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Directors Report of 3i Infotech Ltd.

Mar 31, 2023

The Directors present the Thirtieth Annual Report (the âReportâ) of the Company along with the Audited Financial Statements for the Financial Year ended March 31, 2023.

OVERVIEW

As informed to the Members in the previous Annual Reports for the financial year 2020-21 and 2021-22, the Company had conducted a slump sale of the global software products business carried on by the Company and its subsidiaries in India and across the world on a going concern basis to Azentio Software Private Limited, India, Azentio Software Private Limited, Singapore (âAzentio Singaporeâ) and Azentio Singapore''s subsidiaries in the relevant jurisdictions (collectively âAzentioâ), pursuant to the business transfer agreement dated December 28, 2020 executed between the Company and Azentio. The aggregate consideration for this transaction was '' 1000,20,00,000 (Indian Rupees One Thousand Crores Twenty Lakhs). The slump sale was completed on March 31, 2021, except for subsidiaries in Saudi Arabia and Thailand where regulatory approvals were yet to be received.

During financial year 2021-22, the Company had, on November 12, 2021, completed the slump sale of the software products business of its subsidiary in Saudi Arabia on a going concern basis to Azentio. During financial year 2022-23, on June 30, 2022, the Company has completed

sale of software products business of its subsidiary in Thailand on a going concern basis to Azentio.

Pursuant to the business transfer agreement dated December 28, 2020 executed between the Company and Azentio, vashi property of the Company was intended to be transferred to Azentio against a receivable of '' 50 Crores in the financial year 2020-21. During the year 2022-23, this agreement was rescinded and consequently, the property remained with the Company. The counterparty, Azentio has released from its obligation to pay the consideration. The property, which was earlier transferred by way of a slump sale in the financial year 2020-21, has been recognised in the books of the Company in financial year 2022-23.

Financial Performance of the Company on Standalone and Consolidated basis:

Standalone sales and other income for financial year 202223 stood at '' 391.20 Crores as against '' 269.10 Crores for financial year 2021-22. On a consolidated basis, sales and other income for financial year 2022-23 stood at '' 809.05 Crores as against '' 690.78 Crores for financial year 202122. After meeting all expenditures, the Company made a total comprehensive loss of ''63.40 Crores on a consolidated basis and total comprehensive income of '' 51.63 Crores on a standalone basis for financial year 2022-23.

(Rs. in Crore except EPS)
Particulars	Standalone		Consolidated
	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Total Revenue (I)	391.20	269.10	809.05	690.78
Total Expenses (II)	353.43	239.87	799.66	725.04
Total Exceptional items (III)	14.48	(20.80)	(5.01)	(19.84)
Profit / (Loss) before Tax (I-M MI)	52.25	8.43	4.38	(54.10)
Tax expense
Current Tax	_-	_-	2.68	3.43
Deferred Tax	-	-	0.61	(0.46)
Adjustment of tax relating to earlier periods	-	-	(0.28)	0.42
Profit / (Loss) for the year	52.25	8.44	1.37	(57.49)
Profit/ Loss for the year from Discontinued Operations Other Comprehensive Income			-
A. Other Comprehensive income not to be re-classified to Profit and Loss in subsequent year:
Remeasurement of gains / (losses) on defined benefit plans	(0.62)	(6.1)	(0.21)	(7.97)
Income tax effect	-	-	0.13	0.17

Particulars	Standalone		Consolidated
	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
B. Other Comprehensive income to be re-classified to Profit and Loss in subsequent years:	-	-	(64.69)	-
Other Comprehensive income for the year, net of tax	(0.62)	(0.61)	(64.77)	(7.80)
Total Comprehensive income for the year	51.63	2.34	(63.40)	(65.29)
Profit for the year attributable to:
Equity holders of the parent	-	_-	1.37	(57.49)
Non-controlling interests	-	-	-	-
Other Comprehensive income for the year attributable to:
Equity holders of the parent	-	-	(64.77)	(7.80)
Non-controlling interests	_-	_-	_-	_-
Total Comprehensive income for the year attributable to:
Equity holders of the parent	-	-	(63.40)	(65.29)
Non-controlling interests	-	-	-	-
Earnings per equity share for profit attributable to equity shareholders
Basic EPS	3.10	0.50	0.08	3.44
Diluted EPS	3.05	0.50	0.08	3.44

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve this year.

DIVIDEND

Your Directors regret to state their inability to recommend any dividend on equity shares for the financial year ended March 31, 2023.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the âListing Regulationsâ), as amended, the Dividend Distribution Policy of the Company is available on the Company''s website at https://www.3i-infotech.com/wp-content/uploads/2022/09/dividend-distribution-policy.pdf

BUSINESS

The Company provides information technology services and software solutions. It operates through three key segments, (i) Enterprise Services (includes ADMS, ISMS, Testing, Classic BPS, MVS etc.), (ii) Professional Services (includes Human Capital Management Services) and (iii) Digital Business Services (includes IT & Digital Consulting, AAA, Digital IMS, CloudFirst, Oracle COE, GCC, Cyber SOC, Digital BPS, Cognitive Computing Services, 5G Lab as Service, Private 5G, IoT, Security Services, Secure Access Service Edge (âSASEâ), AgriTech, TME, Edge Computing, Edge Analytics, NuRe Campus, FutureTech etc.).

NuRe â¢ is the brand launched by the Company to offer its new products/services.

â¢ NuRe Edge: 5G ready platform that delivers SASE and 5G Edge services from any device and anywhere. It is a cost effective and easy to deploy solution that breaks conventional and complex boundaries of enterprise security.

â¢ NuRe 3i: With NuRe 3i you can migrate your applications and infrastructure to cloud and enhance your business performance, efficiency and productivity by unlocking cloud benefits with the right platform, tools and services.

â¢ NuRe Desk: NuRe Desk enables borderless perimeter of your global workforce to work from anywhere, bringing their own devices and their own network connectivity. On an average, the Company can give users savings of about 20% to 30% compared to leading solutions with our own self-managed application infrastructure.

â¢ NuRe 3i : NuRe 3i is a next generation Oracle Cloud Infrastructure (OCI) for the most secured, optimised and simplified digital transformation. NuRe 3i and Oracle collaborate to provide a powerful, single vendor, application and database platforms for today''s data driven enterprises. Nure 3i helps verticals like banking, financial services & insurance (BFSI), public and government sectors, healthcare, media and entertainment to seamlessly migrate to NuRe 3i platforms.

â¢ NuRe CloudFirst: It addresses design, construction and managing full-stack cloud solutions, including maintaining crucial operational applications and supporting the entire eco-system in the cloud.

The Company has a presence in more than 15 countries across 4 continents. The Company has a strong foothold and customer base in South Asia, Asia Pacific (APAC), Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA) and North America geographies.

The Company serves customers in banking, insurance, media and entertainment, capital markets, asset and wealth management, government, manufacturing, retail, distribution, telecom and healthcare industry verticals.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Company has incorporated following wholly owned subsidiaries (including wholly owned step- down subsidiaries):

Sr. No.	Name of the Company	Indicate whether wholly owned subsidiary OR wholly owned step- down subsidiary	% of Shareholding	Date of Incorporation	Country of Incorporation
1	Versares BPS Private Limited	Wholly owned step- down subsidiary	100%	December 10, 2022	India
2	NuRe EdgeTech Private Limited	Wholly owned subsidiary	100%	November 28, 2022	India
3	NuRe FutureTech Private Limited	Wholly owned subsidiary	100%	December 12, 2022	India
4	NuRe CampusLabs Private Limited	Wholly owned subsidiary	100%	December 20, 2022	India
5	NuRe Infotech Solutions Pte. Limited	Wholly owned subsidiary	100%	March 15, 2023	Singapore
6	NuRe MediaTech Limited	Wholly owned subsidiary	100%	March 23, 2023	India
7	NuRe EdgeTechInc	Wholly owned step- down subsidiary	100%	March 28, 2023	USA

Further, 3i Infotech Services SDN BHD, a wholly owned subsidiary of the Company based in Malaysia, was struck off on September 12, 2022.

As on March 31, 2023, there are 29 subsidiaries (including step-down subsidiaries) of the Company. There has been no material change in the nature of the business of subsidiaries.

As per the first proviso to Section 129(3) of the Companies Act, 2013 (âthe Actâ) read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of subsidiaries / associate companies / joint venture in the prescribed Form AOC-1 is enclosed to the consolidated financial statements. This statement also mentions highlights of performance of subsidiaries /associate companies / joint venture and their contribution to the overall performance of the Company during the year.

Pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company, along with relevant documents and separate

audited accounts in respect of subsidiaries are available on the website of the Company.

This Report has been prepared based on the standalone financial statements of the Company and highlights the performance of the subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during the period under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Act, your Directors hereby confirm that:

â¢ i n preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

â¢ they 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 the Company as at March 31, 2023 and profit of the Company for the financial year ended on that date;

â¢ they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

a. they have prepared the annual accounts on a going concern basis;

b. hey have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

c. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

Further, the financial statements are prepared in accordance with Indian Accounting Standards (âInd ASâ) as prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended. Based on the reviews of internal, statutory and secretarial auditors, external consultants, the management and respective committees of the Board, the Board is of the opinion that the Company''s system of internal financial controls was adequate and the operating effectiveness of such controls was satisfactory during the financial year 2022-23.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans, guarantees or investments granted/ made during the year are given under the notes to standalone financial statements forming part of this Report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all the contracts / arrangements / transactions entered into by the Company with related parties referred to in Section 188 of the Act were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions.

Since all related party transactions entered into by the Company were in the ordinary course of business and on arm''s length basis, Form AOC-2 is not applicable to the Company.

The Company has in place a Policy on Materiality of Related Party Transactions and a Policy on dealing with Related Party Transactions. The said policy can be viewed on the

Company''s website by accessing the following link: https:// www.3i-infotech.com/wp-content/uploads/2022/05/Policy-on-Materiality-of-Related-Party-Transactions-and-Policy-on-Dealing-with-Related-Party-Transactions-1.pdf

Details regarding related party disclosures are given under the notes to standalone financial statements which form part of this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and as on the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operation in future.

REPORT ON CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements. The Corporate Governance Report along with auditors'' certificate thereon in terms of Regulation 34 read with Schedule V of the Listing Regulations is appended herewith as Annexure I to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report is given under a separate section forming part of this Report.

BUSINESS RESPONSIBILITY AND SUBSTAINABILITY REPORT (BRSR)

Regulation 34 of the Listing Regulations mandates the inclusion of the BRSR as part of the Annual Report for the top 1000 listed entities based on market capitalisation as on 31^st day of March of every Financial Year. Though the Company has not fallen under top 1000 listed entities based on market capitalisation as on March 31, 2023, BRSR is voluntarily being appended hereto as forms part of this Report as Annexure II.

ANNUAL RETURN

In accordance with the Act, the annual return in the prescribed format is available on the Company''s website at the following link: https://www.3i-infotech.com/annual-report/

CAPITALa) Preference Share Capital:

During the year under review, the Company has not allotted any preference shares.

b) Equity Share Capital:

i. Allotment under Employee Stock Options Scheme:

During the year under review, the Company has, on various dates, allotted in all 5,23,385 equity shares under Employee Stock Option Scheme 2007 and Employee Stock Option Scheme 2018.

Considering these allotments, the issued, subscribed and paid-up capital of the Company as on March 31, 2023 stood at '' 1,68,46,60,420/-consisting of 16,84,66,042 fully paid-up equity shares of face value '' 10/- each.

The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor any sweat equity shares to the employees of the Company under any scheme.

EMPLOYEE STOCK OPTION SCHEMES

The Employee Stock Option Schemes of the Company in force are in compliance with the Act and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and there has been no material change in the said schemes during financial year. Disclosures relating to the said schemes as required under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available on the Company''s website at the following link: https://www.3i-infotech.com/ investors/ under Corporate Governance in the Investors'' section.

The Company has received a certificate from the Secretarial Auditors of the Company that its share-based scheme(s) have been implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (formerly the SEBI (Share Based Employee Benefits) Regulations 2014) and the same is available for inspection by members in electronic mode.

PUBLIC DEPOSITS

During the year, the Company has not invited / accepted any deposit under Sections 73 and 76 of the Act.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)a) Composition:

As on the date of this Report, the Board of the Company consists of Seven Directors, out of which

four are Independent Directors (including one woman Independent Director), two are Non-Executive Directors and one is Executive Director.

The current composition of the Board in accordance with the provisions of Section 149 of the Act and Regulation 17 of the Listing Regulations is as follows:

Sr. No.	Name of the Director(s)	Designation
1	Mr. Ashok Shah	Non-Executive Independent Chairman
2	Mr. Thompson Gnanam	Managing Director and Global CEO
3	Dr. Aruna Sharma	Non-Executive Director
4	Mr. Avtar Singh Monga	Non-Executive Independent Director
5	Mr. Sriram V.	Non-Executive Director
6	CA Uttam Prakash Agarwal	Non-Executive Independent Director
7	Ms. Zohra Chatterji	Non-Executive Independent Director

b) Retirement by Rotation:

In accordance with Section 152 (6) and other applicable provisions of the Act and the Articles of Association of the Company, Dr. Aruna Sharma (DIN: 06515361) retires by rotation as a Director at the ensuing AGM and being eligible, offers herself for reappointment.

Detailed profile of Dr. Aruna Sharma along with additional information required under Regulation 36(3) of the Listing Regulations and Secretarial Standard on General Meetings (SS-2) is provided separately by way of an Annexure to the Notice of the AGM which forms part of this Report.

c) Key Managerial Personnel:

As on March 31,2023, following are the Key Managerial Personnel of the Company:

a. Mr. Thompson Gnanam - Managing Director and Global CEO

b. Harish Shenoy - Chief Performance Officer & Chief Risk Officer (presently designated as Chief Operating Officer Professional Services and Chief Risk Officer)

c. Sanjay Rawa - Chief Financial Officer

d. Varika Rastogi - Company Secretary and Compliance Officer.

There were no changes in the Directors and Key Managerial Personnel during the year.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from each Independent Director as per provisions of Regulation 25(8) of the Listing Regulations and Section 149 (7) of the Act, that he / she meets the criteria of independence laid down in Regulation 16(1)(b) read with Regulation 25(8) of the Listing Regulations and Section 149 (6) of the Act.

NUMBER OF MEETINGS OF THE BOARD

There were 6 (Six) meetings of the Board of Directors held during the year. The details of the same are given in Corporate Governance Report section that forms part of this Report. The intervening gap between two consecutive Board Meetings did not exceed 120 days.

POLICIES AS PER THE LISTING REGULATIONS

The Listing Regulations mandated all listed companies to formulate certain policies. These policies are available on the website of the Company at https://www.3i-infotech. com/investors/ under âCorporate Governanceâ in the Investors'' section. The policies, list of which is given below, are reviewed periodically by the Board and amended from time to time:

â¢ Whistle Blower Policy;

â¢ Policy on Remuneration of Directors, Key Managerial Personnel and other Employees;

â¢ Corporate Social Responsibility Policy;

â¢ Policy for determining Material Subsidiaries;

â¢ Policy for determination of Materiality of event or information;

â¢ Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions;

â¢ Policy and Procedure for Inquiry in the event of leak or suspected leak of Unpublished Price Sensitive Information;

â¢ Dividend Distribution Policy;

â¢ Risk Management Policy;

â¢ Policy for Board Diversity;

â¢ Policy for Preservation of Documents; and

â¢ Policy for Prohibition of Fraudulent and Unfair Trade Practices relating to securities.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The current policy is to have appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board. The Company has put in place a policy on Remuneration of Directors, KMP and other employees including criteria for determining qualifications, positive attributes, independence of directors and other

matters provided under Section 178 (3) of the Act, the Policy can be viewed on the website of the Company by accessing the following link: https://www.3i-infotech.com/wp-content/ uploads/downloads/2020/11/Policy-on-Remuneration-of-Directors-KMP-other-employees. pdf.

PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

In terms of the provisions of the Act and the Listing Regulations, your Company has laid down criteria for performance evaluation of Directors and Chairperson of the Board and also the process for such performance evaluation. Schedule IV of the Act states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Company''s policy relating to appointment and remuneration of Directors, KMPs and other employees, including criteria for determining qualifications, positive attributes and independence of a director are covered under the Corporate Governance Report, which forms a part of this Report.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

As per provisions of the Listing Regulations and the Act, the Company has formulated Familiarisation Programme for Independent Directors. The same is available on the website of the Company at https://www.3i-infotech.com/ wp-content/uploads/2022/10/Familiarization-programee-for-independent-directors.pdf. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment to an Independent Director outlining his / her role, function, duties, responsibilities, etc. The terms and conditions for appointment of Independent Directors are also available on the website of the Company at the location mentioned above.

The Board Members are provided with necessary documents / brochures, reports and internal policies to enable familiarising them with the Company''s procedures and practices. Periodic presentations are made at the Board Meetings on business performance updates of the Company, global business environment, business strategy and risk involved.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has six committees:

i. Audit Committee;

ii. Nomination and Remuneration Committee;

iii. Stakeholders'' Relationship Committee;

iv. Corporate Social Responsibility Committee;

v. Risk Management Committee;

vi. Operations Committee (non-mandatory committee); and

vii. Sub-committee on Legacy Matters of the Audit Committee (non-mandatory committee).

A detailed note on the composition of the Board and its mandatory committees is provided in the Corporate Governance Report.

VIGIL MECHANISM

In line with the provisions of the Act and the Listing Regulations, the Company has devised and implemented a vigil mechanism in the form of âWhistle Blower Policyâ. As per the Policy, the Company has an internal committee comprising of the Head-HR and the Compliance Officer of the Company to oversee the functioning of the vigil mechanism as mandated by the Act and assist the Audit Committee thereunder. The Whistle Blower Policy framed by the Company is available on the website of the Company at https://www.3i-infotech.com/wp-content/uploads/2023/05/ Whistle-Blower-Policy-revised-04.05.23.pdf

The detailed information regarding the committees of the Board, including composition of the Audit Committee, has been given in the Corporate Governance Report which forms an integral part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures and form part of this Report. The Consolidated Financial Statements have been prepared in accordance with the Ind AS.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

The Company has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. The Company also ensures that internal controls are operating effectively.

STATUTORY AUDITORS

M/s. GMJ & Co., Chartered Accountants (Reg. No. 103429W) were appointed as the Statutory Auditor of the Company for a term of 5 (five) consecutive years, at the 28^th AGM, held on December 15, 2021 to hold office up to conclusion of the 33^rd AGM to be held in 2026. The Company has received confirmation from them to the effect that they are not disqualified from continuing as Auditors of the Company.

STATUTORY AUDITOR''S REPORT

The Auditor''s Report for the financial year 2022-23 does not contain any qualifications remarks or reservations. The Auditor''s Report is enclosed with the financial statements in this Report.

SECRETARIAL AUDITOR''S REPORT

The Secretarial Audit Report is appended as Annexure III to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

REPORTING OF FRAUD BY AUDITORS

During the year under review, neither the statutory auditor nor the secretarial auditor has reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees under Section 143(12) of the Act.

SECRETARIAL STANDARDS

The Company complies with all the mandatory secretarial standards issued by the Institute of Company Secretaries of India as may be applicable.

LISTING ON STOCK EXCHANGES

The Company''s equity shares are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The Company continues to use the latest technologies to improve the productivity and quality of its services and solutions.

During the year, your Company has taken the following technology initiatives:

â¢ Upskilling programmes to kickstart digital transformation initiatives and boost information security environment.

â¢ Improved delivery through introduction of automation to bring in efficiency.

â¢ Strengthened its solutions through technology innovation, collaboration and acquisition.

â¢ Partnerships with major technology providers for winning go-to market strategies.

â¢ Opened multi-dimensional growth areas by embracing SASE, Cloud and intelligent automation.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and enhanced through FutureTech Lab and Global Development Centres.

QUALITY

The Company is committed to provide innovative and high-quality solutions and services that meet or exceed customer expectations.

This includes-

â¢ Continuous check and improvisation on quality of our human resources, processes, solutions and services.

â¢ Governance to uplift solutions and delivery standards and minimise errors.

The Company is highly focused on quality and conformity to global standards and frameworks which include ISO 9001:2015, ISO 27001:2013, ISO 20000:2018, CMMi and Agile to ensure organised project execution, thereby transforming business from taking corrective & preventive measures to the state of predicting outcomes. This focus enhances productivity, efficiency, reputation, opportunities and value.

The Company has achieved CMMi Level 3 certification and plans to extend the level to CMMi Level 5.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans

Around 18% of the revenue of the Company is derived from exports.

b) Foreign Exchange earnings and expenditure

Details of earnings and expenditure in foreign currency (excluding earnings and expenditure of UAE Branch) during the year are as below:

These arms of the Company focus on developing and expanding the Company''s solutions and IPR

With a focus to further enhance the Company''s solutions based on market needs, all new solution launches ensure the Company''s strategy for growth.

Expenditure on R & D

(Amount '' in Crore)
Particulars	2022-23	2021-22
Capital Expenditure	33.76	8.05
Total	33.76	8.05
Total R&D expenditure as a percentage of total standalone revenue	8.63%	2.99%

(Amount '' in Crore)
Particulars	FY 2022-23	FY 2021-22
Earnings	42.00	28.22
Expenditure	-	2.20

PERSONNEL

The Company has continued to improve the quality of Human Resource. The key facet has been better levels of productivity as compared to earlier years which has contributed to operating financial parameters showing a strong uplift. Regular interactions and career enhancements by way of bigger roles to talented employees have helped in strengthening the confidence of the employees in the tough financial scenario of the Company. The talent pipeline is looking healthy though attrition and retention remains a challenge for the industry and more so for the Company.

The Company will continue to focus and build the human potential which would help in improving operating parameters in the coming years.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provisions of the first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Disclosures pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Report as Annexure IV.

Prevention of Sexual Harassment at Workplace

The Company has in place a policy aiming at prevention of sexual harassment at all workplaces of the Company in line with the requirements of Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Company has complied with provisions relating to constitution of Internal Complaints Committee by setting up such Committee in the Company in accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to consider and redress complaints received with respect to sexual harassment. The details of complaints received during the year are given separately in Corporate Governance Report.

RISK MANAGEMENT

Risk Management is an integral and important component of Corporate Governance. The Company has developed and implemented a comprehensive Risk Management Framework for the identification, assessment and monitoring of key risks that could adversely impact the Company''s goals and objectives. This framework is periodically reviewed by the Risk Management committee of the Company. The Audit Committee of the Board has additional oversight in the area of financial risks and controls. The Company is committed to continually strengthen its Risk Management framework in order to protect the interests of stakeholders.

CREDIT RATINGS

In July 2021, CRISIL Ratings has reaffirmed the rating at âCRISIL BBB-'' while assigning a âStable'' outlook. Similarly, one of the other rating agencies, CARE Ratings has also reaffirmed rating of the Company as âCARE BBB-; Stableâ (Triple B Minus; Outlook: Stable) in September 2021.

However, in September 2022, both CRISIL and CARE had withdrawn the said ratings as the long-term loans were repaid and no dues were outstanding.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. A brief outline of the CSR policy of the Company and the statutory disclosures with respect to CSR Committee and an Annual Report on CSR activities for financial year 2022-23 as required under Rule 8 (1) of the CSR Rules are set out in Annexure V of this Report. The CSR Policy as recommended by CSR Committee and as approved by the Board is available on the website of the Company at https://www.3i-infotech. com/wp-content/uploads/downloads/2021/08/Corporate-Social-Responsibility-Policy.pdf

During the year, the Company has not spent any amount on CSR activities in view of losses incurred as per provisions of the Act.

MAINTENANCE OF COST RECORDS

Maintenance of cost records as specified by the Central Government under the provisions of Section 148(1) of the

Act is not required for the business activities carried out by the Company.

DISCLOSURE REQUIREMENTS

Disclosures required under the Listing Regulations are provided in the Corporate Governance Report. The Corporate Governance Report along with auditor''s certificate thereon, BRSR and the Management Discussion and Analysis Report forms part of this Report.

FUTURE OUTLOOK

The business outlook and the initiatives proposed by the management to address its financial risks have been discussed in detail in the Management Discussion and Analysis Report which forms a part of this Report.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Customs and other government authorities and last but not the least, its trusted customers for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

Mar 31, 2018

Dear Shareholders,

The Directors present the Twenty Fifth Annual Report (the âReportâ) of the Company along with the Audited Financial Statements for the year ended March 31, 2018.

OVERVIEW

The Management is pleased to inform the shareholders that your Company has completed 2 years of consecutive good performance after the Debt Restructuring Scheme (DRS) presented to the Lenders during FY 2015-16. Your Company has earned revenue of Rs.991.19 crores and EBIDTA of Rs.156.14 crores for financial year ended March 31, 2018 on a consolidated basis.

During the year, your Company has made prepayment of Rs.97.66 crores to its Lenders out of total debt of Rs.468.83 crores. With this pre-payment, the Company has now prepaid 15 months of Principal Debt to its Lenders, which represents 20.83% of its Outstanding Debt to Lenders. The Company continues to service its Lenders on a regular basis effective from the date of implementation of DRS i.e. from April 1, 2016.

During the year, CRISIL Limited has upgraded the credit rating of the Company from âCRISIL Dâ to âCRISIL BB/ stableâ in respect of the bank loan facilities. Recently, the credit rating has been further upgraded âBBB-/Stableâ (Investment Grade as per RBI Circular No. RBI/2017-18/131 dated February 12, 2018 on âResolution of Stressed Assets - Revised Frameworkâ).

With a revival in the Companyâs health, we wish to reinvent ourselves to offer higher value to our stakeholders and fast pace our growth. While retaining our core values of Innovation, Insight and Integrity, our aim is to serve our customers, above and beyond their expectations. To signal this transformation, our brand identity has undergone a makeover to reflect our invigorated philosophy. On February 2, 2018, your Company has launched new logo pursuant to the re-branding exercise carried out by the Company. Your Companyâs new brand identity represents its ongoing transition into a company with distinctive portfolio of IT Products and Services that competes in key growth markets. Your Companyâs new tagline âLimitless Excellenceâ aims to represent its passion and zeal to go beyond the expected and deliver extraordinary levels of performance using combination of evolved products and services, exceptional customer engagement and deeper industry expertise.

Your Company has also introduced its new brand âAltirayâ¢â for the services portfolio during the year. This new services brand Altiray reflects strengths and commitment to perform above expectations and enabling our clients to soar high above their challenges.

Financial Performance of the Company on Standalone and Consolidated basis:

Rs. in crores

Particulars	Standalone		Consolidated
Particulars	2017-18	2016-17	2017-18	2016-17
Total Revenue (I)	294.72	344.87	1,010.43	1,055.91
Total Expenses (II)	381.43	253.78	930.95	953.33
Profit / (Loss) before Tax (I-II)	(86.71)	91.09	79.48	102.58
Tax expense
Current Tax	-	-	7.40	5.84
Deferred Tax	-	(1.49)	0.43	0.27
Adjustment of tax relating to earlier periods	-	0.32	0.54	2.40
Profit / (Loss) for the year	(86.71)	92.26	71.11	94.07
OTHER COMPREHENSIVE INCOME
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent year:
Remeasurement of gains / (losses) on defined benefit plans	(0.82)	4.32	0.50	7.01
Income tax effect	-	(1.49)	-	(0.43)

B. Other Comprehensive income to be reclassified to profit and loss in subsequent years:	-	-	-	-
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAx	(0.82)	2.83	0.50	6.58
Total Comprehensive income for the year	(87.53)	95.09	71.61	100.65
Profit for the year attributable to:
Equity holders of the parent	-	-	70.40	94.73
Non-controlling interests	-	-	0.71	(0.66)
Other Comprehensive income for the year attributable to:
Equity holders of the parent	-	-	0.50	6.58
Non-controlling interests	-	-	-	-
Total Comprehensive income for the year attributable to:
Equity holders of the parent	-	-	70.90	101.31
Non-controlling interests	-	-	0.71	(0.66)
Earnings per equity share for profit attributable to equity shareholders
Basic EPS	(0.54)	0.75	0.44	0.77
Diluted EPS	(0.54)	0.75	0.44	0.77

Standalone sales and other income for FY 2017-18 stood at Rs.294.72 crores as against Rs.344.87 crores for FY 2016-17. On a consolidated basis, sales and other income for FY 2017-18 stood at Rs.1,010.43 crores as against Rs.1,055.91 crores for FY 2016-17. After meeting all expenditures, though the Company made a total comprehensive income of Rs.71.61 crores on a consolidated basis, there was a loss of Rs. 87.53 crores on a standalone basis.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve this year.

DIVIDEND

During the year, the Company has issued 0.10% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs.5/- each (âClass B Preference Sharesâ) to the Lenders at par as per the terms of DRS. An amount of Rs.9,288,862 was paid as preference dividend to Class B Preference Shareholders on preference shares issued upto March 31, 2018. The payment of the abovementioned dividend was made as part of the contractual obligations of the Company with respect to the issue of these preference shares.

The Company has also paid a dividend of Rs.395,343 as preference dividend as per the terms of issue of 0.01% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs.5/- each (âClass A Preference Sharesâ) to Class A Preference Shareholders for the period from April 1, 2012 to April 30, 2018.

As per the terms of the Master Restructuring Agreement (MRA) dated March 30, 2012 entered into by the Company with IDBI Bank Limited, the Monitoring Institution and the CDR Lenders, the Company is prohibited from declaring or paying any dividend on its equity shares without prior approval of its Lenders. In view of this fact, your Directors regret to state their inability to recommend any dividend on equity shares for the financial year ended March 31, 2018.

BUSINESS

Your Company has a comprehensive set of IP based software solutions (20 ), coupled with a wide range of IT Services to address the dynamic requirements of a variety of industry verticals including Banking, Insurance, Capital Markets, Asset & Wealth Management (BFSI). The Company also provides solutions for other verticals such as Government, Manufacturing, Distribution, Telecom and Healthcare.

The business activities of the Company are broadly divided into two categories, viz: IT Solutions and Transaction Services. IT Solutions business comprises of software products and IT enabled services while the Transaction Services comprise of BPO and KPO services. The Company has a good product portfolio and has dominant presence in fast growing emerging economies. The Product business of the Company has wide base with more than 800 active customers who are satisfactorily using the Companyâs products.

The contribution to the revenue for the year from IT Solutions was 95% and that of Transaction Services was 5%.

Your Company has presence in 50 countries across six operational geographies, viz. South Asia, Asia Pacific (APAC), Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA), Western Europe (WE) and North America (US). Your Company has marketing network around the world, including US, WE, MEA and APAC. The business of your Company is largely divided into Emerging Markets and Developed Markets. The share of the Emerging Markets to total revenue of the Company is about 70% while that of Developed Markets is about 30%. For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, 3i Infotech Financial Software Inc, a US based step-down subsidiary of the Company was merged with 3i Infotech Inc, another US based step-down subsidiary of the Company effective December 31, 2017. As on March 31, 2018, the number of subsidiaries are 22 (twenty two).

3i Infotech Software Solutions LLC was incorporated as a step-down subsidiary on May 15, 2018 to tap business opportunities in Dubai Mainland, UAE.

As per the first proviso to Section 129(3) of the Companies Act, 2013 (the âActâ) read with Rule 5 of Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of subsidiaries/ associate companies/joint venture in the prescribed Form AOC-1 is enclosed to the consolidated financial statements. This statement also mentions highlights of performance of subsidiaries/associate companies / joint venture and their contribution to the overall performance of the Company during the year.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans, guarantees or investments granted/made during the year are given under the notes to standalone financial statements forming part of the Report.

CONTRACTS OR arrangements WITH RELATED PARTIES

During the year under review, all the contracts or arrangements or transactions entered into by the Company with related parties referred to in Section 188 of the Act, were in the ordinary course of business and on an armâs length basis. During the year, the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an armâs length basis, form AOC-2 is not applicable to the Company.

The Company has in place a Policy on Materiality of Related Party Transactions and a Policy on dealing with Related Party Transactions. The said policy can be viewed on the Companyâs website by accessing the following link: https://www.3i-infotech.com/investors-2/under âCorporate Governanceâ.

Details regarding related party disclosure are given under the notes to standalone financial statements which form part of this Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and as on the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operation in future.

REPORT ON CORPORATE GOVERNANCE

The Corporate Governance Report along with auditorsâ certificate thereon in terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODRâ) read with Schedule V of SEBI LODR is appended herewith as Annexure I to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 of SEBI LODR, the Management Discussion and Analysis Report is given under separate section forming part of this Report.

EXTRACT OF ANNUAL RETURN

In terms of the requirements of Section 92 (3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in the prescribed form MGT- 9 is appended herewith as Annexure II.

CAPITAL

a) Preference Share Capital:

During the year under review, as per the terms of DRS, the Company had allotted Class B Preference Shares of face value of Rs.5/- each at par to its Lenders.

Details of the allotments are as follows:

Date of Allotment	No. of Class B Preference Shares allotted
May 31, 2017	29,761,872
September 27, 2017	78,183,606
January 15, 2018	444,982,211
February 7, 2018	25,638,620
March 7, 2018	3,684,800
TOTAL	582,251,109

After taking into account the above allotments, the preference share capital of the Company as on March 31, 2018 was Rs.7,027,607,980 consisting of 13,00,00,000 Class A Preference Shares of Rs.5/- each and 1,275,521,596 Class B Preference Shares of Rs.5/- each.

b) Equity Share Capital:

1) Allotments under Employees Stock Option Schemes (ESOS) :

The Company has not allotted any shares under ESOS during the year.

2) Allotments against conversion of Foreign Currency Convertible Bonds (FCCBs):

During the year, the Company has allotted Equity Shares against conversion of FCCBs as per the below mentioned details:

ISIN of FCCBs	Value of FCCBs converted (USD)	Date of allotment	Number of Equity Shares allotted	Fixed Foreign Exchange Conversion Rate (in Rs.)	Issue Price (in Rs.)	Premium (in Rs.)
XS1423751418	6,034,014	June 8, 2017	40,021,201	66.326	10	-
XS0308551166	25,000	August 17, 2017	6,148	40.81	165.935	155.935
XS0769181982	345,750	December 21, 2017	1,064,298	50.7908	16.50	6.50
XS1423751418	1,00,000	March 22, 2018	530,608	66.326	12.50	2.50
XS0769181982	3,250	March 22, 2018	10,004	50.7908	16.50	6.50
Total	6,508,014	-	41,632,259	-	-	-

3) Allotments of Equity Shares under the Debt Realignment Scheme (DRS) Package:

During the year under review, the Company has allotted 390,074,516 Equity Shares to some of the Lenders of the Company including the lenders of the Companyâs subsidiaries and lenders of facilities guaranteed by the Company and lessors of the Company (âDRS Lendersâ) as per the terms of DRS package, the details of which are as follows:

Date of Allotment	No. of Shares allotted
April 19, 2017	13,468,574
May 31, 2017	48,855,774
September 27, 2017	47,084,567
January 15, 2018	263,909,361
February 7, 2018	14,650,640
March 7, 2018	2,105,600
TOTAL	390,074,516

As a result of the aforesaid allotments, the paid-up and issued equity share capital of the Company stands at Rs.16,153,581,780 as on March 31, 2018.

The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor any shares (including sweat equity shares) to the employees of the Company under any Scheme.

EMPLOYEES STOCK OPTION SCHEMES

As per SEBI Circular (CIR/CFD/POLICY CELL/2/2015) dated June 16, 2015 relating to requirements specified under the SEBI (Share Based Employee Benefits) Regulations 2014, details of the ESOS of the Company are given in Annexure III to this Report.

PUBLIC DEPOSITS

During the year, the Company has not invited/accepted any deposit under Sections 73 and 76 of the Act.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, pursuant to withdrawal of Nomination by IDBI Bank Limited, Mr. Shantanu Prasad resigned as Nominee Director with effect from January 12, 2018. Further, Mr. Gautam Dutta was appointed as Nominee Director (IDBI Bank Limited) on January 12, 2018 pursuant to nomination by IDBI Bank Limited.

The Directors place on record their sincere appreciation towards services rendered by Mr. Shantanu Prasad during his tenure as Nominee Director of the Company.

In accordance with Section 152 (6) and other applicable provisions of Companies Act, 2013, Ms. Sarojini Dikhale (DIN: 02755309), being a Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and, being eligible, has offered herself for re-appointment. The Board recommends her re-appointment at the ensuing AGM for your approval. As stipulated under the Regulation 36 of SEBI LODR, a brief resume of the Director proposed to be re-appointed is given in the Notice convening the ensuing AGM, which is included in the Annual Report 2017-18.

As on the date of this Report, the Board of the Company consists of 6 Directors, out of which two are Independent Directors, two are Nominee Directors, one is a Non-Executive Director and one is an Executive Director.

None of the Independent Directors have had any pecuniary relationship or transaction with the Company during Financial Year 2017-18, except to the extent of their directorship. None of the Directors or KMP of the Company is related inter-se.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from each independent director as per provisions of SEBI LODR and Section 149 (7) of the Act, that he meets the criteria of independence laid down in Section 149 (6) of the Act.

NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year. The details of the same are given in Corporate Governance Report section that forms part of this Report. The intervening gap between two consecutive Board Meetings did not exceed 120 days.

POLICIES AS PER SEBI LODR

SEBI LODR mandated all Listed Companies to formulate certain policies. The Company has in place all such policies, the list of which is given below:

- Whistle Blower Policy;

- Policy relating to Remuneration of Directors, Key Managerial Personnel and other Key Employees;

- Corporate Social Responsibility Policy;

- Policy for determining Material Subsidiaries;

- Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions;

- Policy for Board Diversity and

- Policy for Preservation of Documents.

PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

In terms of the provisions of the Act and SEBI LODR, your Company has laid down criteria for performance evaluation of Directors and Chairman of the Board and also the evaluation process for the same. Schedule IV of the Act states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Companyâs policy relating to appointment and remuneration of Directors, KMPs and other employees, including criteria for determining qualifications, positive attributes and independence of a director are covered under the Corporate Governance Report, which forms a part of this Report.

It is a practice of the Board of Directors to annually evaluate its own performance and that of its committees and individual directors. Accordingly, the performances of the members of the Board as a whole and of individual Directors were evaluated at the meeting of the Committee of the Independent Directors and the Board of Directors held on April 23, 2018.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

As per provisions of SEBI LODR and the Act, the Company has formulated Familiarization Programme for Independent Directors. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment to an Independent Director outlining his/her role, function, duties, responsibilities, etc. The terms and conditions for appointment of Independent Directors are also available on the website of the Company.

The Board Members are provided with necessary documents/brochures, reports and internal policies to enable familiarizing them with the Companyâs procedures and practices. Periodic presentations are made at the Board Meetings on business performance updates of the Company, global business environment, business strategy and risk involved.

COMMITTEES

As on date of this Report, the Board has four committees:

i. Audit Committee

ii. Nomination and Remuneration Committee

iii. Stakeholdersâ Relationship Committee

iv. Corporate Social Responsibility Committee

As per Regulation 21 of SEBI LODR, the Board needs to constitute Risk Management Committee, wherein majority of the Members of Risk Management Committee should consist of Members of Board. This regulation is applicable only to top 100 listed entities, determined on the basis of market capitalization, as at the end of the preceding financial year. Since your Company is not amongst top 100 listed entities, your Company has not constituted a Risk Management Committee.

In line with the provisions of the Act and SEBI LODR, the Company has devised and implemented a vigil mechanism, in the form of âWhistle Blower Policyâ. As per the Policy, the Company has an internal committee comprising of the Head-HR and the Compliance Officer of the Company to address the functioning of the vigil mechanism as mandated by the Act and assist the Audit Committee thereunder.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures and form part of this Report. The audited consolidated financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as âInd ASâ).

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

Your Company has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. Your Company also ensures that internal controls are operating effectively.

AUDITORS

M/s. GMJ &Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company at the 23rd Annual General Meeting held in 2016 for a term of 5 years, subject to ratification of their appointment at every Annual General Meeting.

The Audit Committee and the Board recommend ratification of appointment of M/s. GMJ & Co., Chartered Accountants as Statutory Auditors of the Company till the conclusion of 26th Annual General Meeting of the Company. The Company has received letter from statutory auditors that their re-appointment, if made, would be within limits as prescribed under Section 141 (3)(g) of Companies Act, 2013 and they are not disqualified for re-appointment.

AUDITORâS REPORT

The Auditorâs Report does not contain any qualifications, reservations or adverse remarks. However, there is an emphasis of matter in the Auditorâs Report on standalone financial statements for the year ended March 31, 2018 with respect to the remuneration paid to the Managing Director and Global CEO of the Company during financial year 2016-17. Your Directors would like to inform you that the remuneration paid / provided to the Managing Director and Global CEO for the financial year 2016-17 has been approved by both the shareholders as well as lenders of the Company. This remuneration was in excess of the limits prescribed under the erstwhile Section 197 of the Companies Act 2013 and was subject to the approval of the Ministry of Corporate Affairs (MCA). The management had made an application to MCA for the necessary approval. Although MCA has granted approval only for a part of the amount, the management, based on the opinion obtained from our legal counsel is of the view that once the amended Section 197 of the Companies (Amendment) Act, 2017 is notified, the Company would be in compliance with the law.

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is not applicable to the Company and hence are not provided.

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

During the year, your Company has taken the following technology initiatives:

- Information Security Awareness programmes;

- Strengthened its IPRs through technology innovation and appropriate security controls;

- Improved utilization and delivery productivity by use of LEAN IT techniques for project delivery and

- Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the Global Development Centers (GDCs).

The GDCs function as the product research and development arm of the Company and focus on developing and expanding the Companyâs products and IPRs. Besides this, the Company is also in the process of upgrading its varied product lines to standard and latest technological platforms.

With a focus to further enhance the Companyâs software products, i.e. its Intellectual Property based on market needs, the GDCs work in line with the Companyâs strategy for growth.

QUALITY

The Company is committed to providing innovative and high quality products and services that meet or exceed customer expectations.

This includes-

- Maintaining a quality focus on continuous improvement to our Products, Process and Services and

- Process adherence and governance ensuring lower defect & On Time delivery.

The Companyâs Quality Management System (QMS) addresses process required for entire Software Development Life Cycle (SDLC) and Project Management Life Cycle (PMLC) supported with industry standard templates and guidelines to ensure disciplined project execution, thereby transforming business from taking corrective & preventive measures to the state of predicting outcomes. This framework is designed based on the CMMi Process framework to enhance productivity and to reduce inefficiencies.

The Company has achieved CMMi Level 3 certification to meet the Companyâs commitment towards quality & business process with further plans to extend the certification to CMMi Level 5.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans More than 28.82% of the revenue of the Company is derived from exports.

b) Foreign Export earnings and expenditure

During the year 2017-18, the expenditure in foreign currencies amounted to Rs.6.13 crores on account of cost of professional charges, cost of outsourced services and bought out items, travelling and other expenses and interest (excluding expenditure incurred by UAE Branch). During the same period, the Company earned an amount equivalent to Rs.68.46 crores in foreign currencies as income from its operations abroad (excluding income from UAE Branch).

PERSONNEL

The Company has continued to improve the quality of Human Resource. The key facet has been better levels of productivity as compared to earlier years which has contributed in operating financial parameters showing a strong uplift. Regular interactions and career enhancements by way of bigger roles to talented employees have helped in strengthening the confidence of the employees in the tough financial scenario of the Company. The talent pipeline is looking healthy though attrition and retention remains a challenge for the industry and more so for the Company.

Your Company will continue to focus and build the human potential which would help in improving operating parameters in the coming year.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. In terms of Section 136, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Prevention of Sexual Harassment at Workplace

The Company has in place a policy aiming at prevention of sexual harassment at all workplaces of the Company in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. An internal Complaint Committee has been set up in the Company to consider and redress complaints received with respect to sexual harassment. During the year under review, the Complaint Committee had received one complaint of the nature covered under the said Act and has been resolved. There are no pending cases.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. A brief outline of the CSR policy of the Company and the statutory disclosures with respect to CSR Committee and an Annual Report on CSR for FY 2017-18 as required under Rule 8 (1) of the CSR Rules are set out in Annexure Vof this Report. The CSR Policy as recommended by CSR Committee and as approved by the Board is available on the website of the Company.

During the year, the Company has not spent any amount on CSR activities in view of losses incurred on an average during the preceding three financial years.

SECRETARIAL AUDITORâS REPORT

Pursuant to the provisions of Section 204 of the Act, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. BNP & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report is appended as Annexure VI to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

DISCLOSURE REQUIREMENTS

Disclosures required under Regulations of SEBI LODR are shown under the Corporate Governance Report. The Corporate Governance Report along with auditorâs certificate thereon and the Management Discussion and Analysis form part of this Report.

FUTURE OUTLOOK

The Company will continue to technologically upgrade its products and concentrate on the Software Products, IT Services and IT enabled Services for its growth. The business outlook and the initiatives proposed by the management to address its financial risks have been discussed in detail in the Management Discussion and Analysis which forms a part of this Report.

FORWARD LOOKING STATEMENTS

This Report along with its annexures and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words âanticipateâ, âbelieveâ, âestimateâ, âexpectâ, âintendâ, âwillâ and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORSâ RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Act, your Directors hereby confirm that:

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

b) they 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 the Company as at March 31, 2018 and of the loss of the Company for the financial year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

Based on the reviews of internal, statutory and secretarial auditors, external consultants, the management and respective committees of the Board, the Board is of the opinion that the Companyâs system of internal financial controls was adequate and the operating effectiveness of such controls was satisfactory during the financial year 2017-18.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Customs and other government authorities, Lenders, FCCB holders and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable team work and professionalism.

For and on behalf of the Board

Sd/- Sd/-

Ashok Shah Padmanabhan Iyer

Chairman Managing Director & Global CEO

June 29, 2018 at Mumbai

Mar 31, 2017

Dear Shareholders,

The Directors present the Twenty Fourth Annual Report (the "Report") of the Company along with the Audited Financial Statements for the year ended March 31, 2017.

OVERVIEW

a) Performance of the Company

The Management is pleased to inform the shareholders that after a period of 5 years, the Company has posted a Net Profit after Tax (called Total Comprehensive Income under the Indian Accounting Standards notified by the Ministry of Corporate Affairs) of Rs.95.09 crores for the financial year 2016-17. On the operational front, the Company made significant efforts during the year towards improving operational performance across its core businesses and is fully geared to progress on its growth aspirations. The thrust in the coming years, starting from FY 2017-18, is not only to strengthen the Company''s position in chosen areas but also to pick up momentum and grow.

b) Update on Debt Realignment Scheme (DRS)

As of the date of this Report, the Company has allotted equity shares to 64% of its Lenders. The allotment in respect of the remaining Lenders is expected to be completed shortly. The Company has also successfully implemented the restructuring of its Foreign Currency Convertible Bonds (FCCBs) during the year.

The Company has been servicing its Lenders and FCCB holders on a regular basis since April 1, 2016.

We are further pleased to announce that on June 28, 2017, the Company pre-paid a part of the principal outstanding debt due to the DRS Lenders amounting to Rs.38.5 crores. This amount represents 6 monthly instalments of the Principal Amount which were due for repayment from April 30, 2018 as per the terms of the DRS approved by its Lenders.

c) Financial Performance of the Company on Standalone and Consolidated basis

Rs. in crores

	Standalone		Consolidated
Particulars	2016-17	2015-16	2016-17	2015-16
Total Revenue (I)	344.87	429.38	1,055.91	1,132.68
Total Expenses (II)	253.78	654.92	953.33	1,402.41
Profit/(loss) before exceptional items and tax (I-II)	91.09	(225.54)	102.58	(269.73)
Exceptional items	-	222.46	-	168.87
Profit/(loss) before tax	91.09	(448.00)	102.58	(438.60)
Tax expense
Current tax	-	-	5.84	5.96
Deferred Tax Expense	(1.49)	85.88	0.27	81.53
Adjustment of tax relating to earlier periods	0.32	5.82	2.40	25.66
Profit/(Loss) for the year	92.26	(539.70)	94.07	(551.75)
OTHER COMPREHENSIVE INCOME
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent year:
Re-measurement of gains (losses) on defined benefit plans	4.32	(0.97)	7.01	(1.79)
Income tax effect	(1.49)	0.34	(0.43)	0.02

B. Other Comprehensive income to be reclassified to profit and loss in subsequent periods:	-	-	-	-
Other Comprehensive income for the year, net of tax	2.83	(0.63)	6.58	(1.77)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX	95.09	(540.33)	100.65	(553.52)
Total comprehensive income for the year, net of tax attributable to:
Profit for the year attributable to:
Equity holders of the parent	-	-	94.73	(548.96)
Non-controlling interests	-	-	(0.66)	(2.79)
Other comprehensive income for the year attributable to:
Equity holders of the parent	-	-	6.58	(1.77)
Non-controlling interests	-	-	-	-
Total comprehensive income for the year attributable to:
Equity holders of the parent	-	-	101.31	(550.73)
Non-controlling interests	-	-	(0.66)	(2.79)
Earnings per share for profit attributable to equity shareholders
Basic EPS	0.75	(8.67)	0.77	(8.85)
Diluted EPS	0.75	(8.67)	0.77	(8.85)

During the year under review, standalone sales and other income stood at Rs.344.87 crores. After meeting all the expenditures, the Company made a total comprehensive income of Rs. 95.09 crores on standalone basis. Further, during the year under review, consolidated sales and other income stood at Rs.1055.91 crores. After meeting all expenditures, the Company made a comprehensive income of Rs.100.65 crores on a consolidated basis.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve this year.

DIVIDEND

During the year, the Company has issued Class B Preference Shares of Rs.5/- each to some of the Lenders as per the terms of Debt Realignment Scheme (DRS). An amount of Rs.3,466,352 was paid as preference dividend to Class B Preference Shareholders on preference shares issued upto March 31, 2017. The payment of the abovementioned dividend was made as part of the contractual obligations of the Company with respect to the issue of these preference shares.

The Company has also paid a dividend of Rs.330,343 as preference dividend to Class A Preference Shareholders for the period from April 1, 2012 to April 30, 2017 as per the terms of issue of Class A Preference Shares.

After payment of preference dividend, the profits available for distribution to equity shareholders work out to be Rs.92.26 crores. As the Members are aware, the Company had not declared dividend on equity shares in the last few years in view of losses incurred by the Company. Though the Company has earned net profits during the financial year ended March 31, 2017, as per the terms of the Master Restructuring Agreement (MRA) dated March 30, 2012, entered into by the Company with IDBI Bank Limited, the Monitoring Institution and the CDR Lenders, the Company is prohibited from declaring or paying any dividend on its equity shares without prior approval of Lenders/ CDR Empowered Group. In view of this fact, your Directors regret to state their inability to recommend any dividend on equity shares for the year ended March 31, 2017.

BUSINESS

The business activities of the Company are broadly divided into two categories, viz. IT Solutions and Transaction Services. IT Solutions business comprises of software products and IT enabled services while the transaction services comprise of BPO and KPO services. The Company has a good product portfolio and has dominant presence in fast growing emerging economies. The Product Business of the Company has a wide base with more than 1000 active customers who are satisfactorily using the Company''s products.

The contribution of IT Solutions to the revenue for the year was 95% and that of Transaction Services was 5%.

Your Company has presence in 50 countries across six operational geographies, viz. South Asia, Asia Pacific (APAC), Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA), Western Europe (WE) and North America (US). Your Company has marketing network around the world, including US, WE, MEA and APAC. The business of your Company is largely divided into Emerging Markets and Developed Markets. The share of the Emerging Markets to total revenue of the Company is about 67% while that of Developed Markets is about 33%. For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Company has neither raised its stake, on its own or through its subsidiaries in any of the companies, nor divested its stake in any of its subsidiaries. As on March 31, 2017, the number of subsidiaries is 23 (twenty three).

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans, guarantees or investments granted/made during the year are given under the notes to standalone financial statements forming part of the Annual Report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all the contracts or arrangements or transactions entered into by the Company with related parties referred to in Section 188 of the Companies Act, 2013 were in the ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm''s length basis, form AOC-2 is not applicable to the Company.

The Company has in place a Policy on Materiality of Related Party Transactions and on dealing with Related Party T ransactions. The said policy can be viewed on the Company''s website in the Investors'' section by accessing the following link: http://www.3i-infotech.com/content/investors/-2/ under âCorporate Governanceâ.

Details regarding related party disclosure are given under the notes to standalone financial statements which form part of the Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year, the Shareholders approved the following Resolutions through Postal Ballot concluded on May 13, 2016:

1. Increase in Authorized Share Capital of the Company to the extent of 20 crore equity shares of Rs.10 each and consequent amendment to the Memorandum of Association of the Company;

2. Amendment to the Articles of Association of the Company;

3. (i) Issue as part of the proposed restructuring of the outstanding USD 125,356,000 5% convertible bonds due 2017 (the â5% Bondsâ) and USD 2,435,000 4.75% convertible bonds due 2017 (the â4.75% Bondsâ, and together with the 5% Bonds, the âExisting Bondsâ), new foreign currency convertible bonds to the holders of the Existing Bonds in exchange for the Existing Bonds, and (ii) amend the terms of the outstanding Existing Bonds (to the extent not exchanged) including extension of the maturity and reduction of the rate of interest; and

4. Issue of equity shares against conversion of a portion of the outstanding amounts due to the Lenders.

The details of results of this Postal Ballot conducted during the year are given in Annexure I in the Corporate Governance Report.

Except as stated above, there have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year to which financial statements relate and as on the date of the Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operation in future.

REPORT ON CORPORATE GOVERNANCE

The Corporate Governance Report along with auditors'' certificate thereon in terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODRâ) read with Schedule V of said regulations is appended herewith as Annexure I to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 of SEBI LODR, the Management Discussion and Analysis Report is given under a separate section forming part of this Annual Report.

EXTRACT OF ANNUAL RETURN

CAPITAL a) Preference Share Capital

During the year under review, as per the terms of DRS, the Company had allotted 0.10% Cumulative Non- Convertible Redeemable Preference Shares (Class B Preference Shares) of face value of Rs.5/- each at par to its Lenders. Details of the allotments are as follows:

Date of Allotment	No. of Class B Preference Shares allotted
September 29, 2016	43,44,31,627
January 2, 2017	18,95,05,860
March 22, 2017	2,14,76,000
March 31, 2017	4,78,57,000
TOTAL	69,32,70,487

Existing preference shares of the Company before the above allotments were designated as Class A Preference Shares. After taking into account the above allotments, the preference share capital of the Company as on March 31, 2017 was Rs.4,11,63,52,435 consisting of 13,00,00,000 Class A Preference Shares of Rs.5/- each and 69,32,70,487 Class B Preference Shares of Rs.5/- each.

b) Increase in Authorized Capital

In order to issue additional share capital as required under DRS, it was felt necessary to increase the authorized share capital of the Company. Pursuant to approval of the Members obtained through Postal Ballot, results of which were declared on May 13, 2016, the authorized share capital of the Company was increased to Rs.3,155 Crores (Rupees Three Thousand One Hundred Fifty Five Crores only) divided into 220 Crore (Two Hundred Twenty Crore) equity shares of Rs.10/- each, 20 Crore (Twenty Crore) preference shares of Rs.5/- each (called Class A Preference Shares), 150 Crore (One Hundred Fifty Crore) preference shares of Rs.5/- each (called Class B Preference Shares) and 105 Crore (One Hundred Five Crore) preference shares of Rs.1/- each (called Class C Preference Shares).

c) Paid-up Equity Share Capital

1) ESOS allotments:

The Company has not allotted any shares under the Employees Stock Option Schemes (ESOS) during the year.

2) Allotments against conversion of Foreign Currency Convertible Bonds (FCCBs):

During the year, the Company had received one conversion notice from an FCCB holder against which 6,37,193 Equity Shares were allotted by the Company at a premium of Rs.6.50/- per share on July 26, 2016. During the year, the Company had proposed an exchange offer to its FCCB holders under the Debt Realignment Scheme (DRS) Package of the Company. FCCB holders opting for the exchange offer were given new FCCBs in exchange for their existing FCCBs. Terms of FCCBs of the remaining FCCB holders were amended as per resolutions passed at the meetings of the FCCB holders. As per terms of new FCCBs and the amended FCCBs, a portion of the FCCBs underwent automatic conversion into equity shares against which the following allotments were made to the FCCB holders on December 12, 2016:

a) 1,90,356 Equity Shares of face value of Rs.10/- each were allotted at a premium of Rs.155.935/- per share to the holders of existing FCCBs held under ISIN XS0308551166;

b) 1,51,65,824 Equity Shares of face value of Rs.10/- each were allotted at a premium of Rs.6.50/- per share to the holders of existing FCCBs held under ISIN XS0769181982 and

c) 13,32,09,406 Equity Shares of face value of Rs.10/- each were allotted at par to the holders of new FCCBs held under ISIN XS1423751418.

The conversion price of the amended FCCBs was as per the original terms of the respective issue of FCCBs (as adjusted for bonus, where applicable). The initial automatic conversion price of the new FCCBs was Rs.10/- per share. In case of any subsequent conversions of the new FCCBs at the option of the FCCB holders, the conversion price would be Rs.12.50/- per share.

3) Allotment of Equity Shares under the Debt Realignment Scheme (DRS) Package:

During the year under review, the Company has allotted 39,36,44,696 Equity Shares to some of the Lenders of the Company including the lenders of the Company''s subsidiaries and lenders of facilities guaranteed by the Company and lessors of the Company (âDRS Lendersâ) as per the terms of DRS package, the details of which are as follows:

Date of allotment	No. of shares allotted
September 29, 2016	25,74,40,351
January 2, 2017	10,82,89,063
March 31, 2017	2,79,15,282
TOTAL	39,36,44,696

Further, 14,85,65,586 Equity Shares of face value of Rs.10/- each were allotted to FCCB holders on December 12, 2016 against automatic conversion of a portion of the existing and new FCCBs as per the terms of DRS. Details of these allotments are mentioned under point no. 2 above.

As a result of the aforesaid allotments, the paid-up equity share capital of the Company stands at Rs.11,83,65,14,030 and the issued equity share capital of the Company stands at Rs.12,23,67,26,040 as on March 31, 2017. The difference between Issued and Paid-up Equity Share Capital is on account of 4,00,21,201 equity shares of Rs.10/- each held in abeyance at the request of an FCCB holder, which were subsequently alloted on June 8, 2017.

EMPLOYEES STOCK OPTION SCHEMES

As per SEBI Circular (CIR/CFD/POLICY CELL/2/2015) dated June 16, 2015 relating to requirements specified under the SEBI (Share Based Employee Benefits) Regulations 2014, details of the Employee Stock Option Schemes (ESOS) of the Company are given in Annexure III to this Report.

PUBLIC DEPOSITS

During the year, the Company has not invited/accepted any deposit under Section 73 of the Act.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, Mr. Padmanabhan Iyer (DIN-05282942) was appointed as an Executive Director for a period of 3 years with effect from May 18, 2016. Later, on June 7, 2016, Mr. Madhivanan Balakrishnan (DIN-01426902) resigned as the Managing Director & Global CEO of the Company. Pursuant to resignation of Mr. Madhivanan Balakrishnan, Mr. Padmanabhan Iyer was elevated to the position of the acting Chief Executive Officer of the Company. Thereafter, Mr. Padmanabhan Iyer was appointed as Managing Director & Global CEO for a period of 5 years effective August 11, 2016. At the 23^rd Annual General Meeting of the Members of the Company, the Members approved the appointment of Mr. Padmanabhan Iyer as Managing Director and Global CEO for a period of 5 years and remuneration payable to him for a period of 3 years by way of special resolution.

On January 23, 2017, Mr. Shanti Lal Jain (DIN-07692739) was appointed as Nominee Director representing Allahabad Bank on the Board of Directors of the Company.

Further, Mr. Rajeev Limaye was appointed as Company Secretary and Compliance Officer effective July 5, 2016.

The Directors place on record their sincere appreciation towards services rendered by Mr. Madhivanan Balakrishnan during his tenure as Managing Director of the Company.

In accordance with Section 152 (6) and other applicable provisions of Companies Act, 2013, Ms. Sarojini Dikhale (DIN-02755309), being a Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and, being eligible, has offered herself for re-appointment. The Board recommends her re-appointment at the ensuing AGM for your approval. As stipulated under the Regulation 36 of SEBI LODR, a brief resume of the Director proposed to be re-appointed is given in the Notice convening the ensuing AGM, which is included in the Annual Report 2016-17.

None of the Independent Directors have had any pecuniary relationship or transaction with the Company during financial year 2016-17, except to the extent of their directorship. None of the Directors or KMP of the Company is related inter-se.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from each independent director as per provisions of SEBI LODR and Section 149 (7) of Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149 (6) of Companies Act, 2013.

NUMBER OF MEETINGS OF THE BOARD

Nine meetings of the Board of Directors were held during the year. The details of the same are given in Corporate Governance Report section that forms part of the Annual Report. The intervening gap between two consecutive Board Meetings did not exceed 120 days.

POLICIES AS PER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") mandated all listed companies to formulate certain policies. The Company has in place all such policies, the list of which is given below:

- Whistle Blower Policy;

- Policy relating to Remuneration of Directors, Key Managerial Personnel and other Key Employees;

- Corporate Social Responsibility Policy;

- Policy for determining Material Subsidiaries;

- Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions;

- Policy for Board Diversity and

- Policy for Preservation of Documents.

PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

In terms of the provisions of the Act and SEBI LODR, your Company has laid down criteria for performance evaluation of Directors and Chairman of the Board and also the evaluation process for the same. Schedule IV of the Act states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Company''s policy relating to appointment and remuneration of Directors, KMPs and other employees, including criteria for determining qualifications, positive attributes and independence of a director are covered under the Corporate Governance Report, which forms a part of this Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

As per provisions of SEBI LODR, and the Act, the Company has formulated Familiarization Programme for Independent Directors. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment to an Independent Director outlining his/her role, function, duties, responsibilities, etc. The terms and conditions for appointment of Independent Directors are also available on the website of the Company.

The Board members are provided with necessary documents/brochures, reports and internal policies to enable familiarizing them with the Company''s procedures and practices. Periodic presentations are made at the Board Meetings on business performance updates of the Company, global business environment, business strategy and risk involved.

COMMITTEES

As on the date of this Report, the Board has four committees:

i. Audit Committee

ii. Nomination and Remuneration Committee

iii. Stakeholders'' Relationship Committee

iv. Corporate Social Responsibility Committee

In line with the provisions of the Act and SEBI LODR, the Company has devised and implemented a vigil mechanism in the form of âWhistle Blower Policyâ. As per the Policy, the Company has an internal committee comprising of the Head-HR and the Compliance Officer of the Company to address the functioning of the vigil mechanism as mandated by the Act and assist the Audit Committee there under.

CONSOLIDATED FINANCIAL STATEMENTS

The audited Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures and form part of the Annual Report. The audited Consolidated Financial Statements have been prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India and the Act.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

AUDITORS

M/s. Lodha & Co., Chartered Accountants and M/s. GMJ &Co., Chartered Accountants were appointed as the Joint Statutory Auditors of the Company at the AGM held on December 7, 2016 till the conclusion of the Twenty Fourth AGM of the Company to be held in the year 2017. As per the provisions of Section 139 of the Act, M/s. Lodha & Co. will retire at the ensuing AGM.

The Audit Committee and the Board recommend ratification of appointment of M/s. GMJ & Co., Chartered Accountants as Statutory Auditors of the Company till the conclusion of the Twenty Fifth AGM of the Company. The Company has received a letter from statutory auditors that their re-appointment, if made, would be within limits as prescribed under Section 141 (3)(g) of the Act and they are not disqualified for re-appointment.

AUDITORS'' REPORT

The Auditors'' Report does not contain any qualifications. However, there is an emphasis of matter in the Auditors'' Report on standalone financial statements for the year ended March 31, 2017 with respect to remuneration paid to the Managing Director & Global CEO of the Company during financial year 2016-17. Your Directors would like to inform that the Company has made an application to Central Government for waiver of excess remuneration paid to Mr. Padmanabhan Iyer, Managing Director & Global CEO of the Company for the financial year 2016-17. Since the appointment of Mr. Padmanabhan Iyer as Managing Director and Global CEO for a period of 5 years and remuneration payable to him for a period of 3 years has been approved by Shareholders by way of a special resolution at the AGM held on December 7, 2016, the Company could not seek prior approval of the Central Government for payment of remuneration in excess of limit prescribed in Schedule V of the Act due to paucity of time.

CONSERVATION OF ENERGY

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products. During the year, your Company has taken the following technology initiatives:

- Information Security Awareness programmes;

- Strengthened its IPRs through technology innovation and appropriate security controls;

- Improved utilization and delivery productivity by use of LEAN IT techniques for project delivery and

- Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies. RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the Global Development Centres (GDCs).

The GDCs function as the product research and development arm of the Company and focus on developing and expanding the Company''s products and IPRs. Besides this, the Company is also in the process of upgrading its varied product lines to standard and latest technological platforms.

With a focus to further enhance the Company''s software products i.e. its Intellectual Property based on market needs, the GDCs work in line with the Company''s strategy for growth.

Expenditure on R & D

Rs. in crores

Particulars	2016-17	2015-16
Revenue Expenditure	9.87	2.28
Capital Expenditure	-	-
Total	9.87	2.28
Total R&D expenditure as a percentage of total standalone revenue	3.54%	0.61%

QUALITY

The Company is committed to provide innovative and high quality products and services that meet or exceed customer expectations.

This includes-

- Maintaining a quality focus on continuous improvement to our Products, Process and Services and

- Process adherence and governance ensuring lower defect and On Time delivery.

The Company''s Quality Management System (QMS) addresses process required for entire Software Development Life Cycle (SDLC) and Project Management Life Cycle (PMLC) supported with industry standard templates and guidelines to ensure disciplined project execution, thereby transforming business from taking corrective and preventive measures to the state of predicting outcomes. This framework is designed based on the CMMi Process framework to enhance productivity and to reduce inefficiencies.

The Company is in the process of getting CMMi Level 3 certification by September 2017 to meet the Company''s commitment towards quality and business process, with further plans to extend the certification to CMMi Level 5 and TMMi Level 5.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans

More than 17.25% of the revenue of the Company is derived from exports.

b) Foreign export earnings and expenditure

During the year 2016-17, the expenditure in foreign currencies amounted to Rs.8.25 crores on account of professional charges, cost of outsourced services and bought out items, travelling and other expenses and interest (excluding expenditure incurred by Dubai Branch). During the same period, the Company earned an amount equivalent to Rs.48.13 crores in foreign currencies as income from its operations abroad (excluding income from Dubai Branch).

PERSONNEL

The Company has continued to improve the quality of Human Resources. The key facet has been better levels of productivity as compared to earlier years which has contributed in operating, financial parameters showing a strong uplift. Regular interactions and career enhancements by way of bigger roles to talented employees have helped in strengthening the confidence of the employees in the tough financial scenario of the Company. The talent pipeline is looking healthy though attrition and retention remains a challenge for the industry and more so for the Company.

Your Company will continue to focus and build the human potential which would help in improving operating parameters in the coming year.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. In terms of Section 136, the said annexure is open for inspection at the Registered Office of the Company. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Prevention of Sexual Harassment at Workplace

The Company has in place a policy aiming at prevention of sexual harassment at all workplaces of the Company in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules there under. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. An Internal Complaint Committee has been set up in the Company to consider and redress complaints received with respect to sexual harassment. During the year under review, the Complaint Committee has not received any grievances or complaints of the nature covered under the said Act.

CORPORATE SOCIAL RESPOSIBILITY ("CSR")

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, ("CSR Rules") the Company has constituted Corporate Social Responsibility (CSR) Committee. A brief outline of the CSR policy of the Company and the statutory disclosures with respect to the CSR Committee and an Annual Report on CSR for FY 2016-17 as required under Rule 8(1) of the CSR Rules are set out in Annexure V of this Report. The CSR Policy as recommended by CSR Committee and as approved by the Board is available on the website of the Company.

SECRETARIAL AUDITOR''S REPORT

Pursuant to the provisions of Section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. BNP & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year 2016-17. The Secretarial Audit report is appended as Annexure VI to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

DISCLOSURE REQUIREMENTS

Disclosures required under Regulations of SEBI LODR are shown under the Corporate Governance Report (CGR). The CGR along with auditor''s certificate thereon and the Management Discussion and Analysis form part of this Report.

FUTURE OUTLOOK

FORWARD LOOKING STATEMENTS

This Report along with its annexure and Management Discussion and Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words ''anticipate'', ''believe'', ''estimate'', ''expect'', ''intend'', ''willâ and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Act, your Directors hereby confirm that:

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

b) they 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 the Company as at March 31, 2017 and of the loss of the Company for the financial year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

Based on the reviews of internal, statutory and secretarial auditors, external consultants, the management and respective committees of the Board, the Board is of the opinion that the Company''s system of internal financial controls was adequate and the operating effectiveness of such controls was satisfactory during the financial year 2016-17.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities and Exchange Board of India, Reserve Bank of India, Customs and other government authorities, Lenders, CDR Cell, CDR Empowered Group, FCCB holders and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable team work and professionalism.

For and on behalf of the Board

Sd/- Sd/-

Ashok Shah Padmanabhan Iyer

Chairman Managing Director & Global CEO

July 22, 2017 at Navi Mumbai

Mar 31, 2015

Dear Shareholders,

The Directors present the Twenty Second Annual Report (the "Report") of the Company along with the Audited Financial Statements for the year ended March 31, 2015.

STATE OF THE COMPANY'S AFFAIRS

Financial Performance of the Company on Standalone and Consolidated basis:

Rs. in crores

Particulars Standalone Consolidated

Year ended Year ended Year ended Year ended March 31, 2015 March 31, 2014 March 31, 2015 March 31, 2014

Total Income 403.81 395.32 1,348.43 1438.50

Total Expenses 747.37 813.24 1,611.78 1,794.23

Profit/(Loss) before exceptional items and tax (343.56) (417.92) (263.35) (355.73)

Exceptional items 690.62 35.85 673.17 -

Profit/(Loss) before tax (1,034.18) (453.77) (936.52) (355.73)

Tax expense - - 14.17 15.97

Deferred Tax Expense - (17.67) (3.03) (18.45)

Tax Expense from earlier years 23.57 4.12 28.40 3.81

Profit/(Loss) after tax (1,057.75) (440.22) (976.06) (357.06)

Minority interest - - (0.21) (0.50)

Profit/(Loss) for the period (1,057.75) (440.22) (976.27) (357.56)

Earnings Per Share (Basic in Rupees) (Before (6.39) (7.15) (5.29) (6.33) exceptional items

Earnings per share (Basic in Rupees) (After (18.25) (7.78) (16.85) (6.33) exceptional items

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve this year due to unavailability of profits.

DIVIDEND

The Board of Directors regrets its inability to recommend any dividend (equity or preference) for the year ended March 31, 2015 due to non-availability of profits..

BUSINESS

Your Company has a comprehensive set of IP based software solutions (20 ), coupled with a wide range of IT Services to address the dynamic requirements of a variety of industry verticals including Banking, Insurance, Capital Markets, Asset & Wealth Management (BFSI). The Company also provides solutions for other verticals such as Government, Manufacturing, Distribution, Telecom and Healthcare.

The business activities of the Company are broadly divided into two categories viz: IT Solutions and Transaction Services. IT Solutions business comprises of software products and IT enabled services while the transaction services comprise of BPO and KPO services. The Company has good product portfolio and has dominant presence in fast growing emerging economies. The Product Business of the Company has wide base with more than 800 active customers who are satisfactorily using the Company's products.

The contribution to the revenue for the year from IT Solutions was 95% and that of Transaction Services was 5%.

Your Company has presence in 50 countries and seven geographies, viz. South Asia, Asia Pacific (APAC), China, Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA), Western Europe (WE) and North America (US). Your Company has marketing network around the world, including North America, Western Europe, Middle East and Africa and Asia Pacific.

The business of your Company is largely divided into Emerging Markets and Developed Markets. The share of the Emerging Markets to total revenue of the Company is about 62%, while that of Developed Markets is about 38%.

For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

In terms of the CDR package, the Company was given a mandate to identify its non core business/assets for sale and utilize the proceeds to deleverage its balance sheet. The Master Restructuring Agreement (MRA) signed with the Lenders had also identified certain such assets. Therefore, as per this mandate, the following subsidiaries were divested during the year:

i. In August 2014, Professional Access Limited (US) was hived off along with the entire business of Professional Access Software Development Private Limited (India) to Zensar Technologies Limited (including its affiliates).

ii. In December2014, 3i Infotech (Western Europe) Limited and 3i Infotech (Flagship-UK) Limited were sold to Object way UK Limited.

On July 29, 2014, Locuz Inc. was incorporated as a step down subsidiary to tap business opportunities in the U.S. region.

Later, in February 2015, the name of one of the Company's step-down subsidiaries, 3i Infotech Outsourcing Services Limited was changed to "IFRS Cloud Solutions Limited" and its main objects were amended to include "providing solutions on implementation of International Financial Reporting Standards (IFRS) on the cloud platform".

As on March 31, 2015, the number of subsidiaries was reduced to 25 (twenty five) from 27 (twenty seven) at the beginning of the year.

As per the first proviso to Section 129(3) of the Companies Act, 2013 (the "Act") read with Rule 5 of Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures in the prescribed Form AOC-1 is attached to the consolidated financial statements.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans, guarantees or investments granted/made during the year are given under the notes to standalone financial statements forming part of the Annual Report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions. The said policy can be viewed on the Company's website by accessing the following link: http://www.3i-infotech.com/content/investors/investors.asp under "Corporate Governance"

Details regarding related party disclosure are given under the notes to standalone financial statements which form part of the Annual Report.

REPORT ON CORPORATE GOVERNANCE

The Corporate Governance Report is appended herewith as Annexure /to this Report.

EXTRACT OF ANNUAL RETURN

In terms of the requirements of Section 92 (3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in the prescribed form MGT- 9 is attached herewith as Annexure II and forms part of this Report.

CAPITAL

a) Preference Capital:

The Company has not allotted any preference shares during the year and therefore as on March 31, 2015, the preference share capital remains unchanged at Rs.65,00,00,000/- (13,00,00,000 Preference Shares of Rs.5/-each). All the preference shares are held by IDBI Trusteeship Services Limited (ICICI Strategic Investments Fund).

b) Paid-up Equity Capital:

1) ESOS allotments:

The Company has not allotted any shares under the Employees Stock Option Schemes (ESOS) during the year.

2) Allotments against conversion of Foreign Currency Convertible Bonds (FCCBs):

During the year, the Company had received conversion notices from FCCB holders against which 2,96,61,822 Equity Shares of face value of Rs.10/- each were allotted by the Company at a premium of Rs.6.50/- per share.

3) Allotments of Equity Shares under the Corporate Debt Restructuring (CDR) Package:

On December 9, 2014, 14,44,747 Equity Shares of face value Rs.10/-each at a premium ofRs.9.74/-per Equity Share were allotted to a CDR Lender towards sacrifice as agreed under the CDR Package.

As a result of the aforesaid allotments, the paid-up equity share capital of the Company stands at Rs.6,03,75,09,470 as on March 31, 2015.

The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor any shares (including sweat equity shares) to the employees of the Company under any Scheme.

EMPLOYEES STOCK OPTION SCHEMES

As per SEBI Circular (CIR/CFD/POLICY CELL/2/2015) dated June 16, 2015 relating to requirements specified under the SEBI (Share Based Employee Benefits) Regulations 2014, details of the Employee Stock Option Schemes (ESOS) of the Company are given in Annexure III to this Report.

PUBLIC DEPOSITS

During the year, the Company has not invited/accepted any deposit under Section 73 of the Act.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Effective September 1, 2014, IDBI Bank Limited, the Lender and Monitoring Institution under CDR, nominated Mr. Shantanu Prasad as Director on the Board of the Company. Mr. Shantanu Prasad replaced Mr. N. S. Venkatesh, who was a nominee director representing IDBI Bank then. Further, Dr. Ashok Jhunjhunwala, Non-Executive Independent Director also stepped down as Director of the Company with effect from September 15, 2014.

Dr. ShashankDesai and Ms. Sarojini Dikhale were appointed as Additional Directors with effect from November 3, 2014 and July 28, 2015 respectively. It is proposed to appoint Dr. Shashank Desai and Ms. Sarojini Dikhale as Independent Directors for a period of 5 years effective September 23, 2015 at the ensuing Annual General Meeting of the Company.

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Mr. Hoshang N. Sinor and Mr. Ashok Shah were appointed as Independent Directors at the Annual General Meeting (AGM) of the Company held on September 16, 2014 to hold office for a period effective April 1, 2014 to September 30, 2015. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. They had submitted a declaration that each one of them meets the criteria of independence as provided under Section 149 (6) of the Act and there has been no change in the circumstances which may affect their status as Independent Director.

Mr. Hoshang N. Sinor, who has been on the Board for over 12 years, retires on September 30, 2015. In spirit of the provisions of the corporate governance, he does not offer himself for appointment as Independent Director for a fresh term thereafter. It is proposed to appoint Mr. Ashok Shah as Independent Director on the Board of the Company for a period of 5 years to hold office up to September 30, 2020.

During the year, with effect from November 11, 2014, Mr. Charanjit Attra, Executive Director and Chief Financial Officer, was redesignated as Executive Director - New Business Initiatives, Strategy and Finance, while Mr. Padmanabhan Iyer was appointed as the Chief Financial Officer of the Company on November 11, 2014.

Subsequently, he has resigned from the Board with effect from May 28, 2015 in order to pursue opportunities in other professional areas.

As per the provisions of Section 152 of the Act, Mr. Madhivanan Balakrishnan is liable to retire by rotation at this AGM and being eligible, seeks re-appointment. The Board of Directors recommends these appointments.

As on the date of this Report, the Board of the Company consists of 7 Directors, out of which four are Independent Directors, two are Nominee Directors and one is an Executive Director.

None of the Independent Directors have had any pecuniary relationship or transactions with the Company during Financial Year 2014-15, except to the extent of their directorship. None of the Directors or KMP of the Company is related inter-se.

Five meetings of the Board of Directors were held during the year. The details of the same are given on page no. 9 of the Annual Report.

Mr. Ninad Kelkar, Company Secretary, is the Compliance Officer of the Company and also one of the KMPs of the Company.

COMMITTEES

As on date of this Report, the Board has four committees-

i. Audit Committee

ii. Nomination and Remuneration Committee

iii. Stakeholders' Relationship Committee

iv Corporate Social Responsibility Committee

The Company also has an internal committee comprising of the Head-HR and the Compliance Officer of the Company to address the functioning of the vigil mechanism as mandated by the Act and assist the Audit Committee thereunder.

The detailed information regarding the committees of the Board, including composition of the Audit Committee, has been given in the Corporate Governance Report which forms an integral part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Act and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with (AS) - 23 on Accounting for Investments in Associates and (AS) - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures and form part of the Annual Report.

AUDITORS

M/s. Lodha & Co., Chartered Accountants were appointed as the Statutory Auditors of the Company at the previous AGM held on September 16, 2014 till the conclusion of the Twenty Fourth AGM of the Company to be held in the year 2017. As per the provisions of Section 139 of the Act, the appointment of Auditor is subject to ratification by members at every AGM. Accordingly, the ratification of the appointment of Auditor has been taken upas an item in the Notice of the forthcoming AGM for the approval of Members.

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is not applicable to the Company and hence are not provided.

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

During the year, your Company has taken the following technology initiatives:

Information Security Awareness programmes;

Strengthened its IPRs through technology innovation and appropriate security controls;

Improved utilization and delivery productivity by use of LEAN IT techniques for project delivery and

Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the Global Development Centers (GDCs).

The GDCs function as the product research and development facility of the Company and focus on developing and expanding the Company's products and IPRs. Besides this, the Company is also in the process of upgrading its varied product lines to standard and latest technological platforms.

With a focus to further enhance the Company's software products, i.e. its Intellectual Property, based on market needs, the GDCs work in line with the Company's strategy for growth.

Expenditure on R & D

Rs. in Crores

Particulars 2014-15 2013-14

Revenue Expenditure 5.83 16.34

Capital Expenditure - -

Total 5.83 16.34

Total R&D expenditure as a percentage of total standalone revenue 1.44% 4.13%

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans More than 19.60% of the revenue of the Company is derived from exports.

b) Foreign Export earnings and expenditure

During the year 2014-15, the expenditure in foreign currencies amounted to Rs. 111.19 crores on account of cost of outsourced services and bought out items, travelling and other expenses and interest. During the same period, the Company earned an amount equivalent to Rs. 78.55 crores in foreign currencies as income from its operations abroad (excluding income form Dubai Branch).

PERSONNEL

The Company has continued to improve the quality of Human Resource. The key facet has been better levels of productivity as compared to earlier years which has contributed in operating financial parameters showing a strong uplift. Regular interactions and career enhancements by way of bigger roles to talented employees have helped in strengthening the confidence of the employees in the tough financial scenario of the Company. The talent pipeline is looking healthy though attrition and retention remains a challenge for the industry and more so for the Company.

Your Company will continue to focus and build the human potential which would help in improving operating parameters in the coming year.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. In terms of Section 136, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Disclosures pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report as Annexure IV.

Prevention of Sexual Harassment at Workplace

The Company has in place a Policy aiming at prevention of Sexual Harassment at all Company's workplaces in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)Act, 2013 and the rules thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. An internal Complaint Committee has been set up in the Company to consider and redress complaints received with respect to sexual harassment. During the year under review, the Complaint Committee has not received any grievances or complaints of the nature covered under the said Act.

PERFORMANCE EVALUATION

The Company's policy relating to appointment and remuneration of Directors, KMPs and other employees, including criteria for determining qualifications, positive attributes and independence of a director are covered under the Corporate Governance Report, which forms a part of this Report.

It is a practice of the Board of Directors to annually evaluate its own performance and that of its committees and individual directors. Details of the process of Board evaluation are also covered under the Corporate Governance Report.

QUALITY

The Company is committed to providing innovative and high quality products and services that meet or exceed customer expectations.

This includes-

Maintaining a quality focus on continuous improvement to our Products, Process and Services

Process adherence and governance ensuring lower Defect & On Time delivery

The Company's Quality Management System (QMS) addresses process required for entire Software Development Cycle (SDLC) and Project Management Life Cycle (PMLC) supported with industry standard templates and guidelines to ensure disciplined project execution, there by transforming business from taking corrective & preventive measures to the state of predicting outcomes. This framework is designed based on the CMMi Process framework to enhance productivity and to reduce inefficiencies.

The Company has achieved CMMi Level 3 certification to meet the Company's commitment towards quality & business process.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Owing to the losses incurred during the year, the Company has not been able to contribute monetarily towards CSR activities. However, the Company has taken many initiatives to sensitise and encourage its employees to participate in CSR activities at an individual level in order to keep alive in them the noble spirit of giving back to the society.

The Company has reaffirmed its concurrence with the concept of CSR through formulation of a specific policy on CSR and constitution of a CSR Committee, details of which are covered under the Corporate Governance Report.

AUDITOR'S REPORT AND SECRETARIAL AUDITOR'S REPORT

The auditor's report does not contain any qualifications, reservations or adverse remarks. The Company appointed a Woman Director on the Board on July 28, 2015 i.e. after the completion of the audit period. The report of the secretarial auditor, which is annexed herewith as Annexure V in accordance with Section 204 of the Act, is qualified to that extent.

DISCLOSURE REQUIREMENTS

Disclosures required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges are shown under the Corporate Governance Report (CGR). The CGR along with auditor's certificate thereon and the Management Discussion and Analysis form part of this Report.

FUTURE OUTLOOK

The Company will continue to technologically upgrade its products and concentrate on the Software Products, IT Services and IT enabled Services for its growth. The business outlook and the initiatives proposed by the management to address its financial risks have been discussed in detail in the Management Discussion and Analysis which forms a part of this Report.

FORWARD LOOKING STATEMENTS

This Report along with its annexures and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words 'anticipate', 'believe', 'estimate', 'expect', 'intend', 'will' and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, your Directors hereby confirm that:

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

b) they 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 the Company as at March 31, 2015 and of the loss of the Company for the financial year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

Based on the reviews of internal, statutory and secretarial auditors, external consultants, the management and respective committees of the Board, the Board is of the opinion that the Company's system of internal financial controls was adequate and the operating effectiveness of such controls was satisfactory during the financial year 2014-15.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Customs and other government authorities, Lenders, CDR Cell, FCCB holders and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable team work and professionalism.

For and on behalf of the Board

Sd/- Sd/-

Hoshang N. Sinor Madhivanan Balakrishnan

Chairman Managing Director & Global CEO

July 28, 2015 at Navi Mumbai

Mar 31, 2013

Dear Shareholders,

The Directors present the Twentieth Annual Report of the Company with the Audited Financial Statements for the year ended March 31, 2013.

OVERVIEW

a. Performance of the Company

The year 2012-13 was a critical year for the Company as this was the first year after the Company had agreed upon a restructuring package with the lender banks in India under the Corporate Debt Restructuring (CDR) Scheme of the Reserve Bank of India. Further, at the beginning of this year, the Company had successfully restructured the Foreign Currency Convertible Bonds (FCCBs) which were due for redemption in the current financial year. Accordingly, as per the restructuring terms agreed with the FCCB holders, the redemption tenure of the FCCBs was rescheduled till 2017. As a result of these restructurings, the debt repayment pressure was eased out which helped the Company focus on the business growth.

The business of the Company during the first quarter ended on June 30, 2012 was largely impacted by the aforesaid restructurings and low sentiment in the financial markets. The Company, under new management and with the re-energized business leaders, has been focusing on the business and achieving the growth targets from the second quarter ended on September 30, 2012. The Company, not only retained its existing customers, but also won new customers during this period. The new management is also looking for various options to infuse liquidity in the Company.

The synopsis of the financials stated below may be read in context of the above review.

b. Financials of the Company on Standalone and Consolidated basis:

Rs.in Crores

Particulars Standalone Consolidated Year ended Year ended Year ended Year ended March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012

Total income 416.19 540.62 1364.28 1730.59

Profit / (Loss) from ordinary activities after (379.45) (165.25) (383.58) (72.54)

finance costs but before exceptional items

Exceptional items 132.96 (87.22) (86.27) (181.42)

Profit / (Loss) from ordinary activities before tax (246.49) (252.47) (469.85) (253.96)

Tax expense 8.87 59.26 (14.06) (80.77)

Profit / (Loss) from ordinary activities after tax (255.36) (311.73) (483.91) (334.73)

Impact of discontinuing operations (14.42) (19.57) (22.67)

Profit / (Loss) after tax and discontinuing operations (255.36) (326.15) (503.48) (357.40)

Minority interest (1.49) (2.63)

Profit / (Loss) after tax, discontinuing operations (255.36) (326.15) (504.97) (360.03) and minority interest

Earnings Per Share (basic in Rs.) (Before (8.94) (12.08) (9.19) (8.51) exceptional items and discontinuing operations)

Earnings Per Share (basic in Rs.) (After (5.92) (17.37) (11.60) (19.14) exceptional items and discontinuing operations)

c. Corporate Debt Restructuring:

The Members are aware that during the year 2011-12, your Company restructured its bank loans under Corporate Debt Restructuring (CDR) mechanism envisaged under the Reserve Bank of India (RBI) guidelines. Accordingly, the Company had entered into a Master Restructuring Agreement (MRA) with the lender banks participating in the CDR package (CDR Lenders).

During the year, the Company has fully implemented the CDR Package and have created security as agreed under the MRA. The details of the encumbrances may be referred in note no. 2.3 of the Standalone Financials on page no. 86 of the Report. Further, the Company has also allotted equity shares against the conversion portion of the outstanding loans and interest (including accrued) for each quarter of the Financial year 2012-13. The details of such allotment have been disclosed under Section c on Page no. 3 of this Report.

TRANSFER FROM RESERVES

It is not proposed to transfer any amount to General Reserve Account this year.

DIVIDEND

Your Directors regret their inability to recommend any dividend (equity / preference) for the year ended March 31, 2013.

BUSINESS

Your Company has a comprehensive set of IP based software solutions (20 ), coupled with a wide range of IT Services to address the dynamic requirements of a variety of industry verticals including Insurance, Banking, Capital Markets, Asset & Wealth Management (BFSI), etc. The Company also provides solutions for other verticals such as Government, Manufacturing, Retail, Distribution, Telecom and Healthcare.

Your Company has a large customer base across the globe including Fortune 500 customers. The Company has physical presence in 50 countries and 6 geographies, viz. South Asia, Asia Pacific (APAC), Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA), Western Europe (WE) and North America (US). Your Company has marketing network around the world, including North America, Western Europe, Middle East and Africa and Asia Pacific.

The business of your Company is majorly divided into Emerging Market and Developed Market. The share of the Emerging Market to total revenue of the Company is about 60%, while that of Developed Market is about 40%.

For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.

SUBSIDIARY COMPANIES

As of the date of this Report, the Company has 26 subsidiaries located in 6 different geographies i.e. South Asia, APAC, MEA, KSA, WE and US.

In keeping with the strategy of the Company to concentrate on its core area, during the current year, 3i Infotech (Kazakhstan) LLC, a non-operating step down subsidiary of the Company was sold on June 18, 2012. 3i Infotech (Australia) Pty Limited, a step down subsidiary of the Company was de-registered on May 23, 2012. Further, during the year, 3i Infotech Services (Bangladesh) Private Limited, one of the subsidiaries of the Company was wound up with effect from September 23, 2012.

As a result of the aforesaid steps, the number of subsidiaries was reduced to 26 (twenty six) as on the date of this Report from 29 (twenty nine) at the beginning of the year.

Accounts of the Subsidiaries

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated February 8, 2011, has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is included in the annual report. The annual accounts of these subsidiaries and the related information will be made available to any Member of the Company seeking such information and are available for inspection by any such Member at the Registered Office of the Company upto the date of Annual General Meeting on all working days except Saturdays, Sundays and National Holidays. The annual accounts of the said subsidiaries will also be available for inspection at the head offices or Registered Offices of the respective subsidiary companies.

CAPITAL

a) Preference Capital:

As reported in Directors'' Report of the previous year, the Company had 20,00,00,000 6.35% Cumulative Redeemable Preference Shares of Rs. 5/- each aggregating to Rs. 100 crores, which were due for redemption on March 31,2012. In terms of the CDR package, the Company had negotiated with the Preference Shareholders to rollover/extend or convert the outstanding preference shares into Equity Shares. Out of the two Preference Shareholders, IDBI Trusteeship Services Limited (ICICI Strategic Investments Fund), holding 13,00,00,000 Preference Shares of Rs. 5 each agreed to extend the tenure of these Preference Shares on the following terms:

- Tenure: Extended for another 10 (Ten) years i.e. upto March 31, 2022 and

- Dividend rate: Reduced from 6.35% p.a. to 0.01% p.a.

The other Preference Shareholder, ICICI Bank Limited (holding 7,00,00,000 Preference Shares of Rs. 5 each) opted to convert the outstanding Preference Shares into Equity Shares as per the conversion price applied to the Equity allotments made under CDR package. Accordingly, 1,77,30,496 Equity Shares of face value Rs. 10/- each at a premium of Rs. 9.74/- per share have been allotted to ICICI Bank Limited in lieu of the Preference Shares held by them. These Equity Shares are under lock-in upto September 14, 2013 in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

The outstanding Preference Shares as on March 31, 2013 are 13,00,00,000 Preference Shares of Rs. 5/- each.

b) Increase in Authorised Capital:

In order to issue additional share capital as required under the CDR package, it was felt necessary to increase the authorised share capital of the Company. Pursuant to the approval of the members, obtained through Postal Ballot, dated May 31, 2012, the authorised share capital of the Company was increased from Rs. 550 Crores, (divided into Rs. 450 Crores consisting of 45 Crores Equity Shares of Rs. 10/- each and Rs. 100 Crores, consisting of 20 Crores Redeemable Preference Shares of Rs. 5 each) to Rs. 1200 Crores (divided into Rs. 1100 Crores consisting of 110 Crores Equity Shares of Rs. 10/- each and Rs. 100 Crores consisting of 20 Crores Redeemable Preference Shares of Rs. 5/- each.)

c) Paid-up Capital:

1) ESOS allotments:

No share allotment was done under the Employees Stock Options Schemes (ESOS) during the period under review. However 1,54,78,000 stock options were granted under ESOS Plan 2013 under existing ESOS Scheme, 2007 to some of its employees & Directors on May 1, 2013.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in the Corporate Governance Report.

2) Foreign Currency Convertible Bonds (FCCBs):

Till the date of this Report, the Company has received 46 conversion notices from the FCCB holders against which 9,71,11,993 Equity Shares of face value of Rs. 10/- each were allotted by the Company at a premium of Rs. 6.50/- per share.

3) Allotments of Equity Shares under the Corporate Debt Restructuring (CDR) Package:

28,28,40,922 Equity Shares were allotted under the CDR Package to the CDR lenders the details of which are mentioned below:

Sr. Date of Allotment Number of Equity Shares allotted

No.

1 June 29, 2012 21,67,32,584

2 July 31, 2012 2,14,70,504

3 October 31, 2012 2,15,83,884

4 February 15, 2013 1,37,38,639

5 March 15, 2013 89,30,813

6 April 23, 2013 3,84,498

Total 28,28,40,922

All Equity Shares allotted pursuant to the CDR Package and all the respective pre-preferential allotment holdings of the CDR Lenders are under lock-in as per the requirements of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Asa result of the aforesaid allotments, the paid up equity share capital of your Company stands atRs. 57,19,39,464 as on the date of this Report.

PUBLIC DEPOSITS

During the year, the Company has not invited or accepted any deposit under Section 58A of the Companies Act, 1956.

DIRECTORS

During the year, Mr. V. Srinivasan was re-designated as non-executive director with effect from July 1, 2012. Subsequently, he resigned from the Board of Directors of the Company with effect from December 30, 2012. Mr. Amar Chintopanth, Deputy Managing Director resigned with effect from March 15, 2013.

Further, Mr. Dileep Choksi and Dr. Bruce Kogut, Independent Non-Executive Directors of the Company resigned effective May 13, 2013 and June 19, 2013 respectively.

The Directors placed on record their sincere appreciation towards services rendered by Mr. V. Srinivasan, Mr. Amar Chintopanth, Mr. Dileep Choksi and Dr. Bruce Kogut during their respective tenures as Directors of the Company.

In terms of the provisions of the Articles of Association of the Company, Dr. Ashok Jhunjhunwala and Mr. Hoshang N. Sinor are liable to retire by rotation at the forthcoming Twentieth Annual General Meeting of the Company and being eligible, have offered themselves for re-appointment.

NEW MANAGEMENT TEAM

During the year under review, Mr. Madhivanan Balakrishnan was appointed as Managing Director & CEO and Mr. Charanjit Attra, presently the Executive Director and Global CFO, was appointed as Executive Director of the Company for a period of 5 years with effect from July 1, 2012 to drive the business of the Company more aggressively. The Company would benefit from their varied experiences in the long term. The Members at the Nineteenth Annual General Meeting of the Company held on August 2, 2012 have approved the appointment of Mr. Madhivanan Balakrishnan and Mr. Charanjit Attra.

COMMITTEES

As on date of this Report, the Board has three committees-

i. Audit Committee

ii. Board Governance Committee

iii. Shareholders'' / Investors'' Grievances Committee

During the year, an internal committee known as Operations Committee was constituted to take decisions on operational matters including matters related to bank account operations, etc. of the Company.

Detailed information regarding the committees of the Board has been given in the Corporate Governance Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard AS 21 form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

AUDITORS

M/s. Lodha & Co., Chartered Accountants and M/s R. G. N. Price & Co., Chartered Accountants, retire as Joint Statutory Auditors of the Company and have given their consent for re-appointment. The Members would be required to appoint Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224 (1B) of the Companies Act, 1956, the Company has obtained a written certificate from both the Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company and hence, are not provided.

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

During the year, your Company has taken the following technology initiatives:

- External Global SAM (Software Asset Management) engagement was taken up for the customers on usage of the Company''s IPRs & third party for ensuring the best practices for the customers;

- 5S initiative was taken up to ensure a green and organized place;

- Information security awareness programs;

- Strengthened its IPRs through technology innovation and appropriate security controls;

- Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies;

- Improved productivity by usage of advanced cutting edge tools to enhance testing and compliance efficiencies;

- Continual improvements towards SAM compliance derived by the recognition of the certification of BSA (Business Software Alliance), an initiative alongside of FICCI and Government of Maharashtra;

- Through standardization of policies, processes and technology across its Global Development Centers (GDCs), sales and corporate offices, your Company has achieved certifications of: ISO/IEC 27001:2005 & ISO/IEC 9001:2008 for best practices in Data Center and support services and

- As part of our support to Green IT, we have partnered with Ecoreco as a life Member to ensure effective scrapping of old assets in an eco-friendly manner.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the GDCs.

The GDCs function as the product research and development facility of the Company and focus on developing and expanding the Company''s products and IPRs. Besides this, the Company is also in the process of migrating its varied product lines to standard and latest platforms.

With a focus to further enhance the Company''s software products i.e. its Intellectual Property, based on market needs, the GDCs work in line with the Company''s strategy for growth.

Expenditure on R & D

Rs.in Crores

Particulars 2012-13 2011-12

Revenue Expenditure 32.71 27.13

Capital Expenditure

Total 32.71 27.13

Total R&D expenditure as a percentage of total standalone revenue 7.87% 5.02%

FOREIGN EXCHANGE EARNING AND EXPENDITURE

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans

Approximately 12% of the revenue of the Company is derived from exports. Your Company has marketing network around the world, including North America, Western Europe, Middle East & Africa and Asia Pacific.

The Registered Office of the Company is located at International Infotech Park, Vashi, Navi Mumbai, India. Some of the software development centers of the Company in India are also registered as Software Technology Parks of India, whereby the Company is required to fulfill its export obligations as laid down by the Government.

b) Foreign Export earnings and expenditure

During the year 2012-13, the expenditure in foreign currencies amounted to Rs. 2.68 Crores on account of import of capital goods, travelling and other expenses. During the same period, the Company earned Rs. 40.60 Crores in foreign currencies as income from its exports.

PERSONNEL

Your Company has over the last few years created a team of talented and dedicated professionals to achieve the Company''s goal. To retain and develop these employees, human resources group along with the senior management team has been working with an objective to enhance employee competence through various initiatives and maximizing employee contribution towards the organisational goals.

The Company has continued rolling out a number of initiatives to attract, retain and develop talent in the organisation. Since August 2012, your Company has launched "Connect" platforms through which all employees are being appraised of the situation and the steps being taken by your Company towards ensuring delivery of organisational goals. The Whole Time Directors alongwith the Head - HR and other senior management members have been addressing the employees on a periodic basis to provide information on development of the Company and to understand the concerns of the employees. Further, in a knowledge based industry, your Company understands that the employees are the main assets of the Company and it is necessary that they feel challenged to use their intellectual skills to the best of their abilities and add value to themselves even as they add value to the Company. To facilitate this, the Company has a feedback mechanism and steps are being taken towards employee growth and sustaining high level of motivation.

Your Company has engaged with partners to ensure that the talent pipeline is made more robust and the employee upskilling programs lead to achievement of a better value output from its employees.

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Report and Accounts are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company and the same will be sent by post.

QUALITY

Your Company is committed to deliver best quality products and services to all its customers. In order to meet its commitment, the Company''s business processes have been thoughtfully designed to develop solutions that fully meet customer expectations and are in accordance with industry and domain specific standards.

The Quality Management System (QMS) of the Company addresses the entire software development and project management life cycle and conforms to Capability Maturity Model Integration (CMMI) process framework. It has been objectively designed to standardise engineering and management practices, enhance productivity and reduce inefficiencies.

Your Company is focused to deliver quality at every stage of operations by driving improvement projects around key business and process metrics and imbibing industry wide best practices.

FUTURE OUTLOOK

The Company will continue to technologically upgrade the products and concentrate on the Software Products, IT services and IT enabled Services for its growth. However, in view of the general market outlook for developed markets and in view of the Company specific issues mentioned in earlier paragraphs, the outlook for the next year will be subdued.

FORWARD LOOKING STATEMENTS

This Report along with its annexure and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words ''anticipate'', ''believe'', ''estimate'', ''expect'', ''intend'', ''will'' and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors, hereby, confirm that:

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

b) they 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 the Company as at March 31, 2013 and of the loss of the Company for the year ended on that date;

c) 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 of the Company and for preventing and detecting fraud and other irregularities and

d) they have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members and Investors for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Software Technology Park of India, Customs and other government authorities, Lenders, CDR Cell, FCCB holders and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Sd/- Sd/-

Hoshang N. Sinor Madhivanan Balakrishnan

Chairman Managing Director & Global CEO

July 29, 2013 at Navi Mumbai

Mar 31, 2012

The Directors present the Nineteenth Annual Report of the Company with the Audited Statement of Accounts for the year ended March 31, 2012.

OVERVIEW

a) Financial Highlights:

The year 2011-12 was a challenging year for the Company. While the year started on an optimistic note and even the financial results and operations were growing in line with the projections, the situation started turning adverse by the end of second quarter and in the later half of this financial year and the Company reported a net loss for the year ended March 31, 2012.The downturn was attributable to various internal and external factors, which are discussed in detail in the Management Discussion and Analysis which forms part of this Report. The Financial Highlights for the year ended March 31, 2012 have been stated hereunder.

The global economic downturn resulted in the slowdown of business activities. The tight monetary environment made banks adopt a cautious approach while lending. Further, CRISIL downgraded its ratings on Company's bank facilities and commercial papers to 'CRISIL D/CRISIL D' from 'CRISIL A-/Stable/CRISIL A1'. As a consequence, the Company could not get re-financing facilities from the banks which resulted in severe liquidity crunch for the Company.

During the year, the revenue of the Company declined compared to previous year as the Company had to divest one of its business units in the USA consisting of Regulus group and J&B Software Inc, which were facing continuous decline in revenue. This was divested and the proceeds were used towards reduction of debt to the extent of about '580 crores. In India, HCCA Business Services Private Limited, a pay roll processing entity was also divested as part of the strategy to hive off non-core business. Further, due to non-availability of working capital funding from the banks, the Company also exited some of the working capital intensive and low margin businesses. All these factors have resulted in significant reduction in revenue and operations resulting in a loss during the year.

The brief financial highlights of the Company are as under. Though the previous year's figures are given against the current year's figures as a matter of record, you may note that the financials are not comparable with previous year, in view of the reasons mentioned above.

b) Financials of the Company on Consolidated basis:

Rs in crores Particulars Year ended Year ended March 31, 2012 March 31, 2011

Total Income 1730.59 2587.48

Profit/(Loss) from ordinary activities after finance costs but before (72.54) 261.21 exceptional items

Exceptional Items (181.42) -

Profit / (Loss) from ordinary activities before tax (253.96) 261.21

Tax Expense 80.77 7.64

Profit/(Loss) from ordinary activities after tax (334.73) 253.57

Impact of discontinuing operations (22.67) -

Minority Interest (2.63) (1.06)

Profit/(Loss) after tax, minority interest and discontinuing operations (360.03) 252.51

Earnings Per Share (Basic in Rupees) (8.51) 12.81 (Before Exceptional items and discontinuing operations)

Earnings Per Share (Basic in Rupees) (19.14) 12.81 (After Exceptional items and discontinuing operations)

The Members may note that the auditors, without qualifying the audit report, have brought to the attention of the Members certain matters which are re-produced below ad verbatim.

1. Note no. 2.26(D) regarding the financial statements of the Group having been prepared on a going concern basis, the appropriateness of which, interalia, is dependent on successful implementation of the scheme approved by the Corporate Debt Restructuring Cell as also that in the opinion of the management, no impairment is considered necessary.

2. Note no. 2.26(D) regarding exceptional write off/reversal of Unbilled Revenue of Rs137.62 crores and Rs2.91 crores in diminution in value of long term investment and both disclosed as exceptional items.

3. Note no. 2.26(D) regarding carrying amount of Rs27.23 crores for Payment Solution Software Product to be adapted for application in different geographies which in the opinion of the management will be localized in due course of time and commercially exploited thereafter.

4. Note no. 2.30(a) certain long overdue/slow-moving Trade Receivables/Unbilled Revenue aggregating to Rs225.98 crores in respect of which the management is confident of realising the same with concerted efforts in due course of time.

5. Attention is also invited to note no. 2.4.4 in financial statements in respect of Net Deferred Tax Assets recognized in the earlier years of Rs103.82 crores being carried forward in the Balance Sheet and expected to reverse in foreseeable future, on the basis of order book on hand and the Restructuring Scheme approved by the CDR Cell. However, we are unable to express an opinion as to when and to what extent the aforesaid net deferred tax asset would reverse in the near future.

The Members are requested to refer the relevant notes referred in the above observations which are self explanatory and reflect Board's/Management's response on these matters.

c) Financials of the Company on Standalone basis:

Rs in crores

Particulars Year ended Year ended March 31, 2012 March 31, 2011

Total Income 540.62 578.62

Profit/(Loss) from ordinary activities after finance costs but before (165.25) 108.15 exceptional items

Exceptional Expenditure/Items (87.22) -

Profit/(Loss) from ordinary activities before tax (252.47) 108.15

Tax Expense 59.26 (11.24)

Profit/(Loss) from ordinary activities after tax (311.73) 119.39

Impact of discontinuing operations (14.42) -

Profit/(Loss) after tax and discontinuing operations (326.15) 119.39

Earnings Per Share (Basic in Rupees) (12.08) 5.85 (Before Exceptional items and discontinuing operations)

Earnings Per Share (Basic in Rupees) (17.37) 5.85 (After Exceptional items and discontinuing operations)

The Members may note that the auditors, without qualifying the audit report, have brought to the attention of the Members certain matters. The observations from the Audit Report (on standalone financials) are re-produced below ad verbatim.

1. Note no. 2.21(D) regarding the financial statements of the Company having been prepared on a going concern basis, the appropriateness of which is interalia dependent on successful implementation of the scheme approved by the Corporate Debt Restructuring Cell as also that in the opinion of the management, no impairment provision is considered necessary.

2. Note no. 2.21(D) regarding Exceptional write off of Trade Receivables and reversal of unbilled revenues of Rs75.40 crores and disclosed as exceptional items.

3. Note no. 2.21(D) regarding carrying amount of Rs27.23 crores for Payment Solution Software Product to be adapted for application in different geographies which in the opinion of the management will be localized in due course of time and commercially exploited thereafter.

4. Attention is also invited to note no. 2.8.2 in respect of Net Deferred Tax Assets recognized in the earlier years of Rs103.66 crores being carried forward in the Balance Sheet and expected to reverse in foreseeable future, on the basis of order book on hand and the Restructuring Scheme approved by the CDR Cell. However, we are unable to express an opinion as to when and to what extent the aforesaid net deferred tax asset would reverse in the near future

The Members are requested to refer the relevant notes referred in the above observations which are self explanatory and reflect Board's/Management's response on these matters.

d) Corporate Debt Restructuring:

During the year, especially by the end of second quarter of the year, due to global economic slowdown when the business environment was gloomy, the bankers were also adopting conservative approach for funding the re-financings. As a result of this, the Company started facing liquidity crunch and it was not able to fulfill some of its repayment obligations. In order to overcome debt repayment obligations, your Company made a reference to the Corporate Debt Restructuring (CDR) cell on December 28, 2011 for restructuring of the debts of the Company through CDR Mechanism envisaged under the Reserve Bank of India (RBI) guidelines dated August 23, 2001 and subsequent amendments thereto. The final restructuring package was approved by CDR empowered group on March 16, 2012. The Master Restructuring Agreement has also been signed with the lenders participating in the CDR package ("CDR Lenders") on March 30, 2012. Some of the salient features of the CDR package are as follows:

- Restructuring of certain debt facilities availed by the Company and business operations of the Company;

- Conversion of 15% of the secured loans and 20% of the unsecured loans into equity;

- Conversion of interest on Term Loan and Working Capital Facilities for first 18 months (i. e from the cut-off date from October 1, 2011 to March 31, 2013) into equity;

- Availing additional debt upto Rs58.37 crores from some of the CDR lenders for certain immediate requirements of the Company;

- Restructuring of short-term loans into long term loans by reset of maturity dates of loans and reset of interest payment dates;

- Restructuring of the outstanding preference shares issued by the Company by conversion into equity shares and/ or rollover of the existing preference shares and

- Creation of security over certain assets of the Company and some of its onshore and offshore subsidiaries and enter into certain documents in favour of a security trustee/agent, as may be necessary for the benefit of the CDR lenders in order to secure the obligations of the Company under the CDR Package.

e) Restructuring of FCCBs:

During the year, the Company was also facing the challenge of redemption of outstanding Foreign Currency Convertible Bonds (FCCBs). The Directors are happy to inform you that through sustained efforts, the Company was able to restructure its debts and FCCBs and bring in stability to the Company.

There were two series of outstanding FCCBs worth Euro 20 Million (Euro Bonds) and USD 66.367 Million (USD Bonds) which were due in April 2012 and July 2012 respectively. 100% of the Euro Bonds and 96.33% of the USD Bonds were restructured, for their face value plus redemption premium, by issuing new US$ 125,356,000 5% Convertible Bonds due 2017 in exchange thereof. Further, the tenure of the remaining 3.67% of the USD bonds was extended till 2017 with a coupon of 4.75% p.a. payable semi anually.

The details such as the total bonds issued, bonds converted, number of shares allotted, number of bonds repurchased and expected number of shares to be allotted with respect to outstanding FCCBs have been given in detail in Corporate Governance Report at para No. VI(o).

TRANSFER FROM RESERVES

Your Company proposes to transfer Rs37 crores from the general reserve to the Profit and Loss Account. No amount is proposed to carried in General Reserve to the Balance Sheet this year.

DIVIDEND

In view of the financial loss reported during this year, your Directors regret to state their inability to recommend any dividend for the year ended March 31, 2012.

Further, during the year, due to inadequacy of profits, the interim dividend given to the preference shareholders for the period April to July 2012 was reversed and called back by the Board. Further, the Board decided not to declare any dividend to its preference shareholders for the remaining part of the year.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, unclaimed dividend of Rs221/- was transferred to the Investor Education and Protection Fund (IEPF), as required by the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001. The Company has also transferred to IEPF an amount of Rs321,900/- which was appearing as refund of application money received at the time of Initial Public Offering of the Company in April 2005.

BUSINESS

Your Company is a global Information Technology company committed to empowering Business Transformation.

Your Company has a comprehensive set of IP based software solutions (20 ), coupled with a wide range of IT Services to address the dynamic requirements of a variety of industry verticals including Insurance, Banking, Capital Markets, Asset & Wealth Management (BFSI) etc. The Company also provides solutions for other verticals such as Government, Manufacturing, Retail, Distribution, Telecom and Healthcare.

The contribution to the revenue for the year from IT Solutions was 95% and that of Transaction Services was 5%.

Your Company has a large customer base across the globe and about 71 of them are Fortune 500 customers. The Company has physical presence in 14 countries and 5 geographies, viz. South Asia, Asia Pacific, Middle East and North Africa,

Western Europe and North America. Your Company has marketing network around the world, including North America, Western Europe, Middle East and Africa and Asia Pacific.

The business of your Company is majorly divided into Emerging Market and Developed Market. The share of the Emerging Market to total revenue of the Company is 60%, while that of Developed Market is 40%.

For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.

AWARDS & ACCOLADES

During the year, the Company has received the following recognitions:

- Retained its 4th position in the lending category of the IBS Sales League table published by IBS Intelligence, UK for the fourth consecutive year (2008-2011);

- Ranked 46th (6th among all Indian IT companies) in the year 2011 in the Fintech 100 list of Financial Services & Technology providers, published by American Banker;

- Locuz Enterprise Solutions Limited, a subsidiary of the Company, won the CRN Xcellence Award 2011;

- Winner of the Systems in the City Award for Best Marketing Material for the 2nd consecutive year, London;

- Award for the Best Takaful Technology Company for the 4th consecutive year at the 5th International Takaful Summit 2011;

- Certified by Wordblu as one of the "Most Democratic Workplaces" for the 2nd consecutive year, 2010 and 2011 and

- Won Technology Vendor of the year Award at the Middle East Insurance Awards.

SUBSIDIARY COMPANIES

As of the date of this Report, the Company has 29 subsidiaries located in 5 geographies.

a) Mergers and Amalgamations:

During the year, Fineng Solutions Private Limited and J&B Software India Private Limited, two of the Indian subsidiaries of the Company were merged with the Company. Further, aok in-house Factoring Services Private Limited and aok in- house BPO Services Limited were merged with 3i Infotech BPO Limited, a wholly owned subsidiary of the Company.

b) Divestment:

In keeping with the strategy of the Company to concentrate on its niche area, during the current year, the Company divested its entire stake in Regulus Group and J&B Software Inc. to an affiliate of Cerberus Capital Management, L.P, a private investment firm. The proceeds of such divestment were used towards reduction of debt to the extent of about Rs580 crores. As a result of this divestment, Regulus Group LLC, Regulus Integrated Solutions LLC, Regulus West LLC, Regulus Tristate LLC, Regulus America LLC, Regulus Holdings Inc., Regulus Group II LLC and J&B Software Inc. have ceased to be the subsidiaries of your Company. 3i Infotech (Canada) Inc. (formerly known as J&B Software (Canada) Inc., renamed with effect from June 16, 2011), a step down subsidiary of the Company, was dissolved with effect from November 3, 2011.

During the year, the entire stake in HCCA Business Services Private Limited was divested to Hinduja Global Solutions Limited.

As a result of the aforesaid steps of mergers, amalgamations and divestment taken by the Company, the number of subsidiaries were reduced to 29 as on the date of this report from 43 at the beginning of the year.

c) Investments:

During the year, the Company has not raised its stake, on its own or through its subsidiaries, in any of the subsidiary companies.

d) Accounts of the Subsidiaries:

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors' Report, Balance Sheet and Profit and Loss Account of the subsidiaries to its Balance Sheet. As per circular no. 5/12/2007-CL-III dated February 8, 2011 issued by Government of India, a general exemption under Section 212 (8) of the Companies Act, 1956 has been granted. As per this Circular, a company need not make an application to the Central Government for seeking exemption from the requirement of attaching the Directors' Report, Balance Sheet and Profit and Loss Account of the subsidiaries to its Balance Sheet, provided the conditions mentioned in the Circular are fulfilled. Your Company has fulfilled these conditions and is eligible for this exemption. Your Directors believe that the audited consolidated accounts present a full and fair picture of the state of affairs and financial conditions of the Company and its subsidiaries. Accordingly, the Annual Report of your Company does not contain separate financial statements of these subsidiaries, but contains audited consolidated financial statements of the Company and its subsidiaries, as is done globally.

However, a statement of the Company's interest in the subsidiaries and a summary of the financials of the subsidiaries are given along with the consolidated accounts. The annual accounts of the subsidiaries, along with the related information, will be made available to the Members seeking such information at any point of time. The annual accounts of the subsidiaries are also available for inspection during business hours except Saturdays and holidays at the Registered Office of the Company and its respective subsidiaries.

CAPITAL

a) Preference Capital:

The Company had 20,00,00,000 6.35% Cumulative Redeemable Preference Shares of Rs5/- each outstanding aggregating to Rs100 crore, which were due for redemption on March 31, 2012. In terms of the CDR package, the Company negotiated with the preference shareholders to rollover/extend or convert the outstanding preference shares into equity. Out of the two shareholders, IDBI Trusteeship Services Limited-(ICICI Strategic Investments Fund) (holding 13,00,00,000 shares of Rs5 each) agreed to extend the tenure of redemption on the following terms:

- Tenure: Extended for another 10 (Ten) years i.e. upto March 31, 2022.

- Dividend rate: Reduced from 6.35% p.a. to 0.01% p.a.

The other shareholder, ICICI Bank Limited (holding 7,00,00,000 shares of Rs5 each) has opted to convert the outstanding preference shares into equity shares as per the conversion price applied to the equity allotments to be made under CDR package. The allotment shall be made upon receipt of approval of the Members through postal ballot.

b) Increase in Authorised Capital:

In order to reduce the leverage and overcome the liquidity crunch, the Company was considering various options of raising funds including by way of issuance of equity. For this purpose, it was necessary to increase the authorised capital of the Company adequately. Hence, vide resolution of the Members dated January 30, 2012, passed through postal ballot, the Authorised Capital of the Company was increased from Rs400 Crores divided into Rs300 Crores, consisting of 30 Crore Equity Shares of Rs10/- each and Rs100 Crores, consisting of 20 Crore Redeemable Preference Shares of Rs5 each, to Rs550 Crores, divided into Rs450 Crores, consisting of 45 Crore Equity Shares of Rs10/- each and Rs100 Crores, consisting of 20 Crore Redeemable Preference Shares of Rs5/- each.

Subsequently, in order to cater to the capital issuance needs under Corporate Debt Restructuring (CDR) package, it was felt necessary to further increase the authorized capital and hence an approval of the Members was sought through postal ballot to increase the authorised share capital of the Companys from Rs550 Crores, divided into Rs450 Crores, consisting of 45 Crore Equity Shares of Rs10/- each and Rs100 Crore, consisting of 20 Crore Redeemable Preference Shares of Rs5 each, to Rs1200 Crores, divided into Rs1100 Crores, consisting of 110 Crore Equity Shares of Rs10/- each and Rs100 Crores, consisting of 20 Crore Redeemable Preference Shares of Rs5/- each.

Further, as per the CDR package, the Company would have to allot equity shares upon conversion of certain portion of outstanding loans and the outstanding and accrued interest thereon. The Company also would have to allot equity shares against conversion of preference shares held by ICICI Bank Limited.

c) Paid-up Capital:

1) ESOS allotments:

No share allotment was done under the Employees Stock Options Schemes (ESOS) during the fiscal year 2012.

2) Foreign Currency Convertible Bonds (FCCBs):

During this year, the Company has not received any conversion notices from the FCCB holders.

During the year under review, the Company did not allot any shares and hence the share capital of your Company is Rs1,91,98,65,490 as on March 31, 2012.

POSTAL BALLOT

During the financial year 2011-12, the Members passed the following resolutions by way of postal ballot, the results of which were declared on January 30, 2012:

a) Enhancing the limit for creation of securities against loan;

b) Raising long term resources through further issue of securities;

c) Increase in the Authorised Capital of the Company;

d) Amendment to the Memorandum of Association of the Company;

e) Amendment to the Articles of Association of the Company and

f) Re-appointment of Mr. Amar Chintopanth as Deputy Managing Director.

Another Notice of Postal Ballot was also sent to the Members for approval of the following proposals by way of Postal Ballot, the results of which would be declared on May 31, 2012:

a) Increase in Authorised Capital and Amendment to the Memorandum of Association of the Company;

b) Amendment to the Articles of Association of the Company;

c) Authorization for restructuring of debts;

d) Allotment of equity shares on preferential basis;

e) Conversion of loans into equity shares and

f) Conversion of certain existing preference shares into equity shares and modification of terms of preference shares. For more details, please refer Part III, Postal Ballot section in Corporate Governance Report.

PUBLIC DEPOSITS

During the year, the Company has not invited/accepted any deposit under Section 58A of the Companies Act, 1956.

DIRECTORS

In terms of the provisions of the Articles of Association of the Company, Mr. Dileep Choksi and Dr. Bruce Kogut are liable to retire by rotation at the forthcoming 19th Annual General Meeting of the Company. Mr. Dileep Choksi and Dr. Bruce Kogut, being eligible, offer themselves for re-appointment.

During the year, Mr. Samir Kumar Mitter resigned from the Board of Directors of the Company with effect from December 1, 2011.

During the year, Mr. Ashok Shah was appointed as an Additional Director of the Company with effect from December 1, 2011. Mr. Ashok Shah, being an Additional Director, will hold office upto the date of the forthcoming Annual General Meeting of the Company. It is proposed to appoint him as Director of the Company at the ensuing Annual General Meeting.

Mr. Amar Chintopanth, Deputy Managing Director, was re-appointed for a further period of three years with effect from January 17, 2012 vide a resolution passed by the Members through postal ballot.

Mr. N. S. Venkatesh was appointed as a Nominee Director on the Board of the Company by IDBI Bank Limited with effect from May 8, 2012 pursuant to the Master Restructuring Agreement signed with the CDR Lenders on March 30, 2012.

COMMITTEES

As on date of this report, the Board has three committees-

i. Audit Committee

ii. Board Governance Committee

iii. Shareholders' / Investors' Grievances Committee

The Fund Raising and Acquisitions Committee (FRAC) was discontinued effective October 21, 2011.

Detailed information regarding the committees of the Board has been given in the Corporate Governance Report.

AUDITORS

M/s Lodha & Co., Chartered Accountants, having their office at 6, Karim Chambers, 40, Ambalal Doshi Marg, Hamam Street, Mumbai - 400 023 and M/s R. G. N. Price & Co., Chartered Accountants, having their office at Simpson's Building, 861, Anna Salai, Chennai - 600 002 were appointed as Joint Statutory Auditors of the Company at the 18th Annual General Meeting and are due for retirement at the conclusion of the 19th Annual General Meeting.

Your Directors, based on the recommendations of the Audit Committee, recommend the re-appointment of M/s Lodha & Co. and M/s R. G. N. Price & Co. as the Joint Statutory Auditors of the Company to hold office from the conclusion of the 19th Annual General Meeting to the conclusion of the 20th Annual General Meeting. The Company has received letters from both the Auditors, wherein they have consented to act as Auditors and have confirmed that they are eligible and qualified to be appointed as Auditors pursuant to the Sections 224(1B) and 226 of the Companies Act, 1956.

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company and hence, are not provided.

TECHNOLOGY ABSORPTION

During the year, your Company has taken the following technology initiatives:

- Improved consolidation by usage of cloud technologies: A public cloud SAAS for sale to fulfillment cycles and a private cloud for project management and ERP systems;

- Strengthened its IPRs through technology innovation and appropriate security controls;

- Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies;

- Improved productivity by usage of advanced cutting edge tools to enhance testing and compliance efficiencies;

- Continual improvements towards SAM (Software Asset Management) compliance derived by the recognition of the certification of BSA (Business Software Alliance), an initiative alongside of FICCI and Government of Maharashtra;

- Through standardization of policies, processes and technology across its Global Development Centers (GDCs), sales and corporate offices, your Company has achieved certifications of: ISO/IEC 27001:2005 & ISO/IEC 9001:2008 for best practices in Data Center and support services and

- As part of our support to Green IT, we have partnered with Ecoreco as a life member to ensure effective scrapping of old assets in a eco-friendly manner.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the GDCs.

The GDCs function as the product research and development facility of the Company and focus on developing and expanding the Company's products and IPRs. Besides this, the Company is also in the process of migrating its varied product lines to standard and latest platforms.

With a focus to further enhance the Company's software products, i.e its Intellectual Property, based on market needs, the GDCs work in line with the Company's strategy for growth.

Expenditure on R & D

Rs in crores Particulars 2011-12 2010-11

Revenue Expenditure 27.13 39.90

Capital Expenditure - -

Total 27.13 39.90

Total R&D expenditure as a percentage of total standalone revenue 5.02% 6.90%

FOREIGN EXCHANGE EARNING AND EXPENDITURE

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans More than 8% of the revenue of the Company is derived from exports. Your Company has marketing network around the world, including North America, Western Europe, Middle East & Africa and Asia Pacific.

The Registered Office of the Company is located at International Infotech Park, Vashi, Navi Mumbai, India. Some of the software development centers of the Company in India are also registered as Software Technology Parks of India, whereby the Company is required to fulfill its export obligations as laid down by the Government.

b) Foreign Export earnings and expenditure

During the year 2011-12, the expenditure in foreign currencies amounted to '36.88 Crores on account of import of capital goods, dividend, travelling and other expenses. During the same period, the Company earned Rs101.84 Crores in foreign currencies as income from its exports.

PERSONNEL

Your Company has talented and dedicated professionals to achieve the Company's goal. To retain and develop these employees, human resources group has been working with an objective to enhance employee competence through various initiatives and maximizing employee contribution towards the organizational goals.

The Company has a number of initiatives to attract, retain and develop talent in the organization. Some of them include Reach HR (HR query management system), the employee referral scheme, internal job rotation, training and development programs, overseas assignments, medical insurance, social functions, etc.

The Managing Director has been addressing the employees on a periodic basis to provide information on development of the Company and to understand the concerns of the employees.

Further, in a knowledge based industry, your Company understands that the employees are the main assets of the Company and it is necessary that they feel challenged to use their intellectual skills to the best of their abilities and add value to themselves even as they add value to the Company. To facilitate this, the Company has a feedback mechanism and steps are being taken towards employee growth and sustaining high level of motivation.

During the year, in view of the tough liquidity situation, rating down grading, Corporate Debt Restructuring (CDR), etc. quite a number of senior executives left the Company, which affected the operations of the Company. The Company is addressing this issue by close and transparent working with its employees. The attrition could continue to affect the operations of the Company to some extent in the coming year also.

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the Directors' Report. However, as per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, this Report and Accounts are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company and the same will be sent by post.

QUALITY

Your Company is committed to deliver best quality products and services to all its customers first time, every time. In order to meet its commitment, the Company's business processes have been thoughtfully designed to develop solutions that fully meet customer expectations and are in accordance with industry and domain specific standards.

The Quality Management System (QMS) of the Company addresses the entire software development and project management life cycle and conforms to CMMI process framework. It has been objectively designed to standardize engineering and management practices, enhance productivity and reduce inefficiencies.

Your Company is focused to deliver quality at every stage of operations by driving improvement projects around key business and process metrics and imbibing industry wide best practices.

FUTURE OUTLOOK

The Company will continue to technologically upgrade the products and concentrate on the Software Products, IT services and IT enabled Services for its growth. However, in view of the general market outlook for developed markets and in view of the company specific issues mentioned in earlier paragraphs, the outlook for the next year will be subdued.

FORWARD LOOKING STATEMENTS

This Report along with its annexure and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words 'anticipate', 'believe', 'estimate', 'expect', 'intend', 'will' and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that:

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

b) we 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 the Company at the end of the financial year and of the profit of the Company for that period;

c) we 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 and

d) we have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members and Investors for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Software Technology Park of India, Customs and other government authorities, Lenders, CDR Cell, FCCB holders and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Sd/- Sd/-

Hoshang N. Sinor V. Srinivasan

Chairman Managing Director & Global CEO

Mumbai, May 16, 2012

Mar 31, 2011

The Directors have pleasure in presenting the Eighteenth Annual Report of the Company with the Audited Statement of Accounts for the year ended March 31, 2011.

FINANCIAL HIGHLIGHTS

Financials of the Company on Consolidated basis:

In the fnancial year 2010-11, your Company recorded overall revenue of ` 2,587.48 crores, a growth of 4.80% as compared to the revenues reported last year. Proft after tax was ` 253.57 crores and Earning per share (EPS) was ` 12.81. In the previous fnancial year 2009-10, there was an exceptional item, the Company had written off a loss on account of discontinued operations. There was no such exceptional item during this year 2010-11. The brief fnancial highlights with comparison of previous year are as below:

` in crores

Particulars Year ended Year ended March 31, 2011 March 31, 2010

Total Income 2,587.48 2,468.75

Proft / (Loss) before taxation 261.21 276.90

Provision for taxation (Current and Deferred) 7.64 10.95

Proft / (Loss) after taxation and before exceptional items and impact of 253.57 265.95

discontinuing operations

Earnings Per Share (Basic in Rupees) (Before Exceptional items and impact 12.81 17.21 of discontinuing operations)

Financials of the Company on Standalone basis:

The Proft & Loss Account of your Company on standalone basis shows a proft after tax of ` 119.39 crores. The disposable proft is ` 241.42 crores, taking into account the balance of ` 122.03 crores brought forward from the previous year, subject to adjustments pertaining to that year. The brief fnancial highlights are as below:

` in crores

Particulars Year ended Year ended March 31, 2011 March 31, 2010

Total Income 578.62 534.47

Proft before tax 108.15 136.49

Provision for taxation (Current and Deferred) (11.24) 3.50

Proft after tax and before exceptional items and impact of discontinuing 119.39 132.99 operations

Balance brought forward from previous year 122.03 84.21

FCCB redemption reserve written back - 234.16

Disposable Proft 241.42 218.76

Transfer to Reserves (General Reserve & FCCB Redemption Reserve) 6.00 59.66

Proft available for distribution after Transfer to Reserves 235.42 159.10

Earning Per Share (Basic in Rupees) (Before Exceptional items) 5.85 8.35

TRANSFER TO RESERVES

Your Company proposes to transfer ` 6 crores to the general reserve. An amount of ` 190.61 crores is proposed to be carried to the Balance Sheet.

DIVIDEND

The proft available for distribution to equity shareholders works out to ` 235.42 crores. Your Directors have recommended a dividend of ` 1.50 on an equity share of face value of ` 10/- each (15%) for the year ended 2010-11. The details of appropriation are as under:

` in crores

Particulars Year ended Year ended March 31, 2011 March 31, 2010

Proft available for distribution 235.42 159.10

Dividend on Preference shares 6.35 6.35

Proposed Dividend Ã Equity shares 28.80 25.32

Residual Dividend Paid 3.46 0.02

Corporate Dividend Tax 6.20 5.38

Balance carried to Balance Sheet 190.61 122.03

TRANSFER OF UNPAID DIVIDEND

Your Company does not have any unpaid dividend required to be transferred to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 in the fnancial year 2010-11.

OVERVIEw

Business:

Your Company has two business drivers viz. IT Solutions (i.e. sale of software products and services affliated to these products, software development and consulting and IT infrastructure services) and Transaction Services (i.e. BPO related services) for a variety of industry verticals including Insurance, Banking, Capital Markets, Mutual Funds & Asset Management, Wealth Management, Government, Manufacturing and Retail. These solutions and services include Managed IT Services, Application Software Development & Maintenance, Payment Solutions, Business Intelligence, Document Imaging & Digitization, IT Consulting and various Transaction Processing Services.

The contribution of the various business segments to the revenue for the year from IT Solutions is 68% and from Transaction Services 32%.

For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.

During the year, the Company has received the following recognitions:

- Retained its 4th position in the lending category of the IBS Sales League table published by IBS Intelligence, UK for the fourth consecutive year (2008-2011);

- Ranked 36th (4th among Indian IT companies) in the Fintech 100 list of Financial Services & Technology providers, published by American Banker;

- Adjudged runner-up for the Maharashtra IT Award 2009 for Outstanding Performance in IT Software category;

- Award for the Best Takaful Technology Company for the 3rd consecutive year from the Middle East Business Forum at the Takaful Awards;

- One of the top 3 companies in the "Service Provider of the Year" and "Technology Initiative of the Year" categories at the 14th Asia Insurance Industry Award;

- Awarded ISV partner of the Financial Year 2010 - Technology by Oracle, India and

- Received Certifcate of Recognition from Business Software Alliance for Software Asset Management Compliance.

- Certifed by Wordblu as one of the "Most Democratic Workplaces" for the 2nd consecutive year, 2010 and 2011.

Geographical reach:

Your Company has a large customer base across the globe and 103 of them are Fortune 500 customers. The Company has physical presence through the offces in 15 countries and 5 geographies, viz. South Asia, Asia Pacifc, Middle East and Africa, Western Europe and North America.

The business of your Company is majorly divided into Emerging Market and Developed Market. Share of the Emerging Market to total revenue of the Company is 43%. Share of Developed Market to total revenue of the Company is 57%.

SUBSIDIARY COMPANIES

As of the date of this Report, the Company has 43 subsidiaries located in 5 geographies.

Mergers and Amalgamations:

This year has been a year of consolidation for your Company. For the last few years, the Company has been in an acquisitive growth phase due to which the number of subsidiaries of the Company considerably increased. As the operations of certain subsidiaries were merged with that of the Company to reduce the operational cost, your Company initiated several mergers during the year.

Accordingly, 3i Infotech Consulting Inc., Lantern Systems Inc., Objectsoft Group Inc., ePower Inc., US subsidiaries of the Company were merged with 3i Infotech Inc. 3i Infotech Consulting Services SDN BHD has been dissolved. Indian subsidiaries for which merger procedure has been completed are Stex Software Private Limited, KNM Services Private Limited and E-enable Technologies Private Limited with 3i Infotech Limited. Further, Delta Services (India) Private Limited and Manipal Informatics Private Limited have been merged with 3i Infotech Consultancy Services Limited. Indian subsidiaries for whom merger procedure has been initiated are Fineng Solutions Private Limited with 3i Infotech Limited, J&B Software

India Private Limited with 3i Infotech Limited and AOK In House Factoring Services Private Limited and AOK In House BPO Services Limited with 3i Infotech BPO Limited.

Divestment:

To enable the Company to concentrate on its niche area, the Company also decided to divest its stake from certain subsidiaries.

Hence, during the year, the Company divested its entire stake in eMudhra Consumer Services Limited (formerly known as 3i Infotech Consumer Services Limited) to Indus Innovest Holdings Private Limited. As a result of this divestment, Antariksh Interactives Private Limited, Access Matrix Technologies Private Limited and Taxsmile.com India Private Limited have ceased to be the subsidiaries of your Company as they were wholly owned subsidiaries of eMudhra Consumer Services Limited.

During the year, the entire stake in 3i Infotech Insurance and Re-insurance Brokers Limited was divested to Aretha Advisors Private Limited.

Investments:

Your Company has raised its stake, on its own or through its subsidiaries, in some of the subsidiary companies.

Your Company has acquired further 40% stake in Fineng Solutions Private Limited (a software product company in the fnancial services vertical) effective from June 10, 2010 thereby making it a wholly owned subsidiary of the Company and further 23% stake in Locuz Enterprise Solutions Limited (a System Integrator and IT infrastructure solutions and services specialist) effective from October 13, 2010. As a result, Companys stake in Locuz increased to 74%.

In case of its Joint Venture in Nigeria, your Company has acquired 47.5% stake in Process Central Limited, through 3i Infotech (Middle East) FZ LLC, one of the subsidiaries of the Company.

On March 24, 2011, Regulus BPO Limited was incorporated by the Company as its wholly owned indirect subsidiary.

Name Change:

The name of Exact Technical Services Limited (one of the subsidiaries of the Company) was changed to 3i Infotech (Flagship- UK) Limited effective from April 13, 2010 and name of Datacons Asia Pacifc SDN BHD was changed to 3i Infotech Services SDN BHD effective from August 5, 2010.

Accounts of the Subsidiaries:

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors Report, Balance Sheet and Proft and Loss Account of the subsidiaries to its Balance Sheet. Your Directors believe that the audited consolidated accounts present a full and fair picture of the state of affairs and fnancial conditions of the Company and its subsidiaries, as is done globally. As per circular no. 5/12/2007-CL-III dated February 8, 2011 issued by Government of India, a general exemption under Section 212 (8) of the Companies Act, 1956 has been granted. As per this Circular, a company need not make an application to the Central Government for seeking exemption from the requirement of attaching the Directors Report, Balance Sheet and Proft and Loss Account of the subsidiaries to its Balance Sheet, provided the conditions mentioned in the Circular are fulflled. Your Company has fulflled these conditions and is eligible for this exemption. Accordingly, the Annual Report of your Company does not contain separate fnancial statements of these subsidiaries, but contains audited consolidated fnancial statements of the Company and its subsidiaries.

However, a statement of the Companys interest in the subsidiaries and a summary of the fnancials of the subsidiaries are given along with the consolidated accounts. The annual accounts of the subsidiaries, along with the related information, will be made available to the Members seeking such information at any point of time. The annual accounts of the subsidiaries are also available for inspection during business hours except Saturdays and holidays at the Registered Offce of the Company and its respective subsidiaries.

FUTURE OUTLOOK:

The Company will continue to technologically upgrade the products and concentrate on the Software Products and BPO business in Emerging Market. In Developed Market, your Company will concentrate majorly on IT Services for its growth.

CAPITAL

1) ESOS allotments:

3,26,504 shares were allotted under Employees Stock Options Schemes (ESOS) during the fscal year 2011.

2) Qualifed Institutional Placement (QIP) Allotment:

2,29,00,099 fully paid-up equity shares of face value of ? 10 each were allotted to Qualifed Institutional Buyers under Qualifed Institutions Placement (QIP) on April 7, 2010.

3) Foreign Currency Convertible Bonds (FCCBs):

During this year, the Company has not received any conversion notices from the FCCB holders. During the year, the Company has redeemed all the 202 outstanding bonds aggregating US$20.2 million from the 1st tranche of FCCBs.

Details such as the total bonds issued, bonds converted, number of shares allotted, number of bonds repurchased and expected number of shares to be allotted with respect to outstanding FCCBs have been given in detail in Corporate Governance Report at para No. VI(p).

As a result of allotment of shares as above, the share capital of your Company increased to? 1,91,98,65,490 in the fnancial year 2010-11 from? 1,68,75,99,460 in the fnancial year 2009-10.

QUALITY

Your Company is committed to deliver best quality products and services to all its customers frst time, every time. In order to meet its commitment, the Companys business processes have been thoughtfully designed to develop solutions that fully meet customer expectations and are in accordance with industry and domain specifc standards.

The Quality Management System (QMS) of the Company addresses the entire software development and project management life cycle and conforms to CMMI process framework. It has been objectively designed to standardize engineering and management practices, enhance productivity and reduce ineffciencies.

Your Company is focused to deliver quality at every stage of operations by driving improvement projects around key business and process metrics and imbibing industry wide best practices.

PUBLIC DEPOSITS

During the year, the Company has not invited / accepted any deposit under Section 58A of the Companies Act, 1956.

DIRECTORS

In terms of the provisions of the Articles of Association of the Company, Mr. Hoshang N. Sinor and Ms. Vishakha Mulye are liable to retire by rotation at the forthcoming 18th Annual General Meeting of the Company. Mr. Hoshang N. Sinor and Ms. Vishakha Mulye, being eligible, offer themselves for re-appointment.

During the year, Mr. Mahadevan Chandrasekaran and Mr. Aninrudh Prabhakaran resigned from the Board of Directors of the Company with effect from April 23, 2010 and November 02, 2010 respectively. The Board placed on record its deep sense of appreciation for the services rendered by Mr. Mahadevan Chandrasekaran and Mr. Anirudh Prabhakaran as Members of the Board.

Mr. V. Srinivasan was re-appointed as the Managing Director for a period of 5 years with effect from October 01, 2010. His re-appointment was approved by the Members at the 17th Annual General Meeting of the Company. As Mr. Srinivasan is a Non-Resident Indian, the Company had made an application to the Central Government for seeking its approval for the re-appointment and such approval was received by the Company vide Letter no. A95194874/5/2010-CL-VII dated December 29, 2010.

COMMITTEES

AUDIT COMMITTEE

The Audit Committee comprises of Mr. Dileep C. Choksi as Chairman and Ms. Vishakha Mulye and Mr. Samir Kumar Mitter as Members of the Committee. Majority of the Members of the Audit Committee are Independent Non-Executive Directors in compliance with Clause 49 of the Listing Agreement. During the year under review, the Committee met four times to review quarterly accounts, internal control systems, discuss the audit fndings and recommendations of the internal and statutory auditors.

BOARD GOVERNANCE COMMITTEE

The Board Governance Committee was reconstituted on July 27, 2010 due to the resignation of Mr. Mahadevan Chandrasekaran from the Board. It currently comprises of Mr. Hoshang N. Sinor as Chairman and Mr. Dileep Choksi and Dr. Bruce Kogut as Members of the Committee. All the Members of the Board Governance Committee are Independent Non-Executive Directors. The Committee attends to matters relating to governance, nomination to the Board, compensation to the Directors and performance bonus, stock options, etc. to the Directors and employees of the Company. During the year under review, the Committee met twice to discharge the functions.

SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE

The Shareholders / Investors Grievances Committee comprises of Mr. Samir Kumar Mitter as Chairman and Dr. Ashok Jhunjhunwala and Mr. Amar Chintopanth as Members of the Committee. Majority of the Members are Independent Non-Executive Directors. During the year under review, the Committee met four times to attend to matters relating to investors servicing and grievances, etc.

FUND RAISING AND ACQUISITIONS COMMITTEE

The Fund Raising and Acquisitions Committee was reconstituted on July 27, 2010 due to the resignation of Mr. Mahadevan Chandrasekaran from the Board. It currently comprises of Mr. Hoshang N. Sinor as Chairman and Dr. Ashok Jhunjhunwala, Mr. Samir Kumar Mitter and Dr. Bruce Kogut as Members of the Committee. All the Members of the Committee are Independent Non-Executive Directors. The Committee attends to matters relating to acquisitions and funding requirements of the Company. During the year, the Committee met three times to discharge its functions.

AUDITORS

M/s Lodha & Co., Chartered Accountants, having their offce at 6, Karim Chambers, 40, Ambalal Doshi Marg, Hamam Street, Mumbai - 400 023 and M/s. R. G. N. Price & Co., Chartered Accountants, having their offce at Simpsons Building, 861, Anna Salai, Chennai - 600 002 were appointed as Joint Statutory Auditors of the Company at the 17th Annual General Meeting and are due for retirement at the conclusion of the 18th Annual General Meeting. The Company has received letters from both the Auditors, wherein they have consented to act as Joint Auditors and have confrmed that they are eligible and qualifed to be appointed as Auditors pursuant to the Sections 224 (1B) and 226 of the Companies Act, 1956.

Your Directors, based on the recommendations of the Audit Committee, recommend the re-appointment of M/s Lodha & Co., Chartered Accountants and M/s R. G. N. Price & Co, Chartered Accountants as the Joint Statutory Auditors of the Company to hold the offce from the conclusion of the 18th Annual General Meeting to the conclusion of the 19th Annual General Meeting.

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company and hence are not provided.

TECHNOLOGY ABSORPTION

During the year, your Company has taken the following technology initiatives:

- Usage of cloud technologies: a public cloud using SAAS for sale to fulfllment cycles and a private cloud for project management and ERP systems;

- Strengthened its IPRs through technology innovation and appropriate security controls;

- Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies;

- Usage of HPs Application Software Quality (ASQ) automation suite to enhance its application testing and compliance effciencies;

- Certifcation of Recognition for SAM (Software Asset Management) compliance through an initiative of BSA / FICCI & Government of Maharashtra and

- Through standardization of policies, processes and technology across its Global Development Centers (GDCs), sales and corporate offces, your Company has achieved:

- Green-IT certifcation by ECORECO certifying the Companys effective processes for retiring of IT equipment.

- Re-certifcation of ISO27001

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the GDCs.

The GDCs function as the product research and development facility of the Company and focus on developing and expanding the Companys products and IPRs. Besides this, the Company is also in the process of migrating its varied product lines to standard and latest platforms.

With a focus to further enhance the Companys software products, namely its Intellectual Property, based on market needs, the GDCs work in line with the Companys strategy for growth.

Expenditure on R & D

? in crores 2010-11 2009-10

Revenue Expenditure 39.90 40.61

Capital Expenditure - -

Total 39.90 40.61

Total R&D expenditure as a percentage of total standalone revenue 6.90% 7.60%

FOREIGN EXCHANGE EARNING AND EXPENDITURE

a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans

More than 30% of the revenue of the Company is derived from exports. Your Company has marketing network around the world, including North America, Western Europe, Middle East & Africa and Asia Pacifc.

The Registered Offce of the Company is located at International Infotech Park, Vashi, Navi Mumbai, India. Some of the software development centers of the Company in India are also registered as Software Technology Parks of India, whereby the Company is required to fulfll its export obligations as laid down by the Government.

b) Foreign Export earnings and expenditure

During the year 2010-11, the expenditure in foreign currencies amounted to ` 20.52 Crores on account of import of capital goods, dividend, travelling and other expenses. During the same period, the Company earned ` 173.91 Crores in foreign currencies, as income from its exports.

PERSONNEL

Your Company has talented and dedicated professional employees to achieve the Companys goal. To retain and develop these employees, human resources group has been working with an objective to enhance employee competence through various initiatives and maximizing employee contribution towards the organizational goals.

The Company has a number of initiatives to attract, retain and develop talent in the organization. Some of them include Reach HR (HR query management system), the employee referral scheme, internal job rotation, training and development programs, overseas assignments, medical insurance, social functions, etc.

The Managing Director has been addressing the employees on periodic basis to provide information on development of the Company and to understand the concerns of the employees.

Further, in a knowledge based industry, your Company understands that the employees are the main assets of a Company and it is necessary that they feel challenged to use their intellectual skills to the best of their abilities and add value to themselves even as they add value to the Company. To facilitate this and to have an independent assessment of the work environment, the Company has appointed an Ombudsman who has a wealth of knowledge, is approachable, maintains confdentiality and is able to guide decision making.

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this report and Accounts are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Offce of the Company and the same will be sent by post.

FORwARD LOOKING STATEMENTS

This Report along with its annexure and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words anticipate, believe, estimate, expect, intend, will and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward- looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This report should be read in conjunction with the fnancial statements included herein and the notes thereto.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, it is hereby confrmed that:

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

b) we 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 the Company at the end of the fnancial year and of the proft of the Company for that period;

c) we have taken proper and suffcient 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 and

d) we have prepared the annual accounts on a going concern basis.

ACKNOwLEDGEMENTS

The Directors are thankful to the Members and Investors for their confdence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Software Technology Park of India, Customs and other government authorities, banks and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from the ICICI group, alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Sd/- Sd/-

Hoshang N. Sinor V. Srinivasan

Chairman Managing Director

Dubai, April 22, 2011

Mar 31, 2010

The Directors have pleasure in presenting the Seventeenth Annual Report of the Company with the Audited Statement of Accounts for the year ended March 31, 2010.

FINANCIAL HIGHLIGHTS

Financials of the Company on Consolidated basis:

In the fnancial year 2009-10, your Company recorded an overall revenue of Rs. 2,468.75 crores, a growth of 7.12% over the corresponding period of the previous year. Proft after tax was Rs. 265.95 crores. Earnings per share (EPS) after exceptional item was Rs.1.73 as against Rs. 21.01 in the corresponding period of the previous year. The brief fnancial highlights with comparison of previous year are as below:

Rs. in Crores Particulars Year ended Year ended March 31, 2010 March 31, 2009 Total Income 2,468.75 2,304.70 Proft /(Loss) before taxation 276.90 288.47 Provision for taxation (Current and Deferred) 10.95 22.05 Proft /(Loss) after taxation and before exceptional items and impact of 265.95 266.42 discontinuing operations Exceptional Items & impact of discontinuing business : Add: Exceptional Income 29.19 77.05 Less: Impact of Discontinuing Operations (260.46) - (Less): Exceptional Expenditure (1.33) (51.09) Add: Share of Proft in Associate - 0.25 Less/ (Add): Minority Shareholders Interest (0.11) 10.62 Proft /(Loss) after taxation and after exceptional items and impact of 33.46 282.01 discontinuing operations Earnings Per Share (Basic in Rupees) (Before Exceptional items and 17.21 19.02 impact of discontinuing operations) Earnings Per Share (Basic in Rupees) (After exceptional Items and 1.73 21.01 impact of discontinuing operations)

Financials of the Company on Standalone basis: The Proft & Loss account of your Company on standalone basis shows a proft after tax (before exceptional item and Impact of discontinuing operations) of Rs.132.99 crores. Whereas, after taking into consideration the exceptional item and impact of discontinuing operation, the Company has incurred loss of Rs. 99.61 Crores. However, the disposable proft is Rs.218.76 crores, after taking into account the balance of Rs.84.21 crores brought forward from the previous year, and writing back of FCCB redemption reserve of 234.16 Crores. The brief fnancial highlights are as below:

Rs. in Crores Particulars Year ended Year ended March 31, 2010 March 31, 2009 Total Income 534.47 538.73 Proft before tax 136.49 161.40 Provision for taxation (Current and Deferred) 3.50 2.79 Proft after tax and before exceptional items and impact of 132.99 158.61 discontinuing operations Exceptional Items & impact of discontinuing operations : Add: Exceptional Income 29.19 77.05 Less: Impact of Discontinuing Operations (260.46) - Less: Exceptional Expenditure (1.33) (51.09) Proft/(Loss) after taxation and exceptional items and impact of (99.61) 184.57 discontinuing operations Balance brought forward from Previous year 84.21 74.7 FCCB redemption reserve written back 234.16 - Disposable Proft 218.76 259.27 Transfer to Reserves (General Reserve & FCCB 59.66 144.66 Redemption Reserve) Proft available for distribution after Transfer to Reserves 159.10 114.61 Earning Per Share ( Basic in Rupees) (Before Exceptional items) 8.35 11.57 Earning Per Share ( Basic in Rupees) (After Exceptional items) (7.12) 13.55

DIVIDEND

After taking into account the preference dividend of Rs.6.35 crores, the proft available for distribution to equity share holder works out to Rs.152.75 crores. Your Directors have recommended a dividend of Rs.1.50 on a equity share of face value of Rs.10 each (15%) for year ended 2009-10. The details of appropriation are as under:

Rs. in Crores Particulars Year ended Year ended March 31, 2010 March 31, 2009 Proft available for distribution 159.10 114.61 Dividend on Preference shares 6.35 6.35 Proposed Dividend Ã Equity shares 25.32 19.61 Residual dividend Paid 0.02 0.02 Corporate Dividend Tax 5.38 4.42 Balance carried to Balance Sheet 122.03 84.21

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 6 crores to the general reserve. An amount of Rs. 122.03 crores is proposed to be carried to Balance Sheet.

TRANSFER OF UNPAID DIVIDEND

Your Company does not have any unpaid dividend required to be transferred to Investor Education and Protection Fund under Section 205C of the Companies Act, 1956 for the fnancial year 2009-10.

OVERVIEW

Business:

Your CompanyÃs businesses broadly comprise of IT services, Transaction Services and Software Products.

The Company has its products in Banking, Insurance, Enterprise Resource Planning (ERP), Capital Markets catering to banks, insurance companies, fnancial services organizations and manufacturing industry and owns Intellectual Property Rights of about 20 products.

The Company`s IT Services solutions are in the feld of Application Development & Maintenance, IT Infrastructure Management, Consultancy Services, Testing, Business Intelligence and e-Commerce.

The Company`s Transaction Services competencies are across retail banking, credit cards, insurance, capital markets, fnance & accounting services, cheque truncation, remittance processing services and telecommunication sector processes.

Even though the global economy was still under recession mode and the recovery was slow during the fscal year 2009 -10, your Company was able to win many signifcant customer orders across geographies and across multiple verticals during the year.

During the year, the Company has achieved the following recognitions:

Ã Ranked among the top 3 Indian software product companies in India (Dataquest Ã AugÃ09);

Ã 189th largest company in India (Business Standard 1000 Ã FebÃ10);

Ã Secured a position in the Deloitte Technology Fast 50 India 2009 list on account of growth of 249% over three years;

Ã Ranked 32nd (3rd among Indian IT companies) in the Fintech 100 Rankings, October 2009 and

Ã One of only three companies from India and 44 worldwide, (including USA, UK and India) to win the ÃWorldBlu List of Most Democratic Workplaces 2010Ã Award. WordBlu is an Austin, TX, (USA) based company, specializing in organizational democracy and freedom-centered leadership.

Geographical reach:

Your Company has a large customer base across the globe and 78 of them are Fortune 500 customers. The Company has physical presence through the offces in 14 countries and has about 15000 employees spread across 5 geographies, viz. South Asia, Asia Pacifc, Middle East and Africa, Western Europe and North America.

All the geographies and business segments have contributed towards the growth of your Company. The share of the geographies in the total revenue for the year has been: South Asia - 26%, North America - 55 %, Western Europe - 6 %, MEARC (Middle East, Africa, Russia, and CIS countries etc.) - 9 % and APAC (Asia Pacifc region comprising of Singapore, Malaysia, Thailand and Australia) - 4 %.

The contribution of the various business segments to the revenue for the year has been from Banking Products - 12.4%, Insurance products - 8.3%, Capital Market products - 8.3%, ERP - 2.7%, IT Services - 31.8% and Transaction Services - 36.5%.

SUBSIDIARY COMPANIES

During the year, Regulus Holdings Inc., a U.S. based wholly owned subsidiary of the Company acquired National Retail lock box business of J. P. Morgan Treasury services in U.S.A. This acquisition is complimentary to current operations of Regulus and it has helped your Company in consolidating its position in the United States market within the payments processing area.

Your Company has raised its stake, on its own or through its subsidiaries, in some of the subsidiary companies namely AOK In-house BPO Services Ltd., AOK In-house Factoring Services Pvt. Ltd., HCCA Business Services Pvt. Ltd., Delta Services (India) Pvt. Ltd., Taxsmile.com India Pvt. Ltd., Professional Access Limited and Black Barret Holdings Pvt. Ltd in order to make them wholly owned subsidiaries. Further, your Company also raised its stake in FinEng Solutions Private Limited and Locuz Enterprise Solutions Ltd. to 60% and 51% respectively.

Elegon Infotech Limited, a Joint Venture company in China was converted into a wholly-owned subsidiary of the Company. The entire 49% stake held by joint venture partner was acquired by the Company.

Your Company was holding entire stake in Antariksh Interactive Private Limited (Antariksh) through the wholly-owned subsidiary, Taxsmile.com India Pvt. Ltd.(Taxsmile). During the year, Taxsmile signed a three year contract with a European tax and accounting solution provider. As per the contract, the shareholding of Taxsmile in Antariksh will be diluted by 2012. The frst tranche of 30% Shareholding was transferred in February 2010.

Name change:

In line with the strategy of the Company to promote Ã3i InfotechÃ as a global brand, the name of Linear Financial and Management Systems Private Limited (one of the acquired entities) was changed to 3i Infotech BPO Limited. The name of Exact Technical Services Limited (one of the subsidiaries of the Company) was changed to 3i Infotech (Flagship-UK) Limited.

During the fscal year 2010, Business Process Outsourcing activity in India handled through different subsidiaries has been consolidated under 3i Infotech BPO brand.

Accounts of the Subsidiaries:

As per Section 212 of the Companies Act, 1956, your Company is required to attach the DirectorsÃ Report, Balance Sheet and Proft and Loss Account of the subsidiaries to its Balance Sheet. Your Directors believe that the audited consolidated accounts presents a full and fair picture of the state of affairs and fnancial conditions of the Company and its subsidiaries, as is done globally. Hence, the Company had made an application to the Central Government, seeking exemption from the requirement of attaching the DirectorsÃ Report, Balance Sheet and Proft and Loss Account of the subsidiaries to its Balance Sheet. The approval of the Central Government has been received vide (letter no.47/285/2010-CL-III dated April 16, 2010). Accordingly, the Annual Report of your Company does not contain separate fnancial statements of these subsidiaries, but contains audited consolidated fnancial statements of the Company and its subsidiaries.

However, a statement of the CompanyÃs interest in the subsidiaries and a summary of the fnancials of the subsidiaries are given along with the consolidated accounts. The annual accounts of the subsidiaries, along with the related information, will be made available to the Members seeking such information at any point of time. The annual accounts of the subsidiaries are also available for inspection during business hours except Saturdays and holidays at the Registered Offce of the Company and its respective subsidiaries.

ECONOMIC SCENARIO AND FUTURE OUTLOOK

As per the recent Deloitte Report, the worst is now over and it is time that the right pace for smooth recovery is set by the CEO`s of the Companies. As per GartnerÃs IT Spending Forecast 2010, worldwide IT spending is expected to return to growth in 2010 as end user spending is projected to reach $3.3 trillion. The report predicts growth in US, Western Europe, MEARC and Asia Pacifc market. Your Company is present in a large way in these markets. As there is going to be substantial growth in Latin America and Canada market, these markets could be potential markets for your Company.

As per the recent CLSA report, IT spending is classifed into Enterprise-IT spending and Consumer-IT spending. While growth in IT spend in Western markets is more towards Enterprise-IT spending, in emerging markets, it is towards Consumer- IT spending. While, Enterprise-IT spending is more towards software products and services, Consumer-IT spending is towards desktops, laptops, mobiles, etc. As your Company is in the technology services business, the CompanyÃs growth will come from Enterprise-IT spending rather than Consumer-IT spending. Thus, volume scale up has to come from developed markets rather than developing markets. In line with this approach, your Company has created a global IT services team to focus exclusively on US and European markets.

While, the major focus would be on global IT services, Transaction Services and Products business will also grow.

With the turnaround in global economic outlook and your CompanyÃs strategic vision driven by responsiveness and foresight, quality of the people and their commitment to the CompanyÃs mission, the Company is set on right growth path.

As the Members are aware that the Company had a mandate to set up over 12,200 citizen service centers in nine states. In this regard, the Company had already set up over 6,200 centers till last year. However, the Company could not make major progress in the absence of G2C Services and state data centers. The non-availability of State Data centre and State Wide Area Network which were crucial for the success of e-governance business was also one of the reasons for the Company not being able to derive much benefts out of its investment in citizen service centers. As the cost of setting up and maintaining these centers was huge and the Company was unable to continue to bear losses on this front, the Company had no option, but to exit from the citizen service center related e-eovernance business in Uttar Pradesh, Andhra Pradesh, Gujarat, Haryana, Tamil Nadu and Maharashtra.

The Company has further decided to exit from this line of business owing to prevailing business environment. Accordingly the assets attributed to this business are being carried as ÃAssets held for DisposalÃ, at their net realizable values. The loss thereof of Rs. 260.46 crores (net of tax of Rs. 70.73 crores) has been written off in the Proft and Loss account and has been disclosed as ÃImpact of Discontinuing OperationsÃ.

CAPITAL

1) ESOS allotments:

5,09,000 shares were allotted under Employees Stock Options Schemes (ESOS) during the fscal year 2010.

2) Qualifed Institutional Placement (QIP) Allotment:

3,75,00,000 fully paid-up equity shares were allotted to Qualifed Institutional Buyers under Qualifed Institutions Placement (QIP) on September 25, 2009. The Company has further allotted 2,29,00,099 fully paid-up equity shares of face value Rs.10 each on April 7, 2010.

POSTAL BALLOT

During the fnancial year 2009-10, the Members approved the following proposals by way of postal ballot

a) Creating security on any borrowings of the Company, whether by way of creating charge(s), mortgage(s) or otherwise on any movable and/or immovable properties of the Company, both present and future, provided that the aggregate of security at any point of time shall not exceed Rs.1000,00,00,000 (Rupees One Thousand Crores Only). The Ordinary Resolution was passed, the results of which was declared on May 19, 2009.

b) Issue of securities of the Company pursuant to Section 81(1A) of the Companies Act, 1956 and other applicable guidelines. The Special Resolution was passed and the results of which was declared on August 31, 2009.

QUALITY

Your Company has always been lending an ear to its customers to improve the quality and grow. Your CompanyÃs constant endeavor is to satisfy its customers globally with the best quality products and services. Therefore, all the CompanyÃs business processes have been thoughtfully designed to develop solutions that fully meet customer expectations and are in accordance with statutory guidelines and industry-wide quality standards.

Your Company has a comprehensive Quality Management System (QMS) in place that addresses the entire software development and project management life cycle. Your CompanyÃs Quality Management Group works closely with project teams to review and improve delivery capabilities on a regular basis.

Your Company has received several location specifc, quality certifcations such as CMMI-DEV; Ver 1.2 at Maturity Level 5, ISO 9001:2008 certifcation for design, development, installation and maintenance of software products and services for banking and fnancial services and ISO / IEC 27001:2005 certifcation by STQC (Standardization, Testing & Quality Certifcation) Directorate, Department of Information Technology (DIT), Government of India.

Your Company remains committed to pursue the quality journey in the coming years focusing on improvement projects around key metrics and embarking on new quality initiatives like six sigma, lean sigma etc. across all divisions of the organization.

PUBLIC DEPOSITS

During the year, the Company has not invited / accepted any deposit under Section 58A of the Companies Act, 1956.

DIRECTORS

In terms of the provisions of the Articles of Association of the Company, Dr. Bruce Kogut and Dr. Ashok Jhunjhunwala are liable to retire by rotation at the forthcoming 17th Annual General Meeting of the Company. Dr. Bruce Kogut and Dr. Ashok Jhunjhunwala being eligible, offer themselves for re-appointment.

During the year, Mr. Dileep C. Choksi and Mr. Mahadevan Chandrasekaran were appointed as Additional Directors of the Company with effect form April 24, 2009 and their appointment was approved by the Members at the 16th Annual General Meeting held on, July 28, 2009.

On April 23, 2010, Mr. Mahadevan Chandrasekaran resigned from the Board of Directors of the Company on personal grounds. The board placed on record its deep sense of appreciation for the services rendered by Mr. Mahadevan Chandrasekaran as an Independent Member of the Board.

Mr. V. Srinivasan was appointed as Managing Director & Chief Executive Offcer for a period of 5 years with effect from October 1, 2005 by Special Resolution dated December 30, 2005 through Postal Ballot. Board of Directors at their Meeting held on June 9, 2010 re-appointed Mr. V. Srinivasan as Managing Director for a period of 5 years with effect from October 1, 2010. This re-appointment is subject to the approval of the Members of the Company at the ensuing Annual General Meeting, the approval of the Central Government and any other approvals, if necessary, as Mr. V. Srinivasan is a Non-Resident Indian.

Mr. Amar Chintopanth was elevated as Deputy Managing Director of the Company with effect from June 9, 2010 on the same terms and conditions for his remaining tenure in offce and will be called Deputy Managing Director & Chief Financial Offcer.

COMMITTEES

AUDIT COMMITTEE

The Audit Committee was reconstituted on April 24, 2009 comprising of Mr. Dileep C. Choksi as Chairman and Ms. Vishakha Mulye and Mr. Samir Kumar Mitter as Members of the Committee. Majority of the Members of the Audit Committee are Independent Non-Executive Directors in compliance with Clause 49 of the Listing Agreement. During the year under review, the Committee met four times to review quarterly accounts, internal control systems, discuss the audit fndings and recommendations of the internal and statutory auditors.

BOARD GOVERNANCE COMMITTEE

The Board Governance Committee was reconstituted on April 24, 2009 comprising of Mr. Hoshang N. Sinor as Chairman and Mr. Mahadevan Chandrasekaran and Dr. Bruce Kogut as Members of the Committee. All the Members of the Board Governance Committee are Independent Non-Executive Directors. The Committee attends to matters relating to governance, nomination to the Board, compensation to the Directors and performance bonus, stock options, etc. to the Directors and employees of the Company. During the year under review, the Committee met three times.

On April 23, 2010, due to the resignation of Mr. Mahadevan Chandrasekaran from the Board, the Committee was reconstituted to consist of Mr. Hoshang N. Sinor as Chairman and Dr. Bruce Kogut as Member of the Committee.

SHAREHOLDERSÃ / INVESTORSÃ GRIEVANCES COMMITTEE

The ShareholdersÃ and InvestorsÃ Grievances Committee was reconstituted on April 24, 2009 to comprise of Mr. Samir Kumar Mitter, as Chairman and Dr. Ashok Jhunjhunwala and Mr. Amar Chintopanth as Members of the Committee. Majority of the Members are Independent Non-Executive Directors. During the year under review, the Committee met four times to attend matters relating to investors servicing and grievances, etc.

FUND RAISING AND ACQUISITIONS COMMITTEE

The Fund Raising and Acquisitions Committee was reconstituted on April 24, 2009 to comprise of Mr. Hoshang N. Sinor as Chairman and Mr. Mahadevan Chandrasekaran and Dr. Bruce Kogut as Members of the Committee. All the Members of the Committee are Independent Non-Executive Directors.The Committee attends to matters relating to acquisitions and funding needs of the Company. During the year, the Committee met four times.

On April 23, 2010, due to the resignation of Mr. Mahadevan Chandrasekaran from the Board, the Committee was reconstituted to consist of Mr. Hoshang N. Sinor as Chairman and Dr. Bruce Kogut as Member of the Committee.

AUDITORS

M/s Lodha & Co.,Chartered Accountants, having their offce at 6, Karim Chambers, 40, Ambalal Doshi Marg, Hamam Street, Mumbai - 400 023 and M/s. R. G. N. Price & Co., Chartered Accountants, having their offce at SimpsonÃs Building, 861, Anna Salai, Chennai - 600 002 were appointed as Joint Statutory Auditors of the Company at the 16th Annual General Meeting and are due for retirement at the conclusion of the 17th Annual General Meeting. The Company has received letters from both the Auditors, wherein they have consented to act as Joint Auditors and have confrmed that they are eligible and qualifed to be appointed as Auditors pursuant to the Sections 224 (1B) and 226 of the Companies Act, 1956.

Your Directors recommend the re-appointment of M/s Lodha & Co. Chartered Accountants and M/s R. G. N. Price & Co, Chartered Accountants as Joint Statutory Auditors of the Company to hold the offce from the conclusion of the 17th Annual General Meeting to the conclusion of 18th Annual General Meeting.

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. Adequate measures are taken to reduce energy consumption whenever possible by using energy effcient equipments. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company and hence are not provided.

TECHNOLOGY ABSORPTION

Your company has an eye on the future ready for the change and adapt according to the need of an hour. During the year, your company has taken the following technology initiatives:

Ã Standardization of policies, processes and technology across its global development centers, sales and corporate offces with state of the art facilities.

Ã Optimization of performance through effective use of technologies; cost optimization by ongoing evaluation and implementation of low cost alternatives, keeping in mind the security consideration. Further a robust software and hardware asset management methodologies has been put in place.

Ã Requisite investments in ERP done with a drive to centralize internal applications across functions and groups.

Ã Critical applications have been equipped with disaster recovery and archiving.

Ã Partnerships with major technology providers and publishers for win-win relationships and go to market strategies.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the Global Development Centres (GDCs).

The GDCs function as the product research and development facility of the Company and focus on developing and expanding the CompanyÃs products. Besides this, the Company is also in the process of migrating its varied product lines to standard and latest platforms.

With a focus to further enhance the CompanyÃs software products, namely its Intellectual Property, based on market needs, the GDCs work in line with the CompanyÃs strategy for growth.

Expenditure on R & D

Rs. in Crores 2009-10 2008-09 Revenue Expenditure 40.61 41.67 Capital Expenditure - - Total 40.61 41.67 Total R&D expenditure as a percentage of total standalone revenue 7.60% 7.73%

PERSONNEL

Your Company has matured enough to take care of the professional aspirations of its employees functioning in varied cultures across the globe. The human resources group has been working with an objective to enhance employee competence through various initiatives & maximizing employee contribution towards the organizational goals.The practices followed by the Company have been manifested in the Company getting global recognition. The Company is one of only three companies from India and 44 worldwide, (including USA, UK and India) to win the ÃWorldBlu List of Most Democratic Workplaces 2010Ã Award. WordBlu is an Austin, TX, (USA) based company, specializing in organizational democracy and freedom-centered leadership.

The various initiatives undertaken in this year are as under:

Ã Reach HR - This HR query management system is a portal to better address the queries of employees and facilitate timely resolution. Reach HR has completed a successful run of more than one year since its launch in November 2008. Besides tracking the number of queries raised and resolved, the portal has helped in offering seamless and quick response.

Ã The HR Connection - The HR newsletter is an endeavour to stay connected with employees. It gives a quarterly update of various initiatives taken by the HR group. Besides containing informative articles on various management related topics, the newsletter also features contributions from employees on various themes. It serves as a platform to appreciate employeesÃ interests and bring out their hidden talents.

Ã Learning and development - comprehensive training & development initiatives are in line with the skills and knowledge required to meet the long & short term corporate objectives. Workshops on Communication skills, Situational Leadership, Leader as a Coach, Customer Orientation etc. are facilitated across locations. During the year, your Company introduced various interventions to enrich leadership skills and build team capabilities to create high performance teams. Besides these, in-house programs, customized offsites have been facilitated for various groups to drive home the specifc group objectives. Employees are also encouraged to acquire technical/functional certifcations to upgrade their knowledge and skills to assume higher responsibilities in the organisation.

Ã Organization Development - Continuous development aided by various initiatives like an Effective Performance Management System, Competency Based Assessments, 360 degree feedback, etc. pave the way for overall employee growth. Competency modeling & mapping exercise was undertaken across various business units to identify critical competencies important for successful delivery. The Competency exercise has been integrated with other HR subsystems like recruitment, performance review & learning & development to ensure tangible outcomes.

The Company has set up robust processes to recruit and select employees. The Company has a number of initiatives to attract, retain and develop talent in the organisation. Some of them include the employee referral scheme, internal job rotation, training and development programs, overseas assignments, medical insurance, etc.

The Managing Director & CEO circulates quarterly newsletters briefng about the signifcant developments of the quarter and also addresses all employees on a regular basis. Various open house sessions are conducted across various locations to facilitate open communication. Informal interaction among employees is encouraged in the form of various competitions, fun events, sports, get together etc. This aids in inter group interaction, thus enabling employees to engage in fun at work.

The Company encourages its employees to maintain a healthy work life balance through fexible timings and opportunity to work from home. The Company ensures that its employees are healthy by organising regular health check ups through recognised medical check up centres for employees above a particular age.

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this report and Accounts are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Any Shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Offce of the Company, and the same will be sent by post.

CORPORATE GOVERNANCE

In recognition of the good corporate governance practices adopted by the Company, ICRA Limited (an associate of MoodyÃs Investors Service), a leading provider of investment information and credit rating services in India, has assigned a CGR2 rating to the Corporate Governance Practices of the Company. This rating implies that the Company has adopted and follows such practices, conventions and codes as would provide its fnancial stakeholders a high level of assurance on the quality of corporate governance. A detailed report on Corporate Governance is given in the annexure to this Report.

FORWARD LOOKING STATEMENTS

This Report alongwith its annexure and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words ÃanticipateÃ, ÃbelieveÃ, ÃestimateÃ, ÃexpectÃ, ÃintendÃ, ÃwillÃ and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward- looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This report should be read in conjunction with the fnancial statements included herein and the notes thereto.

DIRECTORSÃ RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, it is hereby confrmed that:

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

b) we 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 the Company at the end of the fnancial year and of the proft of the Company for that period;

c) we have taken proper and suffcient 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 and

d) we have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members and Investors for their confdence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Software Technology Park of India, Customs and other government authorities, banks and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the un-stinted support and guidance received from the ICICI group, alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board sd/- sd/- Hoshang N. Sinor V. Srinivasan Chairman Managing Director & CEO

Mumbai, June 9, 2010

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