Directors Report of Micro Technologies (India) Ltd.

Sep 30, 2013

The Directors are pleased to present the Twenty-first Annual Report and the Audited Accounts for the Financial Year ended September 30, 2013.

FINANCIAL RESULTS

The financial performance of your Company for the 18 months ended September 30th , 2013 is summarized below: *Previous years'' figures have been regrouped wherever necessary to bring them in line with the current year''s representation of figures Standalone 18 Consolidated 18 months period months period ended Standalone ended Consolidate Particulars September- 2013 2011-12 September 2011-2012

Turnover Sales 48253.42 45548.27 105861.44 86188.37

Operating Profit/(Loss) (5034.07) 8422.75 (2145.51) 21493.18

Less: Interest/ Finance Cost 6790.48 2298.94 8823.05 3090.64

Less: Exceptional Items 1969.01 1969.01

Profit/(Loss) Before Tax (PBT) (11824.55) 4154.8 (10968.55) 16433.53

Current Year- Provision for Tax 823.39 2028.95

Deferred Tax- Provision for Tax (723.09) 384.56 (268.46) 1025.29

Income Tax of earlier years 208.7 (838.63) 208.7

MAT credit entitlement (127.46)

Net Profit/(Loss) before Minority

Interest (11101.46) 2738.15 (9861.46) 13298.05

Less Minority Interest 303.84

Net Profit/(Loss) after Minority

Interest (11101.46) 2738.15 (9861.46) 12994.21

Balance of Profit from previous year 28256.42 25705.7 44936.09 32276.82

Amount available for Appropriation 17154.96 28443.85 35074.63 45271.03

Transferred to General Reserve

Proposed Dividend 161.27 288.19

Dividend Tax 26.16

*Previous years'' figures have been regrouped wherever necessary to bring them in line with the current year''s representation of figures

REVIEW OF PERFORMANCE

The Year 2012-2013 has been a very challenging year.

On a standalone basis, your Company achieved Total Income of Rs. 48253.42 Lac during the year under report as against rs.45548.27 Lac during the previous year, representing an increase of 5.93 %. The Net Profit After Tax stood at Rs. 11101.46 compared to Rs. 2738.15 Lac in the previous year.

On a consolidated basis, your Company achieved Total Income of Rs. 105861.44 Lac during the year under the report and

Net Loss After Tax stood at Rs. 9861.46 Lac.

Overall, 2012-13 has been a very challenging year. Your Company withstood the global economic downturn stoically. The

Company was aggressive in its quest for new contracts, executed on its full services strategy and maintained pricing discipline. This helped to deliver 5.93% revenue growth for the year along with overall performance.

DIVIDEND

No dividends were declared during the Financial Year 2012-2013.

DEPOSITS

The Company has accepted deposits and complied with the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 made thereunder at time of acceptance of deposits.

SUBSIDIARIES

Your Company has two major subsidiaries viz. Micro Secure Solutions Limited and Micro Retail Limited incorporated in 2007 and 2008 respectively. Your Company holds more than 90% of the total equity share capital of these companies.

During the period under review the management of the company has taken the following decisions. Namely

1.Consolidation of business in MTIL Mumbai- Due to the bad economic scenario resulting in decline of business opportunities resulting in the decline in margin of profit and also in some branches incurring of losses the management of the company decided to shift the entire operation of the business and to have the better control on the operation , reduction in the operational cost from their branches to Mumbai including taking over of the assets , liabilities and fixed assets to optimistically utilize there strength in Mumbai main subsidiary. 2.Closure shift of foreign branches In view of the losses being incurred and lack of business opportunities the management has decided to close all the foreign branches one of the branches MSSL branch has been closed during the current financial year to start with and balances branches in the current financial year.

3.Discontinuation of some of the verticals of business segment and as a result accounting of resultant losses in the books The management of the company due to the bad market condition and up gradation of the latest technology and certain product getting outdated has decided to discontinue certain verticals of the business.

4.Technical and financial evaluation of entire evaluation of entire inventories both stock n wip and accounting of devaluation in the value of stock due to drastic technical change resulting into devaluation of stock of Rs. 5,762.27 Lacs on standalone basis.

5.Accounting of long overdue receivable pertaining to disclosure/slowed down business vertical as bad and doubtful. Giving effect of short provision/non provision of depreciation on some of the intangible assets of the company of the FY 2011-12 and given retrospective effect of the same in the financial result amounting to Rs. 3248.2 lacs from the financial result.

DIRECTORS & OFFICERS

1) Mr. Aditya Sekhar has been appointed as an Additional Director and as Joint Managing Director w.e.f 1st October, 2012 and then he was designated as the Chairman and Managing Director of the company w.e.f. 19th May, 2013. Dr. P Sekhar, Founder Chairman & Managing Director has retired w.e.f 19th May, 2013. He is now the Chairman Emeritus of the Company.

2) Ms. Jayanthi Sekhar, Executive Director of the Company resigned from the office of directorship w.e.f 13th August, 2013 and Mr. Ganapathy V, is appointed as Whole –Time Director of the Company w.e.f 13th August, 2013.

3) Mr. A.R.Kale, Dr. R.S. Deshmukh, and Mr. Prakash Bhave, Independent Directors resigned from the office w.e.f. 30th May, 2013, 13th August, 2013 and 26th April, 2013 respectively. Mr. Raghvendra Raichur, alternate director to Prof. Paul Jerome Coleman, Independent Director resigned from the office of alternate directorship w.e.f 26th April, 2013.

4) Mr. Sudhir Koppikar, Mr. Bhavin Parikh and Mr. Satya Swaroop, were appointed as Independent Directors of the Company w.e.f. 26th April, 2013, 26th April, 2013 and 13th August, 2013 respectively.

5) Ms. Neha Gaur, Company Secretary and Compliance Officer of the Company resigned from the office w.e.f. 28th February, 2013 and Mr, Ganapathy V, was appointed as Compliance Officer w.e.f. 25th July, 2013.

6) Mr. Paul Jerome Coleman Jr., Director of the Company who retires by rotation and being eligible offers himself for re-appointment at this ensuing Annual General Meeting. Your directors recommend his re-appointment.

MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR:

1.Capital Work-In-Progress (CWIP)

Capital Work-In-Progress (CWIP) includes tangible assets of Rs. 67.92 cr. is for managing commercial property at Vashi, Navi Mumbai. The expenditure incurred is preliminary in nature and the same would be capitalized and allocated project wise.

The Directors have considered the probability of the project proceeding by assessing the commercial viability of the project, the expectation of obtaining finance and the requirements of the regulatory processes.

Some facilities / assets do remain idle for some time due to technical or economical reason. Sometimes it requires considerable time to bring the assets for its intended use. However, idle assets no longer required, are expensed after proper scrutiny at the year end.

2. Inventory/Work -In-Progress

Company has invested heavily and carrying inventory worth 645.60 Cr on consolidated basis after technical evaluation and based on expert opinion. Management is confident of realizing the value with certain required investment to keep upto date the said inventory. If realized the value of realization, shall not be less than the amount stated in books of account.

3. Human Resources Development

Your company''s human resource strategies and practices are designed to ensure that they integrate with and support the corporate business strategies of your company. The Board wishes to place on record its appreciation of the contribution made by all employees in ensuring a high level of performance for the growth and development of the company during the year.

4. Extraordinary General Meeting

Your Company has not convened any Extra-ordinary General Meeting (EGM) during this period from the last AGM.

5. Delisting/Fresh listing of Securities

The shares of your company will continue to be listed on the Bombay Stock Exchange (BSE) and the National Stock exchange (NSE), which has nation-wide trading terminals and therefore, provides full liquidity to the investors.

The details regarding conversion of FCCB to be mentioned The number of FCCBs outstanding as on September 30, 2013 are 120.

6. Directors'' Responsibility Statement

As required by sub-section (2AA) of Section 217 of the Companies Act, 1956, the Directors state:

(a)That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b)That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the September 30th 2013 and of the profit or loss of your Company for the period;

(c)That 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 your Company and for preventing and detecting fraud and other irregularities; and

(d)That the Directors had prepared the annual accounts on a going concern basis.

7.Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT

As per Section 212 (8) of the Companies Act, 1956, the Company vide a Board Resolution passed on 29th November, 2013 has been exempted from attaching the Directors'' Report, Balance Sheet and Profit and Loss Account of our subsidiaries such as an attachment as however we present the Audited Consolidated Financial Statements in the Annual Report. Accordingly, the Annual Report does not contain the Financial Statements of these subsidiaries. We will make available the Audited Annual Accounts and related information of subsidiaries, where applicable, upon request by any of our investors. These documents will also be available for inspection during business hours at our Registered Office at Mahape, Navi Mumbai, Maharashtra and also at the Registered Office of the subsidiaries at Andheri, Mumbai, Maharashtra.

CORPORATE GOVERNANCE

Your Company is committed to maintaining the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India''s and the Stock Exchange''s Corporate Governance practices and have implemented all the stipulations prescribed. Your Company has implemented several best corporate governance practices as prevalent globally. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

Further, the Company has also engaged the world renowned Legal Consultants – LEGASIS which stands for Legal Systems and Integrated Solutions. Legasis is a process-driven organization and stands apart from other LPO companies because of its distinctive IT-enabled legal support services. Legasis'' core strength lies in its ability to deliver value to law firms and corporate counsels by leveraging the industry expertise and legal framework. They provide the following services: Legal Research, Document Review, Contract Management, Legal & Regulatory Compliance Management, Due Diligence Support, IPR Support Services, Litigation Support, Document Management, and Corporate Secretary Services.

AUDITORS

The Auditors, M/s. Laxmikant Kabra & Co, Chartered Accountants, Thane have expressed their willingness for re-appointment as auditors of your Company at the ensuring Annual General Meeting. The certificate from M/s Laxmikant Kabra & Co, Chartered Accountants, Thane has been received to the effect that their appointment, if made, would be within the limits as prescribed under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGMENTS

Your Directors wish to express their appreciation of the continued co-operation and support of the Central and State Governments, Bankers, Financial Institutions, Customers, Dealers, Suppliers, Consultants and all the Shareholders. The Directors also acknowledge and thank all the employees for their hard work, dedication and commitment.

For and on behalf of the Board of Directors

Sd/-

Aditya Sekhar

Chairman & Managing Director

Place: Navi Mumbai , 29th November 2013

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Mar 31, 2012

The Directors are pleased to present the Twentieth Annual Report and the audited accounts for the financial year ended March 31st, 2012.

FINANCIAL RESULTS

The financial performance of your Company for the financial year ended March 31st, 2012 is summarized below:

(Rupees in Lakhs)

Standalone Standalone Particulars 2011-2012 2010-2011 Consolidated

Turnover - Sales 45548.27 37429.29 86188.37

Operating Profit 8422.75 10001.09 21493.18

Less: Interest / Finance Cost 2298.94 1528.12 3090.64

Less: Exceptional Items 1969.01 2497.95 1969.01

Profit Before Tax (PBT) 4154.80 5975.02 16433.53

Provision For Tax - Current Year 823.39 1290.85 2028.95

Provision For Tax - Deferred Tax 384.56 258.26 1025.29

Income Tax of earlier years 208.70 11.58 208.70

MAT credit entitlement (127.46)

Net Profit before Minority Interest 2738.15 4414.33 13298.04

Less: Minority Interest - - 303.84

Net Profit after Minority Interest 2738.15 4414.33 12994.21

Balance of profit from previous year 25705.70 21947.08 32276.82

Amount available for Appropriation 28443.85 26361.41 45271.02

Transferred to General Reserve - 331.07 -

Proposed Dividend 161.27 278.39 288.19

Dividend Tax 26.16 46.24 46.75

*Previous years' figures have been regrouped wherever necessary to bring them in line with the current year's representation of figures

REVIEW OF PERFORMANCE

You would be pleased to note that your Company has achieved significant growth during the last financial year. The year gone by has been a good year with company closing on a profitable note

On a standalone basis, your Company achieved Total Income of Rs. 45548.27 Lacs during the year under report as against Rs. 37429.29 Lacs during the previous year, representing an increase of 21.69%. The Net Profit After Tax stood at Rs. 2738.15 Lacs compared to Rs. 4414.33 Lacs in the previous year.

On a consolidated basis, your Company achieved Total Income of Rs. 86188.37 Lacs during the year under the report and Net Profit After Tax stood at Rs. 13298.04 Lacs.

Overall, 2011 -12 has been a very rewarding year. Your Company emerged stronger out of the global economic downturn as it stayed close to its customers and helped them in the recovery process. The Company was aggressive in its quest for new contracts, executed on its full services strategy and maintained pricing discipline. This helped to deliver 21.69% revenue growth for the year along with overall performance.

DIVIDEND

Your Directors have recommended a dividend of Re. 1/- per Equity Share @ 10% of the Equity share capital (last year Rs. 2 per Equity Share @ 20 %) for the financial year ended March 31st, 2012 subject to approval by shareholders at the ensuing Annual General Meeting. The dividend will be paid to members whose names appear in the Register of Members as on Friday, 8th June, 2012; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend pay out for the year under review has been formulated, keeping in view your Company's need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

DEPOSITS

The Company has accepted deposits and complied the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 made there under.

SUBSIDIARIES

Your Company has two subsidiaries viz; Micro Secure Solutions Limited and Micro Retail Limited incorporated in the year 2007 and 2008 respectively. Your Company holds more than 90% of the total equity share capital of these companies.

Further your Company has incorporated in the month of April 2011, a new wholly owned subsidiary Known as Micro Technologies FZE and branch office in the tax free zone of Ras-AI-Khaimah in Dubai for better control and administration of the huge market potential in the country of Dubai.

During this year 2011-12,M/s, Micro Retail FZE, a subsidiary of Micro Retail Limited have been established at Ras Al Khaimah, Dubai M/s, Micro Secure Solutions (HK) Limited, a Subsidiary of Micro Secure Solutions Limited at Hongkong.

Ras Al Khaimah is well reputed for its affordability, flexibility and broad geographical reach, they are rapidly emerging as the preferred business hub in the region, from which investors, of all origins and industries, can easily access and branch into the emerging markets.

DIRECTORS

Mr. A. R. Kale, Director of the Company who retires by rotation and being eligible offers himself for reappointment at this ensuing Annual General Meeting. Your directors recommend his re-appointment.

A brief write-up on the directors seeking re-appointment on account of retirement by rotation and regularization has been given in this Annual Report under the heading 'Corporate Governance1.

CHANGE OF COMPANY SECRETARY

There has been a change in the Company Secretary of the Company for the year ended March 31st, 2012. The appointment of Ms. NehaM. Gauras Company Secretary will take effect from May 23rd, 2012

MATERIAL CHANGES AND COMMITMENTS DURING THEYEAR:

1. Conversion of warrants:

On May 28th, 2011, 4,08,000 equity shares were allotted to promoter group upon exercise of right of conversion of share warrants which had been issued in the Annual General Meeting dated September 30th, 2009 at a price of Rs 138.29/- In the Annual General Meeting held on June 28th 2011, the Company had taken approval of shareholders for issue of 15,00,000 convertible warrants on Preferential basis to Promoter and Non-Promoter Group which had been allotted on December 7th 2011.

Further during the year, on March 24th, 2012, first tranche conversion option was exercised for conversion of 5,75,000 warrants into Equity Shares of the Company to promoter and non-promoter group on preferential basis.,.

2. Other Conversions

Conversion of Compulsorily Convertible Debentures (CCDs)

The Company had issued CCDs worth Rs. 20 crores to HT Media Ltd by seeking approval of shareholders through a process of postal ballot held in January 2011. The same has been converted into 12,24,439 equity shares on 11th February 2012.

Conversion of Foreign Currency Convertible Bonds (FCCB)

There has been no conversion of FCCBs during this year.

3. Capital Work-in-Progress (CWIP)

Capital Work-in-Progress (CWIP) includes tangible assets of Rs. 73.70 core. Expenditure incurred is Preliminary in nature and the same would be capitalized after establishing the commercial viability of the project and would be allocated project wise).

The Directors have considered the probability of the project proceeding by assessing the commercial viability of the project, the expectation of obtaining finance and the requirements of the regulatory processes.

Some facilities / assets do remain idle for some time due to technical or economical reason. Sometimes it requires considerable time to bring the assets for its intended use. However, Idle assets no longer required, are expensed after proper scrutiny at the year end.

4. Loan and Advances

Your company has targeted high growth sectors such as infrastructure & logistics, Oil and Gas, telecommunication, education, rural Informatics, for this we have developed and enhanced our product line, Considering the pipeline of good business opportunity and for the brand promotion, we have given Rs.108.54 crore in this year as an Advance to Supplier for Critical Equipments and Components which are required for the integration of the Products, considering the pipeline of good business opportunity an for the brand promotion. This year your company also bagged a huge project from the telecom sector. Your company has given Rs. 5 crore as an Advance for Marketing and Brand Promotion to HT Media considering its plan to penetrate the Indian and International Market.

We have a Strong Relationship with our Suppliers and also hope to create same relationship in new marketplace over wide geographies.

No individual loan or advance has terms and conditions that materially affect the amount, timing or certainty of the consolidated cash flows of the Group.

Directors believe in same philosophy of mutual understanding and support to conquer the market together. They believe in equal growth of company, Investors and Partners (Supplier, Franchisee) together. None should be felt left behind. We believe in idea of growing as a family rather individually.

5. Human Resources Development

Your company's human resource strategies and practices are designed to ensure that they integrate with and support the corporate business strategies of your company. The Board wishes to place on record its appreciation of the contribution made by all employees in ensuring high level of performance and growth during the year.

6. Extraordinary General Meeting

Your Company has not convened any Extra-ordinary General Meeting during this period from the last AGM.

7. Delisting/Fresh listing of Securities

The shares of your company will continue to be listed on The Stock Exchanges, Bombay Stock Exchange (BSE) and The National Stock exchange (NSE), which has nation-wide trading terminals and, therefore, provides full liquidity to the investors.

The Global Depository Receipts (GDRs) issued by your Company during the year are listed with Luxembourg Stock Exchange, (LSE), Foreign Currency Convertible Bonds (FCCB's) issued by your Company are listed with Singapore Stock Exchange, (SGX).

The details regarding Conversion of FCCB to be mentioned

The number of FCCBs outstanding as on March 31 st, 2012 are 120.

8. Directors' Responsibility Statement

As required by sub-section (2AA) of Section 217 of the Companies Act, 1956, the Directors state:

(a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for the period;

(c) That 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 your Company and for preventing and detecting fraud and other irregularities; and

(d) That the directors had prepared the annual accounts on a going concern basis.

9. Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT

As per Section 212 (8) of the Companies Act, 1956, The Company vide a Board Resolution passed on 24th March, 2012 has been exempted from attaching the Directors' Report, Balance Sheet and Profit and Loss Account of our subsidiaries such as an attachment as however we present the audited Consolidated Financial statements in the Annual Report. Accordingly, the Annual Report does not contain the financial statements of these subsidiaries. We will make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our investors, these documents will also be available for inspection during business hours at our Registered Office in Mahape, Navi Mumbai, Maharashtra and also at the Registered Office of the subsidiaries in Andheri, Mumbai Maharashtra.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India's and the Stock Exchange's Corporate Governance practices and have implemented all the stipulations prescribed. Your Company has implemented several best corporate governance practices as prevalent globally. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The Company has on board M/s Makarand M. Joshi & Co, a Practising Company Secretaries Firm, based in Mumbai to render advisory services and supervise the overall statutory compliances and adherence to corporate laws within the secretarial function of the Company. They had a rich and varied experience of past eleven years in the areas of Statutory compliance services, Consultancy and services in aspects of Merger & Acquisitions, takeover and joint ventures, due - diligence audit, public issue/ private placement consultancy etc.

Further the Company has also engaged the world renowed Legal Consultants - LEGASIS, which stands for Legal Systems and Integrated Solutions. Legasis is a process driven organization and stands apart from other LPO companies because of its distinctive IT-enabled legal support services Legasis1 core strength is in its ability to deliver value to law firms and corporate counsel by leveraging the industry expertise and legal framework. They provide the following services: Legal Research, Document Review, Contract Management, Legal & Regulatory Compliance Management, Due Diligence Support, IPR Support Services, Litigation Support, Document Management, and Corporate Secretary Services.

The company has engaged Ernst & Young Pvt ltd w.e.f Feb 2011, as a advisor on key identified indirect tax related matters.

AUDITORS

The Auditors, M/s. K.M. Gupta & Co., Chartered Accountants, Navi Mumbai have been the statutory auditors of the company for the last three years. The company has received the notice from a member of the company recommending the appointment of M/s Walker, Chandiok & Co. and M/s Laxmikant Kabra & Co. as new joint audtors of the company at the20th Annual General meeting.

The certificates from M/s Walker, Chandiok &Co, Chartered Accountants, Mumbai and M/s Laxmikant Kabra & Co. Thane have also been received to the effect that their appointment, if made, would be within the limits as prescribed under Section 224(1 B) of the Companies Act, 1956.

ACKNOWLEDGMENTS

Your Directors wish to express their appreciation of the continued co-operation and support of the Central and State Governments, Bankers, Financial Institutions, Customers, Dealers, Suppliers, Consultants and all the shareholders. The Directors also acknowledge and wish to thank for the hard work, dedication and commitment to all the employees.

For and on behalf of the Board of Directors Sd/- Sd/- Dr. P. Sekhar Ms. Jayanthi S.

Chairman & Managing Director Executive Director

Place: Navi Mumbai

Date: 23rd May, 2012

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Mar 31, 2011

The Directors are pleased to present the Nineteenth Annual Report and the audited accounts for the financial year ended March 31,2011.

FINANCIAL RESULTS

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

(Amount in Rupees)

Standalone Standalone Consolidated Particulars 2010-2011 2009-2010

Turnover - Sales & Other Incomes 3759.8 3126.17 6015.92

Operating Profit (PBIDT) 1267.64 1254.83 1773.93

Less: Depreciation & Interest 6701,39 4603.3 734.062

Profit Before Tax (PBT) 5975.01 7945.0 1039.86

129.08 141.50 223.75 Provision For Tax - Current Year 25.82 16.62 34.26

Provision For Tax - Deferred Tax

Income Tax of earlier years 1.1 -- 2.5

Net Profit before Minority Interest 4414.32 636.38 779.25

Less: Minority Interest -- 0.00 2.76

Net Profit after Minority Interest 441.432 636.38 776.49

Balance of profit from previous year 2194.70 1636.23 2536.17

Amount available for Appropriation 2636.14 2272.61 3312.67

Transferred to General Reserve 33.10 47.72 38.14

Proposed Dividend 27.80 25.79 40.16

Dividend Tax 4.6 4.3 6.67

Balance Carried to Balance Sheet 2570.57 2194.70 3327.68

REVIEW OF PERFORMANCE

You would be pleased to note that your Company has achieved significant growth during the last financial year.

On a standalone basis, your Company achieved Total Income of Rs. 3759.80 million during the year under report as against Rs. 3126.17 million during the previous year, representing an increase of 20.19%. The Net Profit After Tax stood at Rs. 441.43 million compared to Rs. 636.38 million in the previous year.

On a consolidated basis, your Company achieved Total Income of Rs. 6015.92 million during the year under the report and Net Profit After Tax stood at Rs. 776.49 million.

Overall, 2010-11 has been a very satisfying year. Your Company emerged stronger out of the global economic downturn as it stayed close to its customers and helped them in the recovery process. The Company was aggressive in its quest for new contracts, executed on its full services strategy and maintained pricing discipline. This helped to deliver 20.19% revenue growth for the year along with overall performance.

DIVIDEND

Your Directors have recommended a dividend of Rs. 2 per Equity Share @ 20%of the Equity share capital (last year Rs. 2 per Equity Share @ 20%) for the financial year ended March 31 st, 2011 subject to approval by shareholders at the ensuing Annual General Meeting. The dividend will be paid to members whose names appear in the Register of Members as on June, 2011; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend pay out for the year under review has been formulated, keeping in view your Companys need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 made thereunder.

SUBSIDIARIES

Your Company has two subsidiaries viz; Micro Secure Solutions Limited and Micro Retail Limited incorporated in the year 2007 and 2008 respectively. Your Company holds more than 95% of the total equity share capital of these companies.

Further, in view of Companys increased presence in Australia, your Company has incorporated a Pty Ltd Company in the Country of Australia by the name of Micro Technologies limited. Your Company holds a 45% stake in the equity of this Company. The operations of this company are remotely controlled by Mr. Aditya S. the Chief Strategic Officer and a Director in this Australian Company.

Further, your Company has incorporated in the month of April 2011, a new Wholly owned Subsidiary and a branch office in the tax free zone of Ras-AI-Khaimah in Dubai for better control and administration of the huge market potential in the country of Dubai.

You would be further pleased to note that Your Company has very successfully launched the International Command Control centre at its Mahape Office, Navi Mumbai. We plan to aggressively market the relatively new concept Not only in the entire country but even have agood hold and brand name in the International Market. This centre has been set up through a joint venture company formed with 50-50 partnership with the Israeli Company M/s Hash Security Group.

DIRECTORS

Mr. Vinayak Hajare and Mr. Vijay Bhatia who have been associated with the Company since the past few years, have resigned from the Board on May 21, 2010 and February 5, 2011 respectively. The Board appreciates the contribution made by them during their tenure as director of the Company. Mr Mukund Gupta has been designated as an Executive Director (*) with effect from 1st of April 2011. Dr. R.S Deshmukh and Prof. Paul Coleman who retires by rotation and being eligible offers themself for reappointment at this ensuing Annual General Meeting. Your directors recommend their re- appointment.

A brief write-up on the directors seeking re-appointment on account of retirement by rotation and regularization has been given in this Annual Report under the heading Corporate Governance.

(*)This is designated role but not enrolled on Board of Directorship

MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR:

1. Conversion of warrants:

On September 22, 2010, 5,52,000 equity shares and on 15th October 2010, 1,00,000 equity shares were allotted to promoter group upon exercise of right of conversion of share warrants at a price of Rs. 138.29/-

2. Conversion of Foreign Currency Convertible Bonds (FCCB)

On May 21 2010, 80,551 equity shares were allotted pursuant to conversion of 5 bonds of FCCB, On August 6, 2010 , 209,432 equity shares were allotted pursuant to conversion of 13 bonds of FCCB and on August 21, 2010,161,102 equity shares were allotted pursuant to conversion of 10 bonds of FCCB of USD 100000/-each.

3. Capital Work-in-Progress (CWIP)

Capital Work-in-Progress (CWIP) includes both tangible and intangible assets including Advances and payments of Rs. 93.79 Cr. The part of the project is the purchase of a land worth Rs.25 Cr for future expansion. The Expenditure incurred are Preliminary in nature and the same would be capitalized after establishing the commercial viability of the project and would be allocated project wise). They include preliminary environmental monitoring and engineering work, costs associated with planning approval process for the land development and material purchase. The Directors are of the opinion that the proposed land development will be financed and that it is probable that the project will proceed to completion. If the project were not probable, this would involve the expensing of a substantial proportion of the Rs. 25 Cr included in capital work in progress at 31 March 2011 through the profit and loss. The part of the CWIP worth Rs.68.79 Cr. involves proceedings towards development of modules to be made into the future products as per the ongoing projects.

The Directors have considered the probability of the project proceeding by assessing the commercial viability of the project, the expectation of obtaining finance and the requirements of the regulatory processes Some facilities / assets do remain idle for some time due to technical or economical reason. Sometimes it requires considerable time to bring the assets for its intended use. However, Idle assets no longer required, are expensed after proper scrutiny at the year end.

4. Loan and Advances

Your company has targeted high growth sectors such as infrastructure & logistics, Oil and Gas , telecommunication, education, rural Informatics, for this we have developed and enhanced our product line, Considering the pipeline of good business opportunity and for the brand promotion ,we have given Rs.80.71 Cr in this year as Advance to Supplier for Critical Equipments and Components which are required for the integration of the Products. Also your company has given Rs. 10 Cr as Advance for Marketing and Brand Promotion to HT Media considering its plan to penetrate the Indian and international Market.

We have a Strong Relationship with our Suppliers and also hope to create same relationship in new marketplace over wide geographies.

No individual loan or advance has terms and conditions that materially affect the amount, timing or certainty of the consolidated cash flows of the Group.

Directors believe in same philosophy of mutual understanding and support to conquer the market together. They believe in equal growth of company, Investors and Partners (Supplier, Franchisee) together. None should be felt left behind. We believe in idea of growing as a family rather individually.

5. Human Resources Development

Your companys human resource strategies and practices are designed to ensure that they integrate with and support the corporate business strategies of your Company. The Board wishes to place on record its appreciation of the contribution made by all employees in ensuring high level of performance and growth during the year.

6. Extraordinary General Meeting

Your Company has not convened any Extra-ordinary General Meeting during this period from the last AGM.

7. Postal Ballot

Your Company has convened Postal Ballot for issue of compulsorily convertible debentures and the result for the same was declared on 28th January 2011.

8. Delisting/Fresh listing of Securities

The shares of your company will continue to be listed on The Stock Exchange, Mumbai (BSE) and The National Stock exchange (NSE), which has nation-wide trading terminals and, therefore, provides full liquidity to the investors. The Global Depository Receipts (GDRs) issued by your Company during the year are listed with Luxembourg Stock Exchange, (LSE), Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed with Singapore Stock Exchange, (SGX).

The details regarding Conversion of FCCB to be mentioned

9. Directors Responsibility Statement

As required by sub-section (2AA) of Section 217 of the Companies Act, 1956, the Directors state:

(a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for the period;

(c) That 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 your Company and for preventing and detecting fraud and other irregularities; and

(d) That the directors had prepared the annual accounts on a going concern basis.

10. Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT

As per Section 212 (8) of the Companies Act, 1956, The Company vide a Board Resolution passed on 24th March, 2011 has been exempted attach the Directors Report, Balance Sheet and Profit and Loss Account of our subsidiaries such as an attachment as however we present the audited Consolidated Financial statements in the Annual Report. Accordingly, the Annual Report does not contain the financial statements of these subsidiaries. We will make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our investors, these documents will also be available for inspection during business hours at our Registered Office in Mahape, Navi Mumbai, Maharashtra and also at the Registered Office of the subsidiaries in Andheri, Mumbai Maharashtra.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of Indias and the Stock Exchanges Corporate Governance practices and have implemented all the stipulations prescribed. Your Company has implemented several best corporate governance practices as prevalent globally. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The Company has engaged M/s Makarand M. Joshi & Co, a Practising Company Secretaries Firm, based in Navi Mumbai to render advisory services and supervise the over all statutory compliances and adherence to corporate laws within the secretarial function of the Company. They have had a rich and varied experience of past eleven years in the areas of Statutory compliance services, Consultancy and services in aspects of Merger & acquisitions, takeover and joint ventures, due-diligence audit, public issue/private placement consultancy etc.

Further the Company has also engaged the world renowned Legal Consultants - LEGASIS, which stands for Legal Systems and Integrated Solutions. Legasis is a process driven organization and stands apart from other LPO companies because of its distinctive IT-enabled legal support services Legasis core strength is in its ability to deliver value to law firms and corporate counsel by leveraging the industry expertise and legal framework. They provide the following services: Legal Research, Document Review, Contract Management, Legal & Regulatory Compliance Management,

Due Diligence Support, IPR Support Services, Litigation Support, Document Management and Corporate Secretary Services.

The company has engaged Ernst & Young Pvt. Ltd. w.e.f. Feb 2011, as an advisor on key identified indirect tax related matters.

AUDITORS

The Auditors, M/s. K.M.Gupta & Co., Chartered Accountants, Navi Mumbai have expressed their willingness for re- appointment as auditors of your Company at the ensuing Annual General Meeting. A certificate from M/s K.M. Gupta & Co., Chartered Accountants, Mumbai has also been received to the effect that their appointment, if made, would be within the limits as prescribed under Section 224(1 B) of the Companies Act, 1956. The board recommends appointment of M/s. K.M. Gupta & Co. as auditors.

K. M. Gupta & Co. is a medium sized C.A. firm in the field of Audit and Taxation for more than 34 years. The firm has a grueling, hardcore and penetrating experience in the areas of Accounting, Internal Audit, Management Audit, Statutory Audit, Company law matters, Taxation - (Direct & Indirect). The firm has well qualified, well trained and highly motivated man power.

ACKNOWLEDGMENTS

Your Directors wish to express their appreciation of the continued co-operation and support of the Central and State Governments, Bankers, Financial Institutions, Customers, Dealers, Suppliers, Consultants and all the shareholders. The Directors also acknowledge and wish to thank for the hard work, dedication and commitment to all the employees.

For and on behalf of the Board of Directors

Sd/- Sd/-

Dr.P. Sekhar Ms Jayanthi S. Chairman & Managing Director Executive Director

Place: Navi Mumbai Date : 24th May 2011

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Mar 31, 2010

The Directors are pleased to present the Eighteenth Annual Report and the audited accounts for the financial year ended March 31,2010.

FINANCIAL RESULTS

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

(Rs.in millions) Standalone Particulars 2009- 2010 2008-2009 Consolidated

Turnover - Sales & Other Incomes 3126.17 2307.24 4616.32

Operating Profit (PBIDT) 1254.83 1007.84 1596.49

Less: Depreciation & Interest 460.33 288.95 474.50

Profit Before Tax (PBT) 794.50 718.89 1116.99

Provision For Tax - Current Year 141.50 72.80 200.10

Provision For Tax - Deferred Tax 16.62 7.12 17.11

Fringe Benefit Tax - 0.69 -

Income Tax of earlier years - 12.64 -

Net Profit before Minority Interest 636.38 625.64 899.79

Less: Minority Interest 0.00 0.00 6.31

Net Profit after Minority Interest 636.38 625.64 893.47

Balance of profit from previous year 1636.23 1032.93 1738.79

Amount available for Appropriation 2272.61 1658.57 2632.26

Transferred to General Reserve 47.72 9.50 51.49

Proposed Dividend 25.79 10.98 38.12

Dividend Tax 4.38 1.87 6.48

Balance Carried to Balance Sheet 2194.70 1645.73 2536.18

2272.61 1658.57 2632.26

REVIEW OF PERFORMANCE

You would be pleased to note that your Company has achieved significant growth during growth during the last financial year.

On a standalone basis, your Company achieved Total Income of Rs.3126.17 Million during the year under report as against Rs. 2307.24 Million during the previous year, representing an increase of 35.49% The Net Profit After Tax stood at Rs. 636.38 Million compared to Rs. 625.64 Million in the previous year registering a growth of 2%.

On a consolidated basis, your Company achieved Total Income of Rs.4616.32 Million during the year under the report and Net Profit After Tax stood at Rs. 893.48 Million.

DIVIDEND

Your Directors have recommended a dividend of Rs. 2 per Equity Share @ 20% of the Equity share capital (last year Rs. 1 per Equity Share @ 10%) for the financial year ended March 31 st, 2010 subject to approval by shareholders at the ensuing Annual General Meeting. The dividend will be paid to members whose names appear in the Register of Members as on 19th June, 2010; (20th June being Sunday) in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend pay out for the year under review has been formulated, keeping in view your Companys need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 made thereunder.

SUBSIDIARIES

Your Company has two subsidiaries viz; Micro Secure Solutions Limited and Micro Retail Limited incorporated in the year 2007 and 2008 respectively. Your Company holds more than 90% of the total equity share capital of these companies.

DIRECTORS

Mr. S. G. Koppikar and Mr Vinayak Hajare have resigned from the Board of the Company with effect from 30thMarch 2010 and 21st May 2010 respectively However Mr S.G Koppikar continues as a director on the Board of the Companys subsidiary Micro Retail Limited The Board appreciates the contribution made by them during their tenure as directors of the Company. Mr. Vijay Bhatia and Mr. Prakash Bhave have been appointed as Additional directors on the Board of the Company with effect from 28th April 2010 and 21st May 2010 respectively. Your Directors recommend their regularization as Directors. Mr. A. R. Kale who retires by rotation and being eligible offers himself for reappointment at this ensuing Annual General Meeting. Your directors recommend his re- appointment.

A brief write-up on the directors seeking re-appointment on account of retirement by rotation and regularization has been given in this Annual Report under the heading Corporate Governance.

MATERIAL CHANGES AND COMMITMENTS DURING THE YEAR:

1. Conversion of Warrants.

On March 30,2010,18,40,000 equity shares of Rs. 10 each (at a premium of Rs. 128.29/-) were allotted pursuant to conversion of warrants which had been allotted on December 24th 2009.

2. Conversion of FCCB

On 21st May 2010 the Company has allotted 80,551 equity shares pursuant to conversion of 5 bonds of FCCB (Foreign Currency Convertible Bonds) of USD 100000/- each.

3. Capital Work-in-Progress (CWIP)

Capital Work-in-Progress (CWIP) includes both tangible and intangible assets including Advances and payments of Rs. 65 Cr. The part of the cost is towards advance paid for purchase of a land worth Rs.25 Cr for future expansion. The costs capitalized are those costs incurred after establishing the commercial viability of the project and which are directly attributable to development of the project. They include preliminary environmental monitoring and engineering work, costs associated with planning approval process for the land development and material purchase. The Directors are of the opinion that the proposed land development will be financed and that it is probable that the project will proceed to completion. If the project were not probable, this would involve the expensing of a substantial proportion of the Rs. 25 Cr included in capital work in progress at 31 March 2010 through the profit and loss.The part of the CWIP worth Rs. 40 Cr. involves proceedings towards development of modules to be made into the future products as per the ongoing projects.

The Directors have considered the probability of the project proceeding by assessing the commercial viability of the project, the expectation of obtaining finance and the requirements of the regulatory processes

Some facilities / assets do remain idle for some time due to technical or economical reason. Sometimes it requires considerable time to bring the assets for its intended use. However, Idle assets no longer required, are expensed after proper scrutiny at the year end.

4. Loan and Advances

Your company has given Rs. 41 Cr of Advances to suppliers for critical equipments and components.

These Advances works as current assets and save the opportunity cost of keeping the money idle. In exchange we build a bond of trust and long term relationship with our supplier. We have a strong relationship with our supplier and looking forward for creating same bonding in new marketplace over wide geographies.

Being in competitive marketplace of IT/ITES collaborations provides strong chances of survival and growth.

Directors believe in same philosophy of mutual understanding and support to conquer the market together. They believe in equal growth of company, Investors and Partners (Supplier, Franchisee) together. None should be felt left behind. We believe in idea of growing as a family rather individually.

5. Human Resources Development

Your companys human resource strategies and practices are designed to ensure that they integrate with and support the corporate business strategies of your Company. The Board wishes to place on record its appreciation of the contribution made by all employees in ensuring high level of performance and growth during the year.

6.Extraordinary General Meeting

Your Company has not convened any Extra-ordinary General Meeting during this period from the last AGM.

7. Delisting/Fresh listing of Securities

The shares of your company will continue to be listed on The Stock Exchange, Mumbai (BSE) and The National Stock exchange (NSE), which has nation-wide trading terminals and, therefore, provides full liquidity to the investors.

The Global Depository Receipts (GDRs) issued by your Company during the year are listed with Luxembourg Stock Exchange, (LSE), Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed with Singapore Stock Exchange, (SGX).

Further during the year on March 30,2010,18,40,000 equity shares of Rs. 10 each (at a premium of Rs. 128.29/-) were allotted pursuant to conversion of warrants which had been allotted on December 24th 2009. On 21st May 2010 the Company has allotted 80,551 equity shares pursuant to conversion of 5 bonds of FCCB (Foreign Currency Convertible Bonds) of USD 100000/- each.

Your Company is in the process of listing these shares on the Stock Exchanges and hopes to get the same done at the earliest.

8. Directors Responsibility Statement

As required by sub-section (2AA) of Section 217 of the Companies Act, 1956, the Directors state:

(a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for the period;

(c) That 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 your Company and for preventing and detecting fraud and other irregularities; and

(d) That the directors had prepared the annual accounts on a going concern basis.

9. Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors Report, Balance Sheet and Profit and Loss Account of our subsidiaries. We had applied to the Government of India for an exemption from such an attachment as we present the audited Consolidated Financial statements in the Annual Report. The Government of India has granted us exemption from complying with provisions of Section 212. Accordingly, the Annual Report does not contain the financial statements of these subsidiaries. We will make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our investors, these documents will also be available for inspection during business hours at our Registered Office in Mahape, Navi Mumbai, Maharashtra and also at the Registered Office of the subsidiaries in Andheri, Mumbai Maharashtra.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of Indias Corporate Governance practices and have implemented all the stipulations prescribed. Your Company has implemented several best corporate governance practices as prevalent globally. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The Company has engaged M/s Makarand M. Joshi & Co, a Practising Company Secretaries Firm, based in Navi Mumbai to render advisory services and supervise the over all statutory compliances and adherence to corporate laws within the secretarial function of the Company. They have had a rich and varied experience of past ten years in the areas of Statutory compliance services, Consultancy and services in aspects of Merger & acquisitions, takeover and joint ventures, due-diligence audit, public issue/private placement consultancy etc.

Further the Company has also engaged the world renowed Legal Consultants LEGASIS, which stands for Legal Systems and Integrated Solutions. Legasis is a process driven organization and stands apart from other LPO companies because of its distinctive IT-enabled legal support services Legasis core strength is in its ability to deliver value to law firms and corporate counsel by leveraging the industry expertise and legal framework. They provide the following services: Legal Research, Document Review, Contract Management, Legal & Regulatory Compliance Management, Due Diligence Support, IPR Support Services, Litigation Support, Document Management, and Corporate Secretary Services

AUDITORS

The Auditors, M/s. K.M.Gupta & Co., Chartered Accountants, Navi Mumbai have expressed their willingness for re-appointment as auditors of your Company at the ensuing Annual General Meeting. A certificate from M/s K.M. Gupta & Co., Chartered Accountants, Mumbai has also been received to the effect that their appointment, if made, would be within the limits as prescribed under Section 224(1 B) of the Companies Act, 1956.

The board recommends appointment of M/s. K.M. Gupta & Co. as auditors.

K. M. Gupta & Co. is a medium sized C.A. firm in the field of Audit and Taxation for more than 34 years. The firm has a grueling, hardcore and penetrating experience in the areas of Accounting, Internal Audit, Management Audit, Statutory Audit, Company law matters, Taxation (Direct & Indirect). The firm has well qualified, well trained and highly motivated man power.

ACKNOWLEDGMENTS

Your Directors wish to express their appreciation of the continued co-operation and support of the Central and State Governments, Bankers, Financial Institutions, Customers, Dealers, Suppliers, Consultants and all the shareholders. The Directors also acknowledge and wish to thank for the hard work, dedication and commitment to all the employees.

For and on behalf of the Board of Directors

Dr. P. Sekhar Ms.Jayanthi Sekhar

Chairman & Managing Director Executive Director

Place: Navi Mumbai Date :21st May, 2010