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Directors Report of Tanla Solutions Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the 19th Annual Report along with the Audited Financial Statements for the financial year ended March 31, 2015.

Summary of Financial Results (Standalone):

Particulars FY 2014-15 FY 2013-14

Income from Operations 1,326,117,472 257,032,965

Operating Profit (EBITDA) 110,352,965 55,863,987

Less: Depreciation 103,826,714 107,090,414

Operating Profit before Tax 6,526,251 (51,226,428)

Add: Other Income 52,077,522 54,760,885

Profit for the year before Exceptional 58,603,773 3,534,457 Items & Tax

Less: Exceptional Items - 96,809,938

Profit before Tax 58,603,773 (93,275,481)

Less: Provision for Tax incl. deferred tax 27,910,401 3,326,009

Profit after Tax 30,693,372 (96,601,490)

Net Profit transferred to Reserves 30,693,372 (96,601,490)

Earnings Per Share : Basic/ Diluted 0.30 (0.95) (Rs. 1 each)

Share Capital 101,479,593 101,479,593

Reserves & Surplus 6,150,469,044 6,049,856,116

Total Shareholder's Funds 6,251,948,637 6,151,335,709

Book Value per Share (Rs.1 each) 61.61 60.62

State of the Company's Affairs

During the period under review, the Company has achieved revenue of Rs.1326. 12 million and net profit of Rs. 30. 70 million on a Standalone basis. During the same period, the Company has achieved revenue of Rs. 2424.91 million and net profit of Rs. 25.88 million on a consolidated basis.

Transfer to Reserves

The Company has not proposed to transfer any amount to the general reserve for the financial year ended March 31,2015.

Dividend

The Company has not declared dividend for the financial year ended March 31,2015.

Operations

Tanla Solutions [BSE: 532790 | NSE: TANLA] founded in the year 1999 listed since 2007, a Hyderabad based Indian company is a leading provider of telecom solutions to Mobile Operators., Tanla is the first Indian Company to develop and deploy SMSC with all leading telcos. Tanla serves more than 100 clients in 32 countries.

Tanla is a telecom products & solutions company that specializes in pioneering communication roadmaps and integrating various systems of communication for mobile technology.

Tanla is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India.

Material Changes:

There are no Material changes affecting the financial position of the Company during financial year 2014-15.

Management Discussion & Analysis

The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc., is furnished separately and forms part of this Annual Report.

Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013

The Directors' Responsibility Statement pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013 ("the Act") is appended as Annexure A to this Report.

Consolidated Financial Results

Consolidated Financial Statements incorporating the operations of the Company, its subsidiaries and Joint Venture Companies is appended. As required under the provisions of the Act, a statement showing the salient features of the financial statements of the subsidiaries and joint ventures is enclosed as an Annexure B to this Report.

The financial statements of the subsidiary companies will be made available to the members of the Company and its subsidiary companies on request and will also be kept for inspection in the Registered Office of the Company.

Subsidiary Companies

Tanla Solutions (UK) Limited, formerly Techserv Teleservices (UK) Limited, UK (hereinafter referred to as "Tanla UK"), a wholly owned subsidiary of Tanla based at London, UK, provides aggregator and offshore development services to clients in telecommunications and offshore service sectors.

Tanla Corporation Private Limited (formerly known as

Mufithumb Corporation Private Limited, India), a wholly owned subsidiary of Tanla based at Hyderabad, India is engaged in

Board's Report

development of telecom products and services. Tanla Mobile Private Limited (a 100% subsidiary company) was merged with Mufithumb Corporation Private Limited (a 100% subsidiary company) with implementation date April 01,2014 vide Honourable High Court of Andhra Pradesh and Telangana order no. C. P of 7 & 8 of 2015 dt. April 28, 2015 and subsequently the name was changed to Tanla Corporation Private Limited.

Tanla Mobile Asia Pacific Pte Limited, Singapore (hereinafter referred to as "Tanla Singapore"), a wholly owned subsidiary of Tanla based at Singapore, provides aggregator and offshore development services to clients in telecommunications and offshore service sectors.

Tanla Mobile Ireland Pvt Limited, Ireland (hereinafter referred to as "Tanla Ireland"), a wholly owned subsidiary of Tanla Singapore based at Ireland, provides aggregator services to clients in the telecommunications sector.

Tanla Mobile Middle East FZ LLC, Dubai (hereinafter referred to as "Tanla Dubai"), a wholly owned subsidiary of Tanla Singapore based at Dubai, UAE provides aggregator services to clients in the telecommunications sector.

Tanla Mobile Finland Oy, Finland (hereinafter referred to as "Tanla Finland,"), a wholly owned subsidiary of Tanla Dubai based at Finland.

Tanla Oy, Finland (hereinafter referred to as "Tanla Oy"), a wholly owned subsidiary of Tanla Finland Oy, Finland provides payment solutions to clients in telecommunications and allied areas.

Safety, Health and Environment (SHE)

Company's focus on Safety, Health and Environment continued during the year under review across all locations maintaining high safety standards. Company has put in place robust processes and performance indicators to track its SHE performance. There were nil reportable incidents during the year. The Company maintained high standards of environmental performances with all facilities operating well within norms. The Company continued its efforts to track health indicators of its entire operating staff.

Corporate Social Responsibility

As the Company has not made profits during the preceding three (3) years, the Company has not spent any amount on CSR activity.

Particulars of Loans, Guarantees and Investments

Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements.

Public Deposits

The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 73 and 74 of the Companies Act, 2013, and no amount of principal or interest was outstanding as on the Balance Sheet date.

Particulars of Employees

A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure C to this Report.

A statement containing the name of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure D to this Report.

Extract of the Annual Return

In accordance with Section 134(3)(a) of the Act, an extract of the Annual Return (MGT-9) in the prescribed format is appended as Annexure E to this Report.

Corporate Governance

The Company is committed to maintain high standards of Corporate Governance. As stipulated under the requirements of the Listing Agreement with Stock Exchanges, a report on Corporate Governance is appended to this report from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance.

Directors and Key Managerial Personnel

In accordance with Article 121 of the Company's Articles of Association, read with Section 152 of the Act, Mr. D Uday Kumar Reddy, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Satish Kathirisetti, Director of the company resigned from the Board w.e.f. 02nd September, 2014

All the Independent Directors of the Company have given declarations under sub-section (6) of Section 149 of the Act, and the same have been considered and taken on record by the Board.

Mr. D Uday Kumar Reddy, Mr. Gautam Sabharwal Mr. Satish Kathirisetti (resigned w.e.f Sept 02, 2014), Mr G.K.Srinivas, Chief Financial Officer and Smt. Seshanuradha Chava, Company Secretary, are the Key Managerial Personnel (KMP) of the Company in terms of the provisions of the Act.

Familiarisation Programme for Independent Directors

On their appointment, Independent Directors are familiarised about the Company's operations and businesses. Interaction with the Business Heads and key executives of the Company is also

Board's Report

facilitated. Detailed presentations on the business of each of the Division are also made to the Directors. Direct meetings with the Chairman & Managing Director are further facilitated for the new appointee to familiarize him/her about the Company/its businesses and the group practices.

Number of meetings of the Board of Directors

During the year ended March 31,2015, Five (5) Board Meetings were held. The dates on which the Board meetings were held are - May 30, 2014; July 08, 2014; October 17, 2014; December 27, 2014 and January 14, 2015

Internal Financial Control Systems

The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statutes, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Financial Controls and System across all key processes. Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementation are reviewed by the Audit Committee and concerns, if any, are reported to Board.

Vigil Mechanism / Whistle Blower Policy

The Company has a Whistle Blower Policy which provides the employees, customers, vendors and Directors an avenue to raise concerns on ethical and moral standards and legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith.

Board Evaluation

In accordance with the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination & Remuneration Committee and also the Directors individually. The manner in which the evaluation was carried out and the process adopted has been mentioned in the Report on Corporate Governance.

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Salient features of the Remuneration Policy are set out in the Report on Corporate Governance.

Risk Management Policy

The Company has constituted a Risk Management Committee. Details of constitution of the Committee and its terms of reference are set out in the Report on Corporate Governance. The Company has formulated a Risk Management Policy, under which various risks associated with the business operations are identified and risk mitigation plans have been put in place, details of which are set out in the Management Discussion and Analysis Report.

Material Subsidiary Policy

The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Agreement. The Policy on Material Subsidiary is available on the website of the Company at www.tanla.com

Related Party Transactions

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no material significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management which may have a potential conflict with the interest of the Company at large.

The related party transactions entered into are reviewed by an independent audit firm to confirm that they were in the ordinary course of business and at arm's length basis. The Company has formulated a policy for Related Party Transactions which has been approved by the Board and is placed on the website of the Company.

None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration and sitting fee.

In accordance with Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as "Annexure B". The details of related party disclosures form part of the notes to the financial statements provided in this annual report.

The Audit Committee comprises of Padmabhushan Ram Narain Agarwal, Chairman, and Dr. A.G.Ravindranath Reddy & Mr. Gautam Sabharwal, Members. All the recommendations made by the Audit Committee were accepted by the Board.

Statutory Auditors

M/s Ramasamy Koteswara Rao & Co., Chartered Accountants, were appointed as Auditors of the Company for a period of three years from the conclusion of the last Annual General Meeting held on September 30, 2014. As required under the provisions of Section 139 of the Act, a resolution for the yearly ratification of their appointment is being placed before the shareholders for their approval. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Act.

Cost Auditors

The provisions of Section 148 of the Companies Act, 2013 does not apply to the Company and hence, no cost auditors are appointed.

Secretarial Auditor

As per the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed BS & Company, Company Secretaries as Secretarial Auditor to conduct Secretarial audit of the company for the financial year ended on March 31, 2015. Secretarial Audit Report issued by BS & Company, Company Secretaries in form MR-3 is enclosed as a part of Corporate Governance Report.

Secretarial Auditors have observed that, there is no Woman Director on the Board of the Company.

The Company is in the process of identifying a suitable candidate to be appointed as a Woman Director on Board of the Company.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure-F to this Report.

Employees' Stock Options

The Nomination and Remuneration Committee has cancelled the ESOP Scheme 2008 and the underlying ESOP Pool of 5,000,000 Options. The Board in its meeting held on August 13, 2015 has

approved ESOP 2015-16 Policy to its Employees with 50 Lakh fully paid-up Equity Shares, subject to the approval of Shareholders.

Obligation Of Company Under The Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15:

Board's Report

No complaints have been received under this Act, during the year.

Your Directors place on record their appreciation for the services rendered by the employees. The relation between the management and the employees has been cordial throughout the year.

Acknowledgement

The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results. The Directors also wish to acknowledge and record their appreciation of the continued support and assistance received by the Company's Banks, financial institutions, mutual funds, as well as from various Government bodies both at the Centre and the State.

On behalf of the Board of Directors for Tanla Solutions Limited

Sd/- D. Uday Kumar Reddy Chairman & Managing Director (DIN: 00003382)


Mar 31, 2014

To the Members,

The Directors submit the 18th Annual Report of Tanla Solutions Limited along with the audited financial statements for the financial year ended March 31, 2014.

1. Results of Operations:

Financial Performance of the Company (Standalone): Rs.

Particulars Results Results March 31, 2014 March 31, 2013

Income from operations 257,032,965 272,186,941

Operating Profit (EBIDTA) 55,863,987 9,946,777

Less: Depreciation & amortization 107,090,414 105,732,038

Operating Profit before Tax (51,226,428) (95,785,261)

Add: Other Income 54,760,885 79,524,107

Profit for the year before Exceptional Items & Tax 3,534,457 (16,261,154)

Less: Exceptional Items 96,809,938 9,859,244

Profit before Tax (93,275,481) (26,120,398)

Less: Provision for Tax 3,326,009 (8,353,170)

Profit after Tax (96,601,490) (17,767,228)

Dividend (incl. dividend tax) - -

Transfer to General Reserve - -

Net Profit Transferred to Reserves (96,601,490) (17,767,228)

Earnings per share : Basic / Diluted (Rs. 1 each) (0.95) (0.18)

Dividend Rate - -

Share Capital 101,479,593 101,479,593

Reserves & Surplus 6,049,856,116 6,146,457,605

Total Shareholders'' Funds 6,151,335,709 6,247,937,198

Book value per share (Rs. 1 each) 60.62 61.57

1. Operational Performance :

Standalone

For the financial year ended March 31, 2014, the Company has recorded operating revenues of Rs. 2,570.33 Lakhs as against Rs. 2,721.87 Lakhs for FY ended March 31, 2013 and other income of Rs. 547.61 Lakhs for the current year as against Rs. 795.24 Lakhs in the previous year. Total sales decreased by 6% over the previous financial year.

Profits

For the financial year ended March 31, 2014, Profit Before Tax (PBT) stood at Rs. (932.75) Lakhs as against Rs. (261.20) Lakhs in the previous financial year. Profit After Tax (PAT) stood at Rs. (966.01) as against Rs. (177.67) Lakhs in the previous financial year.

Liquidity

As on March 31, 2014, Cash and Cash Equivalents stood at Rs. 1,790.12 Lakhs as against Rs. 1,847.48 Lakhs during the previous financial year.

2. Further Issue of Equity Shares on Preferential Basis

The Company has not issued Equity Shares on Preferential Basis during the financial year 2013-14.

3.Fixed Deposits

The Company has not accepted any public deposits during the financial year under review and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

4. Directors

During the year under review, Dr. A.G.Ravindranath Reddy was appointed as Additional Director (Independent Director) on January 29, 2014 and a notice has been received from a shareholder proposing his appointment as a Director of the Company. The details of Directors seeking appointment or re-appointment as required by Clause 49 of the Listing Agreement are provided in the Notes to the Notice convening the ensuing Annual General Meeting of the Company.

During the year under review, Dr. Sudhanshu Shekar Jamuar, Independent Director, resigned from the Board on January 01, 2014.

5. Corporate Governance Report, Management Discussion & Analysis Report

As per Clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with Certificate from Practicing Company Secretary thereon and Management Discussion and Analysis are attached and form part of this report.

6. Subsidiaries

(a) As on the date of this report, the Company has the following subsidiaries: (i) Mufithumb Corporation Private Limited (ii) Tanla Mobile Private Limited (iii) Tanla Mobile Asia Pacific Pte. Ltd., Singapore (iv) Tanla Solutions (UK) Limited , U.K.

(b) Below mentioned are the subsidiaries of Tanla Mobile Asia Pacific Pte. Ltd., Singapore: (i) Tanla Mobile Middle East FZ LLC, Dubai (ii) Tanla Mobile Ireland Pvt Ltd., Ireland

(c) Tanla Oy, Finland is a subsidiary of Tanla Mobile Finland Oy, which is a subsidiary of Tanla Mobile Middle East FZ LLC, Dubai.

(d) TZ Mobile Private Limited, incorporated in 2009 under the provisions of the Companies Act, 1956, is a joint venture between Tanla Solutions Limited and Zed Worldwide Holdings SL, Spain, each holding 50% of shareholding.

(e) In 2013, an application was submitted for winding up Tanla Mobile South Asia Pvt Ltd., and Tanla Mobile South Africa Proprietary Ltd., South Africa, subsidiaries of Tanla Mobile Asia Pacific Pte. Ltd., Singapore. Tanla Mobile Inc., has been liquidated during the financial year 2013-14.

7. Subsidiary companies and consolidated financial statements

The Company had 4 subsidiaries and 4 step down subsidiary companies as on March 31, 2014. There has been no material change in the nature of the business of the subsidiaries.

As required under the Listing Agreement entered into with the Stock Exchanges, consolidated financial statements of the Company is attached. The consolidated financial statements have been prepared in ac- cordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956.The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

Pursuant to the provision of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company.

A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is included in the annual report. The annual accounts of these subsidiaries and the related information will be made available to any member of the Company/its subsidiaries seeking such information and are available for inspection by any member of the Company/its subsidiaries at the registered office of the Company.

8. Directors'' responsibility statement

Pursuant to the requirement of section 217(2AA) of the Companies Act, 1956, and based on the representations received from the operating management, the directors hereby confirm that:

(i) in the preparation of the annual accounts for the financial year 2013-14, the applicable accounting standards have been followed and there are no material departures;

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

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

9. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, no employee has been paid remuneration equal to or exceeding the remuneration prescribed under the above mentioned rules.

10. Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo

(i) Conservation of Energy

While continuing to believe in philosophy of Energy saved is Energy produced, adequate measures comensureate with the business operations have been taken to reduce and conserve the energy consumption by utilising energy efficient equipment wherever required.

(ii) Research & Development, Technology Absorption

We continue to focus and invest in Research & Development of New Products and methodologies for enhancing the qauality of products and services

(iii) Foreign Exchange earnings & outgo

The particulars regarding foreign exchange earnings and expenditure are annexed hereto and forms part of this report.

11. Employee Stock Option

The Employee Stock Options granted in October 2009 pursuant to SEBI (Employees Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999 shall be revived during the financial year 2014-15.

12. Transfer of Unclaimed Shares to Suspense Account

In accordance with Clause 5A of the Listing Agreement entered into with the Stock Exchanges, 870 Equity Shares held by 15 shareholders, were held in the "Tanla Solutions Limited-Demat Suspense Account” vide DPIDCLID:IN300484 13842503 in Axis Bank Ltd., Jubilee Hills Branch, Hyderabad as on March 31, 2014. The voting rights on these shares shall remain frozen till the rightful owner claims the same.

13. Transfer of Unpaid/Unclaimed Dividend to the "Investor Education and Protection Fund"

According to the provisions of Section 205A (5) of the Companies Act, 1956, unpaid and unclaimed dividend in the dividend account of the company has to be transferred to the "Investor Education and Protection Fund" after seven years of declaration. Shareholders are requested to ensure that they claim the dividend(s) from the Company before transfer to the Investor Education and Protection Fund. The seven year period of "Un-paid and Un-Claimed dividend for the year 2006-07” which amounts to Rs. 2,31,820 /- (Rupees Two lakhs thirty one thousand eight hundred and twenty only) expires on October 04, 2014 and the same will be transferred to the "Investor Education and Protection Fund".

Financial Year Type of Dividend Date of Declaration

2006-07 Dividend of Equity Shares 29.08.2007

2007-08 Dividend of Equity Shares 29.09.2008

2008-09 Dividend of Equity Shares 30.09.2009

2009-10 Dividend of Equity Shares 30.09.2010

2010-11 Dividend of Equity Shares 30.09.2011

Financial Amount of unclaimed Last Date for Due date Year dividend outstanding claiming unpaid for transfer as on 31.03.2014 dividend by to IEPF investors

2006-07 231,820 04.10.2014 03.11.2014

2007-08 201,613 03.11.2015 02.12.2015

2008-09 340,958 04.11.2016 03.12.2016

2009-10 198,515 04.11.2017 03.12.2017

2010-11 236,360 04.11.2018 03.12.2018

14. Industrial Relations

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the employees for their dedicated services to the company, and expects continued support, higher level of productivity for achieving the targets set for the future.

15. Auditors

M/s Ramasamy Koteswara Rao & Co., Chartered Accountants, Hyderabad, who are the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed there under, it is proposed to appoint M/s Ramasamy Koteswara Rao & Co., Chartered Accountants, as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the twenty-first AGM to be held in the year 2017, subject to the ratification of their appointment at every AGM.

The Independent Auditors'' Report to the Members of the Company on the Financial Statements for the Financial Year ended March 31, 2014 does not contain any qualification(s) or adverse observations.

16. Acknowledgement

The directors thank the Company''s employees, customers, vendors, investors and academic institutions for their support.

The directors also thank the government of various countries, Government of India, State Governments in India and concerned government departments/agencies for their co-operation.

The directors appreciate and value the contributions made by every member of the Tanla family globally.

On behalf of the Board of Directors, Sd/- D. Uday Kumar Reddy Chairman & Managing Director DIN : 00003382

Place : Hyderabad Date : July 08, 2014


Mar 31, 2013

Dear Members''

The Directors have pleasure in presenting the 17th Directors'' Report on the business and operations of our Company for the financial year ended on March 31'' 2013.

1. Results of Operations Rs.

Financial performance of the Company (Standalone):

Results Results Particulars March 31'' 2013 March 31'' 2012

Income from operations 27 21 86 941 36 83 28 675

Operating Profit (EBIDTA) 99 46 777 (65 72 494)

Less: Depreciation & amortisation 10 57 32 038 13 93 47 846

Operating Profit before Tax (9 57 85 261) (14 59 20 339)

Add: Other Income 7 95 24 107 49 18 636

Profit Before Tax (1 62 61 154) (14 10 01 703)

Less: Provision for Tax (83 53 170) (3 51 27 709)

Profit after Tax (79 07 985) (10 58 73 994)

Dividend (incl. dividend tax)

Transfer to General Reserve

Net Profit Transferred to Reserves (79 07 985) (10 58 73 994)

Earnings per share: Basic / Diluted (Rs. 1 each) (0.18) (1.04)

Dividend Rate

Share Capital 101479593 10 14 79 593

Reserves & Surplus 614 64 57 605 616 42 24 834

Total shareholders funds 624 79 37 198 626 57 04 427

Book value per share (Rs.1 each) 61.57 62.74

1. Operational Performance Standalone

The total income of the Company for the FY 2012-13 comprises operating revenues of Rs. 272.1 Lakhs as against Rs. 368.3 Lakhs in FY 2011-12 and other income of Rs. 79.5 Lakhs for the current year as against Rs. 4.9 Lakhs in the previous year. Total sales decreased by 26% over the last financial year.

Profits

For the FY 2012-13'' Profit before Tax (PBT) stood atRs. (162.61) Lakhs as againstRs. (1410.02) Lakhs in FY 2011-12. For the FY 2012-13'' Profit after Tax (PAT) stood atRs. (79.07) Lakhs as againstRs. (1058.74) Lakhs for FY 2011-12.

Liquidity

During the financial year'' cash flows have more than adequately covered working capital requirements as well as for the capital expenditure. As of 31 March'' 2013'' the Company has cash and cash equivalents of Rs. 2443.42 Lakhs '' as against Rs. 7135. 92 Lakhs on 31 March'' 2012.

2. Further Issue of Equity Shares on Preferential Basis

The company has not issued Equity Shares on Preferential basis during the financial year 2012-13.

3. Public Deposits

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act'' 1956 and the rules made there under during the financial year under review.

4. Directors

In accordance with the provisions of the Companies Act'' 1956 and Articles of Association of the Company'' Mr. Satish Kathirisetti '' Director - Chief Technology Officer retires by rotation at the forthcoming Annual General Meeting and being eligible'' offer himself for re-appointment.

A brief resume of each of Director proposed to be appointed/re-appointed'' their expertise in specific functional areas and names of companies in which he holds Directorship/Membership/Chairmanship of the Board/Committees'' as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges'' has been provided as annexure to the Notice convening Seventeenth Annual General Meeting.

Mr. Abhishek Khaitan'' Independent Director resigned from the Board on May 29'' 2013 after serving the Board since December 30'' 2004. The Board places on record its sincere appreciation for the services rendered during his tenure on Board.

5. Management Discussion and Analysis

A separate Management Discussion and Analysis Report attached elsewhere forms an integral part of this report.

6. Subsidiaries

(a) As on the date of this Report'' the Company has the following subsidiaries:

1. Mufithumb Corporation Private Limited (earlier known as Mufithumb Entertainment Private Limited)

2. Tanla Mobile Private Limited

3. Tanla Mobile Asia Pacific Pte Ltd.'' Singapore

4. Tanla Solutions (UK) Limited'' UK

(b) In February 2013'' an application was submitted in the Companies House'' UK for striking off Tanla Mobile Ltd.'' UK is a subsidiary of Tanla Solutions (UK) Ltd.'' UK.

(c) Below mentioned are the subsidiaries of Tanla Mobile Asia Pacific Pte Limited'' Singapore: (i) Tanla Mobile Middle East FZ LLC'' Dubai

(ii) Tanla Mobile Inc.'' USA

(iii) Tanla Mobile South Africa Proprietary Ltd.'' South Africa (iv) Tanla Mobile South Asia Pvt Ltd.'' Sri Lanka and (v) Tanla Mobile Ireland Pvt Ltd.'' Ireland

(d) Tanla Oy'' Finland is a subsidiary of Tanla Mobile Finland Oy'' which is a subsidiary of Tanla Mobile Middle East FZ LLC'' Dubai.

(e) TZ Mobile Private Limited'' incorporated in July 2009 under the provisions of the Companies Act'' 1956 is a Joint Venture between Tanla Mobile Pvt Ltd.'' a wholly owned subsidiary of Tanla Solutions Ltd and Zed Worldwide Holdings SL'' Spain each holding 50% of shareholding.

7. Consolidated Financial Statements

Vide General Circular No. 2/2011 dated February 08'' 2011'' the Ministry of Corporate Affairs'' Government of India has granted a general exemption to companies from attaching the Balance Sheet'' Profit & Loss Account and other documents referred to in Section 212(1) of the Act in respect of its subsidiary companies'' subject to fulfillment of the conditions mentioned therein. Accordingly'' the said documents are not being attached with the Balance Sheet of the Company. A gist of the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiary companies are open for inspection by any member/ investor and the Company will make available these documents/details upon request by any member of the company to any investor of its subsidiary companies who may be interested in obtaining the same. Further'' the Annual Accounts of the subsidiary companies will be kept open for inspection by any investor at the Company''s Registered Office would be posted on the website of the company. In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211(3C) of the Companies Act'' 1956'' the Audited Consolidated Financial Statements duly signed by the Statutory Auditors are annexed.

8. Directors Responsibility Statement

In terms of Section 217(2AA) of the Companies Act'' 1956'' the Board of Directors hereby confirm that:

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

(ii) Appropriate accounting policies have been applied consistently and reasonably prudent judgements and estimates which are reasonable have been made so as to a give true and fair view of the state of affairs of the company as at March 31'' 2013 and of the loss of the company for the year ended on that date.

(iii) Proper and sufficient care has been taken 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;

(iv) The annual accounts have been prepared on a "Going Concern basis".

9. Corporate Governance

Pursuant to the provisions of Clause 49 of the Listing Agreement with Stock Exchanges'' a report on Corporate Governance together with a certificate from M/s BS & Company'' Practicing Company Secretaries features as part of this Annual Report.

10. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act'' 1956'' read with the Companies (Particulars of Employees) Rules'' 1975'' as amended'' no employee has been paid a remuneration equal to or exceeding the remuneration prescribed under the above amended rules.

12. Conservation Of Energy'' Research And Development'' Technology Absorption'' Foreign Exchange Earnings And Outgo

Conversation of Energy

The operations of the Company are not energy intensive. However'' adequate measures have been taken to conserve and reduce the energy consumption by using energy efficient hardware'' usage of natural light and other equipment. Air Conditioners are used only when required and air-conditioned areas have been treated with heat resistant material. We continue to evaluate new technologies and invest to conserve and reduce energy consumption. We believe energy saved is energy produced.

Research & Development'' Technology Absorption

The company continues to invest in research and development of new products'' processes and methodologies for improving the productivity and quality of its products and services.

Foreign Exchange earnings and outgo

The particulars regarding foreign exchange earnings and expenditure are annexed hereto and forms part of this report.

13. Employee Stock Option

Options were granted to employees in October 2009'' but no options were vested with the employees pursuant to the grant.

Disclosures in compliance with Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme Guidelines'' 1999) as amended'' are as under:

Nature of Disclosure Particulars

41''75''000 options were granted on October 16'' 2009'' each option gives Options granted the grantee a right to subscribe to equity share of face value of Re.1/- each.

At a discount of 20% on the latest available closing market price prior to the The pricing formula date of grant of options of the company on the exchange having the highest trading volume.

Options Vested No Options were vested during the year

Options Exercised No Options were exercised during the year

Total number of shares arising as a result of exercise of option No Options were exercised during the year

Options lapsed No Options were vested during the year

Variation of terms of Options No variation has been done

Money realized by exercise of Options As no Options were exercised during the year'' no money was realized.

14. Transfer of Unclaimed Shares to Suspense Account

870 Equity Shares held by 15 shareholders'' were held in the "Tanla Solutions Limited – Demat Suspense Account" in Axis Bank Ltd.'' Jubilee Hills Branch'' Hyderabad as on March 31'' 2013 in accordance with the provisions of Clause 5A of the Listing Agreement. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

15. Transfer of Unpaid/Unclaimed Dividend to the Investor Education and Protection Fund

According to the provisions of Section 205A (5) of the Companies Act'' 1956'' unpaid and unclaimed dividend in the dividend account of the company has to be transferred to the "Investor Education and Protection Fund" after seven years of declaration. Hence pursuant to the provisions of Section 205A of the Companies Act'' 1956 and other applicable guidelines'' Rs. 85''962.50 (Rupees Eighty five thousand nine hundred and sixty two and fifty paise only) representing the "Un-paid and Un-Claimed dividend for the year 2005-06" has been transferred to the "Investor Education and Protection Fund."

16. Industrial Relations

The company enjoyed cordial relations with the employees during the year under review and the Management appreciates the employees of all cadres for their dedicated services to the company'' and expects continued support'' higher level of productivity for achieving the targets set for the future.

17. Auditors and Auditor''s Report

M/s Ramasamy Koteswara Rao & Co.'' Chartered Accountants'' Hyderabad'' the Statutory Auditors'' retire at the ensuing annual general meeting and are eligible for re-appointment. The company received confirmation that their appointment'' if made'' would be within the prescribed limits under the provisions of Section 224(1B) of the Companies Act'' 1956. The Auditors Report to the shareholders for the year ended March 31'' 2013 does not contain any qualification and therefore does not call for any explanations/comments.

18. Acknowledgement

The Directors wish to express their appreciation of the support and co-operation of the Central and the State Governments'' bankers'' business partners'' employees'' associates and expects the same in future as well for sustaining the growth rates achieved in the past.

On behalf of Board of Directors

Sd/-

D. Uday Kumar Reddy

Date: August 08''2013 Chairman & Managing Director

Place : Hyderabad


Mar 31, 2012

The Directors have pleasure in presenting the 16th Directors' Report on the business and operations of our Company for the financial year ended on March 31, 2012.

1. Results of Operations in Rs.

Financial performance of the Company (Standalone):

Results Results Particulars March 31, 2012 March 31, 2011

Income from operations 36 83 28 675 28 70 50 801

Operating Profit (EBIDTA) (65 72 494) 5 45 47 723

Less: Depreciation & amortisation 13 93 47 846 31 21 72 843

Operating Profit before Tax (14 59 20 339) (25 76 25 120)

Add: Other Income 49 18 636 53 40 458

Profit Before Tax (14 10 01 703) (25 22 84 661)

Less: Provision for Tax (3 51 27 709) (7 37 93 030)

Profit after Tax (10 58 73 994) (17 84 91 631)

Dividend (incl. dividend tax) - 1 18 33 408

Transfer to General Reserve - -

Net Profit Transferred to Reserves (10 58 73 994) (19 03 25 039)

Earnings per share: Basic / Diluted (Rs.1 each) (1.04) (1.76)

Dividend Rate Nil 10%

Share Capital 10 14 79 593 10 14 79 593

Reserves & Surplus 616 42 24 834 627 00 98 828

Total shareholders funds 626 57 04 427 637 15 78 421

Book value per share (Rs.1 each) 61.74 62.79

2. Further Issue Of Equity Shares On Preferential Basis

The company has not issued Equity Shares on Preferential basis during the financial year 2011-12.

3. Public Deposits

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under during the financial year under review.

4. Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, three Directors retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. A brief resume of the Directors seeking re-appointment is annexed to the Notice. Details of Directors who resigned after the previous AGM till the date of this Report:

1. Mr. Surjeet Kumar Palhan, Independent Director resigned from the Board on September 30, 2011 after serving the Board since July 18, 2007.

2. Mr. Amit Gupta, Director Finance, resigned from the Board on November 01, 2011 after serving the Board since November 11 ,2005.

3. Mr. Anoop Roy Kundal, Director - Operations, resigned from the Board on December 30, 2011 after serving the Board since October 27, 2004.

4. Mr. Navnit Chachan, Director & Chief Operating Officer, resigned from the Board on June 30, 2012 after serving the Board since November 11, 2005.

5. Mr. Shrikanth Madan Chitnis, Independent Director resigned from the Board on August 14, 2012 after serving the Board since December 28, 2005.

The Board placed on record appreciation for the services rendered by the Directors during their tenure on the Board.

5. Management Discussion and Analysis

A separate Management Discussion and Analysis Report is also attached and forms part of this report.

6. Subsidiaries

The subsidiaries of the Company are:

1. Mufithumb Entertainment Private Limited

2. Tanla Mobile Private Limited

3. Tanla Mobile Asia Pacific Pte Ltd., Singapore

4. Tanla Solutions (UK) Limited, U.K.

The step down subsidiaries of the Company are:

1. Tanla Mobile Ltd., UK a subsidiary of Tanla Solutions (UK) Ltd., UK.

2. Tanla Mobile Spain SL, Spain a subsidiary of Tanla Mobile Ltd., UK.

3. Tanla Mobile Middle East FZ LLC, Dubai

4. Tanla Mobile Inc., USA

5. Tanla Mobile South Africa Proprietary Ltd., South Africa

6. Tanla Mobile South Asia Pvt Ltd., Sri Lanka and

7. Tanla Mobile Ireland Pvt Ltd., Ireland are subsidiaries of Tanla Mobile Asia Pacific Pte Ltd., Singapore

8. Tanla Mobile Finland Oy, a subsidiary of Tanla Mobile Middle East FZ LLC, Dubai

9. Tanla Oy, Finland, is a subsidiary of Tanla Mobile Finland Oy

TZ Mobile Private Limited, incorporated in July 2009 under the provisions of the Companies Act, 1956 is a Joint Venture between Tanla Solutions Ltd and Zed Worldwide Holdings SL, Spain each holding 50% of shareholding.

7. Consolidated Financial Statements

Pursuant to the exempti on granted vide General Circular No. 2/2011 dated February 08, 2011, by the Ministry of Corporate Affairs, Government of India, a gist of the financial performance of the subsidiary companies is contained in the Annual Report. The Annual Accounts of the subsidiary companies are open for inspection by any member/investor and the Company will make available these documents/details upon request by any member of the company to any investor of its subsidiary companies who may be interested in obtaining the same.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211(3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements duly signed by the Statutory Auditors are annexed elsewhere in this Annual Report.

8. Directors Responsibility Statement

In terms of Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby confirm that:

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

(ii) Appropriate accounting policies have been applied consistently, judgements and estimates which are reasonable and prudent have been made 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 loss of the company for that period;

(iii) Proper and sufficient care has been taken 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;

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

9. Corporate Governance

Pursuant to the provisions of Clause 49 of the Listing Agreement with Stock Exchanges, a report on Corporate Governance together with a certificate from M/s Ravi & Subramanyam, Practi cing Company Secretaries, Hyderabad, features as part of the Annual Report. The company will continue to implement and adhere in letter and spirit to the policies of good corporate governance.

10. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, no employee /whole-time Director has been paid a remuneration equal to or exceeding the remuneration prescribed under the above amended rules.

11. Conservation Of Energy, Research And Development, Technology Absorption, Foreign Exchange Earnings And Outgo Conversation of Energy

The operations of the Company are not energy intensive. However, adequate measures have been taken to conserve and reduce the energy consumption by using energy efficient hardware, usage of natural light and other equipment. Air Conditioners are used only when required and air-conditioned areas have been treated with heat resistant material. We continue to evaluate new technologies and invest to conserve and reduce energy consumption. We believe energy saved is energy produced.

Research & Development, Technology Absorption

The company has rendered certain cost effective products and solutions to its clients as a result of its constant endeavour to research and develop new products, processes and methodologies for improving the productivity and quality of its products and services.

Foreign Exchange earnings and outgo

The particulars regarding foreign exchange earnings and expenditure are annexed hereto and forms part of this report.

12. Employee Stock Option

Options were granted to employees in October 2009, but no options were vested with the employees pursuant to the grant.

Disclosures in compliance with Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999) as amended, are as under:

Nature of Disclosure Particulars

41,75,000 options were granted on October 16, 2009, each option gives

Options granted the grantee a right to subscribe to equity share of face value of Re.1/- each.

At a discount of 20% on the latest available closing market price prior to The pricing formula the date of grant of options of the company on the exchange having the highest trading volume.

Options Vested No Options were vested during the year_

Options Exercised No Options were exercised during the year

Total number of shares arising as a result of exercise of option No Options were exercised during the year

Options lapsed No Options were vested during the year

Variation of terms of Options No variation has been done_

Money realized by exercise of Options As no Options were exercised during the year, no money was realized.

Total number of options in force Details of Options granted to 41,75,000

senior managerial personnel

Any other employee who receives a grant in any one year of option

No Options were granted during the year 2011-12 amounting to 5% or more of option granted during the year

Identified employees who were granted option, during any one year,

equal to or exceeding 1% of the issued capital (excluding outstanding No Options were granted during the year 2011-12 warrants and conversions) of the company at the time of grant Diluted Earnings per share(EPS) pursuant to issue of shares on

exercise of option calculated in accordance with Accounting No shares were issued as no options were exercised.

Standard(AS) 20 - Earnings Per Share

(i) Method of calculation of employee compensation cost.

(ii) Difference between the compensation cost using the intrinsic value of the stock options(which is the method of accounting used by the company) and the Compensation cost that would have been recognized in the accounts if the As no shares were allotted during the year 2011-12, this section fair value of options had been used as method of Accounting. is in-applicable

(iii)Impact of difference mentioned above in (i) above on the profits of the company.

(iv) Impact of the difference mentioned in (i) above on the EPS

_of the company__

(i) Weighted Average exercise price of options As no shares were allotted during the year 2011-12, this section is

(ii) Weighted Average fair value of options in-applicable

(i) Method used to estimate the fair value of options

(ii) Significant assumptions used

(Weighted Average information relating to all grants):-

(a)Risk free interest rate

As no shares were allotted during the year 2011-12, this section is in-

(b) Expected life of options ,

(c) Expected volatility applicable

(d) Expected dividend yields

(e) Price of the underlying share in market at the time/of option granted

13.Transfer of Unclaimed Shares to Suspense Account

870 Equity Shares held by 15 shareholders, in the "Tanla Solutions Limited - Demat Suspense Account" in Axis Bank Ltd., Jubilee Hills Branch, Hyderabad, as on March 31, 2012 in accordance with the provisions of Clause 5A of the Listing Agreement. The voting rights on these shares shall remain frozen till the rightful owner of these shares claims the shares.

14. Transfer of Unpaid/Unclaimed Dividend to the Investor Education and Protection Fund

Pursuant to Section 205A(5) of the Companies Act, 1956, and other applicable guidelines,Rs. 1,28,579.00 (Rupees One lakh twenty eight thousand five hundred and seventy nine only) representing the "Un-paid and Un-Claimed dividend for the year 2004-05" has been transferred to the Investor Education and Protection Fund.

15. Industrial Relations

The company enjoyed cordial relations with the employees during the year under review and the Management appreciates the employees of all cadres for their dedicated services to the company, and expects continued support, higher level of productivity for achieving the targets set for the future.

16. Auditors and Auditor's Report

M/s Ramasamy Koteswara Rao & Co., Chartered Accountants, Hyderabad, the Statutory Auditors, retire at the ensuing annual general meeting and are eligible for re-appointment. The company received confirmation that their appointment, if made, would be within the prescribed limits under the provisions of Section 224(1B) of the Companies Act, 1956.

The Auditors Report to the shareholders for the year ended March 31, 2012 does not contain any qualification and therefore does not call for any explanations/comments.

17. Group

List of Promoters including the Promoter Group of the company comprising "Group" as defined under the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) pursuant to Regulation 3(1)(e)(i) of the SEBI(Substantial Acquisition of Shares & Takeovers) Regulations, 1997 are:

1. Mr. D. Uday Kumar Reddy

2. Mrs. D. Tanuja Reddy

3. Mr. Satish Kathiriseffi

4. Mr. Gautam Sabharwal

18. Acknowledgements

The Directors wish to express their appreciation of the support and co-operation of the Central and the State Governments, bankers, business partners, employees, associates and expects the same in future as well for sustaining the growth rates achieved in the past.

On behalf of Board of Directors

Sd/-

Date: 14 August, 2012 D. Uday Kumar Reddy

Place : Hyderabad Chairman & Managing Director


Mar 31, 2011

To the Members,

The Directors have great pleasure in presenting the 15th Annual Report of business and operation together with Audited Financial Statement of Accounts for the financial year April 01 2010 to March 31 2011.

RESULTS OF OPERATIONS

In Rs.

Financial performance of the Company (Standalone):

Results Results

Particulars March 31, 2011 March 31, 2010

Income from operations 28 70 50 801 51 05 54 953

Operating Profit (EBIDTA) 5 45 47 723 10 93 26 111

Less: Depreciation & amortisation 31 21 72 843 18 14 96 395

Operating Profit before Tax (25 76 25 120) (7 21 70 283)

Add: Other Income 53 40 458 6 68 36 431

Profit Before Tax (25 22 84 661) (53 33 852)

Less: Provision for Tax (7 37 93 030) (3 79 83 035)

Profit after Tax (17 84 91 631) 3 26 49 183

Dividend (incl. dividend tax) 1 18 33 408 1 18 72 605

Transfer to General Reserve 8 16 230

Net Profit Transferred to Reserves (19 03 25 039) 1 99 60 349

Earnings per share: Basic / Diluted (Rs.1 each) (1.76) 0.33

Dividend Rate 10% 10%

Share Capital 10 14 79 593 10 00 28 376

Reserves & Surplus 627 00 98 828 646 04 23 867

Total shareholders funds 637 15 78 421 656 04 52 243

Book value per share (Rs.1 each) 62.79 65.59

SUBSIDIARIES

The subsidiaries of Tanla Solutions Limited are (i) Mufi Thumb Entertainment Pvt Ltd, India (ii) Tanla Mobile Asia Pacific Pte Ltd, Singapore (iii) Tanla Solutions (UK) Ltd., UK and (iv) Tanla Mobile Private Limited, India

Tanla Mobile Ltd ,UK is a subsidiary of Tanla Solutions (UK) Ltd. UK. Tanla Mobile Spain SL, Spain, is a subsidiary of Tanla Mobile Ltd, UK

(i)Tanla Mobile Middle East FZ LLC, Dubai,

(ii)Tanla Mobile Inc, USA,

(iii)Tanla Mobile South Africa Proprietary Ltd, South Africa

(iv)Tanla Mobile South Asia Pvt Ltd, Srilanka and

(v) Tanla Mobile Ireland Pvt Ltd, Ireland are subsidiaries of Tanla Mobile Asia Pacific Pte Ltd, Singapore.

Tanla Oy, Finland is a subsidiary of Tanla Mobile Finland Oy which is a subsidiary of Tanla Mobile Middle East FZ LLC, Dubai.

TZ Mobile Private Limited, incorporated in July 2009 is a Joint Venture Company between Tanla Mobile Private Limited and Zed Worldwide Holdings SL, Spain each holding 50% of shareholding.

DIVIDEND

The Board recommends a Dividend of 10 % (Re.0.10 per equity share of Rs. 1/- each), as per Companies (Declaration of Dividend out of Reserves) Rules, 1975, subject to the approval of the shareholders at the ensuing Annual General Meeting. The Dividend will be paid in compliance with applicable regulations. The dividend if declared as above, would involve an outflow of Rs.10, 147, 959 towards dividend and Rs.1,685,449 towards dividend tax.

The registers of members and share transfer books shall remain closed from September 28th, 2011 to September 30th, 2011 (both days inclusive).

ISSUE OF EQUITY SHARES ON PREFERENTIAL BASIS

The company has not issued Equity Shares on Preferential basis during the financial year ended 31st March, 2011.

FIXED DEPOSITS

During the financial year 2010-11, the Company has not accepted any deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed section on 'Management Discussion and Analysis' (MDA), pursuant to Clause 49 of the Listing Agreement forms an integral part of this Annual Report.

PARTICULARS PURSUANT TO EXEMPTION UNDER SEC 212 OF THE COMPANIES ACT, 1956

Pursuant to the provisions of Section 212 of the Companies Act, 1956, documents in respect of the various subsidiaries viz., Directors' Report, Auditors' Report, Balance Sheet and Profit and Loss Account, are required to be attached to the Balance Sheet of the holding company. However, the Government of India, Ministry of Corporate Aff airs, has vide letter No.47/15/2011-CL-III dated 27 January 2011, granted a general exemption to applicability of the provisions of Section 212(1) of the Companies Act, 1956. As required under the circular the Company shall make available the audited annual accounts of the subsidiary companies and related detailed information to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Offi ce of the Company during business hours.

Information pertaining to the subsidiary companies to be declared as a part of the consolidated financial statements is in page no. 54.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Shrikanth Madan Chitnis, Mr. Surjeet Kumar Palhan, Mr.Satish Kathirisetti and Mr. Anoop Roy Kundal, retire by rotation at the forthcoming Annual General Meeting and being eligible, off er themselves for re-appointment.

A Brief resume of each of the Directors proposed to be appointed/re-appointed, their expertise in specific functional areas and names of the Companies in which they hold Directorship/membership/chairmanship of the Board Committees, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges has been provided elsewhere in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors in terms of Section 217 (2AA) states that:

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

b) the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent, so as to give true and fair view of the state of aff airs of the Company as at March 31st 2011 and of the Loss of the Company for the year ended on that date;

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

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

CORPORATE GOVERNANCE

Our Directors reaffi rm their continued commitment to good corporate governance practices and Our Company adheres to all major stipulations in this regard as provided in Clause 49 of the Listing Agreement which relate to Corporate Governance. A detailed report on the Corporate Governance, together with, a certificate from Ms Chada Srivani, Practicing Company Secretary, BS & Co., Company Secretaries forms part of this report.

INTERNAL CONTROL SYSTEM

The Company has proper and adequate systems of internal control system commensurate with the size and nature of its business to ensure protection of assets, proper financial & operating functions and compliance with the policies, procedures, applicable Acts and Rules. The company's internal controls are supplemented by sound internal audit practices. The Audit Committee at their meetings regularly reviews the financial, operating, internal audit & compliance reports to improve performance. Further, the company has an independent internal audit system. The process of internal audit involves, reviewing of existing controls and systems. Internal Audit also recommends actions for strengthening of the business processes. The internal audit ensures adherence to operating guidelines, regulatory and legal requirements.

RISK MANAGEMENT SYSTEM

Risk is an integral part of the business process. To enhance the risk management process, the company has mapped the risks. A system has been formulated based on Balanced Score Card with various appropriate measures and accountabilities to identify, assess, prioritise and mitigate the risks. Reports generated from the system are monitored regularly to ensure that appropriate corrective actions are taken.

The company manages business risks through strict compliance and internal checks. It will not be out of context to state that the system has worked very effectively during the year under review.

STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956

In terms of the amended Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956, no employee/Whole time Director has been paid a remuneration equal to or exceeding the remuneration prescribed under the above amended rules.

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

Conservation of energy

Our operations are not energy intensive; however significant measures are taken to reduce energy consumption by using energy efficient computers and purchasing energy efficient equipment. We constantly evaluate new technologies and invest to make our infrastructure more energy efficient.

Technology Absorption

Research and development of new products, processes and methodologies continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous innovation.

Our Company continues to invest in rapidly changing technologies and use them to improve the quality of the products, service offerings, this has resulted in overall reduction in defect rates and a higher level of customer satisfaction.

Foreign Exchange earnings & outgo:

The particulars regarding foreign exchange earnings and expenditure are annexed hereto and forms part of this report.

TRANSFER OF UNCLAIMED SHARES TO SUSPENSE ACCOUNT

As on 31st March, 2011, 870 Unclaimed Equity Shares held by 15 Shareholders , were held in the " Tanla Solutions Limited - Demat Suspense Account" in Axis Bank, Jubilee Hills, Hyderabad in compliance with the provisions of Clause 5A of the Listing Agreement. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

TRANSFER OF UNPAID/UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

According to Section 205A(5) of the Companies Act, 1956, unpaid and unclaimed dividend in the dividend account of the Company has to be transferred to Investor Education and Protection Fund after seven years of declaration. Hence pursuant to Sec 205 (A) of the Companies Act,1956 and other applicable guidelines, Rs. 41,000 representing the unpaid and unclaimed dividend for the year 2003-04 has been transferred to Investor Education and Protection Fund.

HUMAN RESOURCES

Our Company believes that the quality of employees is the key to its success in the long run and is committed to provide necessary human resource development and training opportunities to equip them with required skills. Our Company constantly strives to provide the employees with the required training to hone their skills.

AUDITORS AND AUDITORS' REPORT

M/s.Ramasamy Koteswara Rao, Chartered Accountants, Hyderabad, Statutory Auditors of the Company, shall hold offi ce until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. certificate from the Auditors has been obtained to the effect that their re-appointment, if made, would be within the limits specified under Section 224 (IB) of the Companies Act, 1956.

The Auditors Report to the shareholders for the year ended March 31, 2011 does not contain any qualifi cation and therefore does not call for any explanation/comments.

GROUP

List of Promoters including the Promoter Group of the Company comprising "Group" as defined under the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) pursuant to Regulation 3(1)(e)(i) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 are:

1. Mr. D.Uday Kumar Reddy

2. Mrs.D.Tanuja Reddy

3. Mr.Satish Kathirisetti

4. Mr.Anoop Roy Kundal

5. Mr.Navnit Chachan

6. Mr.Amit Gupta

7. Mr.Gautam Sabarwal

ACKNOWLEDGEMENT

Our Directors wish to place on record their appreciation for the support extended by government authorities, bankers, customers and shareholders of the Company.

Our Directors also wish to place on record their appreciation for the sincere services rendered by the employees of our Company during the year. Their dedication, teamwork and efficiency are commendable.

Sd/- Date: September 05, 2011 D. Uday Kumar Reddy

Place:Hyderabad Chairman & Managing Director


Mar 31, 2010

The Directors have great pleasure in presenting the Fourteenth Annual Report of your Company together with the Audited Statement of Accounts for the year ended on March 31, 2010.

(In Rs.)

Particulars Results

March 31, 2010 March 31, 2009

Income from operations 510,554,953 1,723,834,549

Operating Profit (EBIDTA) 109,326,111 991,136,043

Less: Depreciation & amortisation 181,496,395 160,462,174

Operating Profit before Tax - 72,170,283 830,673,869

Add: Other Income 66,836,431 72,548,530

Profit Before Tax - 5,333,852 903,222,399

Less: Provision for Tax - 37,983,035 170,397,201

Profit after Tax 32,649,183 732,825,198

Dividend (incl. dividend tax) 11,872,605 58,497,500

Transfer to General Reserve 816,230 73,282,520

Net Profit Transferred to Reserves 19,960,348 601,045,178

Earnings per share: Basic / Diluted (Re.1 each) 0.33 7.33

Dividend Rate 10% 50%

Share Capital * 100,028,376 100,000,000

Reserves & Surplus 6,460,423,867 6,350,087,514

Total shareholders funds 6,560,452,243 6,450,087,514

Book value per share (Re.1 each) 65.59 64.50

Subsidaries

The subsidiaries of Tanla Solutions Limited are (i) MufThumb Entertainment Pvt Ltd, India (ii) Tanla Mobile Asia Pacifc Pte Ltd, Singapore and (iii) Tanla Solutions (UK) Ltd., UK.

Tanla Mobile Ltd (UK) is a subsidiary of Tanla Solutions (UK) Ltd.

Tanla Mobile Spain SL, Spain, is a subsidiary of Tanla Mobile

Ltd, (UK)

(i)Tanla Mobile Middle East FZ LLC, Dubai,

(ii)Tanla Mobile Inc, USA,

(iii) Tanla Mobile Malaysia Sdn. Bhd., Malaysia,

(iv)Tanla Mobile South Africa Proprietary Ltd, South Africa

(v) Tanla Mobile Australia Pty Ltd, Australia,

(vi) Tanla Mobile South Asia Pvt Ltd, Srilanka and

(vii) Tanla Mobile Ireland Pvt Ltd, Ireland are subsidiaries of

Tanla Mobile Asia Pacifc Pte Ltd, Singapore.

Tanla Mobile Finland Oy was incorporated by Tanla Mobile Middle East FZ which holds 100% shareholding of Tanla Oy (formerly Openbit Oy) as on date.

Tanla Mobile Australia Pty Ltd, Australia, was deregistered in January 2010 as confrmed by ASIC, Australia.

During the year our Company incorporated:

(i) Tanla Mobile Private Limited, a SEZ Company and wholly owned subsidiary of Tanla Solutions Limited

(ii) TZ Mobile Private Limited , a joint venture company(JVC), with Zed Worldwide Holdings SL, Spain

Joint Venture

TZ Mobile Private Limited, the joint venture company, is engaged in the business of providing the following services:

- Sale of mobile content and services to end users.

- Carriers outsourcing services including the Management of carriers portals.

- Mobile Advertising.

- Design and monitoring of marketing campaigns for Telecom Companies and other companies.

- New MVAS products or services addressable to the direct to consumer market.

These services span across -

- Voice (Songs, dialogs, ring tones, caller tunes etc),

- Text (PSMS, WAP based texts for jokes, astro, info services, etc involving push-pull services)

- Video (voice and video messages)

The business is conducted in accordance with the business plan to be mutually agreed upon by the parties.

Dividend

The Board has recommendsed a Dividend of 10 % (Re.0.10 per equity share of par value of Re. 1/- each), as per Companies (Declaration of Dividend out of Reserves) Rules, 1975, subject to the approval of the shareholders at the ensuing Annual General Meeting. The Dividend will be paid in compliance with applicable regulations. The fnal dividend if declared as above, would involve an outfow of Rs.10, 147, 959 towards dividend and Rs.1, 724, 646 towards dividend tax.

The registers of members and share transfer books shall remain closed from September 25, 2010 to September 30, 2010(both days inclusive).

Our Directors propose to transfer Rs. 816, 230 to the General Reserve account retaining Rs. 19, 960, 348 in the Proft & Loss Account, after dividend and dividend tax.

Fixed Deposits

During the fnancial year 2009-10, the Company has not accepted any deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975

Management Discussion and Analysis

A detailed section on Management Discussion and Analysis (MDA), pursuant to Clause 49 of the Listing Agreement forms an integral part of this Annual Report.

Employee Sock Option Scheme

The grant of stock options to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster long-term commitment. Towards achieving this goal, approval of the members was obtained in the Annual General Meeting held on August 29, 2007, to create, issue, ofer options and allot equity shares under the Employee Stock Option Scheme. The Remuneration Commit- tee met on October 16, 2009; and allotted options to the eligible employees.

Disclosure in compliance with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999), as amended, are as under:

Nature Of Disclosure Particulars

Options granted 41,75,000 options were granted on October 16, 2009, each option grantee gives the grantee a right to subscribe to equity share of face value of Rs.1/- each

The pricing formula At a discount of 20% on the latest available closing market price prior to the date of grant of options of the company on the exchange having the highest trading volume.

Options vested Options would be vested with the Employees from Oct 2010

Options Exercised No Options were exercised during the year

Total number of shares arising as a result of exercise of option No Options were exercised during the year

Options lapsed No options lapsed during the year

Variation of terms of options No variation has been done

Money realized by exercise of options As no options were exercised during the year, no money was realized

Total number of options in force 41,75,000

Details of options granted to senior managerial personnel

Any other employee who receives a grant in any one year of option Name & Designation No. of Options granted

amounting to 5% or more of option granted during that year 1. Vessa Pekka Kirsi, Vice-President 6,50,000

Tanla Oy Finland

Identified employees who were granted option, during any one year, equal Name & Designation No. of Options granted

to or exceeding 1% of the issued capital (excluding outstanding warrants 1. Arto Lehtonen, Vice-President 10,00,000

and conversions) of the company at the time of grant Tanla Oy Finland

Diluted Earnings per share(EPS)) pursuant to issue of shares on exercise of No shares were issued as no options were exercised

option calculated in accordance with Acco unting Standard (AS) 20

Earnings Per Share -

(i) Method of calcul ation of employee compensation cost.

(ii) Difference be tween the compensa tion cost using the intrinsic value of

the stock options (which is the method of accounting used by the

Company)and the Compensation cost that would have been recognized

in the accounts if the fair value of Options had been used as method of As no shares were allotted during the year 2008-09, this

accounting section is in-applicable for this year,

(iii) Impact of the difference mentioned above in

(i) above on the profits of the Company

(iv) Impact of the difference mentioned in

(i) above on the EPS of the

Company

(i) Weighted Ave rage exercise p rice of Options

(ii)Weighted a verage fair va lue of Options

(i)Method used to estimate the fair value of Options

(ii)Significant assumptions used (Weighted Avera ge information relating to all grants):-

(a)Risk free in terest rate As no shares were allotted during the year. 2008-09, this

(b) ExpectedHthe Options section is in-applicable for this year,

(c) Expected volatility

(d) Expected div idend yields

(e) Price of the underlying share in market at the time of option grant

Issue of Equity Shares on Preferential Basis

The Company has in accordance with the statutory provisions, including SEBI (ICDR) Regulations, 2009 Guidelines, and with the approval of the members sought through postal ballot, issued and allotted 1,479,593 equity shares of Re. 1 each at a price of Rs. 61.53 including a premium of Rs. 60.53 each fully paid-up, on a preferential basis to the current management team of erstwhile Openbit Oy, Finland (now known as Tanla Oy) on March 24 2010. This preferential issue was made with the objective to augment long-term fund requirements of the Company for ongoing capital expenditure, new acquisitions and for general corporate purposes.

Pursuant to the issue of equity shares on preferential basis, the paid-up equity share capital of the Company increased from Rs. 100,000,000/- to Rs. 101,479,593/- consisting of 101,479,593 equity shares of face value Re.1 each.

Statement Pursuant to Exemption Under SEC 212(8) of the Companies Act 1956

We believe that the Consolidated Financial Statements present a more comprehensive picture rather than the stand- alone fnancial statements of the Company and each of its subsidiaries. We, therefore, applied to the Ministry of Corpo- rate Afairs, Government of India and obtained vide letter no: 47/128/2010/CL-III dated March 15 2010, an exemption from the requirement of presenting detailed fnancial statements of each subsidiary. In terms of the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet, Proft and Loss Account, and Report of the Board of Directors and Auditors of the subsidiaries have not been attached with the Balance Sheet of the Company. However, these documents will be made available upon request by any member of the Company. As directed by the Central Government, the fnancial data of the subsidiaries has been furnished under Financial Information of Subsidiary Companies, which forms part of this Annual Report. The annual accounts and related detailed information of the Company including that of subsidiaries will be kept for inspec- tion by any member at the registered ofce of the company. Further, pursuant to Accounting Standard (AS - 21) prescribed under Companies (Accounting Standards) Rules, 2006, Consolidated Financial Statements prescribed by the Company include fnancial information of subsidiaries.

Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Padmabhushan Ram Narain Agarwal, Mr. Abhishek Khaitan and Mr. S.S. Jamuar, retire by rotation at the forthcoming Annual General Meeting and being eligible, ofer themselves for re-appointment. A brief resume, expertise and details of other directorship and committee membership thereof of these Directors are given in the explanatory statement annexed to the Notice convening the 14th Annual General Meeting.

The Board of Directors in its meeting held on May 14 2010, re-appointed for a period of 5 years, 1) Mr. D. Uday Kumar Reddy as the Chairman & Managing Director of the Company with efect from May 15 2010, 2) Mr. Amit Gupta as the Director-Finance of the Company with efect from April 01 2010. In this Board Metting, Mr. Navnit Chachan was redis- gnated as the Director- Technical & Engineering with efect from April 01 2010 and re-appointed for a further period of 5 years with efect from May 01 2010.

Mr. Harish Kumar Villadath, Independent Director has resigned from the Board of Directors with efect from January 28 2010.

A Brief resume of each of the Directors proposed to be appointed/re-appointed, their expertise in specifc functional areas and names of the Companies in which they hold Directorship/membership/chairmanship of the Board Committees, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges has been provided as an annexure to the Notice convening 14th Annual General Meet- ing.

Directors Responsibility Statement

The Board of Directors in terms of Section 217 (2AA) states that:

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

b) the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent, so as to give true and fair view of the state of afairs of the Company as at March 31 2010 and of Proft of the Company for the year ended on that date;

c) the Directors have taken proper and sufcient 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 have prepared the annual accounts on a "going concern" basis.

Corporate Governance

Our Directors reafrm their continued commitment to good corporate governance practices and Our Company adheres to all major stipulations in this regard as provided in Clause 49 of the Listing Agreement which relates to Corporate Governance. A detailed report on the Corporate Governance, together with, a certifcate of complaince from BS& Company, Company Secretaries, Hyderabad, forms part of this report.

Internal Control System and its Adequecy

The company has proper and adequate systems of internal control system commensurate with the size and nature of its business to ensure protection of assets, proper fnancial & operating functions and compliance with the policies, proce- dures, applicable Acts and Rules. The companys internal controls are supplemented by sound internal audit practices. The Audit Committee at their meetings regularly reviews the fnancial, operating, internal audit & compliance reports to improve performance. Further, the company has an indepen- dent internal audit system. The process of internal audit involves, reviewing of existing controls and systems. Internal Audit also recommends the actions for strengthening of the business processes. The internal audit ensures adherence to operating guidelines, regulatory and legal requirements.

Risk Management System

Risk is an integral part of the business process. To enhance the risk management process, the company has mapped the risks. A system has been formulated based on Balanced Score Card with various appropriate measures and accountabilities to identify, assess, prioritise and mitigate the risks. Reports gener- ated from the system are monitored regularly to ensure that appropriate corrective actions are taken.

The company manages business risks through strict compli- ance and internal checks. It will not be out of context to state that the system has worked very efectively during the year under review.

Statement Pursuant to SECTION 217(2A) of the Companies Act,1956

Information as required under Section 217(2A) of the Compa- nies Act, 1956 read with the Companies (Particulars of Employ- ees) Rules, 1975, is given as an Annexure to this Report.

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

Conservation of energy

Our operations are not energy intensive; however signifcant measures are taken to reduce energy consumption by using energy efcient computers and purchasing energy efcient equipment. We constantly evaluate new technologies and invest to make our infrastructure more energy efcient.

Technology Absorption

Research and development of new products, processes and methodologies continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous innovation. Our Company continues to invest in rapidly changing technologies and use them to improve the quality of the products, service oferings, this has resulted in overall reduction in defect rates and a higher level of customer satisfaction.

Foreign Exchange earnings & outgo:

The particulars regarding foreign exchange earnings and expenditure are annexed hereto and forms part of this report.

Transfer of Unclaimed Shares to Suspense Account

As on 31.03.2010, 940 Equity Shares of 16 Shareholders laid unclaimed in the Escrow Account of the Company with the Registrar, due to non-availability of the correct particulars. Despite constant eforts to locate the Shareholder, such as reminders to the address given in the Application form and as captured from depositories database, by the Registrars, viz., M/s Karvy Computershare Private Limited, no response has been received. As a result the said unclaimed shares have been credited to “ Tanla Solutions Limited – Demat Suspense Account” in compliance with the provisions of Clause 5A of the Listing Agreement.

Every successful allottee who has not received the shares in his/her demat Account may approach the Company or M/s Karvy Computershare Private Limited, with their correct particulars and proof of their identity for crediting of the Shares from the Demat Suspense Account to their individual demat Account. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Human Resources

Our Company believes that the quality of employees is the key to its success in the long run and is committed to provide necessary human resource development and training oppor- tunities to equip them with required skills. Our Company has granted options to deserving employees during the fnancial year 2009-10, under the Employee Stock Option Scheme 2007, as our Company believes in rewarding performance and providing the employees an opportunity to share the growth of the Company.

Patent & Award

Tanla was granted a Patent by, The Registry of Patents, Singa- pore, and the indian patent ofce, for Automated Meter Read- ing and Method thereof.

A detailed note on the patent has been annexed elsewhere in this report.

Tanla Solutions Limited ranked 25th in the Deloitte Fast 50 Indian 2009 Program. This Program ranks fastest growing technology Companies in India based on their percentage revenue growth over the last three fnancial years.

Auditors and Auditors Report

M/s. Ramasamy Koteswara Rao, Chartered Accountants, Hyder- abad, Statutory Auditors of the Company, shall hold ofce until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. Certifcate from the Auditors has been obtained to the efect that their re-appointment, if made, would be within the limits specifed under Section 224 (IB) of the Companies Act, 1956.

The Auditors Report to the shareholders for the year ended March 31, 2010 does not contain any qualifcation and there- fore does not call for any explanation/comments.

Acknowledgement

Your Directors wish to place on record their appreciation for the support extended by government authorities, bankers, customers and shareholders of the Company.

Your Directors also wish to place on record their appreciation for the sincere services rendered by the employees of your Company during the year. Their dedication, teamwork and efciency have been commendable.

On behalf of the Board of Directors,

Sd/

D. Uday Kumar Reddy

Chairman & Managing Director

Place : Hyderabad

Date : September 05, 2010