AFFLUENCE

REPORT OF THE DIRECTORS TO THE MEMBERS, Your Directors are pleased to present their Twenty fifth Annual Report with Audited Accounts of the Company for the financial year ended 31st March 2012. Performance Results : Your company entered into BPO section with a trial order. With high attrition, quality is a concern. This impedes getting long term order that is vital to this sector. The summarized Results are as follows: (Rs. in Lacs) Particulars 2012 2011 Sales & Other Income 35.70 16.46 Profit Before Interest, Depreciation & Taxation (16.11) (55.14) Depreciation 55.68 71.02 Deferred Tax Adjustment (22.72) 38.63 Loss After Taxation (49.07) (87.52) Review of operations : Your company has taken new stream of activities to broad base the Data migration tools services. The data migration technologies have now been expanded to offer XBRL services to financial institutions. Your company is also productizing this with “Mark & Migrate” type of feature to become OEM to product vendors. Your company is also partnering with Middle East service providers to offer these services. A trial order for BPO has been undertaken with a team of 20 persons during the last 2 quarters. During the year, your company’s total income from Software Development & Services and others incomes stood at Rs.35.70 lacs against Rs.16.46 lacs for the previous year, Loss after taxation stood at Rs.49.07 lacs as against Loss of Rs.87.52 lacs for the previous year. Significant Events The XBRL services and data migration services are being reviewed to expand the features to reflect with the market trends. Future Programs : Partnering, off-shoring and strategic alliances are being pursued with Indian companies to broad base the solutions and services. Corporate Governance : As required under Clause 49 of the Listing Agreement, a report on Corporate Governance is provided elsewhere in this Annual Report along with Auditor’s certificate on the compliance thereof. Public Deposits : Your Company has not accepted any deposits and as such, no amount of Principal or Interest was outstanding on the date of the Balance Sheet. Directors : Mr. M. N Thakkar retires by rotation at this Annual General Meeting and being eligible, offers himself for re-appointment. and Mr.B.S.Chandrashekar who was appointed as an additional Director by the Board vacates his office on the date of AGM, being eligible, proposed to be appointed as a Director of the Company. A brief profile of the Directors is given in the notes to the ensuing AGM. Your Directors recommend that the resolutions relating to the re-appointment of Mr. M. N. Thakkar and appointment of Mr. B S Chandrashekar as director of the Company be passed. Auditors : Auditor Mr. V.Raghavendran, Chartered Accountant, retires at the conclusion of the Twenty fifth Annual General Meeting and being eligible, offers himself for reappointment. The Company has received Certificate under section 224(1B) of the Companies Act, 1956 from Mr.V. Raghavendran. Directors’ Responsibility Statement : In terms of Section 217(2AA) of the Companies Act, 1956, it is indicated as under: i) in the preparation of the annual accounts the applicable accounting standards had been followed and there were no departures. ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the directors had prepared the annual accounts on going-concern basis. Personnel : As no employee meets the remuneration criteria, as required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, this section does not form part of this Report. Energy & Technology Absorption : In pursuance of the provisions of Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the particulars for the year ended 31st March 2012 are given below. Conservation of Energy : The operations of your Company are not energy intensive. However, during the year under review, efforts continued to conserve and avoid wastage of energy in every possible way. Research and Development : R&D on Company’s core Product LeMiT and new services, process & methodologies continue to be of importance which strengthens the company to address the legacy migration and also several vertical markets. Technology Absorption : Not applicable Foreign Exchange Earning and Expenditure : Foreign Exchange Earning : Rs.4.42 lacs Foreign Exchange Expenditure : Rs.NIL Internal Audit In view of the volume of the operations of the company and the cost considerations, internal auditor is not appointed and the internal control procedures have been put in place for adequate management of the same. Acknowledgements : Your Directors place on record their sincere gratitude to the continuing patronage of our shareholders, business associates, customers, bankers, various governmental and regulatory agencies for your company’s growth. Your Directors take this opportunity to place on record, their sincere appreciation for the significant contribution made by the employees of the Company and all your channel partners who have together been responsible for the growth of the Company. For and on behalf of the Board Place : Bangalore S.Ragothaman Date : August 08, 2012 Chairman & Managing Director

Your company entered into BPO section with a trial order. With high attrition, quality is a concern. This impedes getting long term order that is vital to this sector.

Conservation of Energy: The operations of your Company are not energy intensive. However, During the year under review, efforts continued to conserve and avoid wastage of energy in every possible way

As no employee meets the remuneration criteria, as required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, this section does not form part of this Report.

In terms of Section 217(2AA) of the Companies Act, 1956, it is indicated as under : i) in the preparation of the annual accounts the applicable accounting standards had been followed and there were no departures.ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;iv) that the directors had prepared the annual accounts on going-concern basis.

Internal Audit : In view of the volume of the operations of the company and the cost considerations, internal auditor is not appointed and the internal control procedures have been put in place for adequate management of the same.