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Directors Report of Cyient Ltd.

Mar 31, 2016

Dear Shareholders,

The directors have pleasure in presenting the 25th Directors'' Report on the business and operations of your company, for the financial year ended 31 March 2016.

FINANCIAL HIGHLIGHTS

(Amount in Rs. Million)

Consolidated Standalone

Particulars 2015-16 2014-15 2015-16 2014-15

Total Income 32,041.1 28,577.0 13,590.6 13,969.5

EBIDTA 5,292.9 5,225.9 3,635.0 4,053.6

Finance Cost 178.8 57.6 2.3 5.1

Depreciation 893.0 712.8 688.0 618.1

Exceptional items 87.2 - 71.6 -

Profit before Tax 4,134.0 4,455.5 2,873.0 3,430.5

Current Tax 1,139.4 1,023.6 614.5 707.6

Tax pertaining to earlier years 10.3 24.0 - 1.3

MAT Credit (30.3) (1.4) (30.3) (2.0)

Deferred Tax (133.3) 50.1 (45.7) 12.0

Share of profit in associate company 120.3 150.4 - -

Minority Interest (5.7) 22.4 - -

Profit after Tax 3,262.5 3,532.0 2,334.5 2,711.6

Basic Earnings per share (Rs.) 29.01 31.48 20.76 24.17

Diluted Earnings per share (Rs.) 28.96 31.37 20.73 24.09

Interim dividend paid (Rs./Share) 7.00 3.00 7.00 3.00

Final dividend recommended (Rs./Share) - 5.00 - 5.00

Paid up Equity Share Capital 562.4 561.8 562.4 561.8

Reserves 18,535.7 17,878.8 16,267.7 15,244.3

APPROPRIATIONS

Dividend

During the year company has declared and paid two interim dividends of 140% of the par value of the equity share. The 1st interim dividend was Rs. 3 per equity share (60%) on par value of Rs. 5 per share. The 2nd interim dividend was Rs. 4 per equity share (80%) on par value of Rs. 5 per share. The interim dividends were declared on 15 October 2015 and 17 March 2016 respectively. Total dividend (including dividend distribution tax) as a percentage of profit after tax is 40.6% as compared to 39.5% in the previous year.

LIQUIDITY

Your company maintains sufficient cash reserves to meet its operations and strategic objectives. As at 31 March 2016, your company had liquid assets of Rs. 5,746.7 million as against Rs. 4,760.6 million at the previous year end. These funds have been invested in short term deposits and mutual funds with scheduled banks and debt based mutual funds.

FIXED DEPOSITS

Your company has not accepted any deposits and as such, no amount of principal or interest was outstanding as on 31 March 2016.

SHARE CAPITAL

Allotment of Shares

Your company has allotted 1,22,312 equity shares of Rs. 5 each to the associates of the company and its subsidiaries upon exercise of an equal number of stock options vested in them pursuant to the extant Stock Option Schemes of the company.

In view of the above allotments, the outstanding shares of the company increased from 112,361,065 equity shares of Rs. 5 each to 112,483,377 equity shares of Rs. 5 each.

STATE OF AFFAIRS/COMPANY''S PERFORMANCE

DNO

With a goal to provide specialized solutions across our customer''s value chain, the Data Transformation, Network and Operations (DNO) group has been engaged in wide- ranging long-term customer engagements, that has enabled the company to emerge as a renowned organization in the industry with marque customers in the sectors addressed.

In the Data Transformation, we have over 2 decades of experience in providing varied services in the geospatial technology and mapping industry. Over the years, this Data Transformation group has moved from creating of spatial data to also developing insights from the data, positioning itself as an end to end data transformation business.

With some of the world''s largest Communication Service Providers and Utilities as our customers, this Network & Operations group provides specialized services spanning across the "Plan - Build - Operate" life cycle of our customers.

This operating unit generated revenues of Rs. 5,308.0 million as against previous year''s Rs. 5,833.5 million, at a degrowth rate of 9.0%. As a percentage of operating revenues, this vertical contributed 42.6%. Number of employees in this group - 5,343.

Engineering

This operating unit provides complete product life cycle support, from product ideation and design engineering, through product realization to aftermarket services, across Aerospace & Defense, Transportation, Industrial Equipment, Oil & Gas, Energy, Mining, Semiconductors, Consumer, and Medical industries. With deep domain knowledge combined with engineering expertise, application know how and innovative business models, Cyient is positioning itself as an ideal partner for clients who want to design innovative products faster, optimize their engineering costs and improve time to market.

The operating unit generated revenues of Rs. 7,138.8 million as against last year''s revenues of Rs. 7,106.5 million, resulting in an increase of 0.5%. This vertical contributed 57.3% of the total operating revenues. Number of employees in this group - 3,944.

Product Realization

This business unit focuses on building capabilities that support conceptualizing, system engineering, prototyping, testing, certification and high-value realization for customers and prospects. This operating unit generated revenues of Rs. 8.8 million and contributed 0.1% of the total operating revenues. Number of employees in this group - 23.

Focused on Aerospace & Defense, Medical, Rail and Industrial, this business unit of the company offers Design Led Product Realization for its customers by providing sub systems partnerships, accelerated product development and customizing product for emerging markets.

SUBSIDIARIES

Cyient, Inc. (CI)

Headquartered in East Hartford, Connecticut, CI provides engineering services in North America. CI has 23 offices across the US and Canada, with over 1,600 associates working with clients in North America.

CI caters to a broad spectrum of clients, from Fortune 500 companies to small organizations and local, state, and federal government agencies. CI generates annual revenues of over $230 M working across 40 states and 6 Canadian provinces.

CI leverages both the local and global delivery capability of Cyient while executing projects in the Americas region.

Cyient Europe Limited (CEL)

Incorporated in London as Dataview Solutions in 1992, it became a part of the Infotech Group in1999.

Its services are designed to cater to leading tier-1 and tier- 2 telcos, large utility companies, public sector agencies, and commercial businesses. In addition it provides engineering design services as well as big data and analytics capabilities. The company enjoys long-term relationships with several of its partners and customers and has built a strong foundation of trust and reliability.

Cyient Benelux BV, based in Breda, the Netherlands provides support to our business in the Benelux region, Cyient Schweiz GmbH provides support to our business in Switzerland, while the Middle East operations are managed at the Dubai Office. In September 2015, Cyient SRO, Czech Republic was created to provide engineering and data services to customers across the European Union.

The company is an ISO 9001 and ISO 27001 certified organization. Leveraging the global execution capability of its parent organization, it maintains client relationships and ensures efficient project management in Europe.

Cyient GmbH (CG)

Cyient GmbH offers world-class engineering services and solutions in Germany. It was established as Advanced Graphics Software (AGS) in Leonberg, Germany, in 1992 - a 3D CAD/CAM, e-solution software and application provider.

After becoming a part of Cyient Group in 2000, it extended its foray into other service areas like GIS and IT solutions. Owing to the large pool of engineering, GIS, IT resources, CG provides high-quality services and solutions to the clients with offshore cost advantage and onsite project management.

Cyient KK (CKK)

Established in 2008 in Central Tokyo, CKK is a leading engineering service provider in Japan. CKK provides end- to-end engineering services and solutions to manufacturing industries.

CKK leverages the global delivery capability of the parent organisation, while maintaining client relationships and managing projects locally.

Cyient Australia Pty Limited (CAPL)

Headquartered in Melbourne and incorporated during the year 2014-15, CAPL commenced commercial operations during the current year. It provides engineering, data and network operations services to diverse industries to its Asia Pacific customers. CAPL supports its customers from global delivery centres in Sydney and Melbourne with operations Australia wide and across the APAC region.

Cyient Singapore Pte Limited (CSPL)

Cyient Singapore is the South East Asia headquarter. CSPL provides services and solutions to diverse industries such as aerospace, telecommunications, utilities and rail transportation. CSPL has close to 100 engineers supporting its customers from the engineering centre in Singapore. CSPL has a strong customer base in the region and this entity becomes very important for the future growth in the region.

Cyient Engineering (Beijing) Limited (CEBL)

Cyient established its presence by setting up a subsidiary in Beijing. CEBL sees China as having long term market not only to support its global customers in China but also to capture huge potential that the China market brings to its future growth. Particular focus is on semi conductor, manufacturing and energy markets.

Rangsons Electronics Private Limited (REPL)

In 2015 Cyient acquired a majority interest in REPL as an expression of its S3 strategy to provide a complete product life cycle solution set to its customers. Established in 1993 in Mysore, Karnataka with 3 manufacturing facilities REPL is a market leader in High-Mix, High-Tech Electronic & Mechanical Manufacturing Services in Aerospace & Defence, Rail Transportation, Medical Technology, Telecom & Industrial business segments. REPL possesses and maintains quality certifications that enable it to supply electro-mechanical products to clients in these industries.

Since acquisition, REPL is being aligned with the 7 business units of Cyient to extend Design Led Manufacturing solutions to their clients around the world. In many cases, techno-commercial stress points faced by clients (e.g., pricing pressure, supplier cost escalation or need to enter emerging market at different feature/price point) are addressed by a set of seasoned experts to deliver value- engineered products derived from a combination of manufacturing, sourcing and design solutions.

Infotech Geospatial India Private Limited (IGIPL)

IGIPL, a wholly owned subsidiary of the company, was merged effective 1 April 2015 vide order of the Hon''ble High Court of Judicature at Hyderabad for the states of Telangana and Andhra Pradesh dated 2 March 2016.

Infotech Enterprises Information Technology Services Private Limited (IEITSPL)

The Company disinvested its 100% stake in IEITSPL on 16 September 2015.

Cyient Insights Private Limited (CIPL)

Cyient acquired a majority stake in Invati Insights Private Limited, Hyderabad, India and Troy, Michigan, USA based Datasciences Company in October 2014. The company was subsequently renamed Cyient Insights Private Limited.

CIPL enables customers drive business innovation and deliver quantifiable business results through smart data analytics and actionable intelligence. CIPL prides itself on the unique approach in acquiring, managing and analyzing the vast amount of data generated by sensors embedded in machines and devices, and the unmatched commitment to add value to customers with the proven global delivery model.

CIPL leverages Cyient''s relationships in different verticals such as Aerospace & Defence, Heavy Engineering, Transportation, Medical, Telecommunications, Utilities, Energy & Natural Resources its global delivery model in executing projects.

Infotech Aerospace Services Inc. (IASI)

Established in 2003 in Puerto Rico, Infotech Aerospace Services Inc. provides engineering outsourcing and other professional services to Defense, Aerospace, and Power Generation Industries. IASI is a associate company between Cyient and Pratt & Whitney, a pioneer in flight technology.

We also provide engineering and supply chain services, including aerospace engineering, mechanical design and software development for military, industrial and applications.

Infotech HAL Limited (IHL)

IHL aims to provide comprehensive solutions involving conceptual design, re-design and derivates of modules, systems and components, prototyping and supply of these through Manufacturing Programme Management. IHL offers design services in the field of aerospace, viz., aero thermo and mechanical design, structural, stress, thermal and rotor dynamic analysis, aeronautics, computational fluid dynamics, combustion studies, preparation of digital mock up, testing and analysis, control system design, development and software applications.

IHL is a joint venture between Cyient and Hindustan Aeronautics Limited. IHL delivers engineering as well as after market engineering and support services, i.e., technical publications, repair design, service bulletins, testing, performance analysis and maintenance monitoring in the aerospace domain.

IHL is well positioned to undertake work under offset program from various original equipment manufacturers.

Pursuant to section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of company''s subsidiaries in Form AOC-1 is enclosed elsewhere in this report.

BUSINESS RESPONSIBILITY REPORT

The company has suo moto adopted the ''National Voluntary Guidelines on Social, Environmental and Economical Responsibilities of Business'' issued by the Ministry of Corporate Affairs (MCA).

The nine areas of business responsibility adopted by the company are briefly described as follows:

Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.

Principle 3: Businesses should promote the well being of all employees.

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.

Principle 5: Businesses should respect and promote human rights

Principle 6: Business should respect, protect, and make efforts to restore the environment.

Principle 7: Business, when engaged in influencing public and regulatory policy, should do so in a responsible manner.

Principle 8: Business should support inclusive growth and equitable development.

Principle 9: Business should engage with and provide value to their customers and consumers in a responsible manner.

The business responsibility report is enclosed as Annexure ''A''.

Global Compact Network India

The company is a member of the Global Compact Network India - the Indian arm of the United Nations'' Global Compact. The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption. As a member of the Global Compact Network, the company iscommitted to comply with the following principles of United Nations Global Compact:

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and-

Principle 2: make sure that they are not complicit in human rights abuses.

Labour

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;-

Principle 4: the elimination of all forms of forced and compulsory labour;-

Principle 5: the effective abolition of child labour; and-

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;-

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

CORPORATE SOCIAL RESPONSIBILITY

The company believes in giving back to society in some measure that is proportionate to its success in business. Corporate Social Responsibility (CSR) aims at balancing the needs of all stakeholders. The company''s CSR initiative goes beyond charity and believes that as a responsible company it should take into account its impact on society as much as designing tomorrow together. The CSR initiatives are conducted through Cyient Foundation. The CSR Annual Report is enclosed as Annexure ''B''.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

None of the directors of the company is disqualified under the provisions of the Act or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Appointments/Re-appointments

Pursuant to Article 56 of the Articles of Association of your company and the provisions of section 152 of the Companies Act, 2013, Mr. B.V.R. Mohan Reddy and Mr.Krishna Bodanapu retire by rotation at the ensuing Annual General Meeting (AGM) and offer themselves for re- appointment.

Pursuant to the provisions of Secretarial Standard 2 on General Meetings issued by ICSI, brief particulars of the directors who are proposed to be re-appointed are provided as an annexure to the notice convening the AGM.

During the year no additional directors were inducted on the Board. There are no new appointments being made in the ensuing AGM.

Cessations

Mr. Shankar Narayanan ceased to be a Director with effect from 6 August 2015. Your directors place on record their appreciation and gratitude to him for his valuable contributions during his tenure as director.

There is no change in the key managerial personnel during the year.

Policy on directors'' appointment and remuneration and other details

The Company''s policy on directors'' appointment and remuneration and other matters provided in section 178(3) of the Act have been disclosed in the corporate governance report, which forms part of this report.

Number of board meetings during the year

During the year, five meetings of the board were held, the details of which form part of the report on corporate governance.

Board evaluation and assessment

The company believes that formal evaluation of the board and of the individual directors, on an annual basis, is a potentially effective way to respond to the demand for greater board accountability and effectiveness. For the company, evaluations provide an ongoing means for directors to assess their individual and collective performance and effectiveness. In addition to greater board accountability, evaluation of board members helps in:

- More effective board processes

- Better collaboration and communication

- Greater clarity with regard to members'' roles and responsibilities and

- Improved Chairman - Managing Director - Board relations

By focusing on the board as a team and on its overall performance, the company ensures that communication and overall level of participation and engagement also improves. In this background, the board undertook a formal board assessment and evaluation process during 2015-16. The Leadership, Nomination & Remuneration Committee has overall stewardship for the process. The evaluation process covers the following aspects:

- Peer and self-evaluation of Directors

- Evaluation of the performance and effectiveness of the board

- Evaluation of the performance and effectiveness of Board Committees

- Feedback from the Non-Executive Directors to the Chairman, and

- Feedback on management support to the Board

The evaluation process elicits responses from the directors in a judicious manner - ranging from composition and induction of the board to effectiveness and governance. It also seeks feedback on board and committee charters, strategy, risk management and quality of discussion and deliberations at the board. The Lead Independent Director provides feedback to the Executive Chairman. The same is discussed and acted upon accordingly at the board.

AUDITORS

Pursuant to the provisions of section 139 of the Act and the rules framed thereunder, Deloitte Haskins & Sells, Chartered Accountants, were appointed as statutory auditors of the company from the conclusion of the 23rd AGM of the company held on 17 July 2014 till the conclusion of the 28th AGM to be held in the year 2019, subject to ratification of their appointment at every AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

AUDITORS'' REPORT AND SECRETARIAL AUDITORS'' REPORT

The auditors'' report and secretarial auditors'' report do not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report (Annexure ''C'').

EMPLOYEE STOCK OPTION PLANS

During the year the company had the Infotech Associate Stock Option Plans in operation for granting stock options to the associates of the company and its subsidiaries, in accordance with the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Disclosures pursuant to the above Regulations are enclosed as Annexure ''D''.

During the year company put in place a new stock option scheme named ''Cyient Associate Stock Option Plan 2015'' based on the special resolution passed by the shareholders at the 24th AGM. Company has since obtained the in- principle approval for the scheme from BSE Limited and National Stock Exchange of India Limited. No options have been granted by the company from this scheme during this year.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details are enclosed as Annexure ''E''.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, a report on Management Discussion & Analysis is enclosed as Annexure ''F''.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, (''the Act'') the board of directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. 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 at the end of the financial year and of the profit of the company for that period;

iii. 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;

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

v. they have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and operating effectively;

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

Further, there are no qualifications, reservations or adverse remarks made by the statutory auditors/ Practising Company Secretary in their reports.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

RELATED PARTY TRANSACTIONS

None of the transactions with related parties falls under the scope of section 188(1) of the Act. Information on transactions with related parties pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and is enclosed as Annexure ''G''.

EXTRACT OF ANNUAL RETURN (MGT 9)

The extract of the annual return in Form MGT 9 as required under the provisions of section 92 of the Act is enclosed as Annexure ''H''.

Particulars of employees

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Executive Directors Ratio to Median remuneration

B. V. R. Mohan Reddy 85.92

Krishna Bodanapu 108.21

Independent Directors

M.M. Murugappan 2.00

K. Ramachandran 2.00

Som Mittal 2.00

Harsh Manglik 2.00

John Paterson 4.30

Andrea Bierce 4.30

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Directors, Chief Executive % increase in Officer, Chief Financial remuneration Officer and Company in the financial year Secretary

B.V.R Mohan Reddy -9.0%

Krishna Bodanapu 84.7%

Ajay Aggarwal 13%

Sudheendhra Putty 12%

c. The percentage increase in the median remuneration of employees in the financial year: 8%

d. The number of permanent employees on the rolls of Company: 13,123

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 8% in India. The individual increments varied from 4 % to 14 %, based on individual performance.

Employees outside India received wage increase varying from 1 % to 3 %. The increase in remuneration is in line with the market trends in the respective countries. In order to ensure that remuneration reflects company performance, the performance pay is also linked to organization performance, apart from an individual''s performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY16 32,950,356

Revenue 12,455,620,209

Remuneration of KMPs (as % of revenue) 0.3

Profit before Tax (PBT) 2,873,032,762

Remuneration of KMP (as % of PBT) 1.1

g. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31, 2016 March 31, 2015 % Change

Market Capitalization (Rs. lakhs) 479,967 566,603 -15.30

Price Earnings Ratio 20.55 20.86 -1.50

h. Percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars March 31, 2016 IPO Date IPO Price Adjusted IPO price by % Change consider ing CA*

Market Price (BSE) 425.4 September 25, 1997 87.70 7.31 5719

Market Price (NSE) 426.7 September 30, 1998 124.30 10.36 4019

* Adjusted for 1:1 bonus issue in 2002 and 2010

Sub divided 1 share of Rs. 10 into 2 shares of Rs. 5 in 2006

One bonus share issue for every 2 shares of Rs. 5 each in 2006

i. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 8%. However, during the course of the year, the total increase is approximately 8%, after accounting for promotions and other event based compensation revisions.

Increase in the managerial remuneration for the year was 24.4%. j. Comparison of remuneration of the key managerial personnel against the performance of the Company:

(Amount in Rs.)

B.V.R. Mohan Reddy Krishna Bodanapu Ajay Aggarwal Sudheendhra Putty Executive MD & CEO Chief Financial Company Chairman Officer Secretary

Remuneration 51,663,911 65,061,685 12,949,163 2,126,663

Revenue 12,455,620,209 Remuneration as % of revenues 0.41% 0.52% 0.10% 0.02%

Profit before Tax (PBT) 2,873,032,762

Remuneration (as % of PBT) 1.80% 2.26% 0.45% 0.07%

k. The key parameters for any variable component of remuneration availed by the directors:

The members of the company vide postal ballot in October 2014 approved payment of commission to the non-executive directors within the ceiling of 1% of the net profits of the company as computed under the applicable provisions of the Act. The said commission is decided each year by the board of directors, based on the recommendations of Leadership, Nomination & Remuneration Committee and distributed amongst the non-executive directors based on their attendance and contribution at the board and certain committee meetings, as well as the time spent on operational matters other than at meetings.

l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

None.

m. Affirmation that the remuneration is as per the remuneration policy of the Company:

The company affirms that the remuneration is as per its remuneration policy.

n. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. 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.

Particulars relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in its premises through various policies and practices. Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Company has adopted a policy on Prevention of Sexual Harassment (POSH) at Workplace which aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behaviour. An Internal Complaints Committee ("ICC") has been set up from the senior management (with women employees constituting the majority) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy.

During the year the company:

- organized hourly sessions for female associates at each location to connect with them & create more awareness about POSH & its processes

- created a page in Company''s internal portal along with a mailer to all associates with the link to view this page & educate themselves about POSH.

- created an online training programme on POSH for all associates.

There were no complaints received under the policy during 2015-16.

RISK MANAGEMENT

The board of directors has formed a risk management committee to identify, evaluate, mitigate and monitor the risk management in the company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. A comprehensive enterprise risk management mechanism has been put in place and the same is regularly reviewed.

A more detailed analysis of the risk management in the company is published in the management discussion and analysis report published elsewhere in the annual report.

CORPORATE GOVERNANCE

The company will continue to uphold the true spirit of Corporate Governance and implement the best governance practices. A report on Corporate Governance pursuant to the provisions of Corporate Governance Code stipulated under SEBI (LODR) Regulations, 2015 is published else where in the report . The Auditors'' Certificate regarding compliance of conditions of corporate governance is enclosed as Annexure ''I''.

DISCLOSURE REQUIREMENTS

Details of the familiarization programme of the independent directors are available on the website of the Company (http://www.cyient.com/investors/corporate- governance).

Policy for determining material subsidiaries of the Company is available on the website of the Company (http:// www.cyient.com/investors/corporate-governance).

Policy on dealing with related party transactions is available on the website of the Company (http://www.cyient.com/ investors/corporate-governance).

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the section 177(9) of the Act and the SEBI (LODR) Regulations, 2015 (http://www.cyient.com/ investors/corporate-governance).

CEO''s DECLARATION

Pursuant to the provisions of Regulation 17 of the SEBI (LODR) Regulations, 2015, a declaration by the Managing Director & CEO of the company declaring that all the members of the board and the senior management personnel of the company have affirmed compliance with the Code of Conduct of the company is enclosed as Annexure ''J''.

The CEO/CFO certification to the board pursuant to Regulation 17 of the SEBI (LODR) Regulations, 2015 is enclosed Annexure ''K''.

ACKNOWLEDGMENTS

The board of directors expresses its thanks to the company''s customers, shareholders, vendors and bankers for their support to the company during the year. Your directors would like to make a special mention of the support extended by the various Departments of the Central and State Governments, particularly the Software Technology Parks of India, Development Commissioners - SEZ, Department of Communication and Information Technology, the Direct and Indirect tax authorities, the Ministry of Commerce, the Reserve Bank of India, Ministry of Corporate Affairs/Registrar of Companies, Securities and Exchange Board of India, the Stock Exchanges and others and look forward to their support in all future endeavours.

Your directors wish to place on record their deep sense of appreciation for the committed services of the associates of the company at all levels.



For and on behalf of the Board

B.V.R. Mohan Reddy

Executive Chairman

(DIN-00058215)

Place: Hyderabad

Date : 21 April 2016


Mar 31, 2014

Dear Members,

The directors have pleasure in presenting the 23rd Directors'' Report on the business and operations of your company, for the financial year ended 31 March 2014.

FINANCIAL HIGHLIGHTS

(Amount in Rs. Million)

Consolidated Standalone

Particulars 2013-14 2012-13 2013-14 2012-13

Total Income 22,233.7 19,111.7 12,769.2 10,888.7

EBIDTA 4,271.7 3,804.7 3,967.3 3,196.2

Finance Cost 13.7 2.9 3.6 0.9

Depreciation 720.0 635.5 648.7 563.2

Exceptional item - 18.1 - 18.1

Profit Before Tax 3,538.0 3148.2 3,315.0 2,614.0

Current Tax 1036.0 930.5 763.1 698.1

Earlier Years'' Tax 1.3 1.0 - 1.0

MAT Credit 0.5 (1.6) - -

Deferred Tax (7.7) 36.8 2.8 71.5

Share of profit in associate company 152.0 129.1 - -

Profit After Tax 2,660.0 2310.6 2,549.1 1,843.4

Basic Earnings per share (Rs.) 23.80 20.72 22.81 16.53

Diluted Earnings per share (Rs.) 23.70 20.68 22.71 16.50

Interim dividend paid (Rs./ Share) 2.00 2.00 2.00 2.00

Final dividend recommended (Rs./Share) 3.00 2.50 3.00 2.50

Paid up Equity Share Capital 559.8 558.0 559.8 558.0

Reserves 15,323.44 12,663.5 13,298.3 11,108.3

APPROPRIATIONS

Dividend

Your directors have recommended a final dividend of Rs. 3.00 per share (60%) on par value of Rs. 5 per share. The total dividend including dividend distribution tax (gross) is Rs. 633.8 million as against Rs. 585.5 million for the previous year. During the year, the board also declared an interim dividend of Rs. 2.00 per share (40%). The total interim dividend paid including the dividend distribution tax (gross) was Rs. 240.7 million. The interim dividend was paid on 9 November 2013. Total dividend (including dividend distribution tax) as a percentage of profit after tax is 24.9% as compared to 31.8% in the previous year.

Transfer to Reserves

Your directors have proposed to transfer Rs. 255 million to the General Reserve retaining Rs. 4,271.0 million in the Profit and Loss Account.

LIQUIDITY

Your company maintains sufficient cash reserves to meet its operations and strategic objectives. As at 31 March 2014, your company had liquid assets of Rs. 6,208.3 million as against Rs. 4,857.8 million at the previous year end. These funds have been invested in short term deposits and mutual funds with scheduled banks and the debt based mutual funds respectively.

FIXED DEPOSITS

Your company has not accepted any deposits and as such, no amount of principal or interest was outstanding as on 31 March 2014.

SHARE CAPITAL

Allotment of Shares

Your company has allotted 361,646 equity shares of Rs. 5 each to the associates of the company and its subsidiaries upon exercise of an equal number of stock options vested in them pursuant to the extant Stock Option Schemes of the company.

In view of the above allotments, the outstanding shares of the company increased from 111,602,967 equity shares of Rs. 5 each to 111,964,613 equity shares of Rs. 5 each.

NAME CHANGE AND RE-BRANDING

As on 31 March 2014, company has issued notice of a special resolution to be passed through postal ballot for the change of name of the company from Infotech Enterprises Limited to Cyient Limited. The last date to receive the postal ballot forms is 28 April 2014 and the results would be declared by 30 April 2014.

This name change is part of the company''s re-branding exercise.

VERTICAL WISE PERFORMANCE

Utilities, Communications and D&A

This vertical provides geospatial technology solutions and data management services. With wide-ranging customer engagements, this has enabled the company to emerge as one of the largest and most accomplished firms in the industry today.

Focused on electric, gas and water utilities, telecom network operators, transportation companies and government agencies, this vertical of the company helps its customers leverage geospatial technology and data to improve the way they do business.

This vertical generated revenues of Rs. 5,463.9 million as against previous year''s Rs. 3,987.9 million, at a growth rate of 37.0%. As a percentage of operating revenues, this vertical contributed 44.6%.

Engineering

This vertical has developed a unique track record in supporting leading Automotive, Aerospace, Energy, Marine, Plant Engineering, Rail and other engineering industries in their product development support and optimizing their development time & processes.

The Engineering vertical of your company offers a unique combination of engineering skills, domain experience and application know-how. The company''s expert teams in engineering span the complete product development cycle, from concept development through after market support in the areas of Mechanical Design, Electronics Design, Technical publication and Engineering Software Development.

The vertical generated revenues of Rs. 6,764.6 million as against last year''s revenues of Rs. 6,527.7 million, resulting in an increase of 3.6%. This vertical contributed 55.4% of the total operating revenues.

SUBSIDIARIES

Infotech Enterprises Europe Limited (IEEL)

Incorporated in London as Dataview Solutions in 1992, it became a part of the Infotech Group in1999.

Our services are designed to cater to leading tier-1 and tier- 2 telcos, large utility companies, public sector agencies, and commercial businesses. We enjoy long-term relationships with several of our partners and customers that have built a strong foundation of trust and reliability.

Infotech Benelux BV, based in Breda, the Netherlands provides support to our business in the Benelux region, while the Middle East operations are managed at the Dubai Office.

We are an ISO 9001 and ISO 27001 certified organization. Leveraging the global execution capability of our parent organization, we maintain client relationships and ensure efficient project management in Europe.

Infotech Enterprises America, Inc. (IEAI)

Headquartered in East Hartford, Connecticut, IEAI provides engineering services in North America. We have additional offices across the US and Canada, with over 1,000 associates working in North America alone.

We cater to a broad spectrum of clients, from Fortune 500 companies to small organizations and local, state, and federal government agencies, generating annual revenues of over $150M.

We leverage the global delivery capability of Infotech Enterprises Ltd., while engaging clients and executing projects in the American region.

Infotech Enterprises GmbH (IEG)

Infotech Enterprises GmbH offers world-class engineering services and solutions in Germany. It was established as Advanced Graphics Software (AGS) in Leonberg, Germany, in 1992 – a 3D CAD/CAM, e-solution software and application provider.

After becoming a part of Infotech Group in 2000, we extended our foray into other service areas like GIS and IT solutions. Owing to our large pool of engineering, GIS, IT resources, we provide high-quality services and solutions to our clients with offshore cost advantage and onsite project management

Infotech Enterprises Japan KK (IEJ)

Established in 2008 in Central Tokyo, Infotech Enterprises Japan K.K. is a leading engineering service provider in Japan. We provide our end-to-end services and solutions across a wide variety of sectors.

We leverage the global delivery capability of Infotech Enterprises Ltd., while maintaining client relationships and managing projects locally.

Infotech Geospatial (India) Private Limited (IGIPL)

IGIPL, based in Hyderabad, addresses geospatial business opportunities in India and the Middle East. The geospatial market in India and the Middle East is estimated at Rs. 10 billion and is expected to see a 12% growth rate over the next five years. The Indian government''s Open Map Policy and Survey of India''s large-scale mapping initiatives are unlocking geospatial opportunities in several areas. These include: land records; urban planning; environment, forestry and natural resources; utility infrastructure planning and management; and defence. Similarly, the rapid pace of infrastructure development in the Middle East has led to a growing demand for geospatial services in that region. During the year, the company was converted into a private limited company.

Infotech Enterprises Information Technology Services Private Limited (IEITSPL)

Infotech Enterprises IT is a wholly owned subsidiary of Infotech Enterprises Ltd., offering innovative software solutions and services for the retail and supply chain sector across the globe.

We have expertise in a wide of variety of software platforms, including Internet and e-commerce technologies. Leveraging our huge pool of resources and technical acumen, we deliver cutting-edge and cost-effective solutions and services. With global software giants as our partners, we develop end-to-end solutions for the retail sector, including manufacturing, transportation and finance.

JOINT VENTURES

Infotech Aerospace Services Inc (IASI)

Established in 2003 in Puerto Rico, Infotech Aerospace Services Inc. (IAS) provides engineering outsourcing and other professional services to Defense, Aerospace, and Power Generation Industries. IAS is a joint venture between Infotech and Pratt & Whitney, a pioneer in flight technology.

We also provide engineering and supply chain services, including aerospace engineering, mechanical design and software development for military, industrial and applications.

Infotech HAL Limited (IHL)

IHL aims to provide comprehensive solutions involving conceptual design, re-design and derivates of modules, systems and components, prototyping and supply of these through Manufacturing Programme Management. IHL offers design services in the field of aerospace, viz., aero thermo and mechanical design, structural, stress, thermal and rotor dynamic analysis, aeronautics, computational fluid dynamics, combustion studies, preparation of digital mock up, testing and analysis, control system design, development and software applications.

IHL is a joint venture between Infotech and Hindustan Aeronautics Limited. IHL delivers engineering as well as after market engineering and support services, i.e., technical publications, repair design, service bulletins, testing, performance analysis and maintenance monitoring in the aerospace domain.

IHL is well positioned to undertake work under offset program from various original equipment manufacturers.

PARTICULARS PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Your company has prepared the consolidated financial statements in accordance with the relevant accounting standards and the provisions of the Companies Act, 1956 (Act). Pursuant to the provisions of Section 212 of the Act, documents in respect of the various subsidiaries viz., Directors'' Report, Auditor''s Report, Balance Sheet and Statement of Profit and Loss, are required to be attached to the Balance sheet of the Holding Company. However, in terms of the provisions of Section 212(8) of the Act, the Government of India, Ministry of Corporate Affairs (MCA), has vide Circular No. 2/2011, dated 8 February 2011 granted exemption from the provisions of Section 212(1) of the Act. Accordingly, the annual report does not contain the financial statements of the subsidiaries of the company. However, the company will make available, the audited annual accounts and related detailed information of the subsidiaries, to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Office of the company and also at the respective subsidiary companies during business hours.

BUSINESS RESPONSIBILITY REPORT

The company has suo moto adopted the ''National Voluntary Guidelines on Social, Environmental and Economical Responsibilities of Business'' issued by the Ministry of Corporate Affairs (MCA).

The nine areas of business responsibility adopted by the company are briefly described as follows:

Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.

Principle 3: Businesses should promote the well being of all employees.

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.

Principle 5: Businesses should respect and promote human rights

Principle 6: Business should respect, protect, and make efforts to restore the environment.

Principle 7: Business, when engaged in influencing public and regulatory policy, should do so in a responsible manner.

Principle 8: Business should support inclusive growth and equitable development.

Principle 9: Business should engage with and provide value to their customers and consumers in a responsible manner.

The business responsibility report is enclosed as Annexure ''A''.

CORPORATE SOCIAL RESPONSIBILITY

The company believes in giving back to society in some measure that is proportionate to its success in business. Corporate Social Responsibility (CSR) aims at balancing the needs of all stakeholders. The company''s CSR initiative goes beyond charity and believes that as a responsible company it should take into account its impact on society as much as creating business impact.The CSR initiatives are conducted through Infotech Enterprises Charitable Trust (IECT). An elaborate report on CSR is published elsewhere in this annual report.

GREEN INITIATIVES

Company has adopted the publication of abridged standalone financial statements in compliance with the applicable provisions of the Companies Act (the Act) and the Listing Agreement. Since 2010-11, the company is also sending quarterly results, annual report and other correspondence to the shareholders through e-mail, in keeping with its green initiatives. Further, notices of board meetings, draft minutes thereof and circular resolutions are also transacted through electronic mode.

DIRECTORS

None of the directors of the company is disqualified under the provisions of the Act or under the Listing Agreement with the Stock Exchanges.

Appointments

Dr. Jayant Sabnis was appointed as alternate director to Mr. Thomas Prete on 21 October 2013.

Mr. Som Mittal and Mr. Krishna Bodanapu were appointed as additional directors of the company on 24 April 2014. Mr. Som Mittal and Mr. Krishna Bodanapu are proposed to be appointed as directors under the provisions of section 160 of the Companies Act, 2013 at the ensuing Annual General Meeting (AGM). Mr. B.V.R. Mohan Reddy was appointed as Executive Chairman and Mr. Krishna Bodanapu was appointed as Managing Director & Chief Executive Officer by the board on 24 April 2014; on the same date, Mrs. B. Sucharitha stepped down as Whole Time Director.

Pursuant to Article 56 of the Articles of Association of your company and the provisions of Section 256 of the Companies Act, 1956, Mrs. B. Sucharitha, Mr. G.V. Prasad and Mr. Vikas Sehgal retire by rotation at the ensuing AGM and do not offer themselves for re-appointment.

Pursuant to the provisions of Clause 49 of the Listing Agreement, brief particulars of the retiring directors who are proposed to be appointed/re-appointed are provided as an annexure to the notice convening the AGM.

AUDITORS

Deloitte Haskins & Sells (DHS), Chartered Accountants, who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint DHS as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the AGM to be held in the year 2019, subject to ratification of their appointment at every AGM.

SECRETARIAL AUDIT

As a measure of good corporate governance and as recommended by the MCA Corporate Governance Voluntary Guidelines, 2009, the company has voluntarily got a secretarial audit done for the financial year 2013-14. The secretarial audit covered the provisions of the Act, the Depositories Act, 1996, the Listing Agreement with the Stock Exchanges and the SEBI guidelines/regulations on Employee Stock Options, Insider Trading and Takeover Code.

Mr. S. Chidambaram, Company Secretary in Practice, performed the secretarial audit and the report thereon is enclosed as Annexure ''B''.

EMPLOYEE STOCK OPTION PLANS

During the year under report, the company had the Infotech Associate Stock Option Plans in operation for granting stock options to the associates of the company and its wholly owned subsidiaries, in accordance with the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

Disclosures pursuant to Para 12 of the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is enclosed as Annexure ''C''.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed pursuant to provisions of Section 217(1)(e) of the Act read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, is enclosed as Annexure ''D''.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in an Annexure to the Directors'' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis is enclosed as Annexure ''E''.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Act, the directors confirm that:

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

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

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

iv) they have prepared the Annual Accounts on a going concern basis.

Your directors also state that there are proper systems in place to ensure compliance of all laws applicable to the company.

CORPORATE GOVERNANCE

The Company will continue to uphold the true spirit of Corporate Governance and implement the best governance practices. A report on Corporate Governance pursuant to the provisions of Clause 49 of the Listing Agreement forms part of the Annual Report. As required under Clause 49 of the Listing Agreement, the Auditors'' Certificate regarding compliance of conditions of corporate governance is enclosed as Annexure ''F''.

Further, the company has substantially complied with the MCA''s Corporate Governance Voluntary Guidelines, 2009.

CEO''s DECLARATION

Pursuant to the provisions of clause 49(I)(D)(ii) of the Listing Agreement, a declaration by the Chairman and Managing Director of the company declaring that all the members of the board and the senior management personnel of the company have affirmed compliance with the Code of Conduct of the company is enclosed as Annexure ''G''.

The CEO/CFO certification to the board pursuant to clause 49(V) of the listing agreement is enclosed Annexure ''H''.

ACKNOWLEDGMENTS

The board of directors expresses its thanks to the company''s customers, shareholders, vendors and bankers for their support to the company during the year. Your directors would like to make a special mention of the support extended by the various Departments of the Central and State Governments, particularly the Software Technology Parks of India, Development Commissioners - SEZ, Department of Communication and Information Technology, the Direct and Indirect tax authorities, the Ministry of Commerce, the Reserve Bank of India, Ministry of Corporate Affairs/Registrar of Companies, Securities and Exchange Board of India, the Stock Exchanges and others and look forward to their support in all future endeavours.

Your directors wish to place on record their deep sense of appreciation for the committed services of the associates of the company at all levels.

For and on behalf of the Board

B.V.R. Mohan Reddy Chairman and Managing Director Place : Hyderabad Date : April 24, 2014


Mar 31, 2013

Dear Shareholders,

The directors have pleasure in presenting the 22nd Directors'' Report on the business and operations of your company, for the financial year ended March 31, 2013.

FINANCIAL HIGHLIGHTS

(Amount in Rs. Million)

Particulars Consolidated Standalone 2012-13 2011-12 2012-13 2011-12

Total Income 19,111.7 15,706.6 10,888.7 9,173.8

EBIDTA 3,804.7 2,866.4 3,196.2 2,645.6

Finance Cost 2.9 7.3 0.9 5.6

Depreciation 635.5 494.1 563.2 411.6

Exceptional items 18.1 15.9 18.1 -

Profit before Tax 3,148.2 2,349.0 2,614.0 2,228.4

Current Tax 930.5 628.7 698.1 477.3

Earlier Years Tax 1.0 2.6 1.0 2.6

MAT Credit (1.6) 234.7 - 234.7

Deferred Tax 36.8 (30.7) 71.5 (72.1)

Share of profit in associate Company 129.1 100.1 - -

Profit after Tax 2,310.6 1,613.8 1,843.4 1,585.9

Basic Earnings per share (Rs.) 20.72 14.49 16.53 14.24

Diluted Earnings per share (Rs.) 20.68 14.49 16.50 14.24

Interm dividend paid (Rs./Share) 2.00 1.25 2.00 1.25

Final dividend recommended (Rs./Share) 2.50 1.25 2.50 1.25

Paid up Equity Share Capital 558.0 557.1 558.0 557.1

Reserves 12,663.5 11,017.7 11,108.3 9,792.3

APPROPRIATIONS

Dividend

Your directors have recommended a final dividend of Rs. 2.50 per share (50%) on a par value of Rs. 5 per share. The total dividend including dividend distribution tax is Rs. 585.5 million as against Rs. 323.7 million for the previous year. During the year, the board also declared an interim dividend of Rs. 2.00 per share (40%). The total interim dividend paid including the dividend distribution tax was Rs. 259.1 million. The interim dividend was paid on November 30, 2012. Total dividend (including dividend distribution tax) as a percentage of profit after tax was 31.8% as compared to 20.4% in the previous year.

Transfer to Reserves

Your directors have proposed to transfer Rs. 210 million to the General Reserve retaining Rs. 2,563.1 million in the Profit and Loss Account.

LIQUIDITY

Your company maintains sufficient cash reserves to meet its operations and strategic objectives. As at March 31, 2013, your company had liquid assets of Rs. 4,857.8 million as against Rs. 4,130.8 million at the previous year end. These funds have been invested in fixed deposits with scheduled banks and debt based mutual funds.

FIXED DEPOSITS

Your Company has not accepted any deposits and as such, no amount of principal or interest was outstanding as on March 31, 2013.

SHARE CAPITAL

Allotment of Shares

Your company has allotted 187,705 equity shares of Rs. 5 each to the associates of the company and its subsidiaries upon exercise of an equal number of stock options vested in them pursuant to the extant of Stock Option Schemes of the company.

In view of the above allotments, the outstanding shares of the company during the year increased from 111,415,262 equity shares of Rs. 5 each to 111,602,967 equity shares of Rs. 5 each.

BUSINESS UNIT WISE PERFORMANCE

Company has been re-aligned into business units (BU) effective April 1, 2012, which reflect the markets it addresses, and the solutions it provides.

Utilities, Telecom & Content

This BU delivers intelligent network engineering solutions to electric, gas and water utilities, telecom network operators, and government agencies. From helping several US based utilities realize their smart grid vision by providing geospatial information, to helping leading telecom companies improve their network performance, this BU has been at the forefront of technology demands faced by the utilities and telecom industries. Company''s unique combination of utility domain knowledge, experience, partnerships and global delivery capabilities help next generation utilities meet their business challenges. Company out-of-the-box thinking helps create innovative assurance, fulfillment, and data governance strategies and solutions. It enables telecom service providers efficiently manage their operations, create new efficiencies, and drive cost optimization.

Company''s D&A solutions help the customers achieve business excellence by using analytics to transform existing data into value added information for critical decision making. From providing road data updates to enable millions of people reach their homes safely every day, these solutions transform every-day life in more ways than one.

This BU generated revenues of Rs. 3,987.9 million as against previous year''s Rs. 3,038.5 million, at a growth rate of 31.2%. As a percentage of operating revenues, this BU contributed 38%.

Engineering

This BU cutting-edge engineering solutions help customers transform challenges into opportunities. From partnering with an aircraft OEM to help regain its leadership position in the global aerospace industry to designing safer signaling systems for the railways, we have helped our clients achieve more. Company help them contain engineering cost, streamline manufacturing, boost productivity, comply with regulations, enter emerging markets and accelerate time to market. Company provide process engineering solutions to energy, mining, oil and gas companies, and power plants to help improve their efficiencies through process optimization. Company product engineering solutions span across aerospace, defense, hi-tech, consumer, medical, rail transportation, and heavy equipment.

This BU generated revenues of Rs. 6,527.7 million as against previous year''s Rs. 5,600.1 million, at a growth rate of 16.6%. As a percentage of operating revenues, this vertical contributed 62%.

SUBSIDIARIES

Infotech Enterprises Europe Limited (IEEL)

Headquartered in London, IEEL was incorporated in 1992 as Dataview Solutions which subsequently become part of the Infotech Enterprises group in 1999. The company''s fully owned subsidiary, Infotech Enterprises Benelux BV based in Breda, The Netherlands supports its business in the Benelux region, and the Middle East operations are managed out of its Dubai, UAE office.

Building on the company''s long and successful tradition in engineering, geospatial and IT sectors, IEEL has established a significant presence in the network and content engineering markets in the EMEA region. It provides services to major tier 1 and tier 2 telcos, large utility companies, public sector agencies and commercial businesses and enjoys long-term relationships with several customers and partners.

While leveraging the global execution capability of the parent organization, IEEL ensures local responsibility in terms of client and contractual relationships and project management.

Infotech Enterprises America, Inc. (IEAI)

IEAI, a California corporation, was incorporated in 1999, with additional offices across the US and Canada. The company offers engineering services to clients and partners in North America. With more than 1,000 associates working throughout North America, IEAI generates in excess of $100 mn annual revenue.

IEAI leverages the global delivery capability of IEL, while maintaining local responsibility for client management and project execution. Vertical markets addressed include Aerospace, Automotive, Consumer Electronics, Energy, Heavy Equipment, Marine, Medical Devices, Oil & Gas, Transportation, Semiconductor, Telecom and Utilities. Clients range from Fortune 500 companies to small business, as well as local, state and federal government agencies.

Infotech Enterprises GmbH (IEG)

IEG was incorporated as Advanced Graphics Software(AGS) in Leonberg, Germany in 1992. This is a successful mechanical engineering software and services company specializing in 3D CAD/CAM. AGS focused on engineering services and e-solution software and applications within the German market space.

Since becoming part of the Infotech Group in 2000, IEG has broadened its portfolio to include GIS and IT-enabled services. The large pool of engineering, GIS and software development service resources has enabled IEG to address its existing and new customer requirements more effectively by delivering world- class, high-quality services with offshore cost advantage and onsite project management.

Infotech Enterprises Japan KK (IEJ)

IEJ was incorporated in 2008 with its registered office in central Tokyo. Leveraging parent and group companies'' experience and global presence, IEJ offers a wide range of onsite & offshore engineering and design services to Japanese automotive, aerospace, consumer electronics, rail transportation and heavy engineering industries.

IEJ has gained a strong position in the Japanese engineering services market by acquiring a few most valued Japanese companies as customers. Building upon the initial success and helped by a changing mindset towards engineering offshoring, IEJ expects robust growth in the foreseeable future.

IEJ''s highly motivated Japanese bilingual staff is capable of providing sales, account & relationship management and local delivery interface. IEJ is working closely with Japanese customers in the region and providing innovative, high quality and cost effective solutions to sustain their global competitiveness.

Infotech Geospatial (India) Limited (IGIL)

IGIL, based in Hyderabad, addresses geospatial business opportunities in India and the Middle East. The geospatial market in India and the Middle East is estimated at Rs. 10 billion and is expected to see a 12% growth rate over the next five years. The Indian government''s Open Map Policy and Survey of India''s large-scale mapping initiatives are unlocking geospatial opportunities in several areas. These include: land records; urban planning; environment, forestry and natural resources; utility infrastructure planning and management; and defence. Similarly, the rapid pace of infrastructure development in the Middle East has led to a growing demand for geospatial services in that region.

Infotech Enterprises Information Technology Services Private Limited (IEITSPL)

IEITSPL, incorporated in 2008 and headquartered at Hyderabad, offers a range of quality business software solutions and services to several large and medium customers across the globe.

With partnerships with global software giants and skills and expertise on a wide variety of software platforms, including leading- edge internet and e-commerce technologies, IEITSPL brings to its customers high-quality software services and products.

IEITSPL offers cost-effective solutions through its onsite responsibility and offshore development to various customers in the Manufacturing, Finance, Transportation and Retail industries.

ASSOCIATE

Infotech Aerospace Services Inc (IASI)

IASI is joint venture established in 2003 between the company and the Connecticut-based Pratt & Whitney, a pioneer in flight technology.

IASI is a ''near-shore'' facility providing engineering outsourcing and other professional services to the Defence, Aerospace, and Power Generation Industries. IASI provides skilled US labour while maintaining the price and resource advantage of being offshore.

The joint venture also provides Engineering and Supply Chain services for UTC and Non-UTC companies in the areas of Aerospace Engineering, Mechanical Design, and Software Development for military, commercial and industrial applications.

JOINT VENTURES

Infotech HAL Limited (IHL)

IHL aims to provide comprehensive solutions involving conceptual design, re-design and derivates of modules, systems and components, prototyping and supply of these through Manufacturing Programme Management. IHL offers design services in the field of aerospace, viz., aero thermo and mechanical design, structural, stress, thermal and rotor dynamic analysis, aeronautics, computational fluid dynamics, combustion studies, preparation of digital mock up, testing and analysis, control system design, development and software applications.

IHL delivers engineering as well as aftermarket engineering and support services, i.e., technical publications, repair design, service bulletins, testing, performance analysis and maintenance monitoring in the aerospace domain.

IHL is well positioned to undertake work under offset program from various original equipment manufacturers.

SUSTAINABILITY INITIATIVES

Corporate sustainability is a business approach that creates long- term consumer and associate value by not only creating a ''green strategy'' aimed towards the natural environment, but taking into consideration every dimension of how the business operates in the social, cultural and economic environment.

It means meeting the needs of the company''s direct and indirect stakeholders (such as shareholders, associates, clients, pressure groups, communities and so on) without compromising its ability to meet the needs of future stakeholders. The company believes that a single minded focus on economic sustainability can only succeed in the short term. Social and environmental sustainability must be satisfied simultaneously to ensure a smooth continuity of business in the long-term. The company has voluntarily adopted the ''National Voluntary Guidelines on Social, Environmental and Economical Responsbilities of Business'' issued by the Ministry of Corporate Affairs (MCA). The Business Responsiblity Report (BRR) is available on the company''s website.

The nine areas of business responsibility adopted by the company are briefly described as follows:

Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.

Principle 3: Businesses should promote the well being of all employees.

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.

Principle 5: Businesses should respect and promote human rights.

Principle 6: Business should respect, protect, and make efforts to restore the environment.

Principle 7: Business, when engaged in influencing public and regulatory policy, should do so in a responsible manner.

Principle 8: Business should support inclusive growth and equitable development.

Principle 9: Business should engage with and provide value to their customers and consumers in a responsible manner.

CORPORATE SOCIAL RESPONSIBILITY

The company believes in giving back to society in some measure that is proportionate to its success in business. Corporate Social Responsibility (CSR) aims at balancing the needs of all stakeholders. The company''s CSR initiative goes beyond charity and believes that as responsible company it should take into account its impact on society as much as creating business impact. The CSR initiatives are conducted through Infotech Enterprises Charitable Trust (IECT). IECT mainly concentrates on improving quality of education imparted to underprivileged children. As on date, IECT has adopted 13 schools and is supporting 7,000 underprivileged children.

GREEN INITIATIVES

Company has adopted the publication of abridged standalone financial statements in compliance with the applicable provisions of the Companies Act (the Act) and the Listing Agreement. Since 2010-11, the company is also sending quarterly results, annual report and other correspondence to the shareholders through e-mail, in keeping with its green initiatives. Further, notices of board meetings, draft minutes thereof and circular resolutions are also transacted through electronic mode.

PARTICULARS PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Your company has prepared the consolidated financial statements in accordance with the relevant accounting standards and the provisions of the Act. Pursuant to the provisions of Section 212 of the Act, documents in respect of the various subsidiaries viz, Directors'' Report, Auditors'' Report, Balance Sheet and Profit and Loss Account, are required to be attached to the Balance sheet of the Holding Company. However, in terms of the provisions of Section 212(8) of the Act, the Government of India, MCA, has vide Circular No. 2/2011, dated 8 February 2011 granted exemption from the provisions of Section 212(1) of the Act. Accordingly, the annual report does not contain the financial statements of the subsidiaries of the company. However, the company will make available, the audited annual accounts and related detailed information of the subsidiaries, to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Office of the company and also at the respective subsidiary companies during business hours.

DIRECTORS

None of the directors of the company is disqualified under the provisions of the Act or under the Listing Agreement with the Stock Exchanges.

Appointments

Mr. Harsh Manglik and Mr. Shankar Narayanan were appointed as additional directors of the company on July 18, 2012 and January 17, 2013 respectively. Mr. Harsh Manglik and Mr. Shankar Narayanan are proposed to be appointed as directors under the provisions of Section 257 of the Act at the ensuing Annual General Meeting (AGM). Mr. Thomas W Prete is also proposed to be appointed as director at the ensuing AGM under the provisions of the said section.

Pursuant to Article 56 of the Articles of Association of your company and the provisions of Section 256 of the Act, Mr. Alain De Taeye, retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Mr. Abhay Havaldar and Mr. Allan Brockett, who retire by rotation at the ensuing AGM do not offer themselves for re-appointment.

Pursuant to the provisions of Clause 49 of the Listing Agreement, brief particulars of the directors who are proposed to be appointed/re-appointed are provided as an annexure to the notice convening the AGM.

Cessations

Prof. J. Ramachandran ceased to be a director of the Company w.e.f. July 18, 2012. Your directors place on record the appreciation and gratitude to him for his valuable contributions during his tenure as director.

AUDITORS

M/s Deloitte Haskins & Sells (DHS), Chartered Accountants, who retire at the ensuing AGM of the company, are eligible for re-appointment for 2013-14.

The company has received the consent/confirmation of DHS for their re-appointment as statutory auditors and that the same, when made by the members of the company at the 22nd AGM will be within the limits prescribed under Section 224(1B) of the Act.

SECRETARIAL AUDIT

As a measure of good corporate governance and as recommended by the MCA Corporate Governance Voluntary Guidelines, 2009, the company has voluntarily got a secretarial audit done for the financial year 2012-13 also. The secretarial audit covered the provisions of the Act, the Depositories Act, 1996, the Listing Agreement with the Stock Exchanges and the SEBI guidelines/ regulations on Employee Stock Options, Insider Trading and Takeover Code.

Mr. S. Chidambaram, Company Secretary in Practice, performed the secretarial audit and the report thereon is enclosed as Annexure-A.

EMPLOYEE STOCK OPTION PLANS

During the year under report, the company had the Infotech Associate Stock Option Plans in operation for granting stock options to the associates of the company and its wholly owned subsidiaries, in accordance with the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

Disclosures pursuant to Para 12 of the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are enclosed as Annexure-B.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed pursuant to provisions of Section 217(1)(e) of the Act read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, is enclosed as Annexure-C.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are set out in an Annexure to the Directors'' Report. However, having regard to the provisions of Section 219 (1)(b)(iv) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis including risk management report is enclosed as Annexure-D.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Act, the directors confirm that:

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

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

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

iv) they have prepared the Annual Accounts on a going concern basis.

Your directors also state that there are proper systems in place to ensure compliance of all laws applicable to the company.

CORPORATE GOVERNANCE

Your company will continue to implement and abide by the best principles of corporate governance. Recognizing the quality of transparency and best governance practices that the company has adopted, your company was awarded the prestigious Golden Peacock Award for Excellence in Corporate Governance for the year 2012. Established by the Institute of Directors in 1992, the Golden Peacock Awards are regarded as the ''Holy Grail'' of corporate excellence and best practices worldwide. The award was presented to the company at the third ''Global Conference on Sustainability'' at Lords in London on October 11, 2012.

A report on Corporate Governance pursuant to the provisions of Clause 49 of the Listing Agreement forms part of the Annual Report. As required under Clause 49 of the Listing Agreement, the Auditors'' Certificate regarding compliance of conditions of corporate governance is enclosed as Annexure-E.

The company has substantially complied with the MCA''s Corporate Governance Voluntary Guidelines, 2009.

CEO''s DECLARATION

Pursuant to the provisions of clause 49(I)(D)(ii) of the Listing Agreement, a declaration by the Chairman and Managing Director of the company declaring that all the members of the board and the senior management personnel of the company have affirmed compliance with the Code of Conduct of the company is enclosed as Annexure-F.

The CEO/CFO certification to the board pursuant to clause 49(V) of the listing agreement is enclosed as Annexure-G.

ACKNOWLEDGMENTS

The board of directors expresses its thanks to the company''s customers, shareholders, vendors and bankers for their support to the company during the year. Your directors would like to make a special mention of the support extended by the various Departments of the Central and State Governments, particularly the Software Technology Parks of India, Development Commissioners - SEZ, Department of Communication and Information Technology, the Direct and Indirect tax authorities, the Ministry of Commerce, the Reserve Bank of India, Ministry of Corporate Affairs/Registrar of Companies, Securities and Exchange Board of India, the Stock Exchanges and others and look forward to their support in all future endeavours.

Your directors wish to place on record their deep sense of appreciation for the committed services of the associates of the company at all levels.

For and on behalf of the Board

Place : Hyderabad B.V.R. Mohan Reddy

Date : April 25, 2013 Chairman and Managing Director

 
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