To , The Members of Aftek Limited,
 
 The Directors are pleased to present their 25th Annual Report together
 with the Audited Statement of Accounts for the year ended 31st March,
 2012.
 
 FINANCIAL PERFORMANCE
 
                                                  Amount (Rs. in lacs)
 
 PARTICULARS                                  31/03/2012   31/03/2011
 
 Turnover                                        12,124       15,486
 
 Profit Before Depreciation                      10,074       10,726
 
 Less:Depreciation                                8,856        9,254
 
 Profit Before Tax                                1,218        1,472
 
 Less : Provision for Taxation                       76           75
 
 Profit After Tax                                 1,142        1,397
 
 Transfer to General Reserve                        NIL          NIL
 
 DIVIDEND
 
 Considering the heavy investments and restructuring that your Company
 is undergoing and the efforts being made to augment cash flow as also
 looking at the financial performance your Directors have not considered
 it appropriate to recommend any dividend for the year.
 
 BUSINESS REVIEW & FUTURE PROSPECTS
 
 The industry continues to suffer under global slowdown. While your
 Company''s performance for the year under review has been rather dismal,
 your Board attributes this largely to the continuing slowdown in the
 western world, low traction of new clients and business from the West
 which has traditionally been your Company''s hunting ground. At the same
 time, the Company is very much encouraged by the fact that the
 development of new products in different verticals have received a very
 strong endorsement from Defence establishments particularly the Indian
 Navy, which has approved two major products created by your Company
 along with its associates. This certification and approval gives your
 Company a huge opportunity in the near, mid and long term periods to
 grow and scale up its business with the defence establishment. It is
 public knowledge that India''s security concerns have made the Indian
 Government commit very large funds for the defence establishments and
 the Indian Navy is one of the large recipients of this allocation.
 
 Your Company has received a large number of enquiries also about its
 Intelligent Transport System (ITS) since this product is the only one
 of its kind in India having end-to-end solutions. Your directors feel
 that this opportunity too is large enough to scale up operations in
 this vertical in the forthcoming years. Similarly, in the Remote
 Infrastructure Management (RIM) arena, Aftek VTS, Aftek Protocol
 Converters and other components of VTS are getting acceptance and
 enquiries far in excess of your Company''s expectations. Therefore, your
 Directors feel that although there has been a downward trend of the
 topline for the last few years, the strategic investments made in these
 verticals whereby various products were created by your Company are
 steps in the right direction.
 
 FINANCE
 
 Due to global slow down the Company has been experiencing reduced
 business and slow rate of recovery of receivables giving rise to severe
 liquidity situation. Resultantly, the Company has not been able to
 repay its debts to the bankers in time leading to initiation of
 recovery processes by lenders. While part of the dues have been settled
 by liquidating the property of the Company, the process of arriving at
 one-time settlement with bankers is underway.
 
 At an Extra-ordinary General Meeting held on 08th June, 2010, Members
 had approved by means of a special resolution, the proposal to utilize
 a sum of Rs.215 Crores (Rupees Two Hundred & Fifteen Crores only)
 standing to the credit of the Securities Premium Account of the Company
 by allocating and /or earmarking to adjust product development
 expenditure incurred and / or to be incurred, diminution in value of
 investments, if any, and loss arising on account of foreign exchange
 fluctuations. The Hon''ble High Court of Judicature at Bombay, vide
 Order dated 13th August, 2010 had sanctioned the aforesaid utilisation
 of Securities Premium Account and the same has been implemented from
 the second quarter of last year. While an amount of Rs 196.80 crores
 was so adjusted in 2010-2011, the balance amount of Rs 18.20 crores has
 been adjusted during the year under review.
 
 As regards 1% Foreign Currency Convertible Bonds Due 2010 (FCCBs) of
 USD 10,000 each, out of 3,450 FCCBs issued in 2005, a total number of
 2570 FCCBs have already been converted into GDRs/equity shares and
 balance 880 numbers of FCCBs continue to remain outstanding as on 31st
 March, 2012. No conversion of FCCBs has taken place during the year
 under review. As informed earlier, the Company had initiated the
 process of re-setting the conversion price of the FCCBs as per the
 applicable norms. Approval of Reserve Bank of India for the same was
 received vide their letter No. FED/CO/ECBD/ 10308/03.02.775/11-12 dated
 October 31, 2011. The holders of the FCCBs vide their written
 resolution of 25th July, 2012 have consented, inter alia, to the
 revision of Conversion Price of Bonds from Rs 75.20 to Rs 13.76 and
 elongation of maturity period from 25th June, 2010 to 21st December,
 2012 as well as waiver of events of defaults and interest payments.
 Accordingly, the Company has executed a Supplemental Trust Deed on 25th
 July, 2012 with Bank of New York Mellon, the Trustees, for giving
 effect to the aforesaid amendments. All the outstanding 880 numbers of
 FCCBs, if converted into GDRs/ equity shares at the revised conversion
 price of Rs 13.76 would result into issuance of additional 2,78,67,733
 numbers of equity shares of Rs 02/-each.
 
 DIRECTORATE
 
 Mr Ranjit Dhuru, Dr S S S P Rao and Mr Mahesh Naik retire by rotation
 and are eligible for re-appointment. Attention of the members is
 invited to the relevant items in the Notice of the Annual General
 Meeting.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Section 217(2AA) of the Companies Act,
 1956, with respect to Directors'' Responsibility Statement, it is hereby
 confirmed:
 
 i. that in the preparation of the annual accounts for the year ended
 31st March, 2012, the applicable accounting standards had been followed
 along with proper explanation relating to material departures;
 
 ii. that the directors had selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the Financial Year ended 31st
 March, 2012 and of the profit 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 the Companies Act, 1956, 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 for the year
 ended 31st March, 2012, on a ''going concern'' basis.
 
 FIXED DEPOSITS
 
 The Company has not accepted any Fixed Deposits from the Public.
 
 SUBSIDIARY COMPANIES
 
 The Company''s wholly-owned subsidiary, Mihir Properties Private
 Limited, has earned some rental income to support its statutory
 payments.
 
 The product of Digihome Solutions Private Limited (DSPL) is undergoing
 a revision and due to general glut in the real estate sector the
 business for the year under review has been rather slack. However, the
 order book is very strong and as the pick up of the realty industry
 happens this year, with the new and better revised products the company
 should be doing much better. In our last annual report we had reported
 about possibility of takeover of DSPL by a well-known international
 company.  We have to report that due to slow down the matter has been
 deferred. The said international company has however expressed its
 keenness to take participation in DSPL when things ease up by the third
 quarter next year. Accordingly, there is cautious optimism in respect
 of future of DSPL.
 
 In accordance with the General Circulars No: 2 /2011 No:
 51/12/2007-CL-III and No. 3/2011 No: 5/12/2007-CL-III dated 08th
 February 2011 and 21st February 2011, respectively, issued by the
 Ministry of Corporate Affairs, Government of India, the Balance Sheet,
 Profit and Loss Account and other documents of the subsidiary companies
 are not being attached with the Balance Sheet of the Company. The
 Annual Accounts of the subsidiary companies will be kept open for
 inspection at the Registered Office of the Company and that of the
 respective subsidiary companies. The Company will make available the
 Annual Accounts of the subsidiary companies and the related information
 to any member of the Company who may be interested in obtaining the
 same. The Consolidated Financial Statements presented by the Company
 include the financial results of its subsidiary companies. The
 statement pursuant to Section 212 of the Companies Act, 1956 containing
 details of subsidiaries of the Company, forms part of the Annual
 Report.
 
 AUDITORS
 
 At the ensuing Annual General Meeting, Members will be required to
 appoint Auditors for the current year and fix their remuneration. M/s.
 GMJ & Co., Chartered Accountants, retire at the ensuing Annual General
 Meeting and being eligible, offer themselves for re-appointment. A
 Certificate from the Auditors has been received to the effect that
 their appointment, if made, would be within the limits prescribed under
 Section 224(1B) of the Companies Act, 1956.
 
 AUDITORS'' REPORT
 
 As regards the observations in paragraphs (ix) and (xi) of the Annexure
 to the Report of the Auditors, these are due to adverse liquidity
 conditions.
 
 PARTICULARS OF EMPLOYEES
 
 Details of remuneration paid to employees, as required under Section
 217(2A) of the Companies Act, 1956, are set out in a separate statement
 attached hereto as Annexure A and the same forms part of this Report.
 
 CONSERVATION OF ENERGY ETC.
 
 Your Company endeavors to ensure conversation of energy. However, as a
 software company, energy costs constitute a small portion of the total
 cost and there is not much scope for energy conservation. Form A as
 prescribed under the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988 is not applicable for software
 industry.  The particulars of Technology Absorption are also not
 applicable. The Foreign Exchange Earnings and Outgo are as per Para
 Nos. 30 (d) and 30 (c) of the Notes to Accounts.
 
 OTHER DISCLOSURES
 
 The disclosures required to be made under the Securities and Exchange
 Board of India (Employee Stock Option Scheme and Employee Stock
 Purchase Scheme) Guidelines, 1999, together with a certificate obtained
 from the Statutory Auditors confirming compliance, is given in Annexure
 B.
 
 Pursuant to Clause 49 of the listing agreement entered into with the
 Stock Exchanges, the Management Discussion and Analysis, Corporate
 Governance Report and a Certificate obtained from Practising Company
 Secretary confirming compliance form part of the Annual Report.
 
 ACKNOWLEDGEMENT
 
 Your Directors would like to place on record their sincere appreciation
 of the continued co-operation, support and assistance given by
 shareholders, customers, vendors, bankers, service providers, suppliers
 and employees at all levels.
 
                                    FOR AND ON BEHALF OF THE BOARD
 
                                                      RANJIT DHURU
 
                                      CHAIRMAN & MANAGING DIRECTOR
 PLACE : MUMBAI
 
 DATED : August 31, 2012