Directors Report of Nexxoft Infotel Ltd.

Mar 31, 2013

We have pleasure in presenting the 22nd Annual Report with Audited Statements of Accounts for the year ended 31st March 2013.

FINANCIAL HIGHLIGHTS FOR THE YEAR 2012-13:

Rupees in Lakhs

Particulars 2012-13 2011-12

Income

-Software Development Services 1567.05 2928.10

-Other Income Nil Nil

Total Income 1567.05 2928.10

Expenditure 1064.38 2168.32

Depreciation 971.20 1196.23

Profit before the Tax (551.06) (915.44)

Less: Provision for tax (including 438.79 (57.72) fringe benefit tax and deferred tax)

Profit (Loss) after Tax (112.26) (973.16)

OPERATIONS:

The Ministry of Corporate Affairs (MCA) vide notification no. S.O. 447(E) dated 28th February, 2011 amended the existing Schedule VI to the Companies Act, 1956. The Revised Schedule VI is applicable from financial year commencing from 1st April, 2011. The financial statements of your Company for the year ended 31st March, 2013 have been prepared in accordance with the Revised Schedule VI and accordingly, the previous year''s figures have been reclassified/ regrouped to conform to this year''s classification.

The Company has recorded a turnover of Rs. 2928.10 lakhs and loss of Rs. 973.16 Lakhs in the current year against the turnover of Rs 8851.21 lakhs and loss of Rs. 257.08 Lakhs in the previous financial year ending 31.03.2013.

DIVIDEND:

Keeping the Company''s expansion and growth plans in mind, your Directors have decided not to recommend dividend for the year.

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Section 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 Bombay Stock Exchange.

CAPITAL OF THE COMPANY:

Authorized capital of the company stands at Rs. 370,000,000 divided into 37000000 equity shares of Rs. 10/- each. Paid up capital of the company stands at Rs.272,260,500 divided into 27,226,050 equity shares of Rs. 10/- each.

INSURANCE:

The company''s properties have been adequately insured against major risks. All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured.

DIRECTORS:

In accordance with the Companies Act, 1956 read with Articles of Association of the company the Director namely Mr. Ganesh Rao retires by rotation and being eligible, offers himself for re- appointment at this ensuing Annual General Meeting. Your Directors recommend his re- appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT:

In pursuance of Section 217(2AA) of the Companies Amendment Act, 2000 your directors confirm

i) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) That the director had 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 the company at the end of the financial year.

iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

iv) That the director had prepared the annual accounts on the 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:

Your Company''s operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

PARTICULARS OF EMPLOYEES:

There is no employee who is falling under section 217 (2A). Therefore, the disclosures required to be made under section 217 (2A) of the Companies Act, 1956 and the rules made there under are not applicable.

CODE OF CONDUCT:

The Code of conduct has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them. A declaration signed by the Managing Director is given in Annexure.

AUDITORS:

Your directors propose reappointment of M/s. MM Reddy & Co, 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.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of operations, performance and future outlook of your Company and its businesses is given in if Management Discussion and Analysis, which forms part of this Report.

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.

For and on behalf of the Board of

Nexxoft Infotel Limited

Sd/-

Place: Hyderabad G. Dhananjaya Reddy

Managing Director

---

Mar 31, 2012

To The Members

The have pleasure in presenting the 21st Annual Report with Audited Statements of Accounts for the year ended 31st March 2012.

FINANCIAL HIGHLIGHTS FOR THE YEAR 2011-12:

(Rupees in Lakhs) Particulars 2011-2012 2010-11

Income

-Software Development Services 2928.10 8851.21

-Other Income Nil Nil

Total Income 2928.10 8851.21

Expenditure 2168.32 7156.23

Depreciation 1196.23 1066.53

Profit before the Tax (915.44) 297.54

Less: Provision for tax (including fringe (57.72) 554.62 benefit tax and deferred tax)

Profit / (Loss) after Tax (973.16) (257.08)

OPERATIONS:

The Ministry of Corporate Affairs (MCA) vide notification no. S.O. 447(E) dated 28th February, 2011 amended the existing Schedule VI to the Companies Act, 1956. The Revised Schedule VI is applicable from financial year commencing from 1st April, 2011. The financial statements of your Company for the year ended 31st March, 2012 have been prepared in accordance with the Revised Schedule VI and accordingly, the previous year's figures have been reclassified/ regrouped to conform to this year's classification.

The Company has recorded a turnover of Rs. 2928.10 lakhs and loss of Rs. 973.16 Lakhs in the current year against the turnover of Rs 8851.21 lakhs and loss of Rs. 257.08 Lakhs in the previous financial year ending 31.03.2012.

DIVIDEND:

Keeping the Company's expansion and growth plans in mind, your Directors have decided not to recommend dividend for the year.

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 Ahmedabad Stock Exchange and are being traded on IndoNext Model of Bombay Stock Exchange.

CAPITAL OF THE COMPANY:

Authorized capital of the company stands at Rs. 370,000,000 divided into 37000000 equity shares of Rs. 10/- each. Paid up capital of the company stands at Rs.272,260,500 divided Into 27,226,050 equity shares of Rs. 10/- each.

INSURANCE:

The company's properties have been adequately insured against major risks. All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured.

DIRECTORS:

In accordance with the Companies Act, 1956 read with Articles of Association of the company the Director namely Mr. Dinesh Kavoor retires by rotation and being eligible, offers himself for re-appointment at this ensuring Annual General Meeting. Your Directors recommend his re- appointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 217(2AA) of the Companies Amendment Act, 2000 your directors confirm

i) That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) That the directors had 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 the company at the end of the financial year.

iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

iv) That the directors had prepared the annual accounts on the 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:

Your Company's operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

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

Foreign Exchange Outgo : NIL

PARTICULARS OF EMPLOYEES:

There is no employee who is falling under section 217 (2A). Therefore, the disclosures required to be made under section 217 (2A) of the Companies Act, 1956 and the rules made there under are not applicable.

CODE OF CONDUCT:

The Code of conduct has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them. A declaration signed by the Managing Director is given in Annexure.

AUDITORS:

Your directors propose the appointment of M/s. Ramana Reddy & Associates, 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.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this Report.

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.

For and on behalf of the Board of Nexxoft Infotel Limited

Date: 25/08/2012 Sd/-

Place: Hyderabad G. Dhananjaya Reddy

Managing Director

---

Mar 31, 2003

The Directors have pleasure in presenting the Twelfth Annual Report on the business and operation of the Company and Financial accounts for the period ended 31st March 2003.

FINANCIAL RESULTS

The summary of operations are given below:

(Rs. In lakhs) Particulars 2002-2003 2001-2002

Income 33.45 17.85

Expenditure 35.37 16.10

Profit /Loss before Interest and depreciation (1.92) 1.75

Less: 1. Depreciation 2.44 1.86 2. Loss on sale of fixed assets 0 3.86

Profit /(Loss ) for the period (11.65) (3.97)

Less: Provision for Taxation - -

Brought Forward profit /loss (26.99) (23.02) from the previous year

Profit Carried to Balance Sheet (38.63) (26.99)

The Directors are unable to recommend any dividend since the Company is incurring losses.

OPERATIONS

During the year under review the company could improve its turnover to Rs. 33.45 lakhs as against Rs. 17.85 lakhs in the previous year.

Due to the continued bad market conditions in the Software Industry your Company was not able to achieve the expected level of profits. In view of the circumstances your Directors are exploring new vistas in order to improve the profitability of the Company.

FUTURE OUTLOOK

The company has been negotiating with an US part for a contract which is in an advanced stage. The Companys Directors are striving hard to wipe out the losses and are taking steps in that direction.

DIRECTORS

Mr K.T. Raidu retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.

DEPOSITS

Your company has not accepted any Fixed Deposits and the provisions of Section 58A of the Companies act are not applicable to the Company.

AUDITORS

M/S A. Madhusudana & Co. Chartered Accountants, the statutory Auditor of the Company retire at the ensuing Annual General Meeting and is eligible for reappointment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has no activity relating to conservation of energy, power and fuel consumption.

In respect of technology absorption, the Company has its own research and development for the purpose of cost reduction and optimum efficiency.

The Company has foreign exchange earnings and out flow during the year under review as follows:

Rs. Lakhs Earning - Export Sales 0.42

Out Flow Nil

Though the present activities are not power intensive, continuous efforts are made to ensure conservation of energy.

CORPORATE GOVERNANCE

The Securities and Exchanged Board of India (SEBI) has recently announced a code of Corporate Governance to be practiced by Corporates. Some of these provisions have been mandatory through the listing agreement with the Stock Exchanges. Your Company was required to comply with the mandatory provisions within the Financial Year 2002-2003, but not later than 31" March, 2003. However, your Board has initiated necessary action to ensure necessary Compliance by the end of the current financial year.

DIRECTORS RESPONSIBILITY STATEMENT

As required under the Companies Act, 1956, your Directors wish to state:

(a) That in the preparation of the annual accounts, the applicable Accounting standards had been

followed along with proper explanation relating to material departures. (b)That they have selected such accounting policies and applied them consistently and made

judgments and estimates that were 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 and of the profit or loss of the

Company for the year under review; (c) That they 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

and for preventing and detecting fraud and other irregularities; and (d)That they have prepared the accounts for the period ended 31stMarch, 2003 on a going

concern basis.

PARTICULARS OF EMPLOYEES

There were no employees coming under the purview of Section 217 (2A) of the Companies Act, 1956.

PERSONNEL

Your directors wish to thank the employees at all levels of the company for their excellent support and contribution made by them towards achieving the objectives of the Company.

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Bankers, Shareholders, Customers and Staff of the Company during the year under review.

By Order of the Board For NEXXOFT INFOTEL LIMITED

Place: Hyderabad Date: 08-08-2003.

V. RAGHUMALA V. DAMODAR NAIDU

DIRECTOR MANAGING DIRECTOR

---

Mar 31, 2002

The Directors have pleasure in presenting the Eleventh Annual Report on the business and operation of the Company and Financial accounts for the period ended 31st March 2002.

FINANCIAL RESULTS

The financial year 2001-2002 is closed on 31st March, 2002 accounting for 9 months, since last financial year closed on 30th June, 2001.

(Rs. In lakhs)

Particulars 2001-2002 2000-2001

Income 17.85 26.15

Expenditure 16.10 25.38

Profit/Loss before Interest and depreciation 1.75 0.77

Less: 1. Depreciation 1.86 2.06

2. Loss on sale of fixed assets 3.86 3.09 Profit/(Loss) for the period (3.97) (4.38)

Less: Provision for Taxation - -

Brought Forward profit from the previous year (23.02) (18.64)

Profit Carried to Balance Sheet (26.99) (23.02)

The Directors are unable to recommend any dividend since the Company is incurring losses.

CHANGE OF REGISTERED OFFICE

Consequent to the change in management, the Company has changed its registered office from the state of Gujarat to State of Andhra Pradesh for operational conveniences and the permission for such change was approved by the Company Law Board.

OPERATIONS

During the year under review the company achieved a total sales of 17.85 Lakhs and made a loss of Rs 3.97 Lakhs before depreciation due to low realisations and increased input cost and delayed payments.

Due to the continuous recession in the software industry your company is not able to achieve the expected level of profits. In view of the circumstances your Directors are exploring new vistas in order to improve the profitability of the Company.

FUTURE OUTLOOK

The company has participated recently in the Tenders and hoping to get good volume of orders in the near future. The Companys Directors are striving hard to wipe out the losses and are taking steps in that direction.

DIRECTORS

Mr K V Balagopal retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.

DEPOSITS

Your company has not accepted any Fixed Deposits and the provisions of Section 58A of the Companies act are not applicable to the Company.

AUDITORS

M S A. Madhasudana & Co. Chartered Accountants the statutory Auditor of the Company retire at the ensuing Annual General Meeting and is eligible for reappointment. Regarding the point raised by the Auditors, it is self explanatory as stated in notes of the Accounts.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has no activity relating to conservation of energy, power and fuel consumption.

In respect of technology absorption, the Company has its own research and development for the purpose of cost reduction and optimum efficiency.

The Company has no foreign exchange earnings and out flow during the year under review.

Though the present activities are not power intensive, continuous efforts are made to ensure conservation of energy.

CORPORATE GOVERNANCE

The Securities and Exchanged Board of India (SEBI) has recently announced a code of Corporate Governance to be practiced by Corporates. Some of these provisions have been mandatory through the listing agreement with the Stock Exchanges. Your Company is required to comply with the mandatory provisions within the Financial Year 2002-2003, but not later than 31st March, 2003. Your Board has initiated necessary action to ensure necessary Compliance by the end of the current financial year.

DIRECTORS RESPONSIBILITY STATEMENT

As required under the Companies Act, 1956. your Directors wish to state:

(a) That in the preparation of the annual accounts, the applicable Accounting standards had been followed along with proper explanation relating to material departures.

(b) That they have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and of the profit or loss of the Company for the year under review;

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

(d) That they have prepared the accounts for the period ended 31st March, 2002 on a going concern basis.

PARTICULARS OF EMPLOYEES

There were no employees coming under the purview of Section 217 (2A) of the Companies Act, 1956.

PERSONNEL

Your directors wish to thank the employees at all levels of the company for their excellent support and contribution made by them towards achieving the objectives of the Company.

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Bankers, Shareholders, Customers and Staff of the Company during the year under review.

By Order of the Board For NEXXOFT INFOTEL LIMITED

V. RAGHUMALA V. DAMODAR NAIDU

DIRECTOR MANAGING DIRECTOR

Place: Hyderabad Date: 27-06-2002.