Notes to Accounts of Equippp Social Impact Technologies Ltd.

Mar 31, 2022

EquiPPP Insights Exchange (IX), is an AI/ML-based digital platform, for Impact auditors to get on-ground insights collected by field force partners to assess the impact created by social value projects. It is propelled by a framework of impact auditors, knowledge partners, academic institutions and curated field force partners

It has features to gather feedback and insights from beneficiaries of a particular project through digital media, CAPI, CATI, CAWI, and social value partners across multiple geographical locations.

1. The Company has undergone a corporate insolvency resolution process (CIRP) under the aegis of the Insolvency and Bankruptcy Code, 2016. The CIRP commenced on July 10^th, 2019 and culminated with the approval of a resolution plan by the Hon’ble NCLT, Hyderabad Bench, vide its order dated December 03^rd, 2020 in respect of the Company. Upon approval of the plan by the Hon’ble NCLT, new board has been constituted for the purpose of implementation of the Resolution Plan.

2. As per the terms of the Resolution Plan approved by the Hon’ble NCLT, the entire shareholding of the erstwhile promoters held in the Company i.e., 3,42,81,707 Equity Shares of Rs. 1/- each cancelled and public shareholding is reduced by 95% from 6,18,26,729 to 30,95,225 by cancellation of 5,87,31,504 Equity Shares of Rs.1/- each. Resulting into the total paid up share capital of the Company stands reduced from Rs. Rs. 9,61,08,436/- to Rs. 30,95,225/-.

3. Pursuant to NCLT order, 10,00,00,000 new equity shares were allotted to the shareholders on the preferential basis under Promoter Category.

RIGHTS, PREFERENCES, AND RESTRICTIONS OF EQUITY SHARES

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Company has only one class of equity shares at par value of Rs.1/-each.

*** Pertains to income tax demand/matters on account of deductions/disallowances for the earlier years, pending appeals filed consequent orders passed against the Company/demands raised by the Department under Income Tax Act, 1961.

2.19 DEFERRED TAX ASSET/LIABILITY:

Deferred tax asset/liability: In view of carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized, which is as required under AS 22 ‘Accounting for taxes on income’. Accordingly, no deferred tax asset has been recognized as at the year-end.

2.20 PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED / RECLASSIFIED WHEREVER NECESSARY, TO CONFIRM TO CURRENT YEAR CLASSIFICATION.

Accompanying notes form integral part of the financial statements In terms of our report attached

---

Mar 31, 2021

iii) . Derecognition Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit.

iv) . Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

v) . Impairment

The Company recognises loss allowances for expected credit losses on financial assets measured at amortised cost.

At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at fair value through other comprehensive income (FVOCI) are credit impaired. A financial asset is ''credit impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial reorganization; or

- the disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- debt securities that are determined to have low credit risk at the reporting date; and

- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition. Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward looking information.

Measurement of expected credit losses

Expected credit losses are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the trade receivable does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due.

n) Estimation of uncertainties relating to the global health pandemic from COVID-19

The Company has made detailed assessment of its liquidity position for the next year and the recoverability and carrying value of its assets comprising property, inventory and trade receivables. Based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets. The Company continues to evaluate them as highly probable considering the orders in hand. The situation is changing rapidly giving rise to inherent uncertainty around the extent and timing of the potential future impact of the COVID-19 which may be different from that estimated as at the date of approval of the financial results. The Company will continue to closely monitor any material changes arising of future economic conditions and impact on its business.

Rights, preferences and restrictions of equity shares

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Company has only one class of equity shares at par value of Rs.1/-each.

2.21 Disclosure under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDAct,2006)

Based on the information available with the Company, no creditors have been identified as ''supplier'' within the meaning of ''Micro, Small and Medium Enterprises Development Act, 2006.

*Pertains to income tax demand / matters on account of deductions / disallowances for the earlier years, pending appeals filed consequent orders passed against the Company / demands raised by the Department under Income Tax Act, 1961.

* The Company has written off of the dues to the government agencies, as these dues are operational creditors in nature under Insolvency Resolution Process and since the liquidation value of the corporate debtor is not sufficient to cover the dues of the secured financial creditor under the Resolution Plan, the Resolution Applicants have not provide any payment to above dues.

** The Income-Tax Department has re-opened the assessments of the Company for the years 201213, 2013-14, during the moratorium period under CIRP, and determined the tax liability ex-parte and issued notice of demand under Section 156 of the Income-tax Act, 1961. The above claims were not admitted by the Resolution Professional in the Information Memorandum (IM), issued while inviting Resolution plans from the prospective Applicants.

**Subsequent to the approval of the Resolution by the Hon’ble NCLT the above liability has been extinguished completely the Company is not liable for the above liability/demand for tax pursuant to the approval of this resolution plan by the NCLT.

2.25 Deferred tax asset/liability:

In view of carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised, which is as required under AS 22 ''Accounting for taxes on income’. Accordingly, no deferred tax asset has been recognized as at the year-end.

2.26 Events Occurred after Balance Sheet Date

1. An allotment of 2,00,00,000 (Two Crore only) equity shares of Rs. 1/- each fully paid, on June 03, 2021 to the consortium member (s) against the infusion of funds as envisaged in the approved Resolution Plan.

2. An allotment of 8,00,00,000 (Eight Crore only) equity shares of Rs. 1/- each fully paid, on June 03, 2021 to Equivas Capital Private Limited as a consideration other than cash for the acquision of its digital platform www.equippp.com as envisaged in the approved Resolution Plan.

3. The name of the Company has been changed to ''EQUIPPP SOCIAL IMPACT TECHNOLOGIES LIMITED’ and Registrar of Companies Affairs, Telangana region has issued fresh ''Certificate of Incorporation’ on June 23, 2021. The Company is yet to the get the final approval from the NSE for the name change.

4. Reclassification of erstwhile promoters as Public and Classification of Resolution Applicants as promoters of the Company as per the provisions of Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

2.27 Segment reporting Operating Segments:

a) Commodity:

b) Seed :

Identification of Segments:

The chief operating decision make monitors the operating results of its business segments for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on the profit or loss and is measured consistently with profit or loss in the financial statements. Operating segments have been identified on the basis of nature or products/services.

Segment Revenue and Results:

The expenses and incomes which are not attributable to any business segment are shown as unallocated expenditure

Accompanying notes form integral part of the financial statements In terms of our report attached

---

Mar 31, 2015

Overview

Green Fire Agri Commodities Limited ("the Company") was incorporated as Garden Style Private Limited on 11 June 1991. The name of the Company was subsequently changed from Northgate Technologies Limited to Green Fire Agri Commodities Limited on 20 July 2012. The company mainly engaged in Commodities trading business.

1.1 (a) Due to the major fire accident which completely destroyed the physical vouchers upto 10.2.2014 and also affected computers, Furniture and Fixtures, Office Equipments, servers and the steps taken by the Company for recovering the data from the Backup systems. We have conducted limited review of the accounts for the nine months period ending 31.12.2013. We have also conducted Audit for the year ending March 2014, based on data retrieved from the systems including scanned/soft copies and physical records available.

1.1 (b) With respect to balances under Sundry Debtors/Claims Recoverable/Loans & Advances/ Sundry Creditors/Other Liabilities which have not been confirmed by the certain parties.

1.1 (c) Unclaimed Dividend an amount of Rs. 3,12,324/- lying in HDFC Bank for the financial years 2004-05, 2005-06 & 2006-07 is due for transfer to Investor and Education Protection Fund.

1.2 Related party disclosures

i. Entities where control exists

None

ii. Key Management Personnel

D. Prakash Rao – Wholetime Director

T. Naresh Kumar – Director

iii. Enterprises with whom transactions have taken place

Entities where principal shareholders/management personnel have control or significant influence (either directly or indirectly)

Stampede Holdings Limited, India

Stampede Capital Limited, India

Social Media India Limited

1.3 Details of dues to micro and small enterprises as defined under MSMED Act, 2006

There are no dues to Micro and Small Enterprises specified under the Micro, Small and Medium Enterprises Development Act, 2006 as on 31st March, 2015, to the extent such parties have been identified on the basis of information available with the Company and relied on by the auditors

1.4 Provision for employee benefits

a. Pursuant to the adoption of the Accounting Standard 15 (Revised) – Employee Benefits effective 1st April 2007, the following table sets out the status of the gratuity plan :

Discount rate: The discount rate is based on the gross redemption yield on medium to long term risk free investments.

Expected rate of return on plan assets: The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Salary escalation rate: The attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

1.5 Differed tax asset/liability :

In view of carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised, which is as required under AS 22 ''Accounting for taxes on income''. Accordingly, no deferred tax asset has been recognised as at the year-end.

1.6 Segment reporting

During the current year, the Company is engaged in " Commodities trading" in India Revenue by geographical location of customer

1.7 Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year classification.

---

Mar 31, 2014

1 (a) Due to the major fire accident which completely destroyed the physical vouchers upto 10.2.2014 and also affected computers, Furniture and Fixtures, Office Equipments, servers and the steps taken by the Company for recovering the data from the Backup systems. We have conducted limited review of the accounts for the nine months period ending 31.12.2013. We have also conducted Audit for the year ending March 2014, based on data retrieved from the systems including scanned/ soft copies and physical records available.

2 (b) With respect to balances under Sundry Debtors/ Claims Recoverable/ Loans & Advances/ Sundry Creditors/ Other Liabilities which have not been confirmed by the certain parties.

3 (c) Unclaimed Dividend an amount of Rs. 2,29,216/- lying in HDFC Bank for the financial years 2004-05 & 2005-06 is due for transfer to Investor and Education Protection Fund. The company has already made request to HDFC Bank for transfer of said amount to Investor and Education Protection Fund.

4 Capital Commitments and Contingent liabilities

Particulars For the year ended For the year ended 31 March 2014 31 March 2013

Capital Commitments Nil Nil

Contingent Liabilities

Company extended property to Bank of Baroda against the loan sanctioned to Barret Commodity Traders Private Ltd 18,000,000 18,000,000

5 Differed tax asset/liability :

In view of carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised, which is as required under AS 22 ‘Accounting for taxes on income ’. Accordingly, no deferred tax asset has been recognised as at the year-end.

6 Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year classification.

---

Mar 31, 2013

Overview

Green Fire Agri Commodities Limited ("the Company") was incorporated as Garden Style Private Limited on 11 June 1991. The name of the Company was subsequently changed from Northgate Technologies Limited to Green Fire Agri Commodities Limited on 20 July 2012. The company mainly engaged in Commodities trading business.

1.1 Related party disclosures i. Entities where control exists

None

ii. Key Management Personnel

D.V.S. Prakash Rao - Wholetime Director P. Srinivasu - Director

iii. Enterprises with whom transactions have taken place

Entities where principal shareholders/management personnel have control or significant influence (either directly or indirectly)

Stampede Holdings Limited, India

Stampede Capital Limited, India

Bio Ethanol Agro Industries Limited, India

1.2 Capital Comitments and Contingent liabilities

Particulars For the year ended For the year ended 31 March 2013 31 March 2012

Capital Comitments

Continget Liabilities:

Company extended property to Bank of Baroda against the loan sanctioned to Barrot Commodity Traders Pvt. Ltd. 18,000,000

1.3 Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. Total rental expense under cancellable operating leases was Rs. 3,423,200 ( Previous year Rs. 3,464,111) and non cencellable prtion was Rs Nil ( Previous year Nil)

1.4 Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year classification.

---

Mar 31, 2012

* 47,089,846 equity Shares of Re.1 each pending allotment pursuant to the Approved Scheme for consideration other than cash (Refer note 2.24.iv) and accordingly, the same has not been considered for reconciliation of the number of equity shares outstanding.

Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

During the year beginning from 01 April 2007 to 31 March 2012, the Company had issued 16,514,295 equity shares by way of fully paid bonus shares on 03 September 2007 and 47,089,846 equity Shares of Re.1/- each pending allotment pursuant to the Approved Scheme for consideration other than cash.

* Pursuant to the Approved Scheme, all investment of the Company are transferred to Northgate Com Tech Limited except for the investment in Green Fire Agri Commodities Private Limited, which has been debited to the Statement of profit and loss. (Refer note 2.24)

1.1 Deferred tax asset

Deferred tax is provided on all timing differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The deferred tax asset / (liability), net as on 31 March 2012 comprises of:

* Pending allotment of equity shares pursuant to the merger, the number of equity shares pending allotment aggregating 47,089,846 have been considered for computing the diluted earnings per share and the same have not been considered for computing the basic earnings per share.

1.2 Note on Scheme of Arrangement and Amalgamation

"The Honorable High Court of Andhra Pradesh has approved the Composite Scheme of Arrangement and Amalgamation between Northgate Technologies Limited (''the Company''), Northgate Com Tech Limited (''Northgate Com''), Green fire Agri Commodities Private Limited (''Green fire''), their respective shareholders and creditors (''the Approved Scheme'') on 28 March 2012. The Appointed date of the Approved Scheme is 1 April 2011. Pursuant to the Approved Scheme becoming effective:"

i. the financial statements have been prepared giving effect to the Approved Scheme after making suitable adjustments to align the accounting methods and policies, the effect of which has been considered in the opening balance sheet as on the appointed date, which has been approved by the Board of Directors at their meeting held on 30 May 2012. Accordingly, the financial statement of the Company for the year ended 31 March 2012 have been presented after incorporating the effect of the accounting as proposed in the Approved Scheme. The Approved Scheme is in compliance with the relevant accounting standards notified by the Central Government under Section 211(3C) of the Companies Act,1956.

ii. the internet business of the Company has been demerged into Northgate Com and the commodity business of Green fire is merged with the Company.

iii. one share of Northgate Com would be issued to each shareholder of the Company for one equity share held by him in the Company. Difference between the book value of the net assets, pertaining to the internet business, transferred to Northgate Com is debited to Securities Premium account of the Company, as follows:

v. all the assets and liabilities as on the Appointed Date, recorded in the books of Green fire are transferred to and vested in the Company and is recorded by the Company at their respective book values; Difference between the book value of the net assets, pertaining to the Green Fire, transferred to the Company and face value of the equity shares issued by the Company is debited to accumulated balance in the Statement of profit and loss, as follows:

vi. the face value and the paid up value per equity share (including new equity shares issued to Stampede Holdings Limited) of the Company has been reduced by Rs. 9 without any payments to the holders of such equity shares of the Company. Consequently upon such reorganization of equity share capital of the Company, the face value and the paid up value per share of the Company is Re.1. The reduced amount has been credited to "Capital reorganization account". Balance available in Capital Reorganisation account is adjusted with the debit balance in Statement of Profit and Loss.

vii. the balance available in share premium account, after debiting the deficit arising as per point iii above, is adjusted with debit balance of Statement of Profit and Loss.

viii. the Company will remit the applicable stamp duty within the stipulated time line specified in the court order shares on pending allotment of shares to share holders of Green fire.

ix. movement in Share Premium account, Capital Reorganisation account and Statement of profit and loss is explained, as follows:

1.3 Related party disclosures

i. Entities where control exists None

ii. Key Management Personnel

Venkata S Meenavalli - Chairman and Managing Director P. Srinivasu - Executive Director

K. Bhaskara Reddy - Executive Director (up to 12 November 2010)

iii. Enterprises with whom transactions have taken place

Entities where principal shareholders/management personnel have control or significant influence (either directly or indirectly)

Stampede Holdings Limited, india Stampede Capital Limited, india Bio Ethanol Agro industries Limited, india Northgate investments Pte Limited, Singapore*

Globe7 (UK) Limited, United Kingdom*

Globe7 Pte Limited, Singapore$

Social Media India Limited, India$

Globe7 HK Limited, Honk Kong$

Axill Europe Limited, United Kingdom$

VAR Quant Tech Securities Private Limited, india (Upto11 November 2010)*

Green Fire Agri Commodities Private Limited, india (w.e.f. 20 September 2010)*

* Was a subsidiary till 1 April 2011.

$ Was a step down subsidiary till 1 April 2011.

1.4 Details of dues to micro and small enterprises as defined under MSMED Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financial statements based on information received and available with the Company. Further in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

Discount rate: The discount rate is based on the gross redemption yield on medium to long term risk free investments.

Expected rate of return on plan assets: The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Salary escalation rate: The attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

1.5 Contingent liabilities

"The Company issued a corporate guarantee amounting to Rs. Nil (previous year: Rs. 80,000,000) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media india Limited."

1.6 Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. Total rental expense under cancellable operating leases was Rs. 3,464,111 (previous year: Rs. 2,270,934) and under non-cancellable portion was Rs. Nil (previous year: Rs. 2,702,350), which has been disclosed as rent.

1.7 Segment reporting

Pursuant to the Approved Scheme, the internet business of the Company has been demerged into Northgate Com and the commodity business of Green fire is merged with the Company (Refer note 2.24). During the current year, the Company is engaged in " Commodities trading" activity in India. In the previous year, the Company was involved in the business of providing Information Technology services to its sole customer in Singapore. However, in both the years there is one business segment and one geographical segment. Consequently, the requirement for a separate disclosure as required under AS 17 - ''Segment Reporting'' is not applicable.

1.8 The Company has the following un-hedged exposure in foreign currency at the year end:

1.9 In view of the aforesaid Scheme of arrangement and amalgamation with effect from 1 April 2011 (refer note 2.24), the figures of the current year are not comparable with those of the previous year.

1.10 Till the year end 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified the previous year figures to confirm to current year''s classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosure made in the financial statement, particularly presentation of balance sheet.

---

Mar 31, 2011

1. Contingent liabilities

The Company issued a corporate guarantee amounting to Rs. 80,000,000 (previous year: Rs. 80,000,000) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media India limited, a step- down subsidiary.

2. the Board of Directors of the Company at their meeting held on May 19, 2011, considered and approved the Composite Scheme of Arrangement between Northgate Technologies Limited (''NTL'' or ''the Company'') and Northgate Com Tech Private Limited (''Northgate Com'') and Green Fire Agri Commodities Private Limited (''Green Fire'') (''Collectively referred to as Group'') and their respective shareholders and creditors (''Scheme'') under Sections 391-394 read with Sections 100-103 of the Companies act, 1956.

The Scheme is subject to consent, approval of requisite majority of shareholders and creditors of the Company, Northgate Com and green Fire, sanction of the high Court of andhra pradesh and all other regulatory approvals as may be necessary for the implementation of the Scheme.

the salient features of the Scheme are as under:

(a) The Appointed Date of the Scheme is 1 April 2011.

(b) The Scheme involves the demerger of Internet Business Undertaking of the Company into Northgate Com and merger of green Fire into the Company.

(c) Based on an independent valuation and fairness opinion, the Board approved and recommended the Share entitlement ratio as follows:

"1 (One) fully paid Equity Share of Rs. 10 (Rupees Ten) each of Northgate Com shall be issued and allotted for every 1 (One) Equity Share of Rs. 10 (Rupees Ten) each held in the Company."

"158 (One Hundred ffity eight) fully paid Equity Shares of Rs. 10 (Rupees Ten) each of Northgate shall be issued and allotted for every 1 (One) fully paid Equity Share of Rs. 10 (Rupees Ten) each held in Green Fire (except in respect of shares held by the Company in Green Fire)."

(d) Consequent to the demerger of the Internet business of Northgate into Northgate Com, the shares of the Northgate Com will be listed on the National Stock exchange of India limited.

(e) Consequent to the merger of Green Fire into NTL, the name of NTL will be changed to "Green Fire Agri Commodities limited" and the face value and the paid-up value of the shares of the Company together with the new shares issued and allotted on merger will be reduced by rs. 9 without payment to the holders of such equity shares of Northgate. the shares of the Northgate will continue to list on National Stock exchange of India limited.

3. Employee stock option scheme

the Company has instituted the following employee stock option plans for all eligible employees, in pursuance to the respective special resolution approved by the shareholders. all the plan options shall be administered by the compensation committee, which shall determine the employees eligible for receiving options, the number of options to be granted, the exercise price, the vesting period and the exercise period. the vesting period is determined for the options issued on the date of the grant.

18. Notes to Accounts (continued)

The exercise price of the options granted under the ESOP plans, is defned as the closing market price of the underlying equity share, preceding the date of grant of options on the stock exchange having the highest trading volume of such shares.

In the case of termination of employment, all non-vested options would stand cancelled. options that have vested but have not been exercised can be exercised within the time prescribed under each option agreement approved by the compensation committee, which shall not be beyond the initial exercise period, failing which they would stand cancelled.

at the annual general Meeting held on 1 august 2007, the members of the Company approved for issue of fully paid-up bonus shares in the ratio of 1:1 i.e. one additional equity share, fully paid-up for each existing equity share held by the members, by capitalizing a part of the share premium account. the record date for such issue was 3 September 2007 and the shares were allotted on 5 September 2007. Based on the guidelines issued by Securities exchange Board of India, the effect of this corporate action has been applied to all the outstanding options as at the date of the approval.

4. Deferred tax

In view of carry forward of losses under tax laws in the current period, the Company is unable to demonstrate virtual certainty as required by the Explanation in AS 22 ''Accounting for taxes on income''. Accordingly, no deferred tax asset has been recognized as at the year-end as there is no virtual certainty supported by convincing evidence that suffcient future taxable income will be available against which such deferred tax asset can be realized.

5. Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. total rental expense under cancellable operating leases was Rs. 2,270,934 (previous year: Rs. 1,856,500) and under non-cancellable portion was Rs.2,702,350 (previous year: Rs. 4,764,960), which has been disclosed as rent.

the managerial personnel are covered by the personal accident insurance policy and mediclaim insurance policy taken by the Company along with other employees of the Company. the proportionate premium paid towards insurance policies pertaining to the managerial personnel has not been included in the aforementioned disclosures as separate amounts are not available for Directors. Further the above figures do not include provision for gratuity and compensated absences payable to the Managing Director as the same are actuarially determined for the Company as a whole.

10. Details of investments purchased and sold

Sold

During the current year, the Company has sold 100% shares of VAR Quant Tech Securities Private Limited with the approval of the Board of Directors as on 11 November 2010.

- Share application money pending allotment 26,020,590

11. Segment information

the Company is in the business of providing Information technology Services to its step down subsidiary. the Company does not make any distinction amongst the services rendered or the geographical areas to which services are rendered and accordingly, there is only one business and geographical segment.

Pursuant to the Accounting Standard Interpretation (ASI) 20 (Revised) – Disclosure of Segment Information issued by the ICAI, no segment disclosure has been made in these financial statements, as the Company has only one geographical and business segment.

12. Related parties

A) Entities where control exists None

B) Entities with whom transactions have taken place during the year

Subsidiaries

i. Northgate Investments pte limited, Singapore

ii. VAR Quant Tech Securities Private Limited, India

iii. Globe7(UK) Limited, United Kingdom

iv. Green Fire Agri Commodities Private Limited, India (Formally PNM Commodities Private Limited)

Step down subsidiaries

i. globe7 pte limited, Singapore ii. Social Media India limited, India iii. globe7 hK limited, honk Kong iv. axill europe limited, united Kingdom

C) Key Managerial Personnel (KMP)

i. Venkata S Meenavalli - Chairman and Managing Director

ii. P. Srinivasu - Executive Director (w.e.f. 30 September 2010)

iii. D.VS.S.lakshminarayana - Director

iv. K. Bhaskara Reddy - Executive Director (up to June 19, 2010)

Discount rate: the discount rate is based on the gross redemption yield on medium to long term risk free investments.

Salary escalation: the estimates of future salary increases, considered in actuarial valuation, take account of infation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Attrition rate: the attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

14. During the year, the Company raised an amount of rs. 287,000,000 by issue of 14,000,000 equity shares through Qualifed Institutional Placements (QIP) with a face value of Rs.10 per share at a premium of Rs 10.50 per share. The expenses amounting to Rs.11,635,856 relating to the QIP have been deducted from the share premium received.

15. Disclosure as per Clause 32 of the Listing Agreement

During the year ended 31 March 2011, no loans and advances in the nature of loans were given to any subsidiary Company.

16. Amounts payable to micro, small and medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an office Memorandum dated 26 August 2008 which recommends that the Micro and Small enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2011 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said act is not expected to be material. the Company has not received any claim for interest from any supplier under the said act.

Year Ended Year Ended

Particulars 31 March 2011 31 March 2010

the principal amount and the interest due thereon remainingunpaid to any supplier as at the end of each accounting year Nil Nil

the amount of interest paid by the Company along with theamounts of the payment made to the supplier beyond the appointed day during the year Nil Nil

the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specifed under this Act Nil Nil

the amount of interest accrued and remaining unpaid at the end of the year Nil Nil

the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises Nil Nil

17. Quantitative details

the Company is engaged in the business of providing "Information technology Services". these activities are not capable of being expressed in any generic form. Consequently, the quantitative details of sales and the particulars required under paragraph 3, 4C and 4D of part II of Schedule VI to the Companies act, 1956 have not been disclosed.

19. Transfer pricing

the Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax act. Since the law required existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprise during the financial year and expects such records to be in existence latest by 30 September 2011, as required by law. The Management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

20. Previous year figures

Previous year figures have been regrouped / reclassified wherever necessary, to conform to current year classification.

---

Mar 31, 2010

1. Contingent Liabilities

The Company has issued a corporate guarantee amounting to Rs. 80,000,000 (previous year: Rs. 80,000,000) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media India limited, a step-down subsidiary.

The exercise price of the options granted under the 2004 ESOP Plan, is defined as the average of the weekly high and low of the closing price of the underlying equity shares, during the six months preceding the date of grant, on the stock exchange having the highest trading volume of such shares, or closing price on the same stock exchange on the date of grant whichever is lower.

The exercise price of the options granted under the other ESOP plans, is defined as the closing market price of the underlying equity share, preceding the date of grant of options on the stock exchange having the highest trading volume of such shares.

In the case of termination of employment, all non-vested options would stand cancelled. options that have vested but have not been exercised can be exercised within the time prescribed under each option agreement approved by the compensation committee, which shall not be beyond the initial exercise period, failing which they would stand cancelled.

At the annual general Meeting held on 1 august 2007, the members of the Company approved for issue of fully paid-up bonus shares in the ratio of 1:1 i.e. one additional equity share, fully paid-up for each existing equity share held by the members, by capitalizing a part of the share premium account. the record date for such issue was 3 September 2007 and the shares were allotted on 5 September 2007. Based on the guidelines issued by Securities exchange Board of India, the effect of this corporate action has been applied to all the outstanding options as at the date of the approval.

On 18 October 2008, the Compensation Committee of the Board of Directors decided to cancel all the unexercised stock options outstanding as on that date, under the 2004 ESOP plan and the 2005 ESOP plan, resulting out of the significant fall in the stock market price of the Company’s shares, which was detrimental to the interest of option holders.

Accordingly 188,000 and 802,300 number of options under the 2004 ESOP plan and the 2005 plan, respectively have been cancelled which includes 188,000 number of vested options. the cancellation of vested options, the cost for which has been recognized in the previous periods, has been recorded as a credit to the previous year stock compensation expense amounting to rs.1,801,980, in accordance with the guidelines issued by Securities exchange Board of India.

4. Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. total rental expense under cancellable operating leases was Rs. 1,856,500 (previous year: Rs. 2,585,509) and under non-cancellable portion was Rs. 4,764,960 (previous year: Rs. 7,102,241), which has been disclosed as rent.

the managerial personnel are covered by the personal accident insurance policy and mediclaim insurance policy taken by the Company along with other employees of the Company. the proportionate premium paid towards insurance policies pertaining to the managerial personnel has not been included in the aforementioned disclosures as separate amounts are not available for Directors. Further the above figures do not include provision for gratuity and compensated absences payable to the Managing Director as the same are actuarially determined for the Company as a whole.

In the previous year ended 31 March 2009, the Company had paid an amount of Rs. 1,622,500 to the Chairman and Managing Director in excess of the limits prescribed in Schedule XIII of the Companies act, 1956, without obtaining the prior approval of the Central government, as contemplated. however, the Company has recovered this amount by way of a cheque from the Chairman and Managing Director which has been disclosed as Cheque on hand as at 31 March 2009 and has been subsequently realized in April 2009. however, in the current year, the remuneration paid is within the limits prescribed in Schedule XIII of the Companies act, 1956.

5. Segment Information

The Company is in the business of providing Information technology Services to its step down subsidiary. the Company does not make any distinction amongst the services rendered or the geographical areas to which services are rendered and accordingly, there is only one business and geographical segment.

Pursuant to the Accounting Standard Interpretation (ASI) 20 (Revised) – Disclosure of Segment Information issued by the ICAI, no segment disclosure has been made in these financial statements, as the Company has only one geographical and business segment.

6. Related Parties

A) Parties where control exists

S.

No. Name of the party Relationship

1. Northgate Investments Pte limited, Singapore Subsidiary company

2. Var Quant tech Securities private limited, India NSubsidiary company

3. Globe 7 pte limited, Singapore Step down subsidiary company

4. Social Media India limited, India Step down subsidiary company

5. Globe 7 HK limited, hong Kong Step down subsidiary company

6. Axill Europe limited, united Kingdom Step down subsidiary company



B) Other Related Parties

S.

No. Name of the party Relationship

1. Stampede holdings private limited, India Enterprises in which Chairman and Managing

Director is a Director

2. Brilliant Securities Limited, India Enterprises signifcantly infuenced by key

management personnel

3. KBR holdings private limited,India Enterprises owned by key management

personnel and their relatives

4. PNM Commodities Private Limited Enterprises signifcantly influenced by key

management personnel

5. Bio Ethanol India Limited Enterprises signifcantly infuenced by key

management personnel

E) Non Executive Directors and Independent Directors on the board of the Company

S.

No. Name of the Personnel Relationship

1. P. Parthasarathi Independent Director

2. T. Naresh Kumar Independent Director

3. P. Srinivasu Additional Director

4. K. Sujith Kumar Additional Director

5. Y. ramesh Independent Director

7. Gratuity

In accordance with applicable India laws, the Company provides gratuity, a defined benefit, covering certain categories of employees. the gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment. the amount of payment is based on the respective employee’s last drawn salary and the years of employment with the company.

The following table summarizes the components of net benefit expense recognised in the profit and loss account and the funded status of the amounts recognised in the balance sheet for the gratuity plans.

Discount rate: the discount rate is based on the gross redemption yield on medium to long term risk free investments.

Salary escalation: the estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Attrition rate: the attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

8. Amounts payable to micro, small and medium enterprises

The management has initiated the process of identifying enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium enterprises Development act, 2006. Further, the Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small enterprises should mention in their correspondence with its customers the entrepreneurs Memorandum Number as allotted after fling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2010 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said act is not expected to be material. the Company has not received any claim for interest from any supplier under the said act.

9. Quantitative details

the Company is engaged in the business of providing "Information technology Services". these activities are not capable of being expressed in any generic form. Consequently, the quantitative details of sales and the particulars required under paragraph 3, 4C and 4D of part II of Schedule VI to the Companies act, 1956 have not been disclosed.

10. Previous year figures

Previous year figures have been regrouped / reclassifed wherever necessary, to conform to current year classification.

---

Mar 31, 2009

1. Contingent Liabilities

The Company has issued a corporate guarantee amounting to Rs. 80,000,000 (previous year: Rs. Nil) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media India Limited.

2. Employee Stock Option Scheme

The Company has instituted the following employee stock option plans for all eligible employees, in pursuance to the respective special resolution approved by the shareholders. All the plan options shall be administered by the compensation committee, which shall determine the employees eligible for receiving options, the number of options to be granted, the exercise price, the vesting period and the exercise period. The vesting period is determined for the options issued on the date of the grant.

The exercise price of the options granted under the 2004 ESOP Plan, is defi ned as the average of the weekly high and low of the closing price of the underlying equity shares, during the six months preceding the date of grant, on the stock exchange having the highest trading volume of such shares, or closing price on the same stock exchange on the date of grant whichever is lower.

The exercise price of the options granted under the other ESOP plans, is defi ned as the closing market price of the underlying equity share, preceding the date of grant of options on the stock exchange having the highest trading volume of such shares.

In the case of termination of employment, all non-vested options would stand cancelled. Options that have vested but have not been exercised can be exercised within the time prescribed under each option agreement approved by the compensation committee, which shall not be beyond the initial exercise period, failing which they would stand cancelled.

At the Annual General Meeting held on 1 August 2007, the members of the Company approved for issue of fully paid-up bonus shares in the ratio of 1:1 i.e. one additional equity share, fully paid-up for each existing equity share held by the members, by capitalizing a part of the share premium account. The record date for such issue was 3 September 2007 and the shares were allotted on 5 September 2007. Based on the guidelines issued by Securities Exchange Board of India, the effect of this corporate action has been applied to all the outstanding options as at the date of the approval.

3. Leases

The Company leases offi ce facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. Total rental expense under cancellable operating leases was Rs. 2,585,509 (previous year: Rs. 1,668,685) and under non-cancellable portion was Rs. 7,102,241 (previous year: Rs. 4,722,000), which has been disclosed as rent.

4. Details of Investments Purchased and Sold

On 2 July 2008, the Board of Directors of the Company entered into a ‘Share Purchase Agreement’ with certain specifi ed shareholders of Social Media India Limited (“SMIL”), for the transfer of their shareholding in SMIL for consideration of Rs. 10,000,000 settled in cash.

Subsequently on the same date, the Company as part of its restructuring plan approved by the Board during the Year ended

31 March 2008, transferred all of its shares held in SMIL, including those acquired during the year, to Globe7 Pte Limited, for a consideration of Rs. 250,000,000 which was received in cash during the year. The Company has not recorded any gain/loss on this transaction since the sale consideration equals the carrying amount of the investments in SMIL.

5. Segment Information

The Company is in the business of providing Information Technology Services to its step down subsidiary. The Company does not make any distinction amongst the services rendered or the geographical areas to which services are rendered and accordingly, there is only one business and geographical segment.

Pursuant to the Accounting Standard Interpretation (ASI) 20 (Revised) – Disclosure of Segment Information issued by the ICAI, no segment disclosure has been made in these fi nancial statements, as the Company has only one geographical and business segment.

6. Decline in the Value of Long Term Investments

The Company during the current year provided for decline in the value of its investment held in Northgate Investments Pte Limited, Singapore (“NIPL”); amounting to Rs. 2,627,736,657. This decline in the value of investment has been determined owing to the signifi cant decline in the value of the underlying investments held by NIPL in the following step down subsidiaries:

Globe 7 HK Limited, Hong Kong Globe 7 Pte Limited, Singapore Globe 7 Inc., USA

Decline in the value of investments in step-down subsidiaries have been on account of reduced operations resulting from termination of key partnership contracts and signifi cant delays in the recoverability of dues from the customers specifi cally in relation to the Hong Kong operations, which resulted in an other than temporary diminution in the value of the investments on account of obsolescence of certain fi xed assets, intangible assets and irrecoverable debts.

7. Closure of Branch Offi ces

On 5 March 2009, the Board of Directors of the Company decided to close operations conducted by the Company’s branch offi ces at Singapore, Hong Kong and the United States of America, on account of decreased operational benefi ts. As part of the closure process the management decided to absolve its right on certain fi xed assets held at each of these branches and has abandoned the same. Accordingly, the Company has recorded the net book value of these fi xed assets as loss on abandonment of assets amounting to Rs. 24,047,614 for the year ended 31 March 2009.

In addition to the above, the Company abandoned the development of an intangible asset, named “FROG TOOL” amounting to Rs. 5,041,550 disclosed as “Capital work in progress” as at 31 March 2008, on account of change in technical feasibility for the same. This amount has been recorded as part of loss on abandonment of assets for the year ended 31 March 2009.

8. Gratuity

In accordance with applicable India laws, the Company provides gratuity, a defi ned benefi t retirement plan (“Gratuity Plan”) covering certain categories of employees. The Gratuity Plan provides a lump sum payment of to vested employees at retirement or termination of employment. The amount of payment is based on the respective employee’s last drawn salary and the years of employment with the Company.

The following table summarizes the components of net benefi t expense recognised in the profi t and loss account and the funded status of the amounts recognised in the balance sheet for the gratuity plans.

Discount rate: The discount rate is based on the gross redemption yield on medium to long term risk free investments.

Salary escalation: The estimates of future salary increases, considered in actuarial valuation, take account of infl ation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Attrition rate: The attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

9. Amounts payable to micro, small and medium enterprises

The management has initiated the process of identifying enterprises which have provided goods and services to the Company and which qualify under the defi nition of micro and small enterprises, as defi ned under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2009 has been made in the fi nancials statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

10. Quantitative details

The Company is engaged in the business of providing “Information Technology Services”. These activities are not capable of being expressed in any generic form. Consequently, the quantitative details of sales and the particulars required under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 have not been disclosed.

11. Subsequent events

On 1 April 2009, M/s. Price Waterhouse auditors of the Company appointed in the annual general meeting held on 30 September 2008, vacated the offi ce held by them by resignation resulting in a casual vacancy. Subsequently the members of the Company at their extraordinary general meeting held on 11 May 2009, appointed M/s. B S R and Company as the statutory auditors to fi ll such casual vacancy.

12. Previous year fi gures

Previous year fi gures have been regrouped / reclassifi ed wherever necessary, to conform to current year classification.

---

Mar 31, 2008

1. Stock Option Plans

Employee Stock Option Plan 2004 (“The 2004 Plan”)

The 2004 Plan was approved by the Board of Directors of the Company on August 27, 2004 and by the Members on September 28, 2004, for issue of a maximum of 500,000 options representing 500,000 equity shares.

The members of the company during the year approved for issue of bonus shares in the ratio of 1:1 i.e. one additional equity share for every one existing share held on the record date for the financial year 2006-07. The effect of bonus issue has been applied to all the oustanding options as at the date of members’ approval.

Vesting Schedule

At the end of first year from the grant date, 30% of the total options granted shall vest and become vested options.

At the end of second year from the grant date, another 30% of the total options granted shall vest and become vested options.

At the end of third year from the grant date, the balance 40% of the total options granted shall vest and become vested options.

Employee Stock Option Plan 2005 (“The 2005 Plan”)

The 2005 Plan was approved by the Board of Directors of the Company on August 26, 2005 and by the Members on September 21, 2005, for the issue of a maximum of 600,000 options representing 600,000 equity shares.

The members of the company during the year approved for issue of bonus shares in the ratio of 1:1 i.e. one additional equity share for every one existing share held on the record date for the financial year 2006-07. The effect of bonus issue has been applied to all the oustanding options as at the date of members’ approval.

Vesting schedule

At the end of first year from the grant date, 30% of the total options granted shall vest and become vested options.

At the end of second year from the grant date, another 30% of the total options granted shall vest and become vested options.

At the end of third year from the grant date, the balance 40% of the total options granted shall vest and become vested options.

Employee Stock Option Plan 2006 (“The 2006 Plan”)

The 2006 Plan was approved by the Board of Directors of the Company on September 29, 2006 and by the Members on October 25, 2006, for the issue of a maximum of 600,000 options representing 600,000 equity shares. The members of the company during the year approved for issue of bonus shares in the ratio of 1:1 i.e. one additional equity share for every one existing share held on the record date for the financial year 2006-07. The effect of bonus issue has been applied to all the oustanding options as at the date of members’ approval.

Vesting schedule

At the end of first year from the grant date, 30% of the total options granted shall vest and become vested options.

At the end of second year from the grant date, another 30% of the total options granted shall vest and become vested options.

At the end of third year from the grant date, the balance 40% of the total options granted shall vest and become vested options.

Restricted Stock Option - Restricted Stock Option Plan 2007 (RSOP 2007 Plan)

The RSOP 2007 Plan was approved by the Board of Directors on July 07, 2007 and by the Members on August 01, 2007, for the issue of a maximum of 500,000 options representing 500,000 equity shares. Under the Scheme 500,000 equity shares are reserved to be issued to eligible associates at a price to be determined by the Compensation Committee which shall not be less than the face value of the share.

As of March 31, 2008 no options were granted under the RSOP 2007 Plan.

2. Bonus Shares

At the Annual General Meeting held on August 01, 2007, the Members approved for issue of bonus shares in the ratio of 1:1 i.e. one additional equity share for every one existing share held by the Members by capitalizing a part of the share premium. The record date for the bonus issue was September 03, 2007 and the shares were allotted on September 05, 2007.

3. Share Premium

Share Premium received during the year includes Rs. 154,752 being Fringe Benefit Tax recovered and paid on exercise of employee stock options by the employees.

4. In terms of the group reorganisation plan, the following transactions were effected during the year ended March 31, 2008:

(a) Axill Inc, USA, a wholly owned subsidiary of the company was merged with Globe7 Inc, USA, another wholly owned subsidiary of the company. Consequent to this 2,246,880 shares were issued by Globe7 Inc, USA to the company;

(b) The entire shareholding in wholly owned subsidiaries, Globe7 Inc, Axill Europe Limited and Globe7 HK Limited held by the company was sold to another wholly owned subsidiary, Globe7 Pte Limited, based on valuations carried out by an Independent Valuer for a consideration of Rs. 1,971,847,079 and the resultant loss of Rs. 72,009,599 was recognized in the Profit and Loss Account.

(c) The intangible assets i.e. computer software (consisting of Axill-tracking tool and Globe7-SIP phone) held by the Company were sold to its wholly owned subsidiary, Globe7 Pte Limited based on valuations carried out by an Independent Valuer for a consideration of Rs.42,299,749 and the resultant profit of Rs. 18,797,078 was recognized in the Profit and Loss Account.

5. Related Party Transactions

The company had transactions with the following related parties:

Subsidiaries: Northgate Investments Pte Limited, Social Media India Limited, Globe7 Pte Limited (Subsidiary of Northgate Investments Pte Limited), Globe7 Inc*, Globe7 HK Limited*, Axill Europe Limited*, Axill Inc (Merged with Globe7 Inc w.e.f. October 02, 2007) and Northgate Holdings (S) Pte Limited.

* Subsidiaries of Globe7 Pte Limited

Others: Sybanet Communication Inc, Sholay.com Inc and Globe7 Limited, Gibraltar. (Enterprises owned or significantly influenced by key management personnel or their relatives)

Key Management Personnel: Mr. Venkat S. Meenavalli (Chairman and Managing Director) and Mr. K. Bhaskara Reddy (Executive Director)

6. Gratuity

i. Short term

Short term employee benefits are recognized as an expense as per the company’s scheme based on expected obligations.

ii. Post Retirement

Post retirement benefits comprise of provident fund and gratuity which are accounted as follows:

a. Provident Fund Contribution Plan

Contribution in respect of staff is remitted to provident fund authorities in accordance with the relevant statute and are charged to profit and loss account as and when due. The Company has no further obligations for future provident fund benefits other than its annual contribution.

b. Gratuity

This is a defined benefit plan. Provision for gratuity is made based on actuarial valuation using projected unit credit method. Actuarial gain / (losses) of Rs.1,375,629 is charged to Profit and Loss Account.

7. Quantitative details

The company is engaged in the business of providing Information Technology services and Telecommunication services. As the said sale and services cannot be expressed in any generic unit, it is not possible to give the quantitative details of sales and the information required under paragraph 3 and 4C of Part II of Schedule VI of the Indian Companies Act, 1956.

8. Information pursuant to paragraphs 3, 4, 4A, 4C and 4D of Part II to Schedule VI of the Companies Act, 1956 to the extent, either nil or not applicable has not been furnished.

9. Previous year’s figures are not strictly comparable on account of the reorganisation of business carried out during the year.

10. Regroup, recast and re-arrangement

Figures for the corresponding year have been regrouped, recast and rearranged to conform to those of current year, wherever necessary.

---

Mar 31, 2007

1. Commitments and Contingent Liabilities

Estimated amount of contracts remaining to be executed on capital account, net of advances, Rs. Nil (2006 - Rs. 2,099,824).

2. Long Term Investments

During the year the company has sold its investment in the subsidiary M/s. Northgate Holdings (S) Pte. Ltd for a consideration of USD 700,000 (equivalent Indian Rs. 31,150,000). The resultant profit of Rs. 1,681,011 (net of costs) was recognized in the profit and loss account.

3. Related party disclosures

The company had transactions with the following related parties:

Subsidiaries: Axill Inc, Globe7 Inc, Globe7 HK Limited, Axill Europe Limited and Northgate Holdings (S) Pte. Limited (ceased to exist as a subsidiary w.e.f. January 01, 2007).

Others: Sybanet Communication Inc, Sholay.com Inc and Globe7 Limited, Gibraltar. (Enterprises owned or significantly influenced by key management personnel or their relatives)

Directors and Key Management Personnel: Venkat S. Meenavalli and K. Bhaskara Reddy.

4. Operating Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vests with the lessor, are recognized as operating lease. The company has entered into certain cancellable lease agreement for office premises and the amount paid under such agreement Rs.3,488,022 (2006 - Rs. 2,829,295) has been recognized in the profit and loss account.

5. Quantitative details

The company is engaged in the business of providing Information Technology services and Telecommunication services. As the said sale and services cannot be expressed in any generic unit, it is not possible to give the quantitative details of sales and the information required under paragraph 3 and 4C of Part II of Schedule VI of the Indian Companies Act, 1956.

6. Information pursuant to paragraphs 3, 4, 4A, 4B, 4Cand 4Dof Part II to Schedule VI of the Companies Act, 1956 to the extent, either nil or not applicable has not been furnished.

7. Regroup, recast and re-arrangement

Figures for the corresponding previous year have been regrouped, recast and rearranged to conform to those of current year, wherever necessary.

---

Mar 31, 2006

1. Commitments and Contingent Liabilities

(a) Estimated amount of contracts remaining to be executed on capital account, net of advances, Rs. 2,099,824. (Previous Year Rs. Nil).

(b) Contingent liabilities Rs. Nil. (Previous Year Rs. Nil)

3. Stock Option Plans

The Company currently has two stock option plans, details of which are as under:

Employee Stock Option Plan 2004 ("The 2004 plan")

"The 2004 plan" was approved by the Board of Directors on August 27, 2004 and by the shareholders on September 28, 2004, and was for issue of maximum of 500,000 equity shares, of which 408,000 equity shares were granted till March 31, 2006. "The 2004 plan" continues unless terminated by the Company.

Vesting Schedule

At the end of first year from the grant date, 30% of the total options granted shall vest and become vested options.

At the end of second year from the grant date, another 30% of the total options granted shall vest and become vested options.

At the end of third year from the grant date, the balance 40% of the total options granted shall vest and become vested options.

Details of number of options granted, exercised and lapsed are as follows:

Year ended Year ended March 31, 2006 March 31, 2005

Options Outstanding at the beginning of the year 408,000 Nil

Add : Granted Nil 408,000

Less: Exercised 109,500 Nil

Lapsed 44,400 Nil

Options Outstanding at the end of the year 254,100 408,000

Weighted average remaining contractual life (in years) 2.56 3.56

The weighted average exercise price of options outstanding at the beginning of the year, granted during the year, exercised during the year, lapsed during the year and outstanding at the end of the year is Rs. 48.83 per option.

Employee Stock Option Plan 2005 ("The 2005 plan")

"The 2005 plan" was approved by the Board of Directors on August 26, 2005 and by the shareholders on September 21, 2005, and is for the issue of maximum of 600,000 equity shares, of which 385,000 equity shares were granted as on March 31, 2006, "The 2005 plan" continues unless terminated by the Company.

Vesting schedule

At the end of first year from the grant date, 30% of the total options granted shall vest and become vested options.

At the end of second year from the grant date, another 30% of the total options granted shall vest and become vested options.

At the end of third year from the grant date, the balance 40% of the total options granted shall vest and become vested options.

Details of number of options granted, exercised and lapsed are as follows:

Year ended Year ended March 31, 2006 March 31, 2005

Options Outstanding at the beginning of the year Nil Nil

Add : Granted 385,000 Nil

Less: Exercised Nil Nil

Lapsed Nil Nil

Options Outstanding at the end of the year 385,000 Nil

Weighted average remaining contractual life (in years) 2.65 Nil

The weighted average exercise price of options outstanding at the beginning of the year, granted during the year, exercised during the year, lapsed during the year and outstanding at the end of the year is Rs. 292.65 per option.

Pro forma disclosure

In accordance with Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, had the compensation cost for Stock Option plans been recognized based on the fair value at the date of grant in accordance with Black Scholes model, the pro forma amounts of the Companys net profit and earnings per share would have been as follows:

(Amount in Rupees) Year ended Year ended particulars March 31, 2006 March 31, 2005

1. Profit after Taxation

- As reported 241,418,259 72,044,423

- Pro forma 236,678,517 71,725,104

2. Earnings Per Share Basic

- Number of shares 12,974,596 10,751,333

- EPS as reported 18.61 6.70

- Pro forma EPS 18.24 6.67

3. Earnings Per Share Diluted

- Number of shares 13,258,218 11,583,662

- EPS as reported 18.21 6.22

- Pro forma EPS 17.85 6.19

The following assumptions were used for calculation of fair value of grants:

Year ended Year ended March 31, 2006 March 31, 2005

Weighted average fair value 37.51 27.16

Dividend yield (%) 0.00 0.33

Expected volatility (%) 59.27 60.09

Risk-free interest (%) 6.19 7

Expected term (in years) 3.05 2.56

Pro forma disclosure in respect of the 2005 plan is not applicable, since the options were granted at market price prevailing on the date of said grant.

4. Current Investments

Non-trade, unquoted current investments as on March 31, 2006

(Amount in Rupees) Particulars Number of Units Value

DSPML MF-Savings Plus Moderate Monthly Dividend 462,115 5,071,971

DSPML MF-Floating Rate Regular Dividend 248,476 2,519,452

DSPML MF-Fixed Term Plan Series 1C Growth 2,500 2,500,000

HDFC-Floating Rate-Income Fund-Short Term plan 491,823 4,969,223

Reliance Equity Fund 1,200,000 12,000,000

Total - 27,060,646

Details of investments purchased and sold during the year ended March 31, 2006:

(Amount in Rupees) Name of the fund Face Value Units Cost

DSPML Savings Plus Moderate Monthly Dividend 10/- 928,012 10,157,812

DSPML Floating rate Regular Dividend 10/- 1,244,400 12,614,203

DSPML Opportunities Fund 10/- 108,957 2,946,588

DSPML T.l.G.E.R Fund 10/- 150,822 3,038,793

ICICI Prudential Mutual Fund 10/- 933,732 10,035,387

HDFC Monthly Income Plan 10/- 476,276 5,026,483

HDFC Prudent Fund-Dividend Plan 10/- 172,021 5,035,398

Reliance Short term Fund Dividend 10/- 1,460,266 15,000,000

Reliance-RMIP (Monthly Dividend Plan) 10/- 2,115,566 23,186,721

Reliance Growth Fund-Dividend Plan 10/- 95,184 5,000,000

Reliance Floating rate Monthly Dividend 10/- 1,717,321 17,351,014

Disclosure of the above information for the previous year ended March 31, 2005 is not applicable, since the company had not invested in any current investments.

5. Earnings per share (EPS)

Calculation of Basic and Diluted Earnings per Share:

(Amount in Rupees) Year ended Year ended Particulars March 31, 2006 March 31, 2005

Number of shares, outstanding during the year considered for basic EPS 12,974,596 10,751,333

Add:- effect of dilutive issue of stock options 283,622 832,329

Number of shares, outstanding during the year considered for diluted EPS 13,258,218 11,583,662

Net Profit after tax 241,418,259 72,044,423 Earnings per share

- Basic 18.61 6.70

- Diluted 18.21 6.22

7. Related party disclosures

(Amount in Rupees) Year ended Year ended particulars March 31, 2006 March 31, 2005

(a) Subsidiary Companies

Axill Inc

- Sales 268,994,874 46,024,679

- Year end balance Receivable 75,341,958 46,059,024

Globe 7 Inc

- Sales 105,996,703 36,007,976

- Loans given 51,651,377 Nil

- Year end balance Receivable 75,034,351 36,001,549

Northgate Holdings (S) Pte Limited

- Purchases Nil 33,640,848

- Sales 26,493,907 35,993,147

- Purchase of fixed assets Nil 17,897,877

- Expenses paid for services 26,692,066 Nil

- Year end balance Receivable 3,783,559 Nil

Axill Europe Limited

- Advance taken (net) 4,201,276 Nil

- Expenses paid for services 8,620,214 Nil

- Year end balance (Payable) (12,821,490) Nil

Globe 7 HK Limited

- Expenses paid for services 239,750 Nil

- Year end balance (Payable) (240,797) Nil

(b) Key Managerial Personnel * Managerial Remuneration

Venkat S. Meenavalli- Chairman and Managing Director 1,654,910 1,515,433

K. Bhaskara Reddy-Executive Director 920,000 920,000

Yogesh Patel-Director Nil 1,009,493

(c) Enterprises owned or significantly influenced by key management personnel or their relatives. Sybanet Communications Inc

-Purchases 191,741,504 Nil

-Sales 115,986,416 Nil

- Year end balance Receivable 19,323,475 Nil

Sholay.com Inc

- Sales 9,037,527 Nil

- Loans given 106,100,109 Nil

- Year end balance Receivable 115,179,633 Nil

*Managerial remuneration as above does not include leave encashment and gratuity benefit, since the same are computed actuarially for all the employees and the amount attributable to the managerial persons cannot be ascertained separately.

8. Earnings in foreign exchange (on FOB basis)

(Amount in Rupees) Particulars Year ended Year ended particulars March 31, 2006 March 31, 2005

Revenue from sales and services 819,180,763 517,876,712

9. Expenditure in foreign currency

(Amount in Rupees) Particulars Year ended Year ended particulars March 31, 2006 March 31, 2005

Travelling expenses 649,706 1,029,742

Other expenses 896,823 Nil

Expenses incurred at overseas branches

- Purchase of telecommunication minutes/direct inward dial numbers 450,581,871 380,328,360

- Others 25,954,936 16,084,560

10. Sundry debtors

Debtors include the following dues from Companies under the same management.

(Amount in Rupees) As at AS at Particulars March 31, 2006 March 31, 2005

Globe7 Inc 23,382,974 36,001,549

Axill Inc 75,341,958 46,059,024

Northgate Holdings (S) Pte Limited 3,783,559 Nil

102,508,491 82,060,573

13. Managerial remuneration (included under various heads)

(Amount in Rupees) Year ended Year ended Particulars March 31, 2006 March 31, 2005

Whole-time Directors

Salary 2,020,000 3,029,493

Perquisites and incentives 554,910 415,433

2,574,910 3,444,926

14. Operating Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vests with the lessor, are recognized as operating lease. The Company has entered into certain cancelable lease agreement for office premises and the amount paid under such agreement Rs. 2,829,295 (Previous Year Rs. 3,394,191) has been recognized in the profit and loss account.

15. Quantitative details

The Company is engaged in the business of providing Information Technology services and Telecommunication services. As the said sale and services cannot be expressed in any generic unit, it is not possible to give the quantitative details of sales and the information required under paragraph 3 and 4C of Part II of Schedule VI of the Companies Act, 1956.

16. Information pursuant to paragraphs 3, 4, 4A, 4B, 4C and 4D of Part II to Schedule VI of the Companies Act, 1956 to the extent, either nil or not applicable has not been furnished.

17. Regroup, recast and re-arrangement

Figures for the corresponding previous year have been regrouped, recast and rearranged to conform to those of current year, wherever necessary.

---

Mar 31, 2005

DESCRIPTION OF BUSINESS: Apart from software development and web designing, the Company is providing high end back office services to its subsidiaries which are in the field of online advertising that provides clients with flexible, multi-model advertising vehicles for reaching their customers. Subsidiaries offer effective direct and online marketing/advertising solutions by prominently positioning clients' brands within the search results. The Company offers back office services to Singapore subsidiary which is a key player in the global telecom and VOIP market with an established presence in the area of wholesale, prepaid, postpaid, refilling and hubbing of large volumes. Telecom back office services, both wholesale and private labeling contributing a major portion of the company's revenue.

1. COMMITMENTS AND CONTINGENT LIABILITIES

I. There were no contingent liabilities as at 31st March 2005 (Previous year unexpired bank guarantees amounted to USD 500,000 given on behalf of Northgate Holdings (S) Pte Ltd, Singapore)

II. Estimated amount of contracts remaining to be executed on capital account to the extent not provided for (net of advances) Rs. Nil (previous year Rs.Nil).

2. INVESTMENTS

During the year investment made in the subsidiaries are as follows:

Axill Inc (Wholly owned USD 10000 Rs 4,51,200 subsidiary in USA)

Globe7 Inc (Wholly owned USD 480,000 Rs 2,10,52,250 subsidiary in USA)

Northgate Holdings SGD 749,426 Rs 2,04,50,014 (S) Pte Limited

During the year the company has written off the investment in Twin Cities InfoTech Limited amounted to Rs 10,00,000 (Rupees ten lakhs) as the same had not been quoted in regional Stock Exchange.

3. SUNDRY DEBTORS

Sundry Debtors include the following dues from subsidiary companies:

4. PROVISION FOR DOUBTFUL DEBTS

Periodically, the company evaluates all customer dues to the company for collectively. The need for provisions is assessed based on various factors including collect ability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customer's ability to settle. The company normally provides for debtor dues outstanding for 180 days or longer as at the Balance Sheet date.

5. SOFTWARE DEVELOPMENT IN PROGRESS

During the year the company is developing in house SIP software and other web related work which is under Capital work in progress amounting to Rs.3,02,49,775 (previous year Nil). It consists as follows:

Particulars Amount In Rs.

a. SIP Software : 17897877 b. Salaries capitalized : 1337045 c. Web Development : 11014853 TOTAL 30249775

6. CURRENT LIABILITIES

There are no parties which can be classified as small scale industrial undertakings to whom the Company owes any sum which is outstanding for more than thirty days.

7. SEGMENT REPORTING

Accounting Standard - 17 `Segment Reporting' issued by the Institute of Chartered Accountants of India prescribes that where a financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

8. DEFERRED INCOME TAX

Most of Northgate's operations are conducted through Software Technology Parks (STPs). Income from STPs are tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development or March 31, 2009.

The tax holiday under Section 10A of the Income tax Act, 1961, is available to the Company. In view of this, the deferred tax asset/liability in respect of timing differences that originate and reverse during the tax holiday period is ignored.

9. RE-ISSUE OF FORFEITED SHARES

During the year the company has re-issued 1400000 Equity shares of Rs.10/- each at a premium of Rs.30/- each out of the forfeited shares. The Company has obtained listing and trading approvals from all the Stock Exchanges.

10. Employee Stock Option Scheme 2004:

During the year the company has framed the Employee Stock Option Scheme 2004 in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 and obtained the approval of shareholders in their meeting held on 28th September 2004. As per the approvals the Stock Options have been granted to the employees on 20th October, 2004 and the first exercise would take place one year from the date of grant i.e. 19th October, 2005. In the event of any further, rights or bonus issue of equity shares prior to conversion, the entitlement of share shall be suitably revised.

11. IMPAIRMENT OF ASSETS:

The ICAI introduced Accounting Standard 28 to recognize the impairment in the assets of the company. This Accounting Standard becomes effective only accounting periods commencing on or after 01.04.2004. The ICAI also recommends earlier implementation of standard. In a view of obsolesces and frequent technical up gradation of Technology of computers, the company has considered the early implementation of the standard even of this accounting period.

12. In the opinion of the Board current assets, loans and advances, investment are realizable at a value, which is at least equal to the amount, at which these are stated, in the ordinary course of business. Independent confirmation of balances of sundry debtors, sundry creditors, loans and advances, investments and other parties are in progress on the date of this report.

13. The Company is engaged in the development of computer software and back office operations. The production and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under paragraph 3, 4C and 4D of part II of Schedule VI of the companies Act, 1956.

14. Figures for the corresponding year have been regrouped, recast and rearranged to conform to those of the current year wherever necessary.