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Directors Report of Lycos Internet Ltd.

Mar 31, 2016

Dear Members,

We are pleased to present the 17th Annual Report of your Company on business and operations along with the Audited Financial Statements and the Auditor’s Report for the Financial Year ended March 31, 2016.

1. Financial Highlights Rs. in Lakhs

Particulars

Consolidated

FY 2015-16

Consolidated

FY 2014-15

Standalone

FY 2015-16

Standalone FY 2014 -15

Total Revenue

226078.56

197117.32

46433.61

50282.72

Gross Profit before Interest, Depreciation & Tax

67966.93

58588.99

1841.04

2994.66

Less: Interest

1589.69

2252.30

1588.72

1929.78

Depreciation

6364.72

4137.70

217.84

1052.58

Profit before T ax

60012.52

52198.99

34.48

12.30

Less: Provision for Tax

19518.80

18038.60

11.19

3.99

Less: Deferred Tax Liability

(11.02)

(61.38)

(11.02)

(166.13)

Profit after T ax

40504.74

34221.77

34.31

174.44

Balance Brought forward from the previous year

91675.27

59512.92

12872.47

13034.53

Profit available for appropriations

132180.01

93734.69

12906.79

13208.98

Less: Amount transferred to retained earnings as per Schedule II of Companies Act 2013

-

2054.18

-

331.27

Less: Transferred to General Reserve

1.03

5.23

1.03

5.23

Profit Carried to Balance Sheet

131605.78

91675.27

12332.55

12872.47


Performance Review

During the year under review, your Company achieved a consolidated turnover of Rs. 226078.56 lakhs as against Rs. 197117.32 lakhs in the previous fiscal. Your Company has earned a consolidated gross profit of Rs. 67966.93 lakhs before interest, tax and depreciation as against Rs. 58588.99 lakhs in the previous year. After deducting financial charges of Rs. 1589.69 lakhs, providing for depreciation of Rs. 6364.72 lakhs and provision for tax of Rs. 19518.80 lakhs, the operations resulted in a net profit of Rs. 40504.74 lakhs as against Rs. 34221.77 lakhs in the previous year.

The digital segment revenues grew by 21.8% and overall revenue growth is 15.3% compared to last year.

There is no change in the nature of business carried on by the Company during the year under review.

Further information on the Business Overview and Outlook and the state of the affairs of the Company and the Industry in which it operates, is discussed in detail in the Management Discussion & Analysis segment annexed to this report.

There are no Material Changes and Commitments affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this Report.

Dividend:

Your Directors have recommended a dividend of Rs.0.10 (i.e. 5%) per equity share of Rs.2 each for the financial year ended March 31, 2016, amounting to Rs.5,73,20,678/- (inclusive of tax of Rs.96,95,528). The dividend payout is subject to approval of members at the ensuing Annual General Meeting.

Transfer to General Reserve

The Company proposes to transfer an amount of Rs.1,02,945/- lakhs to the General Reserve out of the amount available for appropriations.

Deposits:

The Company has not accepted any fixed deposits from public.

Loans, Guarantees or Investments

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements.

Subsidiary Companies

The Company has formulated a policy for determining ‘material’ subsidiaries pursuant to the provisions of the Listing Agreement. The said policy is available at the Company website www.lycos.com.

Pursuant to Provision to Section 129 (3) of the Act, a statement containing the brief details of performance and financials of the Subsidiary Companies for the financial year ended March 31, 2016 is attached to Financial Statements of the Company.

During the year under review, the Company and Apollo International Limited formed a Joint Venture Company “Apollo Lycos Netcommerce Limited”.

Consolidated financial statements

In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and in compliance with the provisions of Section 129(3) and other applicable provisions of the Companies Act, 2013 and the Accounting Standards on consolidated financial statements, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2016, which forms part of the Annual Report.

Management’s discussion and analysis

Management’s discussion and analysis forms part of this annual report and is annexed to the Board’s report.

Corporate Governance

Pursuant to the provisions of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders. A certificate from the Practicing Company Secretary regarding compliance with the conditions of Corporate Governance as stipulated under the said Schedule V of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 also forms part of this Report.

Directors and key Managerial Personnel

In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Mr. Vijay Kancharla, Executive Director is liable to retire by rotation, at the ensuing Annual General Meeting and being eligible has offered himself for reappointment.

At the 16th Annual General Meeting of the Company held on 28th September, 2015 the Company has appointed Mr. Michael Loren Mauldin and Mr. Subrato Saha as Independent Directors under the Companies Act, 2013 for 5 years term which ends at conclusion of the 21st Annual General Meeting.

A declaration of Independence in compliance with Section 149(6) of the Companies Act, 2013, has been taken on record from all the independent directors of the Company.

During the year under review Mr. Raghunath Allamsetty and Mr.Vijaya Bhasker Reddy Maddi, ceased to be the Directors of the Company on completion of their tenure on September 29, 2015. The Board of Directors records its sincere appreciation and recognition of the valuable contribution and services rendered by both during their association with the Company.

Mr. Y. Ramesh Reddy resigned as Independent Director w.e.f. 09th May, 2016. Mrs. S. V. Rajyalaxmi Reddy has resigned as Director of the Company w.e.f. 18th May, 2016.

The Board of Directors appointed Mr. Y. Ramesh Reddy as an Additional Director and Executive Director (Finance) & Group CFO w.e.f. 09th May, 2016 and Dr. K. Jayalakshmi Kumari as an Independent Director of the Company w.e.f.17th May, 2016.

The resolutions seeking approval of the Members for the appointment of Mr. Y. Ramesh Reddy as Executive Director (Finance) & Group CFO and Dr. K. Jayalakshmi Kumari as Independent Director for a term of five years have been incorporated in the notice of the annual general meeting of the Company.

The Company has received notices under Section 160 of the Act along with the requisite deposit proposing the appointment of Mr. Y. Ramesh Reddy as Director and Dr. K. Jayalakshmi Kumari as Independent Director.

During financial year under review, Mrs. K Anusha has resigned from the position of Company Secretary w.e.fllSlBJBraSffl| URl| K0UU5 and Mrs. V. Sri Lakshmi was appointed as Company Secretary w.e.f. September 09, 2015.

The Policy on appointment and remuneration for Directors, Key Managerial Personnel and other employees as specified under Section 178(3) of the Act has been disclosed in Corporate Governance Report.

Board Evaluation

As required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, an evaluation of all the directors, the Board as a whole and its committees was conducted based on the criteria and framework adopted by the Board.

The details of the said evaluation have been enumerated in the Corporate Governance Report, which is annexed to the Boards’ Report.

Nomination and Remuneration Policy

The Company has adopted the Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company. Details of the Remuneration Policy are given in the Corporate Governance Report.

Board and Committee Meetings

The Board during the financial year 2015-16 met five times. Detailed information regarding the meetings of the Board are included in the report on Corporate Governance, which forms part of the Board’s Report.

The details of Boards Committees - the Audit Committee, the Nomination and Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social Responsibility Committee have been disclosed separately in the Corporate Governance Report which is annexed to and forms part of this annual report.

The Audit Committee comprises Mr. Y. Ramesh Reddy, Mr. Subrato Saha, and Mr. Vijay Kancharla as Members. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the SEBI (LODR) Regulations, 2015.

Related Party Transactions

All transactions entered into with Related Parties as defined under Companies Act, 2013 during the year were in the ordinary course of business and on an arm’s length basis. There were no materially significant related party transactions entered by the Company during year under review.

The Company has formulated a policy on “materiality of related party transactions” and the process of dealing with such transaction, which are in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same is also available on the website of the Company www.lycos.com. Prior omnibus approval from the Audit Committee are obtained for transactions which are repetitive and also normal in nature. Further, disclosures are made to the Committee and the Board on a quarterly basis.

Since all the related party transactions were in ordinary course of business and were on Arm’s length basis, disclosure in form AOC-2 as required under Section 134(3) (h) of the Act is not applicable.

Details of the transactions with Related Parties are provided in the accompanying financial statements.

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

The particulars as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are as follows:

A. Details of Conservation of Energy

The operations of your company do not consume high levels of energy. The Company uses electric energy for its equipment such as computer terminals, air conditioners, lighting and utilities in the work premises. Adequate measures have been taken to conserve energy by using energy-efficient computers and equipment with the latest technologies.

However, the requirement of disclosure of particulars with respect to conservation of energy as prescribed in the Section 134(m) of the Companies Act, 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014 are not applicable to the Company and hence not provided.

B. Technology Absorption

The Information Technology (IT) and Information Technology Enabled Services (ITES) Industry are subject to high rate of technological obsolescence. The Company’s business is Digital Marketing and Software Development. The change in the industry paradigm is dynamic. The Company is continuously updating these changes and constantly evaluating these developments to improve its capabilities towards the industry. Accordingly, research and development of new services, display advertising, platforms and methodologies, continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous improvements and innovations. As part of the continuous thrust on R&D, the company is also focused on Solutions Research and Vertical Focus Research. These would identify new ideas which would enable business process improvement for customers and would be aligned with the business strategy and growth opportunities of the organization. Our R & D activities are not capital intensive and we do not specifically provide for the same in our books.

C. Foreign Exchange Earnings and outgo

The particulars of earnings and expenditure in foreign exchange during the year are given in notes to Standalone financial statements.

Auditors Statutory Auditors

The Company’s Statutory auditors M/s. P. Murali & Co., (Registration Number 007257S) Chartered Accountants, Hyderabad, who retire at the ensuing Annual General Meeting, may continue as statutory auditors for the financial year ending March 31, 2017. M/s. P. Murali & Co., have confirmed their eligibility and willingness to accept office, if re-appointed.

Based on the recommendation of Audit Committee, the Board has approved the proposal for placing the matter of re-appointment of M/s. P. Murali & Co., as statutory auditors for the financial year ending March 31, 2017 at the 17th Annual General Meeting. A resolution to that effect forms part of notice of the 17th Annual General Meeting sent along with this Annual Report.

Secretarial Auditors

Mr. A. Sridhar was appointed to conduct the secretarial audit of the Company for FY 2015-16, as required under section 204 of the Companies Act, 2013 and rules there under. The Secretarial Audit Report for FY 2015-16 forms the part of the annual report as Annexure -A to the Board’s report.

The Auditors’ Report and the Secretarial Audit Report for the financial year ended 31st March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in the future.

Extract of Annual Return

An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of the Companies Act 2013 read with applicable Rules made there under is annexed to this Report as Annexure B.

Internal Financial Controls and Risk Management

The details relating to internal financial controls and their adequacy and Risk Management are included in the Management Discussion and Analysis Report.

Vigil Mechanism/ Whistle Blower Policy

The Company had implemented a vigil mechanism, whereby employees, directors and other stakeholders can report matters such as unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Vigil Mechanism Policy is available on the Company’s website www.lycos.com.

Particulars of Employees and related disclosures:

No Salary is being paid to Directors of the Company including Managing Director other than sitting fee to Independent Directors and hence the details as required to be disclosed under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration to Key Managerial Personnel) Rules, 2014 is not applicable.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

There was no employee employed throughout the year, who was in receipt of remuneration, in aggregate, more than One Crore Two Lakh Rupees. There was no employee employed throughout the year or any part thereof, who was in receipt of remuneration, at a rate, in aggregate, more than Eight Lakh Fifty thousand Rupees per month.

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the company on CSR activities during the year as required to be disclosed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure C to this Report.

Sexual Harassment

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.

Directors’ Responsibility Statement:

In compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirm the following:

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

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

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

(d) The directors had prepared the annual accounts on a going concern basis;

(e) The directors have laid down internal financial controls based on internal controls framework established by the Company, which in all material respects were adequate and operating effectively.

(f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgment:

The Board greatly appreciates the commitment and dedication of its employees across all levels who have contributed to the growth and sustained success of the Company. We would like to thank all our clients, partners, vendors, investors, bankers and other business associates for their continued support and encouragement during the year look forward to the same in the future.

For and on behalf of the Board of Directors

Place: Hyderabad (M. Suresh Kumar Reddy)

Date: 21-11-2016 Chairman and Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present the 15th Annual Report of the Company for the Financial year 2013-14.

1. Financial Highlights

(Rs in Lakhs)

Particulars Consolidated Standalone

FY 2013-14 FY 2012-13 FY 2013-14 FY 2012-13

Total Revenue 167487.28 161538.85 61006.68 60213.67

Gross Profit before Interest, Depreciation & Tax 36864.98 12100.26 9038.85 4623.77

Less: Interest 2694.40 3516.77 2375.45 2319.25

Depreciation 6883.36 2603.08 5287.98 1247.26

Profit Before Tax 27287.22 5980.41 1375.41 1057.25

Less: Provision for Tax 5113.26 1059.97 468.07 221.13

Deferred Tax Liability 77.69 383.83 (8.32) 383.83

Add: MAT Credit Entitlement NIL 562.88 NIL 562.88

Profit After Tax 22096.28 5099.49 915.65 1015.18 Balance Brought forward from the previous year 37444.10 32375.06 12146.35 11161.63

Profit available for appropriations 59540.38 37474.55 13062.00 12176.81

Transferred to General Reserve 27.47 30.46 27.47 30.46

Profit Carried to Balance Sheet 59512.91 37444.10 130 34.53 12146.35 2. DIVIDEND

In order to strengthen the financial viability and in view of the future plans of the company, your directors have expressed their inability to recommend any dividend for the financial year 2013-14.

3. TRANSFER TO GENERAL RESERVE

The Company proposes to transfer an amount of Rs 27.47 lakhs to the General Reserve out of the amount available for appropriations.

4. PERFORMANCE REVIEW

On Consolidation basis, your company has achieved a total revenues of Rs. 1674.87 Crores for financial year 2013-14 as against Rs 1615.39 Crores in previous financial year, an increase of around 4% year on year basis. After considering write off current year and last year, the profit for the year was Rs. 221 crores as against Rs. 51 crores in previous year. The revenues from digital division for the year was Rs.1216 crores, an increase of 41% year-on-year basis.

5. BUSINESS REVIEW

The Management Discussion and Analysis Section of the Annual Report presents a detailed business review of the company.

6. SUBSIDIARY COMPANIES.

The Company has 18 subsidiaries as on date and the details of investments made by the company in the subsidiaries during the financial year 2013-14 and the value of investments as on March 31, 2014 have been furnished vide Note 12 to Notes to Accounts.

In accordance with the Ministry of Corporate Affairs General circular dated February 8, 2011, the Balance sheet and the Statement of Profit and loss and other documents of the Sub- sidiary companies are not being attached to the Balance sheet of the Company. A Statement containing the brief details of financials of the Subsidiary Companies for the financial year ended March 31, 2014 is attached to this Annual Report.

The Annual accounts of the Subsidiary companies shall be made available to the members who seek such information and are also made available for inspection by the members of the company at the Registered office of the Company on any working day during business hours.

7. CONSOLIDATED FINANCIAL STATEMENTS

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Company prepared in accordance with Accounting Standards issued by Institute of Chartered Accountants of India, are attached and forms part of the Annual Report.

8. FIXED DEPOSITS

During year under review, your company has neither invited nor accepted any Fixed Deposits from the public.

9. CORPORATE GOVERNANCE

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, the Report on the Corporate Governance is annexed to this report and forms part of the Annual Report.

The requisite certificate from the Auditors of the Company confirming the compliance of the conditions stipulated under Clause 49 of the Listing Agreement is attached to the Report on Corporate Governance.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated under clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Management Discussion and Analysis is annexed to this report and forms part of the Annual Report.

11. POLICY ON CODE OF CONDUCT

The Company has laid down a "Code of Conduct & Ethics" for all Board members and Senior Management Personnel. Pursuant to Clause 49(I)(D)(ii) of the Listing Agreement, the Declaration by the Chairman and Managing Director affirming the compliance with the Code of Conduct & Eth- ics is attached to the Report on Corporate Governance.

12. DIRECTORS

Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr.Vijay Kancharla, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Company had designated Mr.M.Vijaya Bhasker Reddy, Mr.Y.Ramesh Reddy and Mr. A Raghunath as Independent Directors of the company. As per the provisions of the Section 149 of the Companies Act, 2013 (Act) which came into force from April 1, 2014, every listed company is required to have one-third of the total number of Directors as Independent directors. The above named directors, who are designated as Independent Directors pursuant to Listing Agreement, are now being appointed as Independent Directors to hold the office for tenure as specified in the notice to the AGM, un- der the provisions of Section 149 of the Companies Act, 2013. The Board of Directors recommends the appointment of above named directors as Independent Directors.

13. AUDITORS

M/s.P.Murali & Co., Statutory Auditors of the company holds the office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from the Statutory Auditors that their appointment, if made, would be within the limits prescribed under the provisions of the Companies Act, 2013 and that they are not disqualified for re-appointment. The Board of Directors recommends the reappointment of M/s.P.Murali & Co., as Statutory Auditors of the Company.

14. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Compa-nies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors'' Report. However, as per the pro- visions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information, is being sent to all the members of the Company and others entitled thereto. Members who are desirous of obtaining such particulars are requested to write to the Company Secretary of the Company.

15. DISCLOSURES OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO:

The particulars, as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, are as following:

(i) Details of Conservation of Energy

The operations of your company do not consume high levels of energy. The Company uses electric energy for its equip- ment such as computer terminals, air conditioners, lighting and utilities in the work premises. Adequate measures have been taken to conserve energy by using energy efficient computers and equipment with the latest technologies. However, the requirement of disclosure of particulars with respect to conservation of energy as prescribed in the Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company and hence not provided.

(ii) Research & Development and Technology Absorption

The Information Technology (IT) and Information Technology Enabled Services (ITES) Industry are subject to high rate of technological obsolescence. The Company''s business is Digital Marketing and Software Development. The change in the industry paradigm is dynamic. The Company is continuously updating these changes and constantly evaluating these developments to improve its capabilities towards the industry. Accordingly, research and development of new services, display advertising, platforms and methodologies, continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous improvements and innovations. As part of the continuous thrust on R&D, the company is also focused on Solutions Research and Vertical Focus Research. These would identify new ideas which would enable business process improvement for customers and would be aligned with the business strategy and growth opportunities of the organization.

(a) R & D Initiative:

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R & D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research). Our technical team also works to optimize the existing software applications and to be able to optimally use the existing hardware on a continuous basis.

(b) Specific areas for R&D at the company & the benefits derived there from:

The Company is continuously working on its all business areas specifically digital marketing division for bringing about significant improvements in its services offered at competitive. The R& D activities taken up by the company helps it to remain competitive.

(c) Future plan of action:

The Company is constantly keep working on finding/evaluating new technologies, processes, frameworks and methodologies to enable us in improving the quality of our offering and better ways to service at competitive at all levels.

(d) Expenditure on R & D for the year ended March 31, 2014:

Our R & D activities are not capital intensive and we do not specifically provide for the same in our books.

(iii) Foreign Exchange Earnings and outgo The particulars of earnings and expenditure in foreign exchange during the year are given vide note no 31 & 30 in notes to Standalone financial statements.

16. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby state that:

(a) in preparation of annual accounts containing financial Statements for the financial year ended March 31, 2014 the applicable accounting standards have been followed.

(b) the accounting policies are consistently followed and your Directors have applied them to give a true and fair view of the state of affairs of the Company and the profit/loss for that period.

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safe- guarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) Annual accounts have been prepared on a going concern basis.

17. ACKNOWLEDGEMENTS AND APPRECIATIONS

We thank our Customers, Vendors, governmental authorities, Banks, Financial Institutions and esteemed Shareholders for their continued support. We place on record our appreciations of the contribution made by the employees at all levels.

For and on behalf of the Board of Directors YBRANT DIGITAL LIMITED

SD/- M. Suresh Kumar Reddy Chairman & Managing Director Place: Hyderabad Date: July 26, 2014


Mar 31, 2013

To The Members

The Directors have great pleasure in presenting the Fourteenth Annual Report on the business and operations of the Company for the financial year ended March 31, 2013. Rs. in Lakhs

For the financial year ended 31st March, Financial Results Consolidated Standalone 2013 2012 2013 2012

Total Income 161538.85 129751.10 60213.67 51315.46

Gross Profit before Interest, 12100.26* 27208.05 4623.77* 8967.57

Depreciation & Tax

Less: Interest 3516.77 2765.63 2319.25 2295.34

Depreciation 2603.08 1675.91 1247.26 687.89

Provision for Tax 1059.97 3274.24 221.13 994.91

Profit after Tax 4920.44 19492.27 836.13 4989.43

Less: Provision for Deferred Tax 383.83 312.12 383.83 212.41

Liability

Add: MAT Credit Entitlement 562.88 0 562.88 0

Net Profit for the year 5099.49 19180.15 1015.18 4777.02

Balance Brought forward from the 32375.06 14445.24 11161.63 7634.94 previous year

Profit available for appropriations 37474.55 33625.39 12176.81 12411.96

Provision for proposed Dividend 0 952.50 0 952.50

Tax on Dividends 0 154.52 0 154.52

Transferred to General Reserve 30.46 143.31 30.46 143.31

Profit Carried to Balance Sheet 37444.10 32375.06 12146.35 11161.63

* Figures are after write off of Rs.59.93 Crs and Rs.134.94 Crs in Standalone and Consolidated balance sheet respectively.

DIVIDEND

In order to strengthen financial viability and in view of future plans of the company, the directors of your company expresses their inability to recommend any dividend for the financial year 2012-2013.

TRANSFER OF UNPAID DIVIDEND

Your company docs not have any unpaid dividend required to be transferred to the Investor Education and Protection Fund (1KPI1) under section 205C of the Companies Act, 1956 in the financial year 2012-13.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.30,45,536/-to the General Reserve out of the amount available for appropriations and an amount of ^3,74,44,10,781/- is proposed to be retained in the Consolidated Profit and Loss account and an amount of Rs. 12,14,634,326/- is proposed to be retained in the Stand Alone Profit and Loss account

OPERATIONAL RESULTS & BUSINESS

During the year under review, the standalone total income was 76,02,13,67,206/- as againstRs.5,l 3,15,46,250/- in the previous year. The consolidated total income was Rs.16,15,38,85,005/- as againstRs. 12,97,51,10,298/- in previous year. The financial performance was discussed elsewhere in this Annual Report.

Your Company caters to its clients through a network of global presence by its established offices and a relentless effort is on the leash for bringing out constant improvements.

ACCOUNTS OF SUBSIDIARIES

Your Company has Eighteen subsidiaries and names and relevant information was given elsewhere in this Annual Report. There has been no material change in die nature of the business of the subsidiaries. As required under the Listing Agreement with the Stock F.xchanges, consolidated financial statements have been prepared and included in this Annual Report.

The Ministry of Corporate Affairs (MCA), Govt of India, has granted subject to fulfillment of certain conditions, general exemption from attaching the annual accounts and other reports of Company''s subsidiaries, as required under section 212 of the Companies Act, 1956. Copies of these annual accounts and related information will be made available at the Registered Office of the Company during business hours and also at the venue during the Annual General Meeting. The financial information as required in the above referred notification for each subsidiary is published at the end of the consolidated financial statements in the Annual Report for the year 2012-13. A statement pursuant to Section 212 of the Companies Act, 1956 related to Subsidiary Companies given at the end of the consolidated financial statement in the Annual Report. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements, the Audited Consolidated Financial Statements are included in this Annual Report.

FIXED DEPOSITS

The Company has not invited/accepted any fixed deposits from the public for the financial year ended March 31,2013.

PARTICULARS OF EMPLOYEES

Particulars of employees pursuant to section 217(2A) of the Companies Act, 1956 arc part of the Director''s Report. However, having regard to the provisions of Section 219(i)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the shareholders of the Company and others entitled thereto. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company.

AUDITORS

M/s. P. Murali & Co., Chartered Accountants, Auditors of the Company will retire at the conclusion of the Annual General Meeting and arc eligible for re-appointment. They have conveyed their willingness to accept re-appointment and confirmed their eligibility under Section 224(1-B) of the Companies Act, 1956. The Auditors'' Report to the shareholders docs not contain any qualification or adverse remarks which require any clarification or explanation. DIRECTORS

The Board of Directors has accepted the resignation of Mr.S.Pulla Reddy, Independent director on the board w.e.f June 24, 2013 and placed its deep sense of appreciation for his services during the tenure of his association as Board member. Mr.Y.Ramesh Reddy, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommends the resolution for his re-appointment as director of your Comparand the additional information furnished in the notice of the fourteenth Annual General Meeting pursuant to the provisions of Clause 49 of the Listing Agreement

REPORT ON CORPORATE GOVERNANCE

The Report on Corporate Governance as stipulated under Clause 49 of the 1 .isting Agreement forms part of this .Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report (MDA) is forming part of this Annual Report.

DECLARATION ON CODE OF CONDUCT

Pursuant to provisions of Clause 49 (I) (D) (ii) of the Listing Agreement, a Declaration declaring that all the members of the Board and the Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct of the Company, is forming part of the Corporate Governance Report attached herewith.

DISCLOSURE ON COMPANY''S EMPLOYEES STOCK OPTIONS

During the year under review no scheme is in force and no options were granted, hence no information / disclosures are being made under SEBI (ESOS / ESPS) Guidelines 1999. LGSL Foundation is holding 783509-shares as on March 31,2013 after successfully implementation of various Employees Stock Option Schemes in earlier years. Ybrant Employees Welfare Trust (ESOP Trust) is holding 73,50,000-shares as on March 31, 2013 after successfully implementation of various Employees Stock Option Schemes in earlier years in Ybrant Digital Limited (Transferor Company). No fresh ESOP was implemented during the year under review .

CASH FLOW STATEMENT PURSUANT TO CLAUSE 32

The Cash Flow Statement pursuant to Clause 32 of the Listing Agreement entered into with Stock F.xchangc(s) is appended to this Annual Report.

DISCLOSURES OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO:

The particulars, as prescribed under Section 217(l)(c) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, are as following:

(i) Details of Conservation of Energy

''ITie operations of your company do not consume high levels of energy. The Company uses electric energy for its equipment such as computer terminals, air conditioners, lighting and utilities in the work premises. Adequate measures have been taken to conserve energy by using energy-efficient computers and equipment with the latest technologies. However, the requirement of disclosure of particulars with respect to conservation of energy as prescribed in the Section 217(l)(c) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company and hence not provided. As an ongoing process, the following measures are undertaken to conserve energy :

(a) Implementation of viable energy audit proposals.

(1)) Installation of automatic power factor controllers to save maximum demand charges and energy.

(c) Training front-end operational persons on the opportunities and importance of energy conservation.

(d) Automation of air conditioners is taken up in all locations.

(e) Precision temperature controllers are installed in all locations.

(f) Awareness and training sessions for maintenance personnel were conducted by experts.

(g) Optimum usage of air-conditioning equipment is made within the office space.

(h) F.fforts are on to provide for intelligent lighting, automatic lighting system based on sensors for optimum use of power.

(ii) Research & Development and Technology Absorption

The Information Technology (IT) and Information Technology Enabled Services (1TES) Industry are subject to high rate of technological obsolescence.

The Company''s business is Digital Marketing and Software Development. The change in the industry paradigm is dynamic. The Company is continuously updating these changes and constantly evaluating these developments to improve its capabilities towards the industry. Accordingly, research and development of new services, display advertising, platforms and methodologies, continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous improvements and innovations. As part of the continuous thrust on R&D, the company is also focused on Solutions Research and Vertical Focus Research. These would identify new ideas which would enable business process improvement for customers and would be aligned with the business strategy and growth opportunities of the organization.

(a) R&D Initiative:

The Company believes that technological obsolescence is a practical reality. It invests and encourages continuous innovation. Its R& D is always focused to provide unique benefits to our customers and other stakeholders by working both proactively (self-driven research) and reactively (customer-driven research). Our technical team also works to optimize the existing software applications and to be able to optimally use the existing hardware on a continuous basis.

(1)) Specific areas for R&D at the company & the benefits derived there from:

The Company is continuously working on its all business areas specifically digital marketing division for bringing about significant improvements in its services offered at competitive. The R& D activities taken up by the company helps it to remain competitive.

(c) Future plan of action:

The Company is constantly keep working on finding/evaluating new technologies, processes, frameworks and methodologies to enable us in improving the quality of our offering and better ways to sen-ice at competitive at all levels.

(d) Expenditure on R& D for the year ended March 31, 2013:

Our R & D activities are not capital intensive and we do not specifically provide for the same in our books.

(iii) Foreign Exchange Earnings and outgo

The particulars of earning and expenditure in foreign exchange during the year arc given vide note no.31 & 32 in notes to Standalone financial statements.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby state that:

(a in preparation of annual accounts containing financial statements for the financial year ended March 31, 2013 the applicable accounting standards have been followed.

(b) the accounting policies are consistently followed and your Directors have applied them to give a true and fair view of the state of affairs of the Company and the profit/loss for that period.

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS AND APPRECIATIONS

We thank our Customers, Vendors, governmental authorities, Banks, Financial Institutions and esteemed Shareholders for their continued support. We place on record our appreciations of the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

YBRANT DIGITAL LIMITED

(Formerly LGS Global Limited)

Sd/-

M. Suresh Kumar Reddy

Chairman

Place : Hyderabad

Date: August 08, 2013.


Mar 31, 2010

The Directors have great pleasure in presenting the Eleventh Annual Report on the business and operations of the Company for the financial year ended 31st March 2010.

FINANCIAL RESULTS

(Rupees in Lakhs)

For the financial year ended 31st March

Financial Results Consolidated Standalone

2010 2009 2010 2009

Income from Operations 38446.69 29458.56 24074.54 18514.07

Other Income (360.85) 401.50 (360.85) 401.50

Total Income 38085.84 29860.06 23713.69 18915.57

Operating expenditure 32403.80 25407.09 21015.78 15259.20

Gross Profit before Interest, Depreciation & Tax 5682.04 4452.97 2697.91 3656.37

Less: Interest 1133.75 681.01 1030.70 616.71

Depreciation 480.70 462.03 331.24 329.34

Provision for Tax 774.22 599.77 262.63 426.09

Profit after Tax 3293.37 2710.16 1073.34 2284.23

Less: Provision for Deferred Tax Liability 24.96 11.44 24.96 11.44

Profit after Deferred Tax 3268.41 2698.72 1048.38 2272.79

Net Profit for the year 3268.41 2698.72 1048.38 2272.79

Balance Brought forward from the previous year 6879.46 4255.10 5248.09 3049.65

Profit available for appropriations 10147.87 6953.82 6296.47 5322.44

Provision for proposed Dividend 254.24 63.56 254.24 63.56

Tax on Dividends 43.21 10.80 43.21 10.80

Transferred to General Reserve 63.56 0.00 63.56 0.00

Profit Carried to Balance Sheet 9786.86 6879.46 5935.46 5248.08

DIVIDEND

Your Directors take pleasure in recommending a dividend of Re. 1 per Equity share (10%) on face value of Rs. 10/- per share for the approval of the members for the financial year ended 31st March 2010. The dividend, if declared as above, would involve an outflow of Rs. 2,54,23,667/- towards dividend and Rs. 43,20,752/- towards dividend tax, resulting in a total outflow of Rs. 2,97,44,419/- .

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 63,55,917/- to the General Reserve out of the amount available for appropriations and an amount of Rs. 97,86,86,237/- is proposed to be retained in the Consolidated Profit & Loss Account.

The Company proposes to transfer Rs. 63,55,917/- to the General Reserve out of the amount available for appropriations and an amount of Rs. 59,35,46,580/- is proposed to be retained in the Standalone Profit & Loss Account.

OPERATIONAL RESULTS & BUSINESS

FY 2009-10 showed a strong performance compared to the previous year with skillful financial management in the face of challenging economic conditions. During the year under review, the standalone total income was Rs. 23713.69 lakhs as against Rs. 18915.57 lakhs in the previous year. The consolidated total income was Rs. 38085.84 lakhs as against Rs.29860.06 in previous year.

Your Company caters to its clients through a network of global presence by its established offices and a relentless effort is on the leash for bringing out constant improvements.

SUBSIDIARIES

Your Company has three subsidiaries namely Techorbit Inc, Global IT Inc situated in USA and LGS Global FZE in United Arab Emirates.

There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreement with the Stock Exchanges, consolidated financial statements have been prepared and included in this Annual Report.

STATEMENT UNDER SECTION 212 OF THE COMPANIES ACT, 1956

As per Section 212 of the Companies Act, 1956, we are required to attach the directors report, balance sheet, and profit and loss account of the subsidiaries. The Ministry of Corporate Affairs (MCA), Government of India has granted exemption from complying with Section 212 vide its approval letter No.47/573/2010-CL-III, Dtd.18.06.2010. In compliance with the terms of the exemption we have presented summary of financial information through statements for each subsidiary. Summary financial information includes Share Capital, Reserves & Surplus, Total Assets, Total Liabilities, our holding in the subsidiary, details of Investment, turnover, Profit before taxation, provision for taxation, Profit after taxation etc.. Accordingly, the annual report does not contain the financial statements of these subsidiaries. The Annual Accounts of the Subsidiary Companies and the related detailed information will be made available to the Holding and Subsidiary Companies investors seeking such information at any point of time. The Annual Accounts of the Subsidiary Companies will also be kept for inspection by any investor at the Registered Office of the Company and that of Subsidiary Companies concerned.

A statement pursuant to Section 212 of the Companies Act, 1956 related to Subsidiary Companies given elsewhere in this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements, the Audited Consolidated Financial Statements are included in this Annual Report.

CHANGES & DEVELOPMENTS DURING THE YEAR AND THEREAFTER

Your Company has obtained approval to set up a unit in Special Economic Zone (SEZ) at Sundew Properties Private Limited (formerly K Raheja IT Park (Hyderabad) Private Limited), Mindspace, Cyberabad, Madhapur, Hyderabad, A.P. The SEZ Unit commenced its operations from April 08, 2010.

The Equity Shares of the Company are listed in Madras Stock Exchange with effect from 13th September, 2010.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public for the financial year ended March 31, 2010.

HUMAN RESOURCES

Your company recognizes the importance of human resources as it forms the backbone for its success. Your company strongly believes in nurturing and encouraging human resources. The prime focus of the company is to enhance the professional value of its employees and create win-win situations for both the organization and its employees. Your company continues to adopt best HR practices to recruit and retain talented employees. Your company is confident of reaping the best from its talent pool and sharing the benefits with its employees on an equitable basis in the years to come.

PARTICULARS OF EMPLOYEES

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 report given as annexure to the Directors Report.

AUDITORS

M/s. P. Murali & Co., Chartered Accountants, Auditors of the Company will retire at the conclusion of the Annual General Meeting and are eligible for re-appointment. They have conveyed their willingness to accept re-appointment and confirmed their eligibility under Section 224(1-B) of the Companies Act, 1956.

The Auditors Report to the shareholders does not contain any qualification or adverse remarks which require any clarification or explanation.

DIRECTORS

Mr. Pradeep Kumar Dev Vyricherla, Director, retires by rotation and being eligible offers himself for re- appointment. Mr. G. Ramesh had submitted the resignation to the directorship of the company with effect from April 16, 2010 and the same was accepted by the Board. Your Board placed on record its appreciation to the outgoing Director for the valuable services rendered during his tenure on the Board of the Company.

GROUP FOR INTER-SE TRANSFER OF SHARES

Pursuant to an intimation from the promoters, the names of the promoters and entities comprising group as defined under the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 (and any enactment or re-enactment thereof) for the purpose of the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations, 1997, include:

Venkateswara Rao Kadiyala Sirisha Yarlagadda

Venkata Subba Rao Karusala Sridevi Potu

Fiora Enterprises Ltd Probus Capital Ltd

Mundi Enterprise Ltd Fingrowth Co. Ltd

REPORT ON CORPORATE GOVERNANCE

In line with the recommendation of the Securities Exchange Board of India (SEBI) on Corporate Governance, your company had constituted the Board with optimum combination of Executive and Non Executive and independent and Non independent Directors. Your Company also constituted various committees to comply with the provisions of the Corporate Governance under the Listing Agreement of the Stock Exchanges.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report.

The requisite Certificate from the Auditors M/s. P. Murali & Co., Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis Report (MDA) of the Company forms part of this Annual Report.

DECLARATION ON CODE OF CONDUCT

Pursuant to provisions of Clause 49 (I) (D) (ii) of the Listing Agreement, a Declaration declaring that all the members of the Board and the Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct of the Company, is forming part of the Corporate Governance Report attached herewith.

LISTING OF SHARES & ANNUAL LISTING FEE

The Securities of the Company are listed at Bombay Stock

Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE). The Listing fee for BSE and MSE has been paid and there are no outstanding dues. Your company has filed listing application along with necessary documents and also paid Initial Listing Fees and Annual Listing Fees for listing of its shares at National Stock Exchange of India Limited (NSE). Your company is waiting for listing approval from NSE.

DISCLOSURE ON COMPANYS EMPLOYEES STOCK OPTIONS

During the year under review no scheme is in force, hence no information / disclosures are being made under SEBI (ESOS / ESPS) Guidelines 1999. However, the ESOP Trust namely LGSL Foundation is having 783509-shares as on March 31st, 2010 after successfully implementation of various Employees Stock Option Schemes in earlier years.

CASH FLOW STATEMENT PURSUANT TO CLAUSE 32

The Cash Flow Statement pursuant to Clause 32 of the Listing Agreement entered into with Stock Exchange(s) is appended to this Annual Report.

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

The particulars, as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, are as following:

(i) Details of Conservation of Energy

The operations of your company do not consume high levels of energy. The Company uses electric energy for its equipment such as computer terminals, air conditioners, lighting and utilities in the work premises. Adequate measures have been taken to conserve energy by using energy-efficient computers and equipment with the latest technologies. As an ongoing process, the following measures are undertaken to conserve energy:

(a) Implementation of viable energy audit proposals.

(b) Installation of automatic power factor controllers to save maximum demand charges and energy.

(c) Training front-end operational persons on the opportunities and importance of energy conservation.

(d) Automation of air conditioners is taken up in all locations.

(e) Precision temperature controllers are installed in all locations.

(f) Awareness and training sessions for maintenance personnel were conducted by experts.

(g) Optimum usage of air-conditioning equipment is made within the office space.

(h) Efforts are on to provide for intelligent lighting, automatic lighting system based on sensors for optimum use of power.

(ii) Research & Development and Technology Absorption

The Companys Research & Development investment would primarily focus on Solutions Research and Vertical Focus Research.

Solutions Research would identify new ideas which would enable business process improvement for customers and would be aligned with the business strategy and growth opportunities of the organization.

Vertical Focus would primarily deal with building Centers of Excellence (CoE) around verticals such as financial services, Life sciences, pharmacy, energy, retail and process / discrete manufacturing. The Company would also set up Research & Development facilities around tools supporting some of the COTS solutions and in the BI space. Specialized process oriented tools to enhance business process performance are ready for deployment. The Company would be developing products for B2B and SaaS.

The Company plans to be a player in niche technologies and lays emphasis in staying current in the new technologies. A significant budget would be set aside for building competencies in the new technologies and also building solutions in the migration space, particularly in the open source solutions.

(iii) Foreign Exchange Earnings and outgo

Export Plans and Activities relating to exports - Application Management services, Application development, Tool set development, Product development and support activities have been the primary source of revenues to the offshore delivery center and would be the focus for the future with the aid of Value added tools.

Initiatives taken to increase exports - Demonstrating the benefits to the existing client base on the offshore model in terms of Cost savings, 24/7 support, Maturity in delivery processes through CMMI and ISO, State of the art infrastructure, Competency and knowledge base.

Development of new export markets for products and services - Europe and Middle East have been the markets that are being developed through our partners.

Rs.

A) Foreign Exchange

Earnings (Received) 1,17,11,08,279/-

B) Foreign Exchange outgo

(i) for Capital Expenditure Nil

(ii) for Traveling 40,60,934/-

(iii) for Others 1,22,12,81,734/-

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby state that:

(a) in preparation of annual accounts containing financial statements for the financial year ended 31st March, 2010 the applicable accounting standards have been followed.

(b) the accounting policies are consistently followed and your Directors have applied them to give a true and fair view of the state of affairs of the Company and the profit/loss for that period.

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS AND APPRECIATIONS

Your Directors seize this opportunity to thank the esteemed Shareholders, Financial Institutions, Banks, Customers, Suppliers and Regulatory and Government Authorities for their continued support to the Company. Further, the Directors wish to place on record their appreciation to all employees of the Company for their hard work, dedication and commitment.

For and on behalf of the Board of Directors

LGS GLOBAL LIMITED

Venkata Subba Rao Karusala Venkateswara Rao Kadiyala

Managing Director Joint Managing Director

Place : Hyderabad Date : 11.11.2010

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