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Directors Report of Hinduja Global Solutions Ltd.

Mar 31, 2016

The Directors are pleased to present their Report on the business and operations of your Company along with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended March 31, 2016.

Financial Results

(Rs,in million* except per share data)

Standalone Consolidated

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

Operating Income 13,829 10,704 33,282 28,076

Other Income 245 278 194 245

Total Income 14,074 10,982 33,476 28,321

Operating Expenses 11,403 8,609 30,152 24,949

Depreciation and Amortization 819 606 1,364 1,052

Financial Expenses 149 158 401 386

Profit Before tax 1,703 1,609 1,559 1,934

Provision for Tax (incl. deferred tax) 520 484 549 284

Profit after tax 1,183 1,125 1,010 1,650 Add: Balance brought forward from Previous year 2,528 2,020 1,267 4,410

Profit Available for Appropriation 3,711 3,145 2,277 6,060 Dividend

- Adjustment on account of Depreciation - 161 - 162

- Interim Dividend 285 310 285 310

- Final (Proposed) 26 104 26 104 - Dividend Tax 36 42 63 80

Adjustment on Amalgamation - - - 4,136

transferred to Capital Redemption Reserve - - - 1

Balance Carried Forward 3,364 2,528 1,903 1,267

Earnings per share (Rs,)

- Basic 57.06 54.49 48.73 79.88

- Diluted 56.98 54.21 48.66 79.46

*(Rs, 1 million =^10 lakhs)

Operating Performance

On a Consolidated basis, Operating Income for FY''16 was Rs, 33,282 million compared to Rs, 28,076 million of FY''15. This growth was led by existing and new client wins especially in Healthcare and Consumer Product verticals, revenue from recently acquired companies like HGS Colibrium Inc. and India CRM (Customer Relationship Management) portfolio and turnaround in Canadian operations. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for FY''16 was Rs,3,130 million against Rs,3,172 million of FY''15, a marginal decline of 1.3%. Profit After Tax (PAT) for FY''16 was Rs,1,010 million as against Rs,1,650 million for FY''15, a decrease of 38.8%. The Profitability was impacted due to lower operating Profit and unfavorable foreign exchange variations. However, the numbers are not strictly comparable as FY''15 also had a tax benefit of Rs, 248 million arising out of recognition of some deferred tax assets.

On a Standalone basis, Operating Income for FY''16 was Rs,13,829 million compared to Rs,10,704 million for FY''15, an increase of 29.2%. The Philippines branch of your Company continues to be a major contributor to the growth. EBITDA increased by 15.8% from Rs,2,095 million in FY''15 toRs,2,426 million in FY''16. PAT increased by 5.1% from Rs,1,125 million in FY''15 to Rs,1,183 million in FY''16.

Review of Financial and Operational Performance of the Company and its key subsidiaries has been given in the ''Management Discussion and Analysis Report which forms part of this Report as Annexure ''E''.

Business highlights - FY 2016:

- Client wins: HGS added 20 new clients.

- Active Clients: 190 core BPM clients and 600 HRO and F&A clients.

- Delivery Infrastructure: Currently have 67 global delivery centers across 11 countries. Opened six new centers: Jamaica (1), Philippines (1), and India (4 - Bangalore, Hyderabad and two in Mumbai), and acquired seven centers across 6 cities in India (two in Bangalore and one each in Noida, Pune, Mangalore, Raipur and Indore).

- Employee Headcount at year end: FY''16 - 39,834 (FY''15 - 28,435)

- Acquisitions: Acquisition of India domestic CRM business from Mphasis Limited and MsourceE India Private Limited was completed in September, 2015.

Dividend

Your Directors are pleased to recommend a Final Dividend ofRs, 1.25 per equity share (12.5% on face value of Rs, 10/- each) for the Financial Year ended March 31, 2016, subject to your approval. This is in addition to the three Interim Dividends aggregating to Rs,13.75 per share for the Financial Year 2015-16 declared by the Board of Directors on August 12, 2015, November 6, 2015 and February 9, 2016 respectively and were duly paid. The total dividend for the Financial Year ended March 31, 2016 would be Rs, 15 per equity share (150% on face value of Rs, 10/- each), if approved/ confirmed by the Members.

Business Review

The business environment across the globe is undergoing a transformation in every aspect of its operations, which resulted in increased use of analytics, digital technologies and automation in the Business Process Management (BPM) industry. Over the coming years, the industry will be dominated by digital technologies.

Globally, the BPM spend experienced a moderate growth of 3% compared to 2014 to reach US$186 billion. The growth was primarily driven by increasing demand for analytics services. The customers in general are gradually starting to expect analytics as part of the bundled BPM services.

The Indian BPM industry has grown over 1.7 times in the past five years to reach US$28 billion in FY2016. Around 86% of the total BPM market is estimated to have come from exports and the remaining 14% from the domestic business. The growth momentum is expected to reach US$41 billion by FY2020.

Further information pertaining to Business Review has been provided in the Management Discussion and Analysis Report which forms part of this Report.

Key Subsidiaries

HGS International, Mauritius, a wholly-owned subsidiary of your Company, is primarily engaged in investment activity. HGS International owns 100% of the share capital of Hinduja Global Solutions Inc., USA; C-Cubed N.V., Curacao; Hinduja Global Solutions Europe Ltd., UK; HGS St. Lucia Ltd., Saint Lucia and HGS MENA FZ-LLC, Dubai. The holding of HGS International in HGS Colibrium Inc. was recently increased from 89.8% to 95.2%.

Revenue for FY''16 was US$ 3.9 million as against US$ 4.7 million for FY''15.

hinduja Global Solutions Inc., USa (hGS Inc.), a

wholly-owned subsidiary of HGS International, Mauritius, specializes in marketing and provision of both voice and non-voice related Customer Contact and Business Process Outsourcing services to its clientele. The Company engages in several programme expansions of clients. Its key subsidiaries are HGS (USA), LLC; HGS Canada Inc., Canada; HGS EBOS, LLC and HGS Healthcare LLC (formerly known as RMT LLC, USA).

In FY''16, HGS Inc. reported consolidated revenues of US$ 369.4 million as compared to US$ 348.9 million in FY''15.

HGS (USA), LLC, USA, a wholly-owned subsidiary of HGS Inc., USA, operates in six cities in USA and Canada. It partners with Fortune 1000 companies and Government agencies to provide comprehensive Customer Relationship Management programs. For FY''16, HGS (USA), LLC recorded total revenue of US$ 287.2 million as compared to US$ 252.8 million in FY''15. HGS (USA), LLC and its US subsidiaries namely HGS Healthcare LLC and Affna Company Canada are engaged in providing customer services, fulfillment services, sales, marketing and account management.

hGS Canada Inc., Canada, a wholly-owned step down subsidiary of HGS Inc., USA, is a Canadian contact center service provider servicing marquee customers across verticals such as media, telecom, technology and Banking and Financial Services (BFS). The Company offers technical support, inbound and outbound sales, customer care and customer retention in English and French languages. For FY''16, the Company recorded revenue of CAD 84.5 million as compared to CAD 97.2 million in FY''15.

hinduja Global Solutions europe Ltd., UK, a wholly owned subsidiary of HGS International, Mauritius, focuses on consulting services for BPM, call center services and markets off shoring services to UK based clients. Its wholly owned subsidiaries include Hinduja Global Solutions UK Ltd., UK, HGS France, SARL, France and HGS Italy, SRL. For FY''16, the Company recorded standalone revenue of GBP 1.2 million as compared to GBP 1.3 million in FY''15.

hinduja Global Solutions UK Ltd., UK, a wholly owned subsidiary of Hinduja Global Solutions Europe Limited, UK, is a leading contact center company in London, Preston and Selkirk (Scotland). It offers a range of services for inbound and outbound interactions to around 20 marquee customers across verticals such as Government, FMCG, Financial Services, Automobiles and Retail. It has branches in Rotterdam (Netherlands) and Hamburg (Germany). For FY''16, the Company reported revenue of GBP 34.9 million as compared to GBP 29.6 million in FY''15.

HGS St. Lucia Ltd., Saint Lucia is the holding company of Team HGS Ltd., Jamaica.

team hGS Ltd., Jamaica commenced green field operations in FY''13 and has grown rapidly. Revenue for FY''16 was Jamaican Dollars 806 million compared to Jamaican Dollars 368 million in FY''15.

hGS mena FZ-LLC, Dubai, a wholly-owned subsidiary of HGS International, Mauritius, has a marketing office established in the Dubai Internet City with the objective to build sales pipeline. Demand trend from MENA (Middle East and North Africa) region is encouraging and has started adding new clients. Effective November 25, 2015, Extensya Investment Holdings Limited, HGS Extensya Cayman Limited and HGS Extensya Holdings Limited became wholly owned subsidiaries of HGS MENA FZ- LLC. In FY''16, it recorded revenue of AED 5.1 million as compared to AED 2.1 million in FY''15.

hGS Colibrium Inc., USa: As on March 31, 2016, holding of HGS International, Mauritius was 89.8% which was increased to 95.2% in June, 2016 on acquisition of shares from one of the founder members. The remaining stake is held by the other founder member. In its first year of operations (FY''16), the Company recorded revenue of US$ 14.7 million.

hGS International Services Pvt. Ltd. (hGSISPL) is the wholly owned Indian subsidiary of the Company. The Company achieved turnover of r2,542.9 million in FY''16 as against r1,729.2 million of FY''15, a substantial growth of 47.1%. The SEZ division of HGSISPL continues to operate in four units namely, a) Global Village SEZ, Bangalore; b) DLF Towers SEZ, Hyderabad; c) Pritech Park SEZ, Bangalore; and d) DLF Cybercity, SEZ Hyderabad, while the Human Resource Outsourcing (HRO) business division of HGSISPL continues to successfully service marquee customers in Banking, Financial Services, Insurance and other industry verticals in India and abroad.

Particulars of loans, guarantees or investments

Loans, guarantees and investments as per Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

Communications and Public Relations

In the last year, your Company has continued to tell success stories of digital transformation to potential customers, industry analysts, other influencers and advisors to evolve the reputation and global perception of HGS.

HGS has enhanced its website by making it educational and engaging with visual and video content, which is relevant for both - the industry veteran and the casual observer. Our new content is targeted to challenge status quo thinking and offer transformative solution alternatives. This is given extra life with an ongoing social media effort (e.g. LinkedIn, Twitter, Blog) that reaches a targeted audience across the globe.

In FY''16, HGS was named a "Top 100 Global Outsourcer" by the International Association of Outsourcing Professionals (IAOP), and also brought home a Gold Stevie Award for Best Use of Technology in Customer Service and a Bronze Stevie Award for Sales Consulting Practice of the Year. Your Company was able to then turn these distinctions into news that was used to reach potential customers and importantly, potential employees.

By creating more frequent and more compelling content, your Company is earning consistent coverage in industry and general new publications, reaching both domestic and international audiences. In an independent report published by Apollo Research in April 2016, HGS'' overall global ranking for calendar year 2015 for share of voice in the media across the US, UK and Canada was number 2 of 28 companies that were benchmarked. HGS ranked well ahead of the industry for stories pertaining to customer satisfaction. This prestigious top 2 ranking is a jump from 11th place in 2014, showing a very positive trend of HGS being recognized by the media as a public thought leader to be quoted and published. In India, HGS continues to be perceived as a key industry player and is represented in all important industry and opinion articles.

Your company also signed India''s No.1 Golfer, Anirban Lahiri as its brand ambassador. As the first BPM company to have a brand ambassador in the international market, HGS'' relationship with Lahiri will build the brand, facilitate business growth, increase brand recall with potential and existing customers and continue to create new opportunities tied to the world''s golf calendar.

In our endeavor to propagate an inclusive and transparent culture, your Company leveraged different formats and channels such as e-mailers, newsletters, blogs and articles to share views and news with its employees around the world.

The Company developed a new intranet called "HGS Connect", an integrated, internal two-way communication platform, which serves as a one-stop solution for all communication across the globe. This internal portal serves as a time-out for employees offering various fun elements and also enables them to interact with each other on a common channel. This year, your Company launched a world-wide campaign "GQ SPICE - Living the HGS Values" - a simple and easy to remember acronym of our seven values to reiterate what we stand for as an organization. Employees across the globe connected through different forms of engagement displaying values being the fundamental building blocks of the company. Your Company has also initiated consistent and colorful branding across all locations that will drive pride in the workplace and association with the business and initiatives in the organization.

HGS will sustain its focus on communications engagement. In the year ahead, your Company will continue to relay its best stories to all its important stakeholders, including launches of new service offerings and industry-specific applications in the market.

new Corporate office

The Corporate Office of the Company has been shifted from HGS House, No. 614, Vajpayee Nagar, Bommanahalli, Hosur Road, Bangalore - 560 068 to 1st Floor, Gold Hill Square Software Park, No. 690, Bommanahalli, Hosur Road, Bangalore - 560 068 with effect from June 27, 2016.

Change in Registrar and Share transfer agent

In view of the SEBI Order No. WTM/RKA/MIRSD2/41/2016 dated March 22, 2016, the Company did not renew the agreement with Sharepro Services (India) Pvt. Ltd. (erstwhile Registrar and Share Transfer Agent) which expired on March 31, 2016. The Company has appointed M/s. Karvy Computershare Private Limited (Karvy), having its Registered Office at "Karvy House" 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad - 500 034, as its Registrar and Share Transfer Agent with effect from May 16, 2016. The Agreement with Karvy has been formalized effective June 1, 2016.

Corporate Social Responsibility (CSR)

Pursuant to Section 135 of the Companies Act, 2013 ("the Act"), the Corporate Social Responsibility Committee ("CSR Committee") was constituted and consists of following Members:

Mr. Anil Harish (Independent Director) - Chairman, Mr. Ramkrishan P. Hinduja (Non-Executive, Non- Independent Director), Mr. Rajendra P. Chitale (Independent Director), Mr. Rangan Mohan (Independent Director) and Ms. Vinoo S. Hinduja (Non-Executive, Non- Independent Director).

During the Financial Year 2015-16, two Meetings of CSR Committee were held as follows: February 8, 2016 and March 30, 2016.

Corporate Social Responsibility Policy ("CSR Policy") was formulated by the CSR Committee and recommended to and approved by the Board of Directors ("the Board"). Such policy inter-alia covers the CSR activities to be undertaken as specified in Schedule VII to the Act.

In terms of the CSR Policy, Management has set up a CSR Forum whose role and functions involve: identification and evaluation of CSR projects/ initiatives for recommendation to the CSR Committee, reviewing and monitoring the approved CSR projects and providing periodical status updates to the CSR Committee. The CSR Committee reviews the CSR projects/ initiatives as recommended by the CSR Forum and the expenditure to be incurred thereon as per the provisions of the Act and the Rules made there under. Also, the CSR Committee reviews and monitors reports submitted by CSR Forum relating to implementation of the project(s) and its financial/ operational monitoring. The Board reviews and approves CSR projects/ initiatives as recommended by the CSR Committee and evaluates reports relating to implementation of the approved CSR projects.

The Report on CSR activities in the format as required under Companies (Corporate Social Responsibility) Rules, 2014, is set out in Annexure ''G'' forming part this Report. The CSR Policy is available on the website of the Company.

Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, based upon the information and documents made available to them and to the best of their knowledge, confirm that:

- In preparation of the Annual Accounts for the Financial Year ended March 31, 2016, the applicable accounting standards have been followed and there have been no material departures in the adoption and application thereof;

- 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;

- 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;

- They have prepared the Annual Accounts on a going concern basis;

- They have laid down adequate internal financial controls to be followed by the Company and they are operating effectively;

- 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 framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Statutory, Internal and Secretarial Auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2015-16.

number of meetings of the Board

Nine meetings of the Board were held during the year. The time gap between any two meetings did not exceed one hundred and twenty days. Further details in this regard are given in the Corporate Governance Report, which forms part of this Report.

Declaration by Independent Directors

As required under Section 149(7) of the Companies Act, 2013, the Company has received the declaration from each of the Independent Directors of the Company confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Board evaluation

Pursuant to Sections 134, 178 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI (LODR) Regulations"], the performance evaluation of the individual Directors (Independent, Non-Independent Directors and the Chairman), the Board as a whole and its Committees, for the Financial Year 2015-16 was carried out.

The Nomination and Remuneration Committee (NRC) and the Board carried out the performance evaluation of individual directors, including the Chairman, on the basis of criteria such as exercise of independent judgment, contribution to the deliberations and providing inputs and guidance at the meetings, commitment to role and fiduciary responsibilities, non-partisan appraisal of issues, expertise and domain knowledge, etc.

The Board also carried out annual evaluation of its own performance and its committees based upon the inputs received from the directors and criteria such as Board/ Committee composition and structure, deliberations ensued thereat on critical matters, effectiveness of the Board/ Committee processes, etc.

As required under Schedule IV of the Companies Act, 2013 and Regulation 25 of the SEBI (LODR) Regulations, a separate meeting of the Independent Directors was held during the year. At the said meeting, the performance evaluation of the Non-Independent Directors, including the Chairman was carried out on the basis of criteria such as commitment, inputs and guidance provided, expertise and knowledge, initiatives taken in bringing forth the critical issues and resolutions thereof, etc. At the said meeting, the performance evaluation of the Board as a whole was carried out on the basis of depth and quality of discussions at the meetings, advice and guidance provided to the Management on critical issues relating to business and operations of the Company, etc. Also, assessment of the quality, quantity and timeliness of the fow of information between the Company''s Management and the Board was carried out.

Directors

Mr. Anil Harish (DIN 00001685) who was appointed as an Independent Director at the 19th Annual General Meeting ("AGM") of the Company held on July 3, 2014 resigned as such with effect from May 19, 2015. Proposal for appointment of Mr. Anil Harish as an Independent Director of the Company was put up before the Members at the last AGM held on September 29, 2015 for approval, based upon the Notice received from a Member proposing his candidature. Since Mr. Anil Harish fulfilled the criteria of ''independence'', and also in the opinion of the Board, he is a person of integrity and possesses relevant expertise and experience, the Board recommended his appointment. His appointment as an Independent Director of the Company was approved by the Members at the 20th AGM of the Company held on September 29, 2015, for a term of five years effective from the said date.

Ms. Shanu S. P. Hinduja, Director (DIN 06512872) and Co-Chairperson of your Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. A brief profile of Ms. Shanu S. P. Hinduja is annexed to the Notice of the 21st Annual General Meeting to be held on September 21, 2016.

Mr. B. L. Taparia (DIN 00016551), who was appointed as an Independent Director, effective August 12, 2015, in the casual vacancy caused by the resignation of Mr. Anil Harish, resigned as a Member of the Board with effect from August 31, 2015. The Board placed on record its appreciation for the guidance and advice provided by Mr. Taparia.

audit Committee

The Board has constituted an Audit Committee pursuant to the provisions of Section 177 of the Companies Act, 2013. The Committee comprises of the following Members: Mr. Anil Harish (Independent Director), Chairman, Mr. Ramkrishan P. Hinduja (Non-Executive, Non-Independent Director), Mr. Rajendra P. Chitale (Independent Director) and Mr. Rangan Mohan (Independent Director).

Further details pertaining to the Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

Key managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Company has recognized/ noted Mr. Partha DeSarkar, Manager (designated as Chief Executive Officer); Mr. Srinivas Palakodeti, Chief Financial Officer and Mr. Makarand D. Dewal, Company Secretary as Key Managerial Personnel of the Company.

Chief executive officer Certification

The Chief Executive Officer''s declaration affirming compliance with the Code of Conduct by the Board and Senior Management is furnished in Annexure ''A'' to this Report.

Conservation of Energy, technology absorption and Foreign exchange earnings and outgo

The prescribed particulars as required under Section 134(3)(m) of the Companies Act, 2013 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are furnished in Annexure ''B'' to this Report.

Corporate Governance

As required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI (LODR) Regulations"], a detailed report on Corporate Governance is furnished as Annexure ''C to this Report.

The Statutory Auditors of the Company have examined the compliance of conditions of Corporate Governance as stipulated in Schedule V (C) of the SEBI (LODR) Regulations and have certified compliance thereof. The certificate is attached as Annexure ''D'' to this Report.

management Discussion and analysis Report

A separate report on Management Discussion and Analysis is annexed as Annexure ''E'' to this Report.

ESOP Disclosure

The two ESOP Schemes, viz. "Hinduja Global Solutions Limited Employees Stock Option Plan, 2008" and "Hinduja Global Solutions Limited Employees Stock Option Plan, 2011" were in operation during the Financial Year 2015-16. These ESOP Schemes are in compliance with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014. Particulars of aforesaid ESOP Schemes are available on the Company''s website at http://www.teamhgs.com/investors/other-reports. There were no material changes made to the aforesaid ESOP Schemes during the Financial Year 2015-16.

Extract of Annual Return

Pursuant to Section 134(3)(a) of the Companies Act, 2013, an extract of Annual Return as on Financial Year ended March 31, 2016 in the prescribed format, is furnished in annexure ''F'' to this Report.

Related Party transactions

Transactions entered into with related parties during the Financial Year 2015-16 are in the ordinary course of business and at arm''s length basis and therefore, outside the purview of Section 188(1) of the Companies Act, 2013. Information on related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in the prescribed format in Annexure ''H'' forming part of this Report. material changes and commitments affecting the financial position of the Company between the end of the Financial Year and date of the Report

There were no material changes and commitments affecting the financial position of the Company between the end of the Financial Year and date of the Report.

Policy on Directors'' appointment and Remuneration

Policy on Directors'' Appointment and Remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 have been disclosed in the Corporate Governance Report which forms part of this Report.

whistle Blower Policy

The Company has a Whistle Blower Policy and Vigil Mechanism to report and redress genuine concerns and grievances. The Policy is available on the Company''s website at http://www.teamhgs.com/investors/corporate- policies. This matter is covered in the Corporate Governance Report which forms part of this Report.

Under the Whistle Blower Policy and Vigil Mechanism, no complaints were received during the Financial Year 2015-16.

Risk management Policy

Your Company''s Risk Management Policy inter alia identifies risks taking into consideration the business and operations of the Company and adoption of mitigation measures.

Its robust Enterprise Risk Management (ERM) framework comprises of practices related to identification, assessment, monitoring and mitigation of risks to its business. The details of the Policy/Framework are given in the Management Discussion and Analysis Report attached to this Report.

Fixed Deposits from Public

The Company has not accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Statutory auditors

At the 20th Annual General Meeting of the Company held on September 29, 2015, M/s. Price Waterhouse, Chartered Accountants (Registration No. 301112E), were appointed as Statutory Auditors of your Company till the conclusion of the next Annual General Meeting. The said Auditors have submitted requisite declarations as to their eligibility to act as Auditors of the Company, if appointed. Accordingly, it is proposed to re-appoint

M/s. Price Waterhouse, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. The Board recommends the re-appointment of the Auditors.

The Auditors'' Report (for Standalone and Consolidated financial statements) for the Financial Year ended March 31, 2016 is unmodified/ unqualified.

Secretarial auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed Ms. Rupal D. Jhaveri, Practicing Company Secretary (FCS No. 5441; CP No. 4225), as the Secretarial Auditor to carry out the Secretarial Audit for the Financial Year 2015-16.

The Secretarial Audit Report in the prescribed format, for the Financial Year 2015-16, forms part of this Report as Annexure ''I''. The Report does not contain any qualifications, reservations or adverse remarks.

employees'' Particulars

Pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is necessary to disclose the ratio of remuneration of each director to the median employees'' remuneration. At present, the Directors are paid fees for attending the meetings of the Board of Directors and of the Committees of which they are members. This remuneration, by way of fees, is not related to the performance or Profit of the Company (like payment of commission is related to the Profits of the Company). In view of this, the ratio of remuneration of each director to the median employees'' remuneration is not computed. At the last Annual General Meeting, the Members had approved the proposal for payment of commission for a period of five years commencing from April 1, 2015 up to a limit as per the provisions of the Companies Act, 2013. The Board of Directors have not recommended/ approved payment of commission to Directors for the Financial Year 2015-16.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure forming part of the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report.

Having regard to the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company between 11:00 a.m. to 1:00 p.m. on any working day till the date of the Annual General Meeting and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished free of cost.

In accordance with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, details of foreign employees, excluding directors and their relatives, have not been included in the Annexure. Members interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company and the requested information shall be furnished to such Member, free of cost.

Significant and material orders

There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status and your Company''s operations in the future.

Internal Financial Controls

Internal Financial Controls (including Internal Financial Controls over Financial Reporting) and their adequacy are included under the heading ''Internal Controls'' in the Management Discussion and Analysis which forms part of this Report as Annexure ''E''.

acknowledgements

Your Directors thank the Government of India, State Governments, Government of various countries and regulatory authorities and agencies for their co-operation and support, and look forward to their continued encouragement. Your Directors are grateful to the customers, vendors, collaborators, business partners, investors, financial institutions, bankers and the society at large for their continued support. The Directors place on record their appreciation of the commitment and contribution of the employees, at all levels for achieving the growth of the Company in this challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Ramkrishan P. hinduja

Date : August 11, 2016 Chairman


Mar 31, 2015

To

The Members,

The Directors are pleased to present their Report on the business and operations of your Company along with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2015.

Financial Results

(Rs. in millions except per share data)

For the year ended 31st March Standalone Consolidated

2015 2014 2015 2014

Operating Income 10,704.0 8,663.5 28,075.8 25,048.5

Other Income 278.2 658.4 245.5 340.0

Total Income 10,982.2 9,321.9 28,321.3 25,388.5

Operating Expenses 8,609.4 6,875.1 24,948.2 21,829.6

Depreciation and Amortization 605.6 420.4 1,052.4 862.0

Financial Expenses 157.5 176.7 386.4 387.5

Profit Before Tax 1,609.7 1,849.7 1,934.3 2,309.4

Provision for Tax (incl. deferred tax) 483.9 504.2 284.1 613.9

Profit After Tax 1,125.8 1,345.5 1,650.2 1,695.5

Add: Balance brought forward from Previous year 2,020.3 1,201.9 4,410.4 3,338.4

Profit Available for Appropriation 3,146.1 2,547.4 6,060.6 5,033.9 Dividend

- Adjustment on account of Depreciation 161.2 - 162.3 -

- Interim Dividend 310.3 206.0 310.3 206.0

- Final (Proposed) 103.6 206.2 103.6 206.2

- Dividend Tax 42.4 (19.7) 80.0 (12.1)

Adjustment on Amalgamation - - 4,136.4 46.4

Transferred to General Reserve - 134.6 - 177.0

Transferred to Capital Redemption Reserve - - 1.2 -

Balance Carried Forward 2,528.6 2,020.3 1,266.8 4,410.4

Earnings per share (Rs.)

- Basic 54.49 65.33 79.88 82.33

- Diluted 54.21 65.07 79.46 82.00

* (Rs. 1 million = Rs. 10 lakhs)

Operating Performance

On a Consolidated basis, Operating Income for FY'15 was Rs. 28,075.8 million compared to Rs. 25,048.5 million in FY'14, a growth of 12.1% mainly due to increased contribution from the Healthcare vertical. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for FY'15 was Rs.3,172.1 million compared to Rs. 3,219.0 million in FY'14, a decline of 1.5% due to lower volumes in certain geographies in the fourth quarter coupled with ongoing ramp-up activities across various operations. Profit After Tax (PAT) for FY'15 was Rs. 1,650.2 million compared to Rs. 1,695.5 million in FY'14, a decline of 2.7% mainly due to higher depreciation charge as per the provisions of the new Companies Act, 2013.

In view of amalgamation of Canadian subsidiaries as well as merger of subsidiaries of HGS Colibrium Inc., figures for the FY'15 are not comparable with that of FY'14.

On a Standalone basis, Operating Income was Rs.10,704.0 million in FY'15, compared to Rs. 8,663.5 million in FY'14, an increase of 23.6%. EBITDA increased by 17.1% from Rs. 1,788.5 million in FY'14 to Rs. 2,094.7 million in FY'15. PAT decreased by 16.3% from Rs.' 1,345.6 million in FY'14 to Rs. 1,125.8 million in FY'15 mainly on account of decrease in other income.

Key highlights for the year were:

Growth in revenues: Consolidated revenue up 12.1%; Standalone revenue up 23.6%.

Opening of 3 new centers at - El Paso (the US), Windsor (Canada), and Alabang (Philippines). Total number of centers: 60;

Addition of 32 new customers during the year. As of March 31, 2015, your Company has 171 clients (excluding the payroll processing clients);

Acquisition and merger of Colibrium Partners LLC and Colibrium Direct LLC into HGS Colibrium Inc., USA, step down subsidiary of the Company;

Amalgamation of Canadian subsidiaries;

As of March 31,2015, your Company had a Net Worth ofRs. 10,742.3 million translating into a Book Value of Rs. 518.46 per share;

Employee headcount at year-end: FY'15 - 28,435 (FY'14 - 26,036).

Dividend

Your Directors are pleased to recommend final dividend of Rs. 5 per equity share (50% on face value of Rs. 10 each) for the year ended March 31, 2015 subject to your approval. This is in addition to the three Interim Dividends of Rs. 5 per share for the Financial Year 2014-15 declared by the Board of Directors on August 12, 2014, November 12, 2014 and February 5, 2015 respectively and were paid. The total dividend for the financial year ended March 31, 2015 would be Rs. 20 per equity share (200% on face value of Rs. 10 each).

Business Review

The global Business Process Management (BPM) sector is changing its focus on growth rather than the cost containment. Traditionally, the BPM industry is known to provide services that transform clients' businesses and deliver higher levels of performance and results, as well as reduce costs. In addition to this, the industry has also been providing a range of services providing operational excellence and driving additional business value for customers. This change in the outlook represents a strong future growth potential for the BPM industry.

The Indian BPM industry continues to remain the premier sourcing destination in the world and recorded a steady double digit growth supported by its flexibility to adjust to difficult economic conditions.

India's BPM revenue for FY'15 is estimated to be $26 billion, an increase of around 13% compared to the last year. (Source: NASSCOM)

Further information pertaining to Business Review has been provided in the 'Management Discussion and Analysis Report' which form part of this Report.

Key Subsidiaries

HGS International, Mauritius, a wholly-owned subsidiary of your Company, is primarily engaged in investment activity. HGS International owns 100% of the share capital of Hinduja Global Solutions Inc., USA, C-Cubed N.V., Curacao, Hinduja Global Solutions Europe Ltd., UK, HGS St. Lucia Ltd., Saint Lucia and HGS MENA FZ- LLC, UAE and HGS Colibrium Inc., USA. All the subsidiaries are 100% owned by HGS International except for HGS Colibrium Inc, in which HGS International owns 89.9% and the balance is owned by the founders of Colibrium.

During the year under review, Total Income of HGS International was US$ 4.7 million as compared to US$ 4.9 million in the previous year.

Hinduja Global Solutions Inc., USA (HGS Inc.), a wholly-owned subsidiary of HGS International, Mauritius, specialises in marketing and provision of both voice and non-voice related Customer Contact and Business Process Outsourcing services to its clientele. Its key subsidaries are HGS (USA), LLC, HGS Canada Inc., Canada and HGS EBOS, LLC.

For FY'15, HGS Inc. reported consolidated revenues of US$ 348.9 million as compared to US$ 323.8 million in FY'14.

HGS (USA), LLC, a wholly-owned subsidiary of HGS Inc., USA, operates in five cities in USAand Canada. It partners with Fortune 1000 companies and Government agencies to provide comprehensive Customer Relationship Management programs. For FY'15, HGS (USA), LLC recorded total revenue of US$254.2 million. HGS (USA), LLC and its US subsidiaries have over2,400 employees who are engaged in customer services, fulfillment services, sales, marketing and account management.

HGS Canada Inc., a wholly-owned step-down subsidiary of HGS Inc., USA is a Canadian Contact Center service provider servicing marquee customers across verticals such as media, telecom, technology and BFS. HGS Canada offers technical support, inbound and outbound sales, customer care and customer retention in English and French languages, and has a team size of around 2,800 associates at 12 centers in Canada. On March 31, 2015, HGS Canada Inc. and 101867 P.E.I. Inc. (both wholly-owned subsidiaries of HGS Canada Holdings LLC) were amalgamated into HGS Canada Inc. For FY'15, HGS Canada recorded total revenue of CAD 96.9 million as compared CAD 98.2 million in FY'14.

Hinduja Global Solutions Europe Ltd. is the UK-based subsidiary focusing on consulting services for Business Process Management (BPM), call center services and markets off shoring services to UK-based clients. It owns 100% stake in Hinduja Global Solutions UK Ltd. and HGS France SARL, France. It also has a subsidiary in Italy called HGS Italy, SRL. For FY'15, Hinduja Global Solutions Europe Limited recorded consolidated revenue of GBP 30.3 million as compared to GBP 25.5 million in FY'14.

Hinduja Global Solutions UK Ltd. is a leading contact center company with over 1,000 employees in London, Preston and Selkirk (Scotland). It offers a range of services for inbound and outbound interactions to over 20 marquee customers across verticals such as Government, FMCG, Financial Services, Automobiles and Retail. It has branches in Rotterdam (Netherlands) and Hamburg (Germany). For FY'15, Hinduja Global Solutions UK Ltd. reported revenue of GBP 29.6 million as compared to GBP 24.7 million in FY'14.

HGS St. Lucia Ltd., Saint Lucia is the holding company of Team HGS Ltd., Jamaica.

Team HGS Ltd., Jamaica is operating a call center since FY'13 at Kingston, Jamaica and receiving good response from North American as well as local clients. Revenue for FY'15 was Jamaican Dollars 368 million as compared to Jamaican Dollars 200 million in FY'14.

HGS International Services Pvt. Ltd. (HGSISPL)

HGSISPL recorded revenue of Rs. 1,729.2 million in FY'15 as compared to Rs.1,413.8 million in FY'14, a growth of 22.3%. The SEZ division of HGSISPL is presently operating in three units namely, a) Global Village SEZ, Bangalore, b) DLF Towers SEZ, Hyderabad and c) Pritech Park SEZ, Bangalore and a fourth unit at DLF Cybercity, SEZ Hyderabad is expected to be commissioned shortly. Human Resource Outsourcing (HRO) business of HGSISPL services marquee customers in Banking, Financial Services, Insurance and other industry verticals in India and abroad.

HGS MENA FZ-LLC a wholly-owned subsidiary of HGS International, Mauritius, has established a marketing office in Dubai Internet City with the objective to build sales pipeline. Demand trend from MENA region is encouraging and this subsidiary has started adding new clients. In FY'15, it recorded revenue of AED 2.1 million.

HGS Colibrium Inc, USA is a subsidiary of HGS International, Mauritius. On March 27, 2015, HGS Colibrium acquired 89.98% share in Colibrium Partners LLC and Colibrium Direct LLC at a consideration of USD 14.2 million approximately plus debt funding of USD 1.7 million approximately. On March 31, 2015, Colibrium Partners LLC and Colibrium Direct LLC (subsidiaries of HGS Colibrium Inc., USA) were merged into HGS Colibrium Inc., USA.

This acquisition brings complementary platform and servicing capability in the sales and enrollment area for US and global health insurers. Colibrium is an innovation leader in delivering sales, service and wellness automation to health plans. This acquisition in the US market enhances the Company's already strong healthcare Payer servicing capabilities and will further contribute to the growth of the vertical in the coming years.

Particulars of loans, guarantees or investments

Loans, guarantees and investments as per Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

Communications and Public Relations

In the last one year, your Company (HGS) has initiated efforts on multiple levels to significantly revamp how your Company is represented externally. Your Company is communicating in a new and improved way, whether it is through the website or the external brandings of the Company and this is reflected in all locations across HGS including its subsidiaries.

In a significant step, your Company launched a completely new version of its public web presence, which is mobile enabled and designed to better serve browsers across various devices, and most importantly, tell the HGS story in a more compelling way with videos, packaged solutions and case studies. HGS' digital presence has also been enhanced to align website and social media (e.g. LinkedIn, Twitter, and Blog). Your Company has been significantly leveraging social media platforms to tell the HGS story and reach out to a larger audience across the globe.

This year, HGS made significant progress with the analyst and advisor community and has been recognized by them as a leading player in the Business Process Management industry. HGS also participated in external events, keynote thought leadership presentations and industry panel discussions that have raised the Company profile globally. Several channels of communication have been utilized to create a 360° engagement with our stakeholders and the media, including the Company intranet, the website, media outreach programs, social media platforms, participation in industry events, newsletters - internal as well as external, commemoration of important milestones, leadership blogs and winning business awards.

HGS effectively leveraged Public Relations (PR) to educate and inform various stakeholders-including the media, the analysts, advisors, our clients, future prospects, employees and our investors - about the latest Company updates that include the financial results, new wins, awards and accolades, recognition by the analyst community and community activities. As a result, your Company achieved unprecedented media coverage this year, both domestically and internationally across leading publications.

In our endeavor to propagate an inclusive and transparent culture, HGS continued to ensure regular and consistent internal communication to employees. Your Company leveraged different formats and channels such as e-mailers, newsletters, blogs and articles to share views and news. The Company's internal portal Ozone serves as a time-out zone for employees, offering various fun elements including exciting contests like Predictor contests held during the Football and Cricket World Cups and engagement activities during the holiday season. This year, your Company also conducted an infotainment campaign called 'Know Your HGS', which leveraged different activities like quiz, photo and poster contests and crowd sourcing of trivia across locations and businesses to help employees learn more about the organization. HGS also communicates about its capabilities and achievements through colorful internal branding across the centers.

HGS will continue to focus on gaining even wider public interest in, and visibility of, its achievements. In FY 2015- 2016, your Company will continue the momentum with more analyst engagements, launch of new solutions and aggressive digital presence expansion. Many of this year's accomplishments and highlights arose from the work that was initiated in the previous years. Communication is a continuum and HGS is confident about leveraging the gains in the past to gain even more in the future.

Corporate Social Responsibility (CSR)

As per the provisions of Section 135 of the Companies Act, 2013, the Board has constituted a Corporate Social Responsibility (CSR) Committee to carry out functions as stipulated in the said Section. The CSR Committee presently comprises of Mr. Rajendra P. Chitale, Chairman, Mr. Rangan Mohan, Mr. Ramkrishan P. Hinduja and Ms. Vinoo S. Hinduja.

On the recommendation of the CSR Committee, the Board has formulated a CSR Policy. Company's CSR initiatives focus on education, healthcare and sustainable development of the disadvantaged. The Report on CSR activities in the format as required under Companies (Corporate Social Responsibility) Rules, 2014, is set out in Annexure 'G' forming part of this Report. The CSR Policy is available on the website of the Company.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, based upon the information and documents made available to them and to the best of their knowledge, confirm that:

In the preparation of the Annual Accounts for the Financial Year ended March 31, 2015, the applicable accounting standards have been followed and there have been no material departures in the adoption and application thereof;

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;

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;

They have prepared the Annual Accounts on a going concern basis;

They have laid down adequate internal financial controls to be followed by the Company and they are operating effectively;

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.

The Company has fair number of processes (including checks and balances), certifications, compliance systems, authority matrix, etc. which form framework of internal financial controls. The Internal Auditors carry out audits of various functions as an on-going process and Statutory Auditors and External Consultants perform work in the critical areas. Periodical reviews of the same have been taken up by the Management and the Board Committees for corrective action, if any. Based upon the aforesaid, the Board is of the opinion that during the Financial Year 2014-15, the Company's internal financial controls were adequate and effective.

Number of Meetings of the Board

Seven meetings of the Board were held during the year. The time gap between any two meetings did not exceed 120 days. Further details in this regard are given in the Corporate Governance Report, which forms part of this Report.

Declaration by Independent Directors

As required under Section 149(7) of the Companies Act, 2013, the Company has received the declaration from each of the Independent Directors of the Company confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board Evaluation

As required under Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the performance evaluation of the individual Directors (Independent and Non-Independent Directors, the Chairman), the Board and its Committees, for the Financial Year 2014-15 was carried out.

The Nomination and Remuneration Committee and the Board carried out the performance evaluation of individual Directors including the Chairman on the basis of criteria such as preparedness for the matters to be discussed at the meetings of the Board and the Committees, constructive contribution to the discussions and deliberations and inputs at the meetings, non-partisan appraisal of issues and commitment to the role and fiduciary responsibilities, etc.

The Board also carried out annual evaluation of its own performance and its Committees based upon the inputs received from the Directors on criteria such as Board/ Committees composition and structure, effectiveness of the Board/Committees processes and the deliberations ensued thereat, etc.

At the separate meeting of the Independent Directors held during the year, the performance evaluation of the Non-independent Directors including the Chairman was carried out on the basis of criteria such as commitment and guidance, advice, inputs, expertise and knowledge. They also assessed the performance of the Board as a whole and the quality, quantity and timeliness of flow of information between the Company's Management and the Board.

Directors

Mr. Anil Harish (DIN 00001685), Mr. Rajendra P. Chitale (DIN 00015986), and Mr. Rangan Mohan (DIN 01116821), were appointed as Independent Directors for a term of five years at the Annual General Meeting of the Company held on July 3, 2014.

Mr. Anil Harish, an Independent Director of your Company resigned as a Member of the Board with effect from May 19,2015.

Mr. Anil Harish was a Director of the Company since March 2007. The Board wishes to place on record its deepest gratitude and appreciation for the outstanding contribution made by Mr. Anil Harish during his long association with the Company as a Director and Member of the Board Committees.

Ms. Vinoo S. Hinduja, Director (DIN 00493148) of your Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Mr. B.L. Taparia (DIN 00016551) was appointed as an Independent Director with effect from August 12, 2015 at the meeting of the Board of Directors held on August 12, 2015 in the casual vacancy caused by the resignation of Mr. Anil Harish.

Audit Committee

The Board has constituted an Audit Committee pursuant to the provisions of Section 177 of the Companies Act, 2013. The Committee presently comprises of the following Members: Mr. Rajendra P. Chitale - Chairman, Mr. Ramkrishan P. Hinduja, Mr. Rangan Mohan and Mr. B.L. Taparia.

Further details pertaining to the Audit Committee are included in the Corporate Governance Report, which form part of this Report.

Key Managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Company has recognized/ noted Mr. Partha DeSarkar, Manager (designated as Chief Executive Officer), Mr. Srinivas Palakodeti, Chief Financial Officer and Mr. Makarand D. Dewal, Company Secretary (appointed during the year) as the Key Managerial Personnel of the Company.

During the year, Mr. Kanti Mohan Rustagi resigned as the Company Secretary of your Company.

Chief Executive Officer (CEO) Certification

The Chief Executive Officer's declaration affirming compliance with the Code of Conduct by the Board and Senior Management is furnished as Annexure 'A' to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The prescribed particulars as required under Section 134(3)(m) of the Companies Act, 2013 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are furnished as Annexure 'B' to this Report.

Corporate Governance

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed report on Corporate Governance is furnished as Annexure 'C to this Report.

The Statutory Auditors of the Company have examined the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges by your Company and have certified compliance thereof. The certificate is attached as Annexure 'D' to this Report.

Management Discussion and Analysis Report

A separate report on Management Discussion and Analysis is annexed as Annexure 'E' to this Report.

ESOP Disclosure

The two ESOP Schemes viz. Hinduja Global Solutions Limited Employees Stock Option Plan 2008 and Hinduja Global Solutions Employees Stock Option Plan 2011 were in operation during the Financial Year 2014-15. These ESOP Schemes are in compliance with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014. Particulars of aforesaid ESOP Schemes are available on the Company's website http://www.teamhgs. com/investors/other-reports. There were no material changes made to the aforesaid ESOP Schemes during the Financial Year 2014-15.

Extract of Annual Return

Pursuant to Section 134(3)(a) of the Companies Act, 2013, an extract of Annual Return as on the financial year ended March 31, 2015 in the prescribed format, is appended as Annexure 'F' to this Report.

Related Party Transactions

Transactions entered into with the related parties during the Financial Year 2014-15 are in the ordinary course of business and at arm's length basis and therefore, outside the purview of Section 188(1) of the Companies Act, 2013. Information on related party transactions pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 as Annexure 'H' and the same form part of this Report.

Material changes and commitments affecting the financial position of the Company between the end of the financial year and date of the report

Acquisition of Domestic BPM business of Mphasis:

Your Company on June 30, 2015 has entered into definitive agreements with Mphasis Limited and its wholly owned subsidiary MsourcE India Private Limited for acquisition of significant portion of their domestic BPM business for a consideration of Rs. 17 crores ("the Transaction"). The closing of the transaction is subject to fulfillment of conditions stipulated in the agreements and regulatory approvals as may be required.

Upon completion of the transaction, the acquisition will strengthen the Company's presence in India by adding newer service capabilities and marquee clients in the Telecom, Banking and Financial Services verticals while bringing over 7,000 customer experience professionals. The acquisition will also add to the Company's delivery capabilities in Raipur, Indore, NOIDA, Mangalore, Pune and Bangalore.

Policy on Directors' Appointment and Remuneration

Policy on Directors' Appointment and Remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 have been disclosed in the Corporate Governance Report which form part of this Report.

Whistle Blower Policy

The Company has a Whistle Blower Policy and Vigil Mechanism to report and redress genuine concerns and grievances and the Policy is available on the Company's website. This matter is covered in the Corporate Governance Report which form part of this Report.

Under the Whistle Blower Policy and Vigil Mechanism, no complaints were received during the Financial Year 2014-15.

Risk Management Policy

Your Company has formulated Risk Management Policy which inter alia identifies risks taking into consideration the business and operations of the Company and adoption of mitigation measures. The Policy identifies elements of risks which in the opinion of the Board may threaten the existence of the Company. The details of the Policy are given in the Management Discussion and Analysis Report attached to this Report.

Fixed Deposits from Public

The Company has not accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Statutory Auditors

At the 19th Annual General Meeting of the Company held on July 3, 2014, M/s. Price Waterhouse, Chartered Accountants, were appointed as Statutory Auditors of your Company till the conclusion of the next Annual General Meeting. The said Auditors have submitted requisite declarations as to their eligibility to act as Auditors of the Company, if appointed. Accordingly, it is proposed to re-appoint M/s. Price Waterhouse, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. The Board recommends the re-appointment of the Auditors.

The Auditors' Reports (for Standalone and Consolidated financial statements) for the Financial Year ended March 31, 2015 do not have any qualifications, reservations or adverse remarks in their Reports.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed Ms. Rupal D. Jhaveri, Practicing Company Secretary, as the Secretarial Auditor to carry out the Secretarial Audit for the Financial Year 2014-15.

The Secretarial Audit Report in the prescribed format, for the Financial Year 2014-15, forms part of this Report as Annexure 'I'. The Report does not contain any qualifications, reservations or adverse remarks.

Employees' Particulars

Pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is necessary to disclose the ratio of remuneration of each director to the median employees' remuneration. At present, the Directors are paid fees for attending the meetings of the Board of Directors and of the Committees of which they are members. This remuneration, by way of fees, is not related to the performance or profit of the Company (like payment of commission is related to the profits of the Company). In view of this, the ratio of remuneration of each director to the median employees' remuneration is not computed.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 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 are provided in the Annexure forming part of the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report.

Having regard to the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours (i.e. 10:00 am to 6:00 pm) and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost.

In accordance with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details of foreign employees, excluding directors and their relatives, have not been included in the Annexure. Members interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company and the requested information shall be furnished to such Member.

Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status and your Company's operations in the future.

Internal Financial Controls

Internal Financial Controls and their adequacy are included under the heading 'Internal Controls' in the Management Discussion and Analysis which form part of this Report.

Acknowledgement

The Directors thank the customers, vendors, business partners, investors and bankers for the faith reposed in the Company and their continued support. The Directors also thank the Government of India, State Governments, Governments of various countries and regulatory authorities and agencies, for their cooperation and support, and look forward to their continued encouragement. The Directors place on record their sincere appreciation of the contribution of your Company's most important asset, viz. the One HGS family i.e, employees.



For and on behalf of the Board of Directors

Place : Mumbai Ramkrishan P. Hinduja

Date : August 12, 2015 Chairman


Mar 31, 2014

The Directors are pleased to present their Report on the business and operations of your Company for the financial year ended March 31, 2014.

Financial Results

(Rs. in millions except per share data)

For the year ended March 31st Standalone Consolidated

2014 2013 2014 2013

Operating Income 8,663.5 7,034.1 25,048.5 19,834.3

Other Income 658.4 175.0 340.0 332.8

Total Income 9,321.9 7,209.1 25,388.5 20,167.1

Operating Expenses 6,875.1 5,874.8 21,829.6 17,650.0

Depreciation and Amortization 420.4 386.0 862.0 772.5

Financial Expenses 176.7 173.1 387.5 436.6

Profit Before Tax 1,849.7 775.2 2,309.4 1,308.0

Provision for tax (incl. deferred tax) 504.2 235.1 613.9 402.3

Profit After Tax 1,345.5 540.1 1,695.5 905.7

Add: Balance brought forward from Previous year 1,201.9 1,196.0 3,338.4 2,989.7

Profit Available for Appropriation 2,547.4 1,736.1 5,033.9 3,895.4

Dividend

- Interim Dividend 206.0 - 206.0 -

- Final (Proposed) 206.2 411.8 206.2 411.8

- Dividend Tax (19.7) 68.4 (12.1) 70.0

Adjustment on Amalgamation - - 46.4 -

Transferred to General Reserve 134.6 54.0 177.0 75.2

Balance Carried Forward 2,020.3 1,201.9 4,410.4 3,338.4

Earnings per share (Rs.)

- Basic 65.33 26.23 82.33 43.99

- Diluted 65.07 26.23 82.00 43.99



Operating Expenses (Standalone as well as Consolidated) for the year ended March 31, 2013 include exceptional expense ofRs.52.9 million.

Review of Financials

On a Consolidated basis (covering global operations in India, USA, Canada, Europe, Philippines, Jamaica and UAE), Operating Income for FY ''14 was a 25,048.5 million higher by 26.3% compared to the Operating Income of a19,834.3 million in FY ''13. EBITDA (Earnings before Interest, Taxes, Depreciation & Amortization) was a 3,218.9 million and grew by 43.9% over the EBITDA of a 2,237.1 million in FY ''13 (excluding exceptional expense).

On a Standalone basis (for India and overseas branch offices), Operating Income was r 8,663.5 million in FY ''14, an increase of 23.2% over the Operating Income of r 7,034.1 million in FY ''13. EBITDA increased by 47.5% from r1,212.2 million (excluding exceptional expense) in FY ''13 to a 1,788.4 million in FY ''14. PAT increased by 149.1% from a 540.1 million in FY ''13 to r1,345.5 million in FY ''14.

Key highlights for the year were:

Growth of operating revenues by 26.3%;

Opening of 5 new centers at - Princeton (US), Barrie (Canada), Bengaluru SEZ (India) and 2 centers in Alabang (Philippines); Total number of centers now stand at 58;

Employee headcount at 26,036 (Previous Year-end 23,100);

Addition of 119 new customers during the year including addition of 105 customers from Payroll business. As of March 31, 2014, your Company has 139 clients (excluding the payroll processing clients);

As of March 31, 2014, your Company had a Net Worth of r14,520.6 million translating into a Book Value of r 704.32 per share.

Dividend

Your Directors are pleased to recommend final dividend of r10 per equity share (100% on face value of r10/- each) for the year ended March 31, 2014. This is in addition to the two Interim Dividends of r5 per share during the Financial Year 2013-14 declared on November 11, 2013 and February 11, 2014 respectively and were duly paid. The total dividend for financial year would be r20 per share (200% on face value of r10/- each).

Business Review

Global ITeS Industry Overview

The global economic environment remained volatile and uncertain during the last year. Despite challenges arising from this volatility, the global IT-BPM industry continued its growth trajectory, driven by the increasing acceptance of outsourcing services by corporate. In addition to private companies, many governments have now started to outsource services for the first time to manage costs. Further, with technological advancement, the trend for outsourcing has been gradually shifting from traditional services to extended services. Service providers are now focused on improving customer experience, managing risks and improving efficiencies with the use of Social Media, Mobility, Analytics and Cloud Computing (SMAC).

The industry is also experiencing an increase in hybrid service offerings from providers. These offerings enable customers to customize and split processes into in-house and outsourcing activities. In this model, the provider benefits from access to client database platforms and the ability to access data simultaneously alongside its client. Gartner expects that by 2017, around 75% of the BPM demand will be achieved through hybrid offerings, as clients gradually become accustomed to the latest enabled technologies such as cloud computing.

Gartner expects worldwide spend for BPM services to grow from US$140.1 billion in 2012 to US$186.5 billion in 2017, a CAGR of 5.9%. There is a significant difference in the expected growth rates of Business Process as a Service (BPaaS) and the traditional BPM. BPaaS is expected to grow at three times the growth rate of the traditional BPM services. During 2013, Gartner estimated BPaaS revenues to have accounted for 22% of the total BPM spend.

Indian ITeS Industry Overview

For FY ''14, NASSCOM projected that Indian IT-BPM exports will grow by 13% to reach US$86 billion while domestic annual revenue will touch r1,150 billion, a YoY increase of 10%.

During the year, technology and related sectors benefitted from vertical and geographic market expansion, new customer segments, and a wider spectrum of the services and solutions being offered. For FY ''15, NASSCOM expects export revenues to grow in the range of 13% to 15% and domestic market to grow between 9% to 12%.

The sustained focus of the Indian BPM industry on providing end-to-end transformational services with a customer-centric approach is expected to take the industry to US$50 billion in revenue by 2020 from the current US$21 billion. India is also expected to emerge as an effective center for the global BPM industry by implementing new generation technologies such as SMAC, which will drive demand for specialized services.

Performance of Hinduja Global Solutions Ltd.

During FY ''14, Operating Income of your Company grew by around 26.3%, displaying strong financial performance, high growth and improved margins. This strong growth was driven by increase in volumes from existing customers and new client additions.

Of the total growth, around 1.6% was due to full year impact of EBOS acquisition. The balance growth was due to organic growth and variation in the exchange rate. Geographies such as the Philippines, North America, Canada and India experienced strong volume growth.

The significant growth in EBITDA and margin improvement was due to better capacity utilization levels at delivery centers across all geographies coupled with various performance optimization initiatives undertaken during the year.

Growth in PBT was primarily due to lower interest expense as a result of debt repayment and better working capital management.

Key Subsidiaries

HGS International, a wholly-owned subsidiary of your Company, incorporated under the laws of Mauritius, is primarily engaged in investment business. HGS International owns 100% of the share capital of Hinduja Global Solutions Inc., USA, C-Cubed N.V., Curacao, Hinduja Global Solutions Europe Ltd., UK, HGS St. Lucia Ltd., Saint Lucia and HGS MENA FZ- LLC, UAE.

During the year under review, Total Income of HGS International was US$ 4.9 million as compared to US$ 5.5 million in the previous year.

Hinduja Global Solutions Inc., USA (HGS Inc.),

wholly-owned subsidiary of HGS International, Mauritius, specializes in marketing and provision of both voice and non-voice related Customer Contact and Business Process Outsourcing services to its clientele. Its key subsidiaries are HGS (USA), LLC, HGS Canada Inc., Canada and HGS EBOS, LLC.

For FY ''14, HGS Inc. reported consolidated revenues of US$ 323.8 million as compared to US$ 270.5 million in FY ''13.

HGS (USA), LLC, which was acquired in November 2006 by HGS Inc., USA, operates in five cities in USA and Canada. It partners with Fortune 1000 companies and Government agencies to provide comprehensive Customer Relationship Management programs. For FY ''14, HGS (USA), LLC recorded total revenues of US$ 218.2 million. HGS (USA) LLC and its US subsidiaries have over 2,400 employees who are engaged in customer services, fulfillment services, sales, marketing and account management.

HGS Canada Inc., which was acquired in August 2011 by HGS Inc., USA is a leading Canadian contact center service provider servicing marquee customers across verticals such as media, telecom, technology and BFS. HGS Canada offers technical support, inbound and outbound sales, customer care and customer retention in English and French languages, and has a team size of over 3000 associates at 12 centers in Canada. For FY ''14, HGS Canada recorded total revenues of CAD 98.2 million as compared CAD 72.8 million in FY ''13.

Hinduja Global Solutions Europe Ltd. is the UK-based subsidiary focusing on consulting services for BPM, call center services and markets off shoring services to UK-based clients. It owns 100% stake in Hinduja Global Solutions UK Ltd., HGS France SARL and HGS Italy SRL.

Hinduja Global Solutions UK Ltd. is a leading contact center company with over 890 employees in London, Preston and Selkirk (Scotland). It offers a range of services for inbound and outbound interactions to over 24 marquee customers across verticals such as Government, FMCG, Financial Services, Automobiles and Retail. It has branches in Rotterdam (Netherlands) and Hamburg (Germany). For FY ''14, Hinduja Global

Solutions UK Ltd. reported revenues of GBP 24.7 million as compared to GBP 26.8 million in FY ''13.

HGS St. Lucia Ltd., Saint Lucia is the holding company of Team HGS Ltd., Jamaica.

Team HGS Ltd., Jamaica in FY ''13, has opened a call center at Kingston, Jamaica. The center is currently servicing a Jamaican client. Jamaica has been eliciting strong interest as a near-shore destination among North American clients as well as local clients.

HGS International Services Pvt. Ltd. (HGSISPL) (formerly Hinduja Outsourcing Solutions Pvt. Ltd.)

The SEZ business of HGSISPL operates through three units namely, a) Global Village SEZ, Bengaluru, b) DLF Towers SEZ, Hyderabad; and c) Pritech Park SEZ, Bengaluru.

During the year, HGS Business Services Pvt. Ltd, the Human Resource Outsourcing (HRO) business was merged into HGSISPL. HGS Business Services provide HRO services to marquee customers in Banking, Financial Services, Insurance and other industry verticals in India and abroad.

In FY ''14, HGSISPL recorded revenues of a1,413.8 million as compared to a 673.6 million in FY ''13.

HGS MENA FZ-LLC was set up in the Dubai Technology and Media Free Zone, Dubai, United Arab Emirates during the year as a wholly-owned subsidiary of HGS International, Mauritius. HGS MENA FZ-LLC plans to provide Business Process Management services and HRO services to companies in the Middle East and North African region.

Addressing Social Concerns

Your Company has proved, yet again, that it remains firmly committed to community welfare initiatives. It partnered with organizations and NGOs championing various causes and reaching out to the needy. The Company partnered with Sightsavers, by participating in the World 10K Run 2013 in Bengaluru. Sightsavers is an international development organization working with partners to eliminate avoidable blindness and promote equality of opportunity for differently bled people.

2013, unfortunately, has been a year of calamities. In the Philippines, your Company took the lead in mitigating the effects of the catastrophic typhoon - ''Yolanda'' that devastated homes and lives of millions of Filipinos in November 2013. The employees donated their leave encashment to both the Red Cross and the Baptist Churches to distribute basic food and necessities to the typhoon stricken areas. Similar commitment was seen in the help your Company has provided for the earthquake-stricken Bohol victims struggling to recover after a massive 7.2 magnitude hit their towns in October, 2013 and left hundreds dead and thousands homeless. Your Company launched a unique initiative "Happy Rains" in the Philippines, which was a donation-drive program to keep public school children happy, disease-free, clean and dry during the rainy seasons, and also gifted computers to elementary and high school children of the Payatas Orione Foundation, which takes care of children in one of the poorest regions of the Philippines.

In June 2013, flash floods and landslides struck Uttarakhand in India leaving thousands of people dead and missing. Employees across nine locations in India voluntarily contributed to the cause of alleviating the suffering of the victims. Overwhelmed by the employees'' generosity, management of your Company matched the contribution and Rs. 1.85 million was donated towards relief efforts undertaken by Oxfam in Uttarakhand. Your Company is associated with a number of non-profit organisations such as Mother Teresa - Orphanage for Children, Desire Society, HOPE - school for disabled children, Green life Foundation, Chaya Devi Education Trust, Green Peace, Good Life Centre, I Lead - Education and Magic Bus. Employees take great pride in raising funds and are actively involved in organising interactive activities with these institutions. In addition to financial support, clothes, toiletries, stationery and medical supplies were donated to them. Another regular feature across the centers in your Company is organizing blood donation camps throughout the year.

In a bid to increase awareness among potential recruits, HGS UK has evolved an "employability skills course" with Flood Academy Preston, a local academy. The course includes awareness programs on the business, role play, aid in drafting curriculum vitae and interview skills. At the end of the course, a certificate of achievement is presented to the local young adults, thus providing them an advantage in the employment market. HGS UK plans to put 120 young adults through this course by June 2014. It is notable that this course is not just to train the future employees, but for the industry at large.

HGS centers in Canada have strong linkages with the local communities and this year too, they contributed towards many local charities and hospitals. The coveted Golden Spade Award, presented to the business that embraces all aspects of the Communities in Bloom program and serves as an example for others to follow, was presented to HGS Canada in Pembroke, Ontario. Communities in Bloom is a Canadian non-profit organization committed to fostering civic pride, environmental responsibility and beautification through community involvement.

HGS USA contributed donations in cash and gifts in kind to help those that were affected by a severe tornado which hit Illinois in November 2013. Our clients also rose to the occasion and donated generously to take care of the immediate needs of citizens. When Typhoon Yolanda, one of the severest typhoons ever, hit the Philippines, donations were sent all the way from HGS USA. The HGS US team also joined hands with a client to help their customers when a tornado struck New York City in November 2013. The HGS team in Peoria raised funds for the American Cancer Society in "The Relay for Life" event.

Your Company will continue to actively engage with society across all strata and geographies through noteworthy and worthwhile causes.

Communications and Public Relations

Your Company has continued to extend its efforts towards standardization and diversification of its communication channels, both internal and external. As a global organization, your Company has the responsibility to ensure consistency of branding and messaging across all locations. This has now been achieved in totality through the successful deployment of "One HGS" throughout the organization, including the acquired subsidiaries. HGS has connected each employee to every other through the revamped intranet and has also connected itself with the wider world through the efforts of its Global Marketing and Communications Team.

All the channels of communication have been utilized to create a 360° engagement with our stakeholders and the media. They include the intranet, the website, media outreach programs, social media platforms, participation in industry events, newsletters - internal as well as external, commemoration of important milestones, leadership blogs and winning business awards.

Your Company effectively leveraged Press Releases (PR) to educate and inform various stakeholders - including the public - about the latest company updates. This year, your Company achieved unprecedented media coverage, both domestically and internationally across publications such as The Economic Times, Business Standard, The Hindu Business Line and Reuters. The PR around the completion of 40 years by HGS USA was particularly well received in North America. The CEO of HGS is now a regular invitee to industry discussions on business TV Channels like ET Now and NDTV Profit. The financial results of HGS are covered by prominent media houses and discussed by leading reporters. HGS held its first Investor Relations Meet in December 2013, which was well attended, and made the investor community aware about the recent achievements and strong financials of HGS. Your Company now has considerable traction in the Analyst and Investor community.

HGS has developed an Employee Engagement Platform (EEP) - which is an integrated, internal communication strategy with a focused plan for communicating the Company''s vision and values, and why they matter to employees. We use different formats such as e-mailers, newsletters, reports, internal Points of View (PoVs) and articles to share thought-provoking content for our employees on a regular basis. The internal portal Ozone serves as a time-out for employees, offering various fun elements, and enables them to interact with each other on a common channel. While the CEO Blog remains popular on the intranet, a ''Leadership Speak'' section has been introduced on the website to enable our leaders to share their ideas with external audiences. ''Leadership Speak'' has emerged as one of the most popular sections on the website. Social media continues to grow and be an important channel of communication. HGS is utilizing all the popular social media platforms to inform and engage the public and its own employees.

Your Company is now truly global with presence in 11 countries. To beneft from the economies of scale in its sales efforts, a ''Global Growth Portal'' has been launched, which is a globally accessible archive of all collaterals, case studies, competitive insights, proposals, sales training material and any client or internal sales/growth supporting material.

During the year under review, HGS won many awards and featured in top rankings of the NASSCOM Top BPO Companies survey, Dataquest Top BPO Companies and Global 100 Survey. The Preston center of HGS UK was named as ''Best Mid-sized Contact Centre'' at the 2014 Contact Centre World Awards Global finals. This center has also been recognized as the best contact center by a Telecommunications client, which is one of the biggest telecom service providers in the UK. HGS UK was also the highest placed outsourcer in the Top 50 Companies for Customer Service, a prestigious benchmarking program undertaken by the International Customer Management Institute in UK. Our contact center operation run for a FMCG giant was ranked 11th in the Top 50 Companies'' list, making it the highest ranked newcomer in the list. HGS also won awards for excellence in internal communications by Corporate Affairs and Forum Awards and Fun at Work award at the Asia BPO Summit, BPO Excellence Awards.

HGS will continue to focus on increasing public interest in, and visibility of, its achievements. In FY ''15, your Company will pay special attention to digital media and analyst relations. Many of this year''s accomplishments and highlights arose from the work that was initiated in previous years. Communication is a continuum and HGS is confident about leveraging the gains in the past to gain even more in the future.

Awards & Recognition

Your Company was conferred with awards and recognitions during this year, such as:

HGS named runner-up in the ''Best Outsourced Provider'' category at the 14th Annual Call Center Week

HGS'' Preston center in the UK named as Best Mid- sized Contact Centre at the 2014 Contact Centre World Awards Global fnals

HGS was recognized in the Internal Communications category by the Corporate Affairs and Forum Awards in 2014

Won the ''Fun at Work award at the 2014 Asia BPO Summit - BPO Excellence Awards

HGS ranked in the Top 50 companies for Customer Service, a prestigious benchmarking program undertaken by the International Customer Management Institute, UK in 2014

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

The Chief Executive Officer and Chief Financial Officer Certification as required under Clause 49 of the Listing Agreements and Chief Executive Officer declaration about the Code of Conduct are furnished as Annexure ''A and ''A-1'' to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The prescribed particulars as required under Section 217 (1)(e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are furnished as Annexure ''B'' to this Report.

Corporate Governance

As required under Clause 49 of the Listing Agreements, a detailed report on Corporate Governance forms Annexure ''C to this Report.

The Statutory Auditors of the Company have examined the Company''s compliance and have certified the same as required under the Listing Agreements. The certificate is reproduced as Annexure ''D'' to this Report.

Management Discussion and Analysis Report

Further, a separate Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, company performance, SWOT analysis, corporate process, business outlook among others is annexed as Annexure ''E'' to this Report.

ESOP Disclosure

The disclosures required to be made under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexures ''F1'' and ''F2'' to this Report.

Fixed Deposits

Your Company has not accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Directors

Ms. Shanu S.P Hinduja, who was appointed as a Director in the casual vacancy caused by the resignation of Mr. Dheeraj G. Hinduja and designated as Co-Chairperson of the Company with effect from March 4, 2013, will be appointed as a Director on the Board of the Company at the ensuing Annual General Meeting (AGM) proposed to be held on July 3, 2014.

Ms. Vinoo S. Hinduja, Director of your Company is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers herself for re-appointment.

Appointment of Mr. Anil Harish, Mr. Rajendra P. Chitale and Mr. Rangan Mohan as Independent Directors pursuant to Sections 149 and 152 of the Companies Act, 2013 are proposed to be made at the forthcoming Annual General Meeting for a term of consecutive five years. Pursuant to Sections 149 and 152 of the Companies Act, 2013 Independent Directors will not be liable to retire by rotation.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the information and documents made available to them, confirm that:

i) in the preparation of Annual Accounts for the year ended March 31, 2014, the applicable accounting standards have been followed. There are no material departures in the adoption and application of the accounting standards;

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

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

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

Auditors

M/s. Price Waterhouse, Chartered Accountants, the Statutory Auditors of your Company, retire at the conclusion of the forthcoming Annual General Meeting of your Company and being eligible, offer themselves for re- appointment. The Board recommends the re-appointment of the Auditors.

Exemption from attaching Accounts and other Documents of Subsidiaries

The Ministry of Corporate Affairs (MCA) vide Circular dated February 8, 2011 has granted exemption under Section 212(8) of the Companies Act, 1956 from annexing Balance Sheet and other documents of subsidiaries with the Annual Report of the holding company provided certain conditions are fulfilled. The Board of Directors of your Company at its meeting held on February 11, 2014 (in view of fulfillment of all conditions prescribed by the Ministry of Corporate Affairs under Circular No. 5 / 12 /2007 - CL - III dated February 8, 2011) resolved for not attaching the Balance Sheet and other documents of the subsidiaries, with the Balance Sheet of the holding Company, i.e. Hinduja Global Solutions Limited, for FY ''14.

Accordingly, the Annual accounts and other documents for the year ended March 31, 2014 of the subsidiary companies are not attached to the Annual Report. The accounts of the subsidiaries will be made available for inspection by any member of the Company at its Registered Office and also at the Registered Office of the concerned subsidiary. The accounts of the subsidiary companies and detailed information will be made available to the members upon receipt of request from them. The summary of key financials of the Company''s subsidiaries, as provided in the circular dated February 8, 2011 is included in this Annual report. The accounts of individual subsidiary companies would be available on Company''s website www.teamhgs.com.

Employees'' Particulars

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, form part of this Directors'' Report. However, in accordance with the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Report is being sent to all the shareholders of the Company excluding the aforesaid information. Members interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company.

Complaints

1. The Whistle Blower Policy: No complaints were received during the FY ''14.

2. The Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013:

A. Number of complaints received during the year: 2

B. Number of cases disposed of during the year: 2

C. Number of cases pending as on March 31, 2014 for more than 90 days: Nil

Acknowledgements

Your Board takes this opportunity to thank the customers, vendors, business partners, shareholders and bankers for the faith reposed in the Company, and also thank the Government of India, various regulatory authorities and agencies, State Governments, Governments of various countries for their support, and looks forward to their continued encouragement. Your Directors place on record their sincere appreciation of the contribution of the Company''s most important asset, viz. the employees, who through their competence, hard work and co-operation have enabled the Company to achieve consistent growth.



For and on behalf of the Board of Directors



Place : Mumbai Ramkrishan P. Hinduja

Date : May 21, 2014 Chairman


Mar 31, 2013

To The Members,

The Directors are pleased to present their Report on the business and operations of your Company for the financial year ended March 31, 2013.

Financial Results

(Rs. in million except share data)

For the year ended March 31 Standalone Consolidated

2013 2012 2013 2012

Operating Income 7,034.1 6,313.5 19,834.3 15,543.1

Other Income 175.0 141.7 332.8 288.2

Total Income 7,209.1 6,455.2 20,167.1 15,831.3

Operating Expenses 5,874.8 5,261.5 17,650.0 13,702.0

Depreciation and Amortization 386.0 361.4 772.5 612.9

Financial Expenses 173.1 110.2 436.6 292.3

Profit Before Tax 775.2 722.1 1,308.0 1,224.1

Provision for tax (incl. deferred tax) 235.1 95.9 402.3 163.4

Profit After Tax 540.1 626.2 905.7 1,060.7

Add: Balance brought forward from Previous year 1,196.0 1,109.5 2,989.7 2,476.7

Profit Available for Appropriation 1,736.1 1,735.7 3,895.4 3,537.4

Dividend

- Final (Proposed) 411.8 411.8 411.8 411.8

- Dividend Tax 68.4 65.3 70.0 66.8

Transferred to General Reserve 54.0 62.6 75.2 69.1

Balance Carried Forward 1,201.9 1,196.0 3,338.4 2,989.7

Earnings per share (Rs.)

- Basic 26.23 30.41 43.99 51.52

- Diluted 26.23 30.41 43.99 51.52

Review of Financials

On a Consolidated basis (covering global operations in India, USA, Canada, Europe, Philippines, Jamaica and Mauritius), Operating Income for FY''13 was Rs. 19,834 million higher by 27.6% compared to the Operating Income of Rs. 15,543 million in FY''12. EBITDA (Earnings before Interest, Taxes, Depreciation & Amortization) was Rs. 2,237 million and it grew by 22% over the EBITDA of Rs. 1,841 million in FY''12.

On a Standalone basis (for India and overseas branch offices), Operating Income was Rs. 7,034 million in FY''13, an increase of 11.4% over the Operating Income of Rs. 6,314 million in FY''12. EBITDA increased by 15.2% from Rs. 1,052 million in FY''12 to Rs. 1,212 million in FY''13. PAT fell by 13.7% from Rs. 626 million in FY''12 to Rs. 540 million in FY''13.

Key highlights for the year were:

- Growth of consolidated revenues by 27.6%;

- Acquisition of healthcare revenue cycle management business by HGS Inc. from Deloitte;

- Opening of five new centers at - Belleville (Canada), Preston (UK), Jamaica, Hyderabad (SEZ) and Bangalore; Total number of centers now stand at 55;

- Employee headcount at 23,100 (Previous Year-end 23,899);

- Addition of 50 new customers during the year including addition of 11 customers from the acquisition of healthcare revenue cycle management business in the US. As of March 31, 2013, your Company has 535 active customers;

- As of March 31, 2013, your Company had a Net Worth of Rs. 12,355 million translating into a Book Value of Rs. 600.07 per share.

Dividend

Your Directors are pleased to recommend final dividend of Rs. 20 per equity share (200% on face value of Rs. 10/- each) for the year ended March 31, 2013. The total dividend for the financial year will absorb Rs. 481.8 million including dividend distribution tax of Rs. 70.0 million.

Business Review

Global ITES Industry Overview

In the context of volatile economic environment, the ITES sector has registered a steady growth rate of 4.8% compared to the previous year. Global IT spend was estimated to be $1.9 trillion in 2012, of which software products, IT and Business Process Management (BPM) services accounted for $1.1 trillion. The global outsourcing market was estimated to grow at 9% to reach $130 billion. The ongoing uncertainty in demand impacted the overall volumes which declined by around 13%.

The ongoing corporate IT spending budget constraints continued to put pressure on the IT/BPO industry margins. This has led to outsourcing service providers offer solutions that can leverage technology-enabled platforms and effective delivery models. The BPO industry today is focused on delivering innovative business models that offer specialized delivery services to their customers. These new solutions are designed to provide customized solutions and facilitate transformation. Access to specialized services, ability to concentrate on their core businesses, decreased time-to-market and increased customer centricity are some of the key drivers.

Increasing use of the mobile technologies is expected to result in significant growth in the pace of adoption of high-end mobile devices and mobile applications in the coming years. Delivery of complex services from India along with emerging technologies such as social media, analytics, cloud technology and platform-based solutions will offer new opportunities to the outsourcing service providers in the near future.

Indian ITES Industry Overview

The Indian IT services and BPO sectors are an integral part of the global sourcing strategy. These sectors have made increasing contributions to the domestic economy over the years. During FY''13, the IT industry in India is estimated to have generated revenues of $108 billion, with the IT software and services sector accounting for $95 billion of revenues. Export revenues are estimated to be at $76 billion in FY''13, up 10.2% compared to the previous year and have contributed 80% to the total IT-BPO revenues (Source: NASSCOM).

NASSCOM indicated that FY''14 total revenues from India (domestic and exports) are expected to grow by 13-15% to reach $106-111 billion and out of this, exports are likely to be in the range of $84-87 billion, indicating a growth of 12-14%.

Despite India being the global outsourcing leader, it accounts for only 10% of the global IT-BPM spend. This reflects significant untapped opportunities for Indian IT-BPM firms. They are well positioned to take advantage of these trends by developing new capabilities, servicing the entire IT services value chain and expanding their focus to new geographies and industry verticals.

Performance of Hinduja Global Solutions Ltd.

During FY ''13, revenues of your Company grew by around 27.6%. Of the total growth, around 10.5% was due to the revenue cycle management business acquisition made during the year and full benefits of the Canada and payroll processing businesses acquired in August 2011. The balance of the growth was due to organic growth and variation in the exchange rate.

Nearly 31% of your Company''s revenues are from the telecom sector. In the first half of FY ''13, telecom volumes across all geographies remained subdued. This coupled with costs associated with opening of new centers at Belleville (Canada), and Preston (UK), adversely affected the financial performance of the Company during the first two quarters. Telecom volumes in Canada rebounded strongly in the second half of FY ''13. This along with costs better matched with revenues led to a strong improvement in the financial performance of your Company in the second half of the year.

For a larger part of the year, the financial performance of your Company was also adversely affected by the excess capacity built in the Philippines. By the end of the year, volumes improved significantly which contributed to the improvement in the financial performance of your Company.

During the year, your Company performed a stringent review of its various accounts and has initiated necessary measures to improve the overall profitability of the Company.

Depreciation and amortization expenses for the year were higher on account of the new delivery centers opened during the year, impact of exchange rate and full year impact of the acquisition.

Interest costs were higher on account of full year impact of loans taken for the HGS Canada acquisition and growth in working capital requirements in line with growth in the business.

Tax was higher on account of end of tax holiday period for some of the units in the Philippines and absence of the tax reversals recorded in FY''12. Overall profitability was impacted by certain one-time costs related to the revenue cycle management business acquisition and exceptional costs on account of a settlement of a dispute with a bank.

Key Subsidiaries

HGS International, a wholly owned subsidiary of your Company, incorporated under the laws of Mauritius, is primarily engaged in investment business. HGS International owns 100% of the share capital of Hinduja Global Solutions Inc., USA, C-Cubed N.V., Curacao, Hinduja Global Solutions Europe Ltd., UK and HGS St. Lucia Ltd., Saint Lucia.

During the year under review, Total Income of HGS International was US$ 5.5 million as compared to US$ 5.6 million in the previous year.

Hinduja Global Solutions Inc., USA (HGS Inc.), a wholly owned subsidiary of HGS International, Mauritius, specializes in marketing and provision of both voice and non-voice related Customer Contact and Business Process Outsourcing services to its clientele. Its key subsidiaries are HGS (USA), LLC and HGS Canada Inc., Canada. During the year HGS EBOS, LLC was setup to acquire the healthcare revenue cycle management business from Deloitte.

For FY''13, HGS Inc. reported consolidated revenues of US$ 270.5 million as compared to US$ 230.7 million in FY''12.

HGS (USA), LLC, which was acquired in November 2006 by HGS Inc., USA, operates in five cities in USA and Canada. It partners with Fortune 1000 companies and Government agencies to provide comprehensive Customer Relationship Management programs. For FY''13, HGS (USA), LLC recorded total revenues of US$ 191.7 million. HGS (USA) LLC and its US subsidiaries have over 2,000 employees who are engaged in customer services, fulfillment services, sales, marketing and account management.

HGS Canada Inc., which was acquired in August 2011 by HGS Inc., USA is a leading Canadian contact center service provider servicing marquee customers across verticals such as media, telecom, technology and BFS. HGS Canada offers technical support, inbound and outbound sales, customer care and customer retention in English and French languages and has a team size of over 2,200 associates at 10 centers in Canada. For FY''13, HGS Canada recorded total revenues of CAD 72.8 million as compared CAD 48.6 million in FY''12.

Hinduja Global Solutions Europe Ltd. is the UK based subsidiary focusing on consulting services for BPO and call center services and markets offshoring services to UK based clients. It owns 100% stake in Hinduja Global Solutions UK Ltd. During FY''13, it acquired 100% stake in HGS France making it a wholly owned subsidiary. It also has a subsidiary in Italy called HGS Italy, SARL.

Hinduja Global Solutions UK Ltd. is a leading contact center company with over 850 employees in London, Preston and Selkirk (Scotland). Established in 1977, it offers a range of services for inbound and outbound interactions to over 20 marquee customers across verticals such as Government, FMCG, Financial Services, Automobiles and Retail. It has branches in Rotterdam (Netherlands) and Hamburg (Germany). For FY''13, Hinduja Global Solutions UKLtd. reported revenues of GBP 26.8 million as compared to GBP 25.0 million in FY ''12. During the year, it was selected as one of the four service providers for the UK Government''s outsourcing contracts.

HGS St. Lucia Ltd., Saint Lucia is the holding company of Team HGS Ltd., Jamaica.

Team HGS Ltd., Jamaica in FY''13, has opened a call center at Kingston, Jamaica. The center is currently servicing a Jamaican client. Jamaica has been eliciting strong interest as a near-shore destination among North American clients.

HGS International Services Pvt. Ltd. (HGSISPL)

HGSISPL has set up two Special Economic Zone (SEZ) units at i) Global Village, Bangalore; and ii) DLF Towers, Hyderabad. While the Global Village SEZ has completed two years of operations, the Hyderabad SEZ commenced operations in the last quarter of FY''13. HGSISPL has also received approvals for setting up its third SEZ at Pritech Park, Bangalore which is in the process of being built up and is expected to be completed in the first half of FY''14. In FY''13, it recorded revenues of r 673.6 million as compared to r 284.7 million in FY''12.

HGS Business Services Pvt. Ltd., which was acquired in August 2011, is a prominent player in Human Resource Outsourcing (HRO) domain. This acquisition also included a Payroll Processing activity in the Middle East. HGS Business Services offers payroll, statutory compliance and employee life cycle support to marquee customers in Banking, Financial Services, Insurance and other industry verticals. In FY''13, it recorded revenues of r 388.9 million as compared to r 227.2 million in FY''12.

HGS International Services Private Limited and HGS Business Services Private Limited have filed a Scheme of Amalgamation of HGS Business Services Private Limited into HGS International Services Private Limited with Hon''ble High Court of Judicature at Bombay on March 29, 2013.

Addressing Social Concerns

Your Company continues to be committed to community welfare initiatives and engages with the local community where HGS has work locations.

HGS employees participated in the Bangalore 10K Open as well as the Majja Run and the proceeds from this event were donated to Concern India Foundation - an NGO which supports the primary education of less privileged children, specifically children of migrant workers.

In addition, HGS is engaged with Magic Bus Foundation which supports the education of children and enables them develop skills in order to support themselves reducing their dependence on others. The Foundation has programmes running across the country and your Company supported a programme which trains their project leaders to manage their programmes in their local regions.

HGS also continues to support orphanages, old age homes and the cause of less privileged children through its offices at different locations including Durgapur and Siliguri in the East, Bangalore, Mysore and Guntur in the South.

HGS is also engaged with various NGOs for the collection of donations and subscriptions on their behalf.

In the Philippines, your Company has partnered with Dr. Jose Fabella Memorial Hospital and Quirino Memorial Medical Center for charitable purposes. Besides, the Philippines branch on a regular basis supports the children and public during the period of national disasters.

In the US, your Company supports two national charities each year and it supported St. Jude Children''s Research Hospital and the American Cancer Society in the past year. The Peoria center supported the Children''s Hospital of Illinois and the Peoria Humane Society. The Waterloo center supports the Cedar Bend Humane Society and Cedar Valley Hospice. Your Montreal center takes great pride in raising funds for the Cure Foundation.

On the whole, your Company actively meets its duties towards all stakeholders through a positive and a very active Corporate Social Responsibility programme.

Marketing / Communication and Public Relations

HGS continued to employ all the communications and marketing tools to constructively engage with all its stakeholders. FY''13 marked the completion of brand alignment of all its units. The year was especially fruitful in terms of generating brand awareness internally and externally using all possible media channels, including social media.

Brand transition activities were successfully carried out in HGS UK, HGS Canada and HGS Business Services India. Your Company hopes to reap benefits of brand integration, which will enable it to put together cross-geography teams to carry out complex global projects in quick time. ''One HGS'' - the umbrella program for carrying out brand integration has now become bigger and better. ''One HGS'' has two equally important objectives - Standardize the look and feel of all entities and substantially increase the brand awareness of your Company among the general public. It has used the print as well as the digital and electronic media to good effect in raising the brand awareness globally. Your Company received considerable media interest during the past year, and all its events and awards were covered by leading media houses. It got positive mentions in all media channels and its press releases were syndicated in good numbers.

HGS paid special attention to the social media, creating platforms for continuous outreach to the wider community on Facebook, LinkedIn, twitter and YouTube. The response has been encouraging. These platforms will be used for branding and recruitment activities. Your Company believes in pro-actively sharing information with all stakeholders and tapping the boundless opportunities to listen, understand and engage with its audiences.

All the Global Delivery Centers are now connected to the rest of the centers through the new intranet - Ozone. Ozone has developed into a powerful tool to engage the employees and facilitate two-way communication between the management and the employees. Through many creatively conceived online events and competitions, Ozone has helped augment the awareness level of all employees regarding the business and the brand of your Company. In the coming year, Ozone will become richer in terms of features and build on the good work done in the past year. This new avatar of the intranet will soon become your Company''s internal wiki.

The CEO of your Company continued to communicate directly with the employees through his blog and Town Hall Meetings. The Town Hall Meetings now cover all the locations and get active participation from thousands of employees. ''Global Voice'', the flagship internal digital quarterly newsletter, keeps employees informed on the latest happenings in your Company.

Continuing the trend of the previous years, HGS was recognized for its excellence during FY''13 too. It featured in the NASSCOM list of Top 10 BPO exporters in India and among the Top 10 in Dataquest India''s list of Top BPO Companies. HGS featured among the Top 50 Business Process Management Service Providers in the annual International Association of Outsourcing Professionals'' (IAOP) Global Outsourcing 100 List of 2012. It jumped 28 ranks within a span of just one year, reaffirming the belief of the stakeholders that your Company is making the right moves towards the top of the field.

Your Company''s financial results, and updates on important developments and achievements are available on its website www.teamhgs.com.

Awards & Recognition

Your Company was conferred with awards and recognitions during the year, such as:

- HGS Canada Inc. was recognized as top 3rd party vendor by a Canadian telecom client across all its outsourced lines of business; and

- Charlottetown, Canada center earned recognition as the #1 site for warranty product sales across North America by a technology client in FY''13.

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

The Chief Executive Officer and Chief Financial Officer Certification as required under Clause 49 of the Listing Agreements and Chief Executive Officer declaration about the Code of Conduct are furnished as Annexure ''A'' and ''A-1'' to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The prescribed particulars as required under Section 217 (1)(e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are furnished as Annexure ''B'' to this Report.

Corporate Governance

As required under Clause 49 of the Listing Agreements, a detailed report on Corporate Governance forms Annexure ''C'' to this Report.

The Statutory Auditors of the Company have examined the Company''s compliance and have certified the same as required under the Listing Agreements. The certificate is reproduced as Annexure ''D'' to this Report.

Management Discussion and Analysis Report

Further, a separate Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, company performance, SWOT analysis, corporate process, business outlook among others is annexed as Annexure ''E'' to this Report.

ESOP Disclosure

The disclosures required to be made under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexures ''F1'' and ''F2'' to this Report.

Fixed Deposits

Your Company has not accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Directors

Ms. Shanu S.P. Hinduja has been appointed as Director and designated as Co-Chairperson of the Company w.e.f. March 4, 2013, in the casual vacancy caused by resignation of Mr. Dheeraj G. Hinduja. The Board place on record their appreciation of the invaluable contribution provided by Mr. Dheeraj G. Hinduja during his tenure as a Director.

Mr. Rangan Mohan and Mr. Anil Harish, Directors of your Company, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors, based on the information and documents made available to them, confirm that:

i) in the preparation of Annual Accounts for the year ending March 31, 2013, the applicable accounting standards have been followed. There are no material departures in the adoption and application of the accounting standards;

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 your Company at the end of the financial year and of the profits of your Company for that period;

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

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

Auditors

M/s. Price Waterhouse, Chartered Accountants, the Statutory Auditors of your Company, retire at the conclusion of the forthcoming Annual General Meeting of your Company and being eligible, offer themselves for re-appointment. The Board recommends the re-appointment of the Auditors.

Exemption from attaching Accounts and other Documents of Subsidiaries

The Ministry of Corporate Affairs (MCA) vide Circular dated February 8, 2011 has granted exemption under Section 212(8) of the Companies Act, 1956 from annexing Balance Sheet and other documents of subsidiaries with the Annual Report of the holding company provided certain conditions are fulfilled. The Board of Directors of your Company at its meeting held on May 28, 2013 (in view of fulfilment of all conditions prescribed by the Ministry of Corporate Affairs under Circular No. 5 / 12 /2007 - CL - III dated February 8, 2011) resolved for not attaching the Balance Sheet and other documents of the subsidiaries, with the Balance Sheet of the holding Company, i.e. Hinduja Global Solutions Limited, for FY''13.

Accordingly, the Annual accounts and other documents for the year ended March 31, 2013 of the subsidiary companies are not attached to the Annual Report. The accounts of the subsidiaries will be made available for inspection by any member of the Company at its Registered Office and also at the Registered Office of the concerned subsidiary. The accounts of the subsidiary companies and detailed information will be made available to the members upon receipt of request from them. The summary of key financials of the Company''s subsidiaries, as provided in the circular dated 8th February, 2011 is included in this Annual report. The accounts of individual subsidiary companies would be available on Company''s website www.teamhgs.com.

Employees'' Particulars

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, form part of this Directors'' Report. However, in accordance with the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Report is being sent to all the shareholders of the Company excluding the aforesaid information. Members interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company.

Acknowledgements

Your Board takes this opportunity to thank the customers, vendors, business partners, shareholders and bankers for the faith reposed in the Company and also thank the Government of India, various regulatory authorities and agencies, State Governments, Government of various countries for their support and looks forward to their continued encouragement. Your Directors place on record their sincere appreciation of the contribution of the Company''s most important asset, viz. the employees, who through their competence, hard work and co-operation have enabled the Company to achieve consistent growth.

For and on behalf of the Board of Directors

Place : Mumbai Ramkrishan P. Hinduja

Date : May 28, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present their Report on the business and operations of your Company for the financial year ended March 31, 2012.

Financial Results

(R in Crore except share data)

For the year ended March 31 Standalone Consolidated

2012 2011 2012 2011

Operating Income 631.35 544.71 1,554.31 1,073.07

Other Income 14.17 8.20 28.82 29.12

Total Income 645.52 552.91 1,583.13 1,102.19

Operating Expenses 526.15 420.48 1,370.20 917.53

Depreciation and Amortisation 36.14 38.04 61.29 45.22

Financial Expenses 11.02 5.96 29.23 9.32

Profit Before Tax 72.21 88.43 122.41 130.12

Provision for tax (incl. deferred tax) 9.59 13.24 16.34 22.80

Profit After Tax 62.62 75.19 106.07 107.32

Add: Balance brought forward from Previous year 110.96 90.98 247.67 195.56

Profit Available for Appropriation 173.58 166.17 353.74 302.88

Dividend

- Final (Proposed) 41.18 41.18 41.18 41.18

- Dividend Tax 6.53 6.52 6.68 6.52

Transferred to General Reserve 6.26 7.51 6.91 7.51

Balance Carried Forward 119.61 110.96 298.97 247.67 Earnings per share (R)

- Basic 30.41 36.52 51.52 52.12

- Diluted 30.41 36.50 51.52 52.09

Review of Financials

On a Consolidated basis (covering global operations in India, USA, Canada, Europe, Philippines and Mauritius), Total Income for FY '12 was R 1,583.13 crore, higher by 43.6% compared to the Total Income of R 1,102.19 crore in FY '11. EBITDA (Earnings before Interest, Taxes, Depreciation & Amortization) was R 184.11 crore and it grew by 18.4% over the EBITDA of R 155.53 crore in FY '11.

On a Standalone basis (for India and overseas branch offices), Total Income was R 645.52 crore in FY '12, an increase of 16.7% over the Total Income of R 552.91 crore in FY '11. EBITDA fell by 15.3% from R 124.23 crore in FY '11 to R 105.20 crore in FY '12. PAT fell by 16.7% from R 75.19 crore in FY '11 to R 62.62 crore in FY '12.

Key highlights for the year were:

- Growth of 45% in consolidated revenues;

- Acquisition of Canada based On-Line Support Inc. ("OLS, Inc"), which services marquee customers across verticals such as media, telecom, technology and BFS from 10 centres in Canada;

- Acquisition of Mumbai-based HGS Business Services Pvt. Ltd. ("HGS Business Services"), (formerly known as HCCA Business Services Pvt. Ltd.), which is a prominent player in the Human Resource Outsourcing (HRO) domain;

- Operations started in Netherlands, Germany, Italy and France;

- Fourth delivery centre in Philippines commissioned in Manila;

- Achieved Level 4 certification of eSCM SP V 2.01 from UL-DQS;

- Employee headcount at 23,899 (Previous Year-end 19,442);

- Addition of 401 new customers during the year including the addition of 5 customers from OLS, Inc., 357 customers from HGS Business Services and 39 customers on an organic basis. As of March 31, 2012, your Company has 485 active customers.

- Addition of 18 centres during the year including the addition of 10 centres from OLS, Inc., 4 centres from HGS Business Services and 4 centres on an organic basis. As of March 31, 2012, your Company has 50 centres across its global operations.

- As of March 31, 2012, your Company had a Net Worth of R 1,148.26 crore translating into a Book Value of R 557.70 per share.

Dividend

Your Directors have recommended a dividend of R 20/- per share (200% on the face value of R10/-) for the current year.

The dividend payout will absorb R 47.71 crore, including dividend tax. The dividend payout ratio for the year

(including dividend distribution tax) will be 76.2% of the standalone profits and 45% of the consolidated profits.

Business Review

Global ITES Industry Overview

While FY '12 has clearly been a challenging year, some geographic regions and businesses were able to circumvent the trend. Global GDP grew 2.7% on the whole in the calendar year 2011 which indicates that the contraction in certain developed economies was compensated by expansion in others as well as continued growth in emerging markets.

With the financial crisis continually affecting two of the biggest outsourcing client markets - US & Europe, there is a concern that the growth of the industry will be affected. In general, economic conditions such as these represent opportunities to increase services outsourcing contracts to better implement cost-cutting initiatives. However, the misplaced concern that outsourcing takes away crucial jobs from the domestic population continues to be a point of contention, especially on the sociopolitical front.

There is a visible shift towards localisation with these countries encouraging service providers to set up delivery centres within their jurisdictions thereby opening themselves to both investment from global service providers and local employment. However, it is believed that outsourcing activity will continue to increase but contract size may diminish given budget cuts.

According to the Everest Group, the global business process outsourcing (BPO) industry could be worth $220-$280 billion this year, with growth in both voice- based and non-voice based services. There is a clear preference towards more complex skills and services with a greater proportion of research and analytics based operations.

Some of the key trends emerging in 2012

1. Changing Delivery Models:

With reduced budgets and increased cost consciousness, enterprises are demanding more from their service providers. There is a noticeable shift away from cost and labour arbitrage towards high value transformational programs. Service providers and clients alike are focused on further efficiencies in the delivery of services, with a greater impetus on process innovation. There is an increasing prevalence of Business Process as a Service (BPaaS) models. Only those vendors that remain relevant through delivery evolution and manage to differentiate their offerings will continue to see growth.

2. Focus on Verticalisation:

An emerging trend is the growth of vertical-specific BPO processes or Vertical BPO, characterized by the delivery of an array of processes rooted on a deep understanding of a specific vertical industry. There has been a rise in the demand for domain-specific processes, especially across the BFS sector. It is imperative for service providers to understand how industry verticals and customer segments adjust to the changing technology landscape. Service Providers need to devise specific strategies, develop products and mobilise people to meet the evolving needs of various verticals.

3. Evolving Mediums for market engagement:

Disruptive technologies especially social media, mobility, big data/analytics and cloud computing are impacting service providers themselves who are applying these technologies to their internal operations - from IT to Human Resources to Finance, and dramatically changing how they do business, in addition to developing solutions around the same for their customers. It is expected that service providers will re-invent the use of social media as a pragmatic, interactive link to the end-users and a significant value add to service buyers.

4. Increasing importance of Risk:

While risk has always been one of components considered by customers in vendor selection, it has often been overshadowed by more primary concerns such as costs and availability of skilled labor. Global Service Provider offerings have always incorporated comprehensive solutions addressing risk management, data security, business continuity and disaster management. However, recent events like natural disasters in Indonesia, floods in Bangkok have dimmed the attractiveness of emerging delivery destinations. Customers now assess the political, social, and natural risk of a location and how they influence business operations.

5. Greater focus on the midmarket opportunity:

The midmarket segment has been traditionally underserved for a variety of reasons, including lack of knowledge of outsourcing, unattractive deal sizes for the premium vendors, inability of traditional delivery models to customize offerings and a lower degree of competitiveness and industry maturity. The increasing propensity of pay-as-you- use models and the rising outsourcing maturity of midmarket companies are catalyzing the opportunity in addressing this segment. Vendors are increasingly looking beyond Fortune lists.

Indian ITES Industry Overview

It has been a landmark year for the Indian IT and ITES industry which is rapidly approaching the landmark of US$ 100 billion in aggregate revenues (Source: Nasscom Strategic Review 2012). While growth rates in the primary geographic regions and services lines are moderating as the industry matures, several new avenues have emerged. These include a budding domestic market, hitherto underserved geographies and emerging service lines.

Within the overall pie, it is estimated that export revenues from ITES alone will touch US$ 16 billion in FY '12 growing 12% over FY '11 (Source: Nasscom Strategic Review 2012). While the USA remains the largest market by value for Indian ITES providers, markets such as Europe, Japan and Australia are gaining ground as lucrative markets with abundant scope for both traditional service lines as well as emerging areas. The APAC region also exhibited fairly healthy growth as customers in that region aim to compete on a more even scale in the global market.

The Indian domestic market provides an exciting opportunity for ITES providers to tap. It is estimated that the domestic IT/ITES market will touch R 918 billion in FY '12. Of this, the BPO Services market alone is expected to be R 149 billion representing growth of 17% over FY '11 (Source: Nasscom Strategic Review 2012). This provides an attractive market with adequate critical mass and scale for leading global vendors. Growth is being driven by demand from voice-based (incl. local language) services and increasing adoption by both traditional and emerging verticals, including the government.

India will continue to remain a leading provider of services due to:

- Increasing maturity of service offerings: The

profile of the industry and service providers has undergone a significant evolution from delivering basic labour and cost arbitrage to providing a high value proposition. The track record, skill sets, market understanding, innovation focus and domain expertise of Indian service providers remain unmatched.

- Sustained focus on cost efficiency: The lessons of the 2008 financial crisis have resounded well and customers continue to remain focussed on costs. India emerged as and remains a cost-competitive provider of IT-BPO services. The ability to leverage innovation to further enhance cost efficiencies through process and productivity improvements, effective cost management, widening of the employee pyramid, innovative delivery models and a shift to Tier II/III cities has ensured that India retains its pre-eminent position in the Industry.

- Unparalleled human capital: India will churn out an estimated 4.4 million graduates in FY '12 compared to 2.0 million in China and 0.5 million in the Philippines. It retains its position as the largest source of employable talent in the world. Service providers are effectively utilising India's talent pool by designing large scale talent re-engineering initiatives and employee engagement activities. This is enabling the industry to provide both end-to-end and high-end value-added services across sectors.

- Increasing geographic presence: While countries such as China, Philippines, Poland, Brazil, Mexico are clamouring to increase their relevance in the global sourcing market, Indian service providers are moving to establish bases in these countries to cater to client preference for diversified and near-shore delivery models. As the talent pools in these markets improve their capabilities, they are being tapped by Indian service providers in greater numbers.

- Unique focus on customer needs: Leading industry players have been able to deliver continuous value to customers. This unique customer-centric approach is best demonstrated by re-engineering their business/ organisational structures, engage in strategic advisory relationships, focus on delivery innovation and manage high-end complex engagements.

- Scalable and secure environment: The sheer size of the Indian market provides a high level of stability in terms of managing concentricity risk as compared to other sourcing markets. With a largely unblemished track record, India is able to stand out among service providers on parameters like value for money, quality, depth and stability of business and legal systems, propensity of natural disasters and susceptibility to economic and political shocks to ensure business continuity.

Performance of Hinduja Global Solutions Ltd.

Your Company delivered exemplary growth and a steady financial performance in the face of varied operating conditions. Total Consolidated Operating Revenue for FY '12 was higher by 45% at R 1,554.31 crore. Revenue growth was both organic and inorganic in nature. Organic growth of 20% was realised by focused delivery, growing existing client accounts and new account wins. On the inorganic front, the contribution from OLS, Inc. and HGS Business Services, which were acquired during the year were instrumental towards achieving robust growth rates.

There has been significant variability in operating conditions in FY '12 with a sluggish pace of recovery in USA, intensification of the Eurozone Debt crisis, political unrest in the Middle East, fallout of natural disasters in Japan and Indonesia and slowing growth in India and China. This has led to volatility in foreign exchange rates, a variety of interest rate regimes in different markets, changing commodity prices and persistent inflation in high growth markets.

These challenges intensified customer needs for operating efficiencies and resulted in increased demand for your Company's services. To further its cause, your Company has also consistently been ranked among the top vendors on several customer accounts. The innovative right shore delivery model offering customers the option of an optimal mix of onshore, near-shore and offshore delivery has also been a factor in greater customer engagement. Your Company's track record in implementing successful transformational programs in established geographies provided customers in recently entered geographies with the confidence to embark on similar programmes.

This year also saw further growth in key markets. In the US, there has been growth in onshore healthcare and telecom accounts. In Europe, Careline has reported new wins in public sector accounts and a successful pan-European rollout for one of its marquee customers. In the Philippines, a fourth centre was commissioned and Philippines has sufficient capacity in the coming year for dealing with growing demand. The first UK offshore contract with Manila delivery centre went live during the year. In India, increased volumes from the telecom segment due to new client wins, tariff hikes and rollout of value added services like 3G and Mobile Number Portability (MNP) have aided growth. Initiatives catering to the BFS segment and emerging verticals have also provided abundant traction.

To add to the impressive organic growth, your Company also successfully undertook two acquisitions during the year. The first was the acquisition of a 100% stake in Canada based On-Line Support Inc., which is a leading customer relationship management company with marquee clients in verticals such as telecom, technology, BFS and media. OLS, Inc. has multi-lingual delivery capabilities and has team size of over 2,000 associates at over 10 centres in Canada. OLS, Inc. offers HGS a gateway into the lucrative and stable Canadian market as also an alternative near-shore option for the US market. When combined with its existing US operations, this acquisition makes your Company a formidable player in the North American market.

The other acquisition during the year was the purchase of a 100% stake in HGS Business Services Pvt. Ltd. (formerly known as HCCA Business Services Pvt. Ltd.) This Mumbai based company is a prominent player in the Human Resource Outsourcing (HRO) domain. The transaction also included the Payroll Processing activities in UAE and other Gulf Council countries. This opened up a new horizontal for your Company and also provided it with a presence in the Middle East, a hitherto unpenetrated geography. With over 350 clients serviced by over 600 employees, HGS Business Services has been a valuable addition to your Company's portfolio.

Marking another global footprint, an entity has been set up for onshore and near-shore business in Jamaica and the first delivery centre is expected to go live in the first half of FY '13.

This year also saw increased cost pressures due to an increased employee base, higher sales and marketing investments, setting up of new centres and cost inflation. However, your Company was able to mitigate some of these challenges. Further, some of these investments, especially the set-up costs of centres in Siliguri, Manila, and acquisition of three properties in Peoria will provide benefits in coming years. Your Company is well placed to grow with steady progress in strategic plans, renewal of multi-year contracts, rollouts of planned initiatives and significant potential to cross sell and up sell to clients across its operations in multiple countries.

Subsidiaries

HGS International (formerly known as Pacific Horizon Limited), a wholly owned subsidiary of your Company incorporated under the laws of Mauritius. The principle activity of the company consists of investments. HGS International owns 100% of the share capital of Hinduja Global Solutions Inc., USA, C-Cubed N.V., Curacao, Hinduja Global Solutions Europe Ltd. (formerly known as HTMT Europe Ltd.), UK and HGS

St. Lucia Ltd., which was formed during the year and has in turn incorporated Team HGS Ltd., Jamaica.

During the year under review, Total Income was USD 5,566,011 as against USD 5,514,868 in the previous year.

Hinduja Global Solutions Inc., USA (HGS, Inc.), a wholly owned subsidiary of HGS International, Mauritius, specialising in marketing and providing both voice and non-voice related Customer Contact and Business Process Outsourcing services to its clientele.

For FY '12, HGS, Inc., reported consolidated revenues of USD 231,012,250. HGS, Inc., added two subsidiaries during the year viz. HGS Properties LLC (for acquisition of three properties in Peoria, Illinois) and HGS Canada Holdings LLC (for acquisition of Canada-based OLS, Inc.), in addition to its earlier two subsidiaries, one being in North America namely, HGS (USA), LLC and one in Europe namely, Hinduja TMT France.

HGS (USA), LLC (formerly known as Affina LLC), which was acquired in November 2006 by HGS, Inc., USA, operates in five cities in USA and Canada. It partners with Fortune 1000 companies and government agencies to provide comprehensive Customer Relationship Management programs. For FY '12, HGS (USA), LLC recorded total revenues of USD 85,758,030 compared to FY '11 revenues of USD 85,139,154.

On-Line Support Inc. (OLS, Inc.) which was acquired in August 2011 by HGS, Inc., USA is a leading Canadian contact centre provider servicing marquee customers across verticals such as media, telecom, technology and BFS. OLS, Inc. offers technical support, inbound and outbound sales, customer care and customer retention in English and French languages and has a team size of over 2,000 associates at 10 centres in Canada. For FY '12, OLS, Inc. recorded total revenues of CAD 48,573,797.

Hinduja Global Solutions Europe Ltd. (formerly known as HTMT Europe Ltd.) is a UK based subsidiary which focuses on consulting services for BPO and call centre services and markets off shoring services to UK based clients. It owns 100% stake in U.K. based Careline Services Ltd.

Careline Services Ltd. is a leading contact centre company with over 800 highly trained employees in London and Scotland. Established in 1977, it offers a range of services for inbound and outbound interactions to over 20 marquee customers across verticals such as Government, FMCG, Financial Services, Automobiles and Retail. In FY '12, Careline, as part of its pan European rollout for a key customer, established branches in Hamburg (Germany) and Rotterdam (Holland). Careline, through its affiliates Hinduja TMT France and HGS Italy, SARL, has also set up centres in Paris (France) and Rome (Italy). For FY '12, Careline reported revenues of GBP 24,982,311.

Hinduja Outsourcing Solutions India Pvt. Ltd. (HOSIPL) Your Company holds 100% stake in HOSIPL which has received the necessary permissions to set up a unit in the Special Economic Zone at Global Village, Bangalore. The unit is housed over an area of approximately 43,000 sq. ft. and has a capacity of approximately 1,000 seats. FY '12 was the first full year of operations for HOSIPL and it recorded revenues of R 28.47 crore.

HGS Business Services Pvt. Ltd. (formerly known as HCCA Business Services Pvt. Ltd.), which was acquired in August 2011, is a prominent player in Human Resource Outsourcing (HRO) domain. The acquisition also included the Payroll Processing activities of 3i Infotech in UAE and other Gulf Council countries. HGS Business Services offers payroll, statutory compliance and employee life cycle support to marquee customers in Banking, Financial Services, Insurance and other industry verticals. It has over 350 clients and over 600 employees and for the year ended 31st March, 2012, it reported revenues of R 22.72 crore.

Addressing Social Concerns

In the past year, your Company has proved yet again, that it is firmly committed to community welfare initiatives. It supported and partnered with organizations and NGOs, championing various causes and reaching out to the needy and disadvantaged in the society.

During the year, your Company supported orphanages and Destitute homes at Mysore, Chennai and Durgapur and organised blood donation camps. Your Company has also partnered with "Sadhana", an NGO dedicated to the welfare of persons who are mentally challenged.

Your Company contributed to the "Concern India Foundation", by way of participating in the World 10k Run. The contributed sum will aid in supporting the Bridge School run by the foundation to help in mainstreaming children of the migrant workers who live in the slums on the outskirts of Bangalore City, who otherwise end up as rag pickers or indulge in anti social activities.

In Philippines, your Company has partnered with Dr. Jose Fabella Memorial Hospital and Quirino Memorial Medical Center for charitable purposes. Besides, the Philippines branch on a regular basis supports the children and public during the period of national disasters.

In the US, your Company each year supports two national charities and last year, it supported St. Jude Children's Research Hospital and the American Cancer Society. The Peoria centre supported the Children's Hospital of Illinois and the Peoria Humane Society. The Waterloo centre supports the Cedar Bend Humane Society and Cedar Valley Hospice. Your Montreal centre takes great pride in raising funds for the Cure Foundation.

On the whole, your Company actively meets its duties to all stakeholders through positive and active Corporate Social Responsibility programme.

Communication and Public Relations

Your Company recognizes that meaningful, transparent, timely and accurate communication is integral in enhancing brand value and strengthening stakeholder support. It appreciates the importance of ensuring an appropriate balance in meeting the diverse needs and expectations of all its stakeholders and building lasting relationships with them. Your Company has tried with good success to keep all the stakeholders well informed. This includes its employees, shareholders, government, clients, suppliers, rating agencies, local communities and the media.

During the year, your Company successfully re-branded itself with a new corporate identity. To launch the new logo and position itself as a thought leader, your Company associated with Nasscom BPO Summit 2011 as a 'Knowledge Partner'. With keynote addresses from the leaders of your Company stimulating significant media and analyst interest, the summit served as a good branding platform.

Your Company has now adopted a uniform brand identity, with all the subsidiaries being brought under the umbrella brand of 'HGS'. It has used the print as well as the digital and electronic media to good effect in raising the brand awareness globally.

Your Company got positive media coverage on all its announcements throughout the year. The communication about the two acquisitions by your Company during the year was well received.

The CEO communicates with the employees directly and regularly through his blog on the intranet. Town Hall meeting, one every quarter, has become an effective tool for real-time interaction of the CEO with the employees across the globe. 'Global Voice', the flagship internal digital newsletter, keeps all the employees abreast with the most recent happenings within your Company.

Continuing the trend of the previous year, your Company was recognised for its excellence during FY '12. It featured in the Nasscom list of Top 10 BPO exporters in India. It moved five notches up to thirteenth position in the Dataquest India's list of Top BPO Companies.

Your Company's financial results, and updates on important developments and achievements are available on its new website www.teamhgs.com

Rebranding and Consolidation of Global Operations

With diverse operations, entities and employees, your Company has embarked on a project to provide a common global identity to all its operations across the globe. In FY '11, your Company rebranded its operations as HGS and introduced a new, reinvigorated logo.

The colour combination of the new logo with a contemporary typography and the rainbow hues on the 'Energy Rings' symbolise the renewed strength and vigour of HGS and emphasize your Company's flexibility to changes as it makes inroads into new continents. The colour gradient also represents a work environment that is an assimilation of varied regions, religions, cultures and traditions.

The brand name has higher recall value and retains your Company's heritage and pride while being versatile, attractive and designed for an increasingly international audience. It also provides an umbrella brand to your Company's culturally and geographically diverse global operations.

During FY '12, your Company has taken further steps to rebrand its global operations and to consolidate recently acquired entities into one single identity. Accordingly, the names of various subsidiaries have been changed to implement the concept of "ONE HGS".

New Name Old Name Effective Date

Hinduja Global HTMT Europe Ltd March 28, 2012 Solutions Europe Ltd.

HGS (USA), LLC Affina LLC March 29, 2012

HGS International, Pacific Horizon Limited, April 16, 2012 Mauritius Mauritius

HGS Business HCCA Business Se- May 11, 2012 Services Pvt. Ltd. vices Pvt. Ltd.

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

The Chief Executive Officer and Chief Financial Officer Certification as required under Clause 49 of the Listing Agreements and Chief Executive Officer declaration about code of conduct are furnished in Annexure A and A-1 to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The prescribed particulars as required under Section 217 (1)(e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo are furnished in Annexure - B to this Report.

Corporate Governance

As required under Clause 49 of the Listing Agreements, a detailed report on Corporate Governance forms Annexure-C to this Report.

The Statutory Auditors of the Company have examined the Company's compliance and have certified the same as required under the Listing Agreements. The certificate is reproduced as Annexure-D to this Report.

Management Discussion and Analysis Report

Further, a separate Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, company performance, SWOT analysis, corporate process, business outlook among others is annexed as Annexure - E to this Report.

ESOP Disclosure

The disclosures required to be made under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexures - F1 and F2 to this Report.

Fixed Deposits

Your Company has not accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Directors

Mr. Dheeraj G. Hinduja and Mr. Rajendra P. Chitale, Directors of your Company, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors, based on the information and documents made available to them, confirm that:

i) in the preparation of Annual Accounts for the year ending 31st March, 2012, the applicable accounting standards have been followed. There are no material departures in the adoption and application of the accounting standards;

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

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

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

Auditors

M/s Price Waterhouse, Chartered Accountants, the Statutory Auditors of your Company, retire at the conclusion of the forthcoming Annual General Meeting of your Company and being eligible, offer themselves for re-appointment. The Board recommends the re-appointment of the Auditors.

Exemption from attaching Accounts and other Documents of Subsidiaries

The Ministry of Corporate Affairs (MCA) vide Circular dated 8th February, 2011 has granted exemption under Section 212(8) of the Companies Act, 1956 from annexing Balance Sheet and other documents of subsidiaries with the Annual Report of the holding company provided certain conditions are fulfilled. The Board of Directors of your Company at its meeting held on 9th February, 2012 (in view of fulfilment of all conditions prescribed by the Ministry of Corporate Affairs under Circular No. 5 / 12 /2007 - CL - III dated 8th February, 2011) resolved for not attaching the Balance Sheet and other documents of the subsidiaries, with the Balance Sheet of the Holding Company i.e., Hinduja Global Solutions Limited, for FY '12.

Accordingly, the Annual accounts and other documents for the year ended March 31, 2012 of the subsidiary companies are not attached to the Annual Report. The accounts of the subsidiaries will be made available for inspection by any member of the Company at its Registered Office and also at the Registered Office of the concerned subsidiary. The accounts of the subsidiary companies and detailed information will be made available to the members upon receipt of request from them. The summary of key financials of the Company's subsidiaries, as provided in the Circular dated 8th February, 2011 is included in this Annual Report. The accounts of individual subsidiary companies would be available on Company's website www.teamhgs.com.

Employees' Particulars

Particulars of employees as required under Section 217(2A) of Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Directors' Report. However, in accordance with the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 this Report is being sent to all the shareholders of the Company excluding the aforesaid information. Members interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company.

Acknowledgements

Your Board takes this opportunity to thank the customers, vendors, business partners, shareholders and bankers for the faith reposed in the Company and also thank the Government of India, various regulatory authorities and agencies, State Governments, Government of various countries for their support and looks forward to their continued encouragement. Your Directors place on record their sincere appreciation of the contribution of the Company's most important asset, viz. the employees, who through their competence, hard work and co-operation have enabled the Company to achieve consistent growth.

For and on behalf of the Board of Directors

Ramkrishan P. Hinduja

Chairman

Place: Mumbai

Date : May 23, 2012


Mar 31, 2011

The Directors are pleased to present their Report on the business and operations of your Company for the year ended March 31, 2011.

Financial Results (Rs. in Crore except share data)

For the year ended 31st March Standalone Consolidated

2011 2010 2011 2010

Operating Income 544.88 486.81 1,073.24 892.34

Other Income 8.03 2.71 28.95 31.13

Total Income 552.91 489.52 1,102.19 923.47

Operating Expenses 420.85 352.32 917.90 737.85

Depreciation 38.04 33.60 45.22 38.56

Financial Expenses 5.59 7.65 8.95 9.93

Profit before Exceptional Items and Tax 88.43 95.95 130.12 137.13

Exceptional Items -- (5.76) -- (5.76)

Profit before Tax 88.43 101.71 130.12 142.89

Provision for tax (incl. deferred tax) 13.24 6.57 22.80 12.81

Profit after Tax 75.19 95.14 107.32 130.08

Add: Share of Profit in Associates -- -- -- 0.02

Add: Balance brought forward from the Previous Year 90.98 53.53 195.56 123.15

Profit Available for Appropriation 166.17 148.67 302.88 253.25

Dividend

-Final (Proposed) 41.18 41.18 41.18 41.18

-Dividend Tax 6.52 7.00 6.52 7.00

Transferred to General Reserve 7.51 9.51 7.51 9.51

Balance Carried Forward 110.96 90.98 247.67 195.56

Earnings per share (Rs.)

-Basic 36.52 46.32 52.12 63.35

-Diluted 36.50 46.16 52.09 63.12

Review of Financials

On a standalone basis, Total Income for the year ended 31st March 2011 (FY 2011) was Rs. 552.91 crore, an increase of 12.9% over the Total Income of Rs. 489.52 crore for the year ended 31st March 2010 (FY 2010). Profit Before Tax (PBT) (pre-exceptional items) was Rs. 88.43 crore, a decrease of 7.8% from Rs. 95.95 crore in the previous Financial Year. The PBT Margin (pre-exceptional items) fell by 40 basis points to 15.9% in FY 2011 from 19.6% in FY 2010. Profit after Tax (PAT) for FY 2011 was Rs. 75.19 crore as against Rs. 95.14 crore in FY 2010. PAT Margin fell from 19.4% in FY 2010 to 13.6% in FY 2011.

On a Consolidated basis, Total Income was Rs. 1,102.19 crore in FY 2011 as against Rs. 923.47 crore in FY 2010, an increase of 19.4%. PBT (pre-exceptional items) was Rs. 130.12 crore in FY 2011 as compared to Rs. 137.13 crore in FY 2010, a decrease of 5.1%. PBT Margin (pre-exceptional items) was at 11.8% as compared to 14.8% in FY 2010. PAT was Rs. 107.32 crore in FY 2011 as against Rs. 130.08 crore in FY 2010. PAT Margin fell from 14.1% in FY 2010 to 9.7% in FY 2011.

The highlights of the year were:

Growth of 20.3% in Consolidated Revenues;

Employee headcount at 19,442 associates - a growth of 24.5% (Previous Year - 15,615);

Addition of 34 new clients - an increase of 47.2%, bringing the total to 106 clients at the end of the year;

Acquisition of Careline Services Limited, UK;

Addition of 7 new centres of which 3 centres are in India, 3 in the UK through Careline acquisition and 1 in the Philippines (Manila);

Setting up SEZ unit by Hinduja Outsourcing Solutions India Private Limited, a wholly owned subsidiary of the Company;

Consolidated PAT for FY 2011 - Rs. 107.32 crore translating into a Diluted EPS of Rs. 52.09 per share;

Cash & Cash equivalents as on 31st March 2011 - Rs. 618.92 crore translating to Cash & Cash Equivalents of Rs. 300 per share; and

Net Worth as on 31st March 2011 - Rs. 998.83 crore translating to a Book Value of Rs. 485 per share.

Dividend

Your Directors have recommended a dividend of Rs. 20/- per share (200% on the face value of Rs. 10/-) for the current year.

The dividend payout will absorb Rs. 47.70 crore, including dividend tax. The dividend payout ratio for the year (including dividend distribution tax), would be 63.4% of the standalone profits and 44.4% of the consolidated profits.

Business Review

BPO Industry Overview

Your Company focuses on ITeS BPO services within the broader IT/ITeS industry.

While the domestic market continued to demonstrate a strong performance with sustained growth in GDP, the key customer markets of North America and Europe displayed marginally improved signals of economic performance. This was evident in the resurgence in demand for business services in both traditional as well as emerging markets. While this was helped in part by pent-up demand from the corporate sector and the return of discretionary spending, the improved value proposition from service providers was a key catalyst in industry growth. FY 2011 has been a year in which the operating environment became more dynamic resulting in a heightened focus on innovation for suppliers. Apart from engaging current customers, service providers needed to attract and encourage fi rst time buyers.

This has brought about a shift in focus from rudimentary outsourcing models which deliver cost or talent leverage to higher value added services, innovation and transformation; the latter results in greater strategic benefits to clients.

The emergence of the newer, value added focus is evident in the manner in which the sector has begun to actively diversify beyond core offerings and markets through new business and pricing models, specialize in providing end-to-end service offerings with deeper penetration across verticals, transform process delivery through re-engineering and drive inclusive growth in India by developing targeted solutions for the domestic Indian market. All these factors helped India grow faster than its competitors, accounting for almost 90% of incremental growth in the global sourcing market.

Global Sourcing Trends

On the back of resurgence in global business spending, the IT services spend increased by 1.4% in 2010. Of this, IT outsourcing grew by 2.4%. An ROI-led focus resulted in BPO sector growing by 4%, while software products rose by 3.7%. Within IT outsourcing, global sourcing grew by 10.4% in 2010 validating Industrys integral position in service delivery chain.

The year saw wide ranging contract restructuring exercises and deal size reductions as buyers came to terms with new business models and budgetary constraints. With customers demanding more immediate value from IT and forward-looking strategies that support growth and innovation, service providers are adopting newer value focused methods incorporating operational excellence through ongoing innovation, diversifi cation, renewed partnerships and alliances and recalibrated business models.

The BPO services market in Asia/Pacifi c (excluding Japan) reached USD 8.6 billion in 2010, a 22.85% increase from 2009 revenue of USD 7 billion. By vertical, Banking, Financial Services and Insurance (BFSI), Communications, Government and Travel & Transportation were the largest consumers of BPO services in the region.

Indian IT - BPO performance

The sector is estimated to aggregate revenues of USD 88.1 billion in FY 2011, with the IT software and services sector (excluding hardware) accounting for USD 76.1 billion of revenues.

Export Market:

Export Revenues: Export revenues of the IT software and services sector (excluding hardware) are estimated to gross USD 59 billion in FY 2011 accounting for a 2 million workforce. The BPO segment of this sector grew by 14 per cent to reach USD 14.1 billion.

Geographic focus: The year was characterized by a consistent demand from the US, which increased its share to 61.5% to retain its status as the pre-eminent market. Emerging markets of Asia Pacifi c and Rest of the World also contributed signifi cantly to overall growth.

Vertical Markets: While the sectors vertical mix is well balanced across several mature and emerging sectors, the year was characterized by broad based demand across traditional segments such as Banking, Financial Services and Insurance (BFSI), as well as across emerging verticals of Retail, Healthcare, Media and Utilities.

Service Lines: The BPO segment grew by 14% to reach USD 14.1 billion and the year also witnessed the next phase of BPO sector evolution characterized by greater breadth and depth of services, process re-engineering, increased delivery of analytics and knowledge based services through platforms, strong domestic market focus and SME centric delivery models. Changing demand patterns led to a renewed focus on existing client relationships, mining for new clients and restructured operations to provide focused vertical solutions. Further, the Industry focused on achieving excellence in business process management and delivering strong transformational benefits creating revenue impact for clients.

Domestic Market:

Domestic Revenues: Domestic IT-ITeS revenues, excluding hardware, are expected to grow at almost 16% to reach USD 17.1 billion in FY 2011. IT services is one of the fastest growing segment in the Indian domestic market, rising by 16.8% to reach Rs. 501 billion, driven by localized strategies designed by service providers.

Movement to Non-Metro Cities: Service Providers are beginning to reap the benefits of transitioning business from Tier I to Tier III cities. These destinations result in signifi cant cost savings and are an attractive proposition for the price sensitive Indian market.

Drivers of Growth: The Domestic market in India offers among the highest growth rates globally and is characterized by emerging sophistication as well as heightened competition. The growth of the Domestic BPO segment is expected to be driven by demand from emerging verticals, new customer segments and value based transformational outsourcing platforms in addition to voice based services. Strong economic growth, rapid advancement in technology infrastructure, increasingly competitive Indian organizations, enhanced focus by the government and emergence of business models that help provide IT to new customer segments are the key drivers for increased technology adoption in India.

Government Initiatives: The Government sector has emerged as a key catalyst for increased IT adoption - through sector reforms that encourage IT acceptance. National e-Governance Programmes (NeGP) and the Unique Identifi cation Development Authority of India (UIDAI) program are landmark programs that highlight the increased adoption of large scale IT infrastructure and IT enabled services by Central, State and Local governments.

Indian IT-BPO Value Proposition & Outlook

The top three slots in AT Kearneys 2011 Global Services Location Index (GSLI) are occupied by three Asian countries: India, China and Malaysia; with India a half-point ahead of China and a full point in front of Malaysia as per the report.

India has retained its position as the leading global off-shoring destination with a 55% share of the global IT and ITeS market in 2010 and been able to increase its market share in spite of competitive challenges presented by emerging off-shoring destinations. This has been made possible due to the development of a set of factors unique to India, which help to multiply its value proposition manifold. While the cost advantage has narrowed over the years, India enjoys the worlds largest pool of employable talent, a service delivery infrastructure across multiple geographically dispersed locations within the country and a supportive policy regime.

Indian IT-ITeS companies are expected to diversify their business from core markets such as the US and UK and Indian IT companies have already begun to explore opportunities offered by other growing markets such as Mexico, Ireland, the Netherlands, the Philippines and Brazil. Though these fl ourishing markets are presently small, they are expected to drive the growth in future. In addition, by concentrating on these markets, businesses can diversify their risks across regions.

Software Technology Parks of India (STPI) units have played a vital role in fostering growth of the Indian IT-ITeS industry. The cessation of tax holiday after March 2011 could slow down future expansion proposals especially of smaller companies. However, larger companies are expected to alleviate the marginally higher taxes and narrowing returns through increased scale.

In future, the IT-ITeS industry is likely to go through a paradigm shift across fi ve parameters:

Markets - Growth will be driven by new markets - SMEs, Asia, public sector and government infl uenced entities will become a priority customer base.

Customers - Customers will demand transformative value propositions that go beyond cost leverage. As technology creates virtual supply chains, customers will require a seamless experience across time zones and geographies and there will be an increasing demand for innovation and end-to-end transformation.

Service Offerings - Offerings that are high-end and deeply embedded in customer value chains will emerge. Services and delivery will become location-agnostic leading to new opportunities such as design services in manufacturing and Remote Infrastructure Management (RIM). Solutions for the domestic market will be a key focus area.

Talent - Government pressures to create local jobs and the need for local knowledge will alter the employee mix - a higher proportion of non-Indians with multilingual and localized capabilities. There will be a much greater focus on ongoing development of specialized skills and capabilities.

Business models - Driven by a focus on expertise and intellectual property, offerings will shift from piecemeal, technology-centric applications to a range of integrated solutions and higher-end services, spanning new service lines (e.g., green IT). Additional productivity improvements and the development of Tier II and Tier III cities as future delivery centres is expected to help enhance Indias competitiveness.

Other aspects of the Indian ITeS industry, besides the growing breadth and depth of the service portfolio that refl ect its increasing maturity, include the increasing global delivery footprint and continuous emphasis on enhancing service delivery effi ciency and productivity.

Strong fundamentals, a robust enabling environment and enhanced value delivery capability are the hallmarks of the Indian IT-ITeS industry.

Performance of Hinduja Global Solutions Ltd.

Your Company continued its strong performance despite the uncertainty and volatility of the operating environment. The Total Consolidated Income for FY 2011 expanded by 19.4% to Rs. 1,102.19 crore from Rs. 923.47 crore in FY 2010.

This performance was creditable in view of the challenges faced by the Company during the year, viz.:

o Appreciation of the Indian Rupee and Philippine Peso against the U.S. dollar;

o Pricing pressure in the domestic market by domestic telecom clients due to heightened competition and a continued reduction in ARPUs;

o Rising infl ation leading to salary revisions and increase in employee attrition rates; and

o Phasing out of some of the Companys tax benefits.

This performance was due to initiatives undertaken by your Company to reduce cost of delivery in order to be more price competitive as it pursues more opportunities in the gradually improving operating environment.

During FY 2011, in India, your Company opened delivery centres in Tier III cities of Nagercoil and Guntur and set up a second center in Durgapur. The total seat capacity for your Company stands at 10,434 as of March 31, 2011. Your Company has initiated steps to open a delivery centre in Siliguri in northern West Bengal and is examining the possibility of opening more centers in other parts of India.

Your Company has set up its third Philippines delivery centre at Iloilo city with a capacity of 400 seats and spread across 25,000 sq. ft. Your Company was one of the fi rst Indian BPO companies to enter the Philippines and setting up of the third delivery centre is a testimony to the excellent performance of the Companys Philippines operations.

Apart from the Philippines operations, your Companys international operations, viz. Affi na, LLC (in the USA) and Careline Services Ltd (in the UK) (acquired in June 2010) have performed well and have contributed to the overall profitability of your Company. The integration of Careline has progressed well and your Company is already discussing expansion plans with some of Carelines key customers.

Your Company will continue to pursue growth primarily from these three areas: -

Increase business volumes from the existing customers;

Increase business by approaching new customers in the existing verticals and markets; and

Identify and enter new verticals and markets.

Your Company believes that this diversifi ed business model would enable it to maintain growth and profitability in the coming years.

In future, your Companys outsourcing projects are expected to be both operative and consultative in nature. It will need to work more closely with clients to better understand and evaluate strategies and business models and identify room for improvement. Despite an improved operating environment over the last couple of years, customers continue to be conservative with budgets and are keen to run leaner organizations in order to sustain the cost savings realized from measures taken in the aftermath of the global fi nancial crisis of 2008. In order to respond to the dynamic macro-environment, your Company will concentrate on reducing costs, increase the diversifi cation of its business across different markets / verticals, setup centres in best fit geographies and sustain best practices within the organization.

Subsidiaries

Pacifi c Horizon Limited is a wholly owned subsidiary of your Company incorporated under the laws of Mauritius. Its principle activity consists of investments in overseas subsidiaries and investment of surplus funds. Pacifi c Horizon Limited owns 100% of the share capital of Hinduja Global Solutions Inc., USA, C-Cubed NV, Netherlands and HTMT Europe Ltd., UK.

During the year under review, the total income was USD 5,714,604 as against USD 6,810,527 during the previous year and profit after tax was USD 4,100,355 as against USD 5,090,352 during the previous year.

Hinduja Global Solutions Inc., (Previously known as Source1 HTMT Inc.,) USA, a wholly owned subsidiary of Pacifi c Horizon Ltd., Mauritius, specializes in marketing and provides both voice and non-voice related Customer Contact and Business Process Outsourcing services to its clientele. The name of the Company was changed from Source1 HTMT Inc. to Hinduja Global Solutions Inc. with effect from 29th June, 2010.

For FY 2011 Hinduja Global Solutions Inc., reported consolidated revenues of USD 169,259,605 and Net Income of USD 2,056,094.

Affi na LLC, (and its subsidiaries RMT LLC and Affi na Company) "Affi na" was acquired in November 2006 by Hinduja Global Solutions lnc., USA. Affi na operates in fi ve cities in USA and Canada. Affi na partners with Fortune 1,000 companies and government agencies to provide comprehensive Customer Relationship Management programs integrating inbound contact center, internet, database marketing, market research, close-loop lead management and fulfi llment services.

For FY 2011, Affina recorded total revenues of USD 85,139,154 as compared to FY 2010 revenues of USD 79,233,758 and Profit before Tax of USD 5,556,870 as compared to USD 6,087,256 in FY 2010.

Apart from Affi na LLC, Hinduja Global Solutions Inc., has a subsidiary called Hinduja TMT France.

HTMT Europe Limited is a UK based subsidiary which focuses on consulting services for BPO and call centre services and markets offshoring services to UK based clients. In June 2010, HTMT Europe acquired 100% stake of the U.K. based Careline Services Limited thereby making it a wholly owned subsidiary of HTMT Europe with effect from 21st June, 2010.

Careline Services Limited is a leading contact centre servicing more than 20 marquee customers across verticals such as Government, FMCG, Financial Services, Automobiles, Telecom and Retail. Established in 1977, it offers a range of services for inbound and outbound interactions and has over 800 highly trained employees in London and Scotland. It handles in excess of 50,000 customer interactions every day across multiple channels and in 14 different languages.

For the period 21st June 2010 to 31st March 2011, Careline reported revenues of GBP 15,626,268 and Profit after tax of GBP 820,810.

Hinduja Outsourcing Solutions India Private Limited (HOSIPL)

During FY 2011, your Company also acquired 100% equity stake of Hinduja Outsourcing Solutions India Private Limited (HOSIPL) making it a wholly owned subsidiary. HOSIPL has received necessary approvals from the Development Commissioner, Special Economic Zone (IT/ITeS), Karnataka, Bangalore and has set up a unit in Special Economic Zone (SEZ) at Global Village, Bangalore. HOSIPLs SEZ unit, housed over an area of approximately 43,000 sq. ft., has a capacity of approximately 1,000 seats.

During FY 2011, HOSIPL has commenced partial operations with international clients from the health insurance and hospitality verticals and recorded revenues of Rs. 2.78 crore.

New Logo

With operations in six countries and continuously expanding to other geographies, your Company is today uniquely poised at the edge of an important transformation with its operations becoming truly global. This metamorphosis must refl ect in an identity and a logo is a critical component of such identity.

Your Company has therefore, designed a new logo which is easy on the tongue for international audience and binds your Companys diverse operations across globe.

The basic color gradient of the new logo in a contemporary typography and the rainbow hues on the Energy Rings are a symbol of the renewed strength and vigor of HGS and emphasizes your Companys fl exibility to changes as it makes inroads into new continents. The color gradient also represents a work environment that is an assimilation of varied regions, religions, cultures and traditions. For a business transformation powerhouse like HGS, the deep blue hues of the initials HGS progresses from a dark blue to a lighter shade of blue, signifying exploration, adventure and movement to a much brighter future.

The recall value of the new logo is improved by the fact that it uses the acronym for Hinduja Global Services. The logo retains our heritage and pride while being contemporary, providing an umbrella brand to your Companys culturally and geographically diverse global operations.

Addressing Social Concerns

In the past year, your Company has proved, yet again, that it has fi rmly remained committed to community welfare initiatives. It patronized and partnered with organizations and NGOs championing various causes, reaching out to the needy. The Company contributed to the Concern India Foundation, by way of participating in the World 10k Run. The contributed sum will aid in supporting the child care center for preschool children, run by the foundation. Apart from numerous other NGOs, the Company has also donated funds to the Hinduja Foundation, known for its humanitarian activities in the fi elds of Arts, Culture, Education, Social Welfare and Healthcare.

Your Company continues to enrich its contribution to the society by engaging in activities that make a positive social impact. The Company has made a concerted effort to contribute to the community, by engaging in philanthropic acts such as visiting orphanages and old age homes, donating clothes, money, toiletries and stationary and organizing interactive activities for the inmates of these institutions. Another regular feature across the centers is organizing blood donation camps through the year. In a bid to increase awareness among potential recruits from various institutes about the ITeS sector, the recruitment team also organized various awareness programs across the centers.

Driven by a sense of responsibility to the community that is deeply embedded in its culture, your Company engages with the society across all levels, across geographies. From initiating projects promoting public health to creating awareness about the importance of education and environmental protection, there has been a constant involvement in noteworthy and worthwhile causes. As your Company scales new heights, its resolve to serve and contribute to the society has also gotten stronger.

Communication and Public Relations

Your Company progressed to the next level in its communications and public relations plan by expanding the function and building a more robust communication strategy. Driven by a vision that envisaged the Company as climbing greater heights, the Companys communications plans have now matured as a tool to shape its future in the media. Thus, as your Company diversifi es its reach and potential, its communication strategy is now all set to ensure a parallel spurt in visibility and brand recognition, internally and externally.

2010-2011 also saw the initiation of various projects meant to strengthen the brand of your Company and streamline its communication processes. The intranet and internet overhaul formed the crux of this initiative, with both communication platforms receiving a more progressive and user friendly look in terms of design, content and functionality.

While the Companys internal human resources newsletter, Global Connect, has now adopted a consistent format, the Town Hall meetings have received a fi llip by covering all global centers in the webcast and includes speakers from these centers. The Company also focused on increasing brand awareness amongst employees in its acquired entities, by tailoring an engagement plan themed Connect Beyond.

Your Companys visibility in the media has grown substantially with astute media management. Proactive and positive coverage on the Companys success stories, appearances in key forums and discussions have ensured that brand HGS has come a long way in gaining a foothold in mainstream media. The Companys top rankings in the NASSCOM Top BPO Companies survey, Dataquest Top BPO Companies and Dataquest Employee Satisfaction survey, and its inclusion in the India Inc. Fast 500 Companies list is indicative of the growing stature of your Company.

With the launch of the new visual identity, multiple initiatives for brand enhancement and brand integration are currently underway and are slated to continue into the next fi nancial year.

Your Companys financial results, important developments and achievements are communicated and uploaded on its website www.hindujagsl.com.

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certifi cation

Chief Executive Officer and Chief Financial Officer Certifi cation as required under Clause 49 of the Listing Agreement and Chief Executive Officer declaration about Code of Conduct are furnished in Annexure A and A-1 to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The prescribed particulars as required under Section 217(1) (e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and

Foreign Exchange earnings and outgo are furnished in Annexure-B to this Report.

Corporate Governance

As required under Clause 49 of the Listing Agreements, a detailed report on Corporate Governance forms Annexure-C to this Report.

The Statutory Auditors of the Company have examined the Companys compliance and have certifi ed the same as required under the Listing Agreements. The certifi cate is reproduced as Annexure-D to this Report.

Management Discussion and Analysis Report

Further, a separate Management Discussion and Analysis Report covering a wide range of issues relating to performance, outlook etc., is annexed as Annexure-E to this Report.

ESOP

The disclosures required to be made under the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure-F to this Report.

Fixed Deposits

Your Company has not accepted any fixed deposits from the public and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

Directors

Ms. Vinoo S. Hinduja and Mr. Anil Harish - Directors of your Company, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, based on the information and documents made available to them, confi rm that:

i) In the preparation of Annual Accounts, for the year ending 31st March 2011, the applicable accounting standards have been followed. There are no material departures in the adoption and application of the accounting standards;

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 your Company at the end of the fi nancial year and of the profit of your Company for that period;

iii) They have taken proper and suffi cient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

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

Auditors

M/s Price Waterhouse, Chartered Accountants, the Statutory Auditors of your Company, retire at the conclusion of the forthcoming Annual General Meeting of your Company and being eligible offer themselves for re-appointment. The Board recommends the re-appointment of Auditors.

Exemption from attaching Accounts and other Documents of Subsidiaries

The Ministry of Corporate Affairs (MCA) vide Circular dated 8/2/2011 has granted exemption under section 212(8) of the Companies Act, 1956 from annexing Balance Sheet and other documents of subsidiaries with the Annual Report of the holding company provided certain conditions are fulfi lled. The Board of Directors of your Company at its meeting held on 8th February 2011, (in view of fulfi llment of all conditions prescribed by the Ministry of Corporate Affairs under Circular No. 5/12/2007-CL-III dated 8th February 2011) resolved for not attaching the Balance Sheet and other documents of the subsidiaries named below, with the Balance Sheet of the Holding Company i.e., Hinduja Global Solutions Limited, for the fi nancial year 1st April, 2010 to 31st March, 2011:

1) Pacifi c Horizon Limited, Mauritius;

2) Hinduja Global Solutions Inc., USA;

3) Affi na LLC, USA;

4) Affi na Company, Canada;

5) RMT LLC, USA;

6) HTMT Europe Limited, UK;

7) Careline Services Limited, UK;

8) Hinduja TMT France, France;

9) Customer Contact Center Inc., Philippines;

10) C-Cubed (Antilles) N.V., Netherlands;

11) C-Cubed B.V., Netherlands;

12) Hinduja Outsourcing Solutions India Pvt. Ltd., India.

Accordingly, the Annual Accounts and other documents for the year ended March 31, 2011 of the subsidiary companies are not attached to the Annual Report. The Accounts of the subsidiaries will be made available for inspection by any member of the Company at its Registered Office and also at the Registered Office of the concerned subsidiary. The accounts of the subsidiary companies and detailed information will be made available to the members upon receipt of request from them. The summary of key fi nancials of the Companys subsidiaries, as provided in the Circular dated 8/2/2011 is included in this Annual Report. The ¦ accounts of individual subsidiary companies would be available on Companys website www.hindujagsl.com

Employees Particulars

Particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules 1975 as amended, forms part of this Directors Report. However, in accordance with the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, this Report is being sent to all the shareholders of the Company excluding the aforesaid information. Members interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company.

Acknowledgements

Your Board takes this opportunity to thank the customers, vendors, business partners, shareholders and bankers for the faith reposed in the Company and also thank the Government of India, various regulatory authorities and agencies for their support and looks forward to their continued encouragement. Your Directors place on record their sincere appreciation of the contribution of the Companys most important asset, viz. the employees, who through their sheer competence, hard work and co-operation have enabled the Company to achieve consistent growth.

For and on behalf of the Board Place: Mumbai Ramkrishan P. Hinduja

Date: May 12, 2011 Chairman



 
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