The Directors have pleasure in presenting the Eighteenth Annual Report
 of the Company with the Audited Statement of Accounts for the year
 ended March 31, 2011.
 
 FINANCIAL HIGHLIGHTS
 
 Financials of the Company on Consolidated basis:
 
 In the fnancial year 2010-11, your Company recorded overall revenue of
 ` 2,587.48 crores, a growth of 4.80% as compared to the revenues
 reported last year. Proft after tax was ` 253.57 crores and Earning per
 share (EPS) was ` 12.81. In the previous fnancial year 2009-10, there
 was an exceptional item, the Company had written off a loss on account
 of discontinued operations. There was no such exceptional item during
 this year 2010-11. The brief fnancial highlights with comparison of
 previous year are as below:
 
                                                        ` in crores
 
 Particulars                               Year ended     Year ended
                                       March 31, 2011 March 31, 2010
 
 Total Income                                2,587.48       2,468.75
 
 Proft / (Loss) before taxation                261.21         276.90
 
 Provision for taxation (Current 
 and Deferred)                                   7.64          10.95
 
 Proft / (Loss) after taxation and 
 before exceptional items and impact of        253.57         265.95
 
 discontinuing operations
 
 Earnings Per Share (Basic in Rupees) 
 (Before Exceptional items and impact           12.81          17.21
 of discontinuing operations)
 
 Financials of the Company on Standalone basis:
 
 The Proft & Loss Account of your Company on standalone basis shows a
 proft after tax of ` 119.39 crores. The disposable proft is ` 241.42
 crores, taking into account the balance of ` 122.03 crores brought
 forward from the previous year, subject to adjustments pertaining to
 that year. The brief fnancial highlights are as below:
 
                                                      ` in crores
 
 Particulars                              Year ended       Year ended
                                      March 31, 2011   March 31, 2010
 
 Total Income                                 578.62           534.47
 
 Proft before tax                             108.15           136.49
 
 Provision for taxation (Current and 
 Deferred)                                    (11.24)            3.50
 
 Proft after tax and before exceptional 
 items and impact of discontinuing            119.39           132.99
 operations
 
 Balance brought forward from previous year   122.03            84.21
 
 FCCB redemption reserve written back           -              234.16
 
 Disposable Proft                             241.42           218.76
 
 Transfer to Reserves (General Reserve & 
 FCCB Redemption Reserve)                       6.00            59.66
 
 Proft available for distribution after 
 Transfer to Reserves                         235.42           159.10
 
 Earning Per Share (Basic in Rupees) 
 (Before Exceptional items)                     5.85             8.35
 
 TRANSFER TO RESERVES
 
 Your Company proposes to transfer ` 6 crores to the general reserve. An
 amount of ` 190.61 crores is proposed to be carried to the Balance
 Sheet.
 
 DIVIDEND
 
 The proft available for distribution to equity shareholders works out
 to ` 235.42 crores. Your Directors have recommended a dividend of `
 1.50 on an equity share of face value of ` 10/- each (15%) for the year
 ended 2010-11. The details of appropriation are as under:
 
                                                        ` in crores
 
 Particulars                            Year ended        Year ended
                                    March 31, 2011    March 31, 2010
 
 Proft available for distribution           235.42            159.10
 
 Dividend on Preference shares                6.35              6.35
 
 Proposed Dividend – Equity shares           28.80             25.32
 
 Residual Dividend Paid                       3.46              0.02
 
 Corporate Dividend Tax                       6.20              5.38
 
 Balance carried to Balance Sheet           190.61            122.03
 
 TRANSFER OF UNPAID DIVIDEND
 
 Your Company does not have any unpaid dividend required to be
 transferred to Investor Education and Protection Fund under Section
 205C of the Companies Act, 1956 in the fnancial year 2010-11.
 
 OVERVIEw
 
 Business:
 
 Your Company has two business drivers viz. IT Solutions (i.e. sale of
 software products and services affliated to these products, software
 development and consulting and IT infrastructure services) and
 Transaction Services (i.e. BPO related services) for a variety of
 industry verticals including Insurance, Banking, Capital Markets,
 Mutual Funds & Asset Management, Wealth Management, Government,
 Manufacturing and Retail. These solutions and services include Managed
 IT Services, Application Software Development & Maintenance, Payment
 Solutions, Business Intelligence, Document Imaging & Digitization, IT
 Consulting and various Transaction Processing Services.
 
 The contribution of the various business segments to the revenue for
 the year from IT Solutions is 68% and from Transaction Services 32%.
 
 For detailed operations and business performance and analysis, kindly
 refer the Management Discussion & Analysis which forms a part of this
 Report.
 
 During the year, the Company has received the following recognitions:
 
 - Retained its 4th position in the lending category of the IBS Sales
 League table published by IBS Intelligence, UK for the fourth
 consecutive year (2008-2011);
 
 - Ranked 36th (4th among Indian IT companies) in the Fintech 100 list
 of Financial Services & Technology providers, published by American
 Banker;
 
 - Adjudged runner-up for the Maharashtra IT Award 2009 for Outstanding
 Performance in IT Software category;
 
 - Award for the Best Takaful Technology Company for the 3rd consecutive
 year from the Middle East Business Forum at the Takaful Awards;
 
 - One of the top 3 companies in the Service Provider of the Year and
 Technology Initiative of the Year categories at the 14th Asia
 Insurance Industry Award;
 
 - Awarded ISV partner of the Financial Year 2010 - Technology by
 Oracle, India and
 
 - Received Certifcate of Recognition from Business Software Alliance
 for Software Asset Management Compliance.
 
 - Certifed by Wordblu as one of the Most Democratic Workplaces for
 the 2nd consecutive year, 2010 and 2011.
 
 Geographical reach:
 
 Your Company has a large customer base across the globe and 103 of them
 are Fortune 500 customers. The Company has physical presence through
 the offces in 15 countries and 5 geographies, viz. South Asia, Asia
 Pacifc, Middle East and Africa, Western Europe and North America.
 
 The business of your Company is majorly divided into Emerging Market
 and Developed Market. Share of the Emerging Market to total revenue of
 the Company is 43%. Share of Developed Market to total revenue of the
 Company is 57%.
 
 SUBSIDIARY COMPANIES
 
 As of the date of this Report, the Company has 43 subsidiaries located
 in 5 geographies.
 
 Mergers and Amalgamations:
 
 This year has been a year of consolidation for your Company. For the
 last few years, the Company has been in an acquisitive growth phase due
 to which the number of subsidiaries of the Company considerably
 increased. As the operations of certain subsidiaries were merged with
 that of the Company to reduce the operational cost, your Company
 initiated several mergers during the year.
 
 Accordingly, 3i Infotech Consulting Inc., Lantern Systems Inc.,
 Objectsoft Group Inc., ePower Inc., US subsidiaries of the Company were
 merged with 3i Infotech Inc. 3i Infotech Consulting Services SDN BHD
 has been dissolved. Indian subsidiaries for which merger procedure has
 been completed are Stex Software Private Limited, KNM Services Private
 Limited and E-enable Technologies Private Limited with 3i Infotech
 Limited. Further, Delta Services (India) Private Limited and Manipal
 Informatics Private Limited have been merged with 3i Infotech
 Consultancy Services Limited. Indian subsidiaries for whom merger
 procedure has been initiated are Fineng Solutions Private Limited with
 3i Infotech Limited, J&B Software
 
 India Private Limited with 3i Infotech Limited and AOK In House
 Factoring Services Private Limited and AOK In House BPO Services
 Limited with 3i Infotech BPO Limited.
 
 Divestment:
 
 To enable the Company to concentrate on its niche area, the Company
 also decided to divest its stake from certain subsidiaries.
 
 Hence, during the year, the Company divested its entire stake in
 eMudhra Consumer Services Limited (formerly known as 3i Infotech
 Consumer Services Limited) to Indus Innovest Holdings Private Limited.
 As a result of this divestment, Antariksh Interactives Private Limited,
 Access Matrix Technologies Private Limited and Taxsmile.com India
 Private Limited have ceased to be the subsidiaries of your Company as
 they were wholly owned subsidiaries of eMudhra Consumer Services
 Limited.
 
 During the year, the entire stake in 3i Infotech Insurance and
 Re-insurance Brokers Limited was divested to Aretha Advisors Private
 Limited.
 
 Investments:
 
 Your Company has raised its stake, on its own or through its
 subsidiaries, in some of the subsidiary companies.
 
 Your Company has acquired further 40% stake in Fineng Solutions Private
 Limited (a software product company in the fnancial services vertical)
 effective from June 10, 2010 thereby making it a wholly owned
 subsidiary of the Company and further 23% stake in Locuz Enterprise
 Solutions Limited (a System Integrator and IT infrastructure solutions
 and services specialist) effective from October 13, 2010. As a result,
 Companys stake in Locuz increased to 74%.
 
 In case of its Joint Venture in Nigeria, your Company has acquired
 47.5% stake in Process Central Limited, through 3i Infotech (Middle
 East) FZ LLC, one of the subsidiaries of the Company.
 
 On March 24, 2011, Regulus BPO Limited was incorporated by the Company
 as its wholly owned indirect subsidiary.
 
 Name Change:
 
 The name of Exact Technical Services Limited (one of the subsidiaries
 of the Company) was changed to 3i Infotech (Flagship- UK) Limited
 effective from April 13, 2010 and name of Datacons Asia Pacifc SDN BHD
 was changed to 3i Infotech Services SDN BHD effective from August 5,
 2010.
 
 Accounts of the Subsidiaries:
 
 As per Section 212 of the Companies Act, 1956, your Company is required
 to attach the Directors Report, Balance Sheet and Proft and Loss
 Account of the subsidiaries to its Balance Sheet. Your Directors
 believe that the audited consolidated accounts present a full and fair
 picture of the state of affairs and fnancial conditions of the Company
 and its subsidiaries, as is done globally. As per circular no.
 5/12/2007-CL-III dated February 8, 2011 issued by Government of India,
 a general exemption under Section 212 (8) of the Companies Act, 1956
 has been granted. As per this Circular, a company need not make an
 application to the Central Government for seeking exemption from the
 requirement of attaching the Directors Report, Balance Sheet and Proft
 and Loss Account of the subsidiaries to its Balance Sheet, provided the
 conditions mentioned in the Circular are fulflled. Your Company has
 fulflled these conditions and is eligible for this exemption.
 Accordingly, the Annual Report of your Company does not contain
 separate fnancial statements of these subsidiaries, but contains
 audited consolidated fnancial statements of the Company and its
 subsidiaries.
 
 However, a statement of the Companys interest in the subsidiaries and
 a summary of the fnancials of the subsidiaries are given along with the
 consolidated accounts. The annual accounts of the subsidiaries, along
 with the related information, will be made available to the Members
 seeking such information at any point of time. The annual accounts of
 the subsidiaries are also available for inspection during business
 hours except Saturdays and holidays at the Registered Offce of the
 Company and its respective subsidiaries.
 
 FUTURE OUTLOOK:
 
 The Company will continue to technologically upgrade the products and
 concentrate on the Software Products and BPO business in Emerging
 Market. In Developed Market, your Company will concentrate majorly on
 IT Services for its growth.
 
 CAPITAL
 
 1) ESOS allotments:
 
 3,26,504 shares were allotted under Employees Stock Options Schemes
 (ESOS) during the fscal year 2011.
 
 2) Qualifed Institutional Placement (QIP) Allotment:
 
 2,29,00,099 fully paid-up equity shares of face value of ? 10 each were
 allotted to Qualifed Institutional Buyers under Qualifed Institutions
 Placement (QIP) on April 7, 2010.
 
 3) Foreign Currency Convertible Bonds (FCCBs):
 
 During this year, the Company has not received any conversion notices
 from the FCCB holders. During the year, the Company has redeemed all
 the 202 outstanding bonds aggregating US.2 million from the 1st
 tranche of FCCBs.
 
 Details such as the total bonds issued, bonds converted, number of
 shares allotted, number of bonds repurchased and expected number of
 shares to be allotted with respect to outstanding FCCBs have been given
 in detail in Corporate Governance Report at para No. VI(p).
 
 As a result of allotment of shares as above, the share capital of your
 Company increased to? 1,91,98,65,490 in the fnancial year 2010-11 from?
 1,68,75,99,460 in the fnancial year 2009-10.
 
 QUALITY
 
 Your Company is committed to deliver best quality products and services
 to all its customers frst time, every time. In order to meet its
 commitment, the Companys business processes have been thoughtfully
 designed to develop solutions that fully meet customer expectations and
 are in accordance with industry and domain specifc standards.
 
 The Quality Management System (QMS) of the Company addresses the entire
 software development and project management life cycle and conforms to
 CMMI process framework. It has been objectively designed to standardize
 engineering and management practices, enhance productivity and reduce
 ineffciencies.
 
 Your Company is focused to deliver quality at every stage of operations
 by driving improvement projects around key business and process metrics
 and imbibing industry wide best practices.
 
 PUBLIC DEPOSITS
 
 During the year, the Company has not invited / accepted any deposit
 under Section 58A of the Companies Act, 1956.
 
 DIRECTORS
 
 In terms of the provisions of the Articles of Association of the
 Company, Mr. Hoshang N. Sinor and Ms. Vishakha Mulye are liable to
 retire by rotation at the forthcoming 18th Annual General Meeting of
 the Company. Mr. Hoshang N. Sinor and Ms. Vishakha Mulye, being
 eligible, offer themselves for re-appointment.
 
 During the year, Mr. Mahadevan Chandrasekaran and Mr. Aninrudh
 Prabhakaran resigned from the Board of Directors of the Company with
 effect from April 23, 2010 and November 02, 2010 respectively. The
 Board placed on record its deep sense of appreciation for the services
 rendered by Mr. Mahadevan Chandrasekaran and Mr. Anirudh Prabhakaran as
 Members of the Board.
 
 Mr. V. Srinivasan was re-appointed as the Managing Director for a
 period of 5 years with effect from October 01, 2010. His re-appointment
 was approved by the Members at the 17th Annual General Meeting of the
 Company. As Mr. Srinivasan is a Non-Resident Indian, the Company had
 made an application to the Central Government for seeking its approval
 for the re-appointment and such approval was received by the Company
 vide Letter no. A95194874/5/2010-CL-VII dated December 29, 2010.
 
 COMMITTEES
 
 AUDIT COMMITTEE
 
 The Audit Committee comprises of Mr. Dileep C. Choksi as Chairman and
 Ms. Vishakha Mulye and Mr. Samir Kumar Mitter as Members of the
 Committee. Majority of the Members of the Audit Committee are
 Independent Non-Executive Directors in compliance with Clause 49 of the
 Listing Agreement. During the year under review, the Committee met four
 times to review quarterly accounts, internal control systems, discuss
 the audit fndings and recommendations of the internal and statutory
 auditors.
 
 BOARD GOVERNANCE COMMITTEE
 
 The Board Governance Committee was reconstituted on July 27, 2010 due
 to the resignation of Mr. Mahadevan Chandrasekaran from the Board. It
 currently comprises of Mr. Hoshang N. Sinor as Chairman and Mr. Dileep
 Choksi and Dr. Bruce Kogut as Members of the Committee. All the Members
 of the Board Governance Committee are Independent Non-Executive
 Directors. The Committee attends to matters relating to governance,
 nomination to the Board, compensation to the Directors and performance
 bonus, stock options, etc. to the Directors and employees of the
 Company. During the year under review, the Committee met twice to
 discharge the functions.
 
 SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE
 
 The Shareholders / Investors Grievances Committee comprises of Mr.
 Samir Kumar Mitter as Chairman and Dr. Ashok Jhunjhunwala and Mr. Amar
 Chintopanth as Members of the Committee. Majority of the Members are
 Independent Non-Executive Directors. During the year under review, the
 Committee met four times to attend to matters relating to investors
 servicing and grievances, etc.
 
 FUND RAISING AND ACQUISITIONS COMMITTEE
 
 The Fund Raising and Acquisitions Committee was reconstituted on July
 27, 2010 due to the resignation of Mr. Mahadevan Chandrasekaran from
 the Board. It currently comprises of Mr. Hoshang N. Sinor as Chairman
 and Dr. Ashok Jhunjhunwala, Mr. Samir Kumar Mitter and Dr. Bruce Kogut
 as Members of the Committee. All the Members of the Committee are
 Independent Non-Executive Directors. The Committee attends to matters
 relating to acquisitions and funding requirements of the Company.
 During the year, the Committee met three times to discharge its
 functions.
 
 AUDITORS
 
 M/s Lodha & Co., Chartered Accountants, having their offce at 6, Karim
 Chambers, 40, Ambalal Doshi Marg, Hamam Street, Mumbai - 400 023 and
 M/s. R. G. N. Price & Co., Chartered Accountants, having their offce at
 Simpsons Building, 861, Anna Salai, Chennai - 600 002 were appointed
 as Joint Statutory Auditors of the Company at the 17th Annual General
 Meeting and are due for retirement at the conclusion of the 18th Annual
 General Meeting. The Company has received letters from both the
 Auditors, wherein they have consented to act as Joint Auditors and have
 confrmed that they are eligible and qualifed to be appointed as
 Auditors pursuant to the Sections 224 (1B) and 226 of the Companies
 Act, 1956.
 
 Your Directors, based on the recommendations of the Audit Committee,
 recommend the re-appointment of M/s Lodha & Co., Chartered Accountants
 and M/s R. G. N. Price & Co, Chartered Accountants as the Joint
 Statutory Auditors of the Company to hold the offce from the conclusion
 of the 18th Annual General Meeting to the conclusion of the 19th Annual
 General Meeting.
 
 CONSERVATION OF ENERGY
 
 Although the operations of the Company are not energy intensive, the
 management is highly conscious of the criticality of the conservation
 of energy at all operational levels. The requirement of disclosure of
 particulars with respect to conservation of energy as prescribed in
 Section 217 (1) (e) of the Companies Act, 1956 read with the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988, are not applicable to the Company and hence are not provided.
 
 TECHNOLOGY ABSORPTION
 
 During the year, your Company has taken the following technology
 initiatives:
 
 - Usage of cloud technologies: a public cloud using SAAS for sale to
 fulfllment cycles and a private cloud for project management and ERP
 systems;
 
 - Strengthened its IPRs through technology innovation and appropriate
 security controls;
 
 - Partnerships with major technology providers and publishers for
 win-win relationships and go-to-market strategies;
 
 - Usage of HPs Application Software Quality (ASQ) automation suite to
 enhance its application testing and compliance effciencies;
 
 - Certifcation of Recognition for SAM (Software Asset Management)
 compliance through an initiative of BSA / FICCI & Government of
 Maharashtra and
 
 - Through standardization of policies, processes and technology across
 its Global Development Centers (GDCs), sales and corporate offces, your
 Company has achieved:
 
 - Green-IT certifcation by ECORECO certifying the Companys effective
 processes for retiring of IT equipment.
 
 - Re-certifcation of ISO27001
 
 RESEARCH AND DEVELOPMENT (R & D)
 
 The solutions offered by the Company for various market segments are
 continuously developed and upgraded through the GDCs.
 
 The GDCs function as the product research and development facility of
 the Company and focus on developing and expanding the Companys
 products and IPRs. Besides this, the Company is also in the process of
 migrating its varied product lines to standard and latest platforms.
 
 With a focus to further enhance the Companys software products, namely
 its Intellectual Property, based on market needs, the GDCs work in line
 with the Companys strategy for growth.
 
 Expenditure on R & D
 
                                                       ? in crores
                                           2010-11              2009-10
 
 Revenue Expenditure                         39.90                40.61
 
 Capital Expenditure                           -                    -
 
 Total                                       39.90                40.61
 
 Total R&D expenditure as a percentage of 
 total standalone revenue                     6.90%                7.60%
 
 FOREIGN EXCHANGE EARNING AND EXPENDITURE
 
 a) Activities relating to exports, initiatives taken to increase
 exports, development of new export markets for products and services
 and export plans
 
 More than 30% of the revenue of the Company is derived from exports.
 Your Company has marketing network around the world, including North
 America, Western Europe, Middle East & Africa and Asia Pacifc.
 
 The Registered Offce of the Company is located at International
 Infotech Park, Vashi, Navi Mumbai, India. Some of the software
 development centers of the Company in India are also registered as
 Software Technology Parks of India, whereby the Company is required to
 fulfll its export obligations as laid down by the Government.
 
 b) Foreign Export earnings and expenditure
 
 During the year 2010-11, the expenditure in foreign currencies amounted
 to ` 20.52 Crores on account of import of capital goods, dividend,
 travelling and other expenses. During the same period, the Company
 earned ` 173.91 Crores in foreign currencies, as income from its
 exports.
 
 PERSONNEL
 
 Your Company has talented and dedicated professional employees to
 achieve the Companys goal. To retain and develop these employees,
 human resources group has been working with an objective to enhance
 employee competence through various initiatives and maximizing employee
 contribution towards the organizational goals.
 
 The Company has a number of initiatives to attract, retain and develop
 talent in the organization. Some of them include Reach HR (HR query
 management system), the employee referral scheme, internal job
 rotation, training and development programs, overseas assignments,
 medical insurance, social functions, etc.
 
 The Managing Director has been addressing the employees on periodic
 basis to provide information on development of the Company and to
 understand the concerns of the employees.
 
 Further, in a knowledge based industry, your Company understands that
 the employees are the main assets of a Company and it is necessary that
 they feel challenged to use their intellectual skills to the best of
 their abilities and add value to themselves even as they add value to
 the Company. To facilitate this and to have an independent assessment
 of the work environment, the Company has appointed an Ombudsman who has
 a wealth of knowledge, is approachable, maintains confdentiality and is
 able to guide decision making.
 
 Information in accordance with the provisions of Section 217 (2A) of
 the Companies Act, 1956, read with the Companies (Particulars of
 Employees) Rules, 1975, as amended, forms part of the Directors
 Report. However, as per the provisions of Section 219(1)(b)(iv) of the
 Companies Act, 1956, this report and Accounts are being sent to all the
 Members of the Company, excluding the Statement of Particulars of
 Employees under Section 217(2A) of the Companies Act, 1956. Any Member
 interested in obtaining a copy of the said statement may write to the
 Company Secretary at the Registered Offce of the Company and the same
 will be sent by post.
 
 FORwARD LOOKING STATEMENTS
 
 This Report along with its annexure and Management Discussion &
 Analysis contains forward-looking statements that involve risks and
 uncertainties. When used in this Report, the words anticipate,
 believe, estimate, expect, intend, will and other similar
 expressions as they relate to the Company and/or its businesses are
 intended to identify such forward- looking statements. The Company
 undertakes no obligation to publicly update or revise any forward-
 looking statements, whether as a result of new information, future
 events, or otherwise. Actual results, performances or achievements
 could differ materially from those expressed or implied in such
 forward-looking statements. Readers are cautioned not to place undue
 reliance on these forward-looking statements that speak only as of
 their dates. This report should be read in conjunction with the
 fnancial statements included herein and the notes thereto.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217(2AA) of the Companies Act, 1956, it is
 hereby confrmed that:
 
 a) in preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures;
 
 b) we 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 fnancial year and of the proft of the
 Company for that period;
 
 c) we have taken proper and suffcient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities and
 
 d) we have prepared the annual accounts on a going concern basis.
 
 ACKNOwLEDGEMENTS
 
 The Directors are thankful to the Members and Investors for their
 confdence and continued support. The Directors are grateful to the
 Central and State Government, Stock Exchanges, Securities & Exchange
 Board of India, Reserve Bank of India, Software Technology Park of
 India, Customs and other government authorities, banks and last but not
 the least, its trusted clients for their continued support.
 
 The Directors would like to express their gratitude for the unstinted
 support and guidance received from the ICICI group, alliance partners
 and vendors.
 
 The Directors would also like to express their sincere thanks and
 appreciation to all the employees for their commendable teamwork and
 professionalism.
 
 For and on behalf of the Board
 
 Sd/-                                 Sd/-
 
 Hoshang N. Sinor                     V. Srinivasan
 
 Chairman                             Managing Director
 
 Dubai, April 22, 2011