annually, to the Board regarding the Committee's examinations and recommendations.

6. General Body Meetings:

Last three AGMs dates are given below:

i) 12th AGM 2007-08 held on 30th September, 2008 at 10.30 AM.

ii) 11th AGM 2006-07 held on 29th September, 2007 at 10.00 AM.

iii) 10th AGM 2005-06 held on 29th September, 2006 at 10.00 AM.

Chairman of the Audit Committee was present in all the Annual General Meetings.

7. Disclosures:

(a) Disclosures on material significant related party transactions i.e. transactions of the company of material nature with its promoters, the directors or the management, their subsidiaries etc., that may have potential conflict with the interests of the company at large.

There was no such transaction during the year.

(b) Details of non-compliance by the company, penalties, and strictures imposed on the company by stock exchange or SEBI or any other statutory authorities on any matter related to capital markets, during the last three years: Nil

Nomination Facility:

Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the company. As permitted under section 109A of the Companies Act,1956, are requested to submit to the Company the prescribed form 2B for this purpose.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. Appropriate accounting policies have selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGMENT:

Your Directors wish to place on the record their appreciation and gratitude to our Bankers, Share Holders, Customers, Employees and various Statutory Authorities for their support to the Company.

For and on behalf of the Board

M Manivanan R.Venkatesh

Managing Director Director

Place: Hyderabad

Date : 21/08/2009

---

Mar 31, 2007

The Directors have pleasure in presenting their 11th Annual Report together with the audited statement of accounts for the year ended 31st March 2007.

REVIEW OF OPERATIONS:

The summary of operations during the year are given below:

(Rupees in Lacs)

2006-07 2005-06

Income 568.75 15.09

Work in Progress - -

Expenses 503.56 10.26

Bad Debts Written Off - -

Misc. Exp Written Off 3.65 3.65

Profit/ (Loss) Before Interest 65.18 (1.86) and Depreciation

Depreciation 3.81 2.97

Interest and Finance Charges

Profit Before Tax 57.71 (1.79)

Profit After Tax 57.71 (1.79)

REVIEW OF PERFORMANCE:

As can be seen from the above, the company made a turnover of Rs.568.75 lacs during the year as against Rs.15.09 lacs during the previous year registering the robust growth. The net profit of the company has increased many folds from loss to Rs 57.71 lacs, registering a turnaround growth, it is actually the year where the company has turnaround and its given the results in positive. The management has reoriented its strategies in the line of business. The management is hopeful of confident of earning more and more profits in the current year and in the years ahead.

Term Loan:

The Company has no Secured Term Loan or unsecured Loan outstanding at the end of FY 2006-07.

CONSERVATION OF ENERGY:

The Company not being a manufacturing Company, inclusion of particulars regarding conservation of energy is not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

There is foreign exchange earnings of Rs Nil during the year and out go is Rs Nil lacs.

PARTICULARS OF EMPLOYEES:

Your Company has not employed any person drawing salary more than Rs.2,00,000/- per month or Rs. 24,00,000/- per year. Hence particulars under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is Nil.

AUDITORS:

M/s. Hariharan & Associates, Chartered Accountants, Bangalore, Auditors of the Company retires at the ensuing Annual General Meeting and have given their willingness to be the auditor of the company. Board will decide the remuneration of the auditors at its meeting separately.

Audit remark: Regarding qualifications made by the auditors, the notes are self- explanatory.

1. Number of Board meetings held during the financial year 2006-07 and dates:

i) 21st April 2006

ii) 30th July, 2006

iii) 1st Sep, 2006

iv) 27th Sep, 2006

v) 28th Oct, 2006

vi) 31st Jan , 2007

vii) 24th March 2007

2. Audit Committee:

During the financial year, audit committee met four times on the following dates:

1. 20th April, 2006

2. 24th July, 2006

3. 23rd October, 2006

4. 30th January, 2007

Role & Responsibilities :

Internal Audit

a. Reviewing the adequacy of internal control systems with the management, external and internal auditors.

b. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

c. Reviewing and discussing with internal auditors and management on significant issues/ findings arising from the internal audit reports and follow up thereon.

d. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

External Audit

e. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services.

f. Discussion with external auditors before the audit commences about nature and scope of audit.

g. Post-audit discussion with external auditors to ascertain any area of concern. Review of performance of the external auditors.

General

h. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

i. Reviewing with management the annual financial statements before submission to the Board, focusing primarily on

- Any changes in accounting policies and practices.

- Major accounting entries based on exercise of judgment by management.

- Qualifications in draft audit report.

- Significant adjustments arising out of audit.

- The going concern assumption.

- Compliance with accounting standards.

- Compliance with stock exchange and legal requirements concerning

financial statements.

- Any related party transactions.

j. Reviewing with the management, external and internal auditors, adequacy of internal control systems.

k. Reviewing the Company's financial and risk management policies.

l. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

m. Identifying and reporting of the potential risk factors with necessary remedial measures, if any.

In addition to the above, the Audit Committee will undertake such other duties as the Board of Directors delegates to it, and will report, at least annually, to the Board regarding the Committee's examinations and recommendations.

6. General Body Meetings:

Last three AGMs dates are given below:

i) 10th AGM 2005-06 held on 29th Sep 2007 2005 at 10.30 AM.

i) 9th AGM 2004-05 held on 29th September 2006 at 10.00 AM.

ii) 8th AGM 2003-04 held on 26th September 2004 at 10.00 AM.

Chairman of the Audit Committee was present in all the Annual General Meetings.

7. Disclosures:

(a) Disclosures on material significant related party transactions i.e. transactions of the company of material nature with its promoters, the directors or the management, their subsidiaries etc., that may have potential conflict with the interests of the company at larg e.

There were no such transactions during the year.

(b) Details of non-compliance by the company, penalties, strictures imposed on the company by stock exchange or SEBI or any other statutory authorities on any matter related to capital markets, during the last three years : Nil

Nomination Facility:

Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the company. As permitted under section 109A of the Companies Act,1956, are requested to submit to the Company the prescribed form 2B for this purpose.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. Appropriate accounting policies have selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGMENT:

Your Directors wish to place on the record their appreciation and gratitude to our Bankers, Share Holders, Customers, Employees and various Statutory Authorities for their support to the Company.

For and on behalf of the Board

S Nagaraju R.Venkatesh

Managing Director Director

Place: Hyderabad

Date : 31/08/2007