The Members of
 
 ALLLIED DIGITAL SERVICES LIMITED
 
 We are delighted to present the Directors'' Report on our business and
 operations together with the audited statement of accounts for the year
 ended March 31st 2011.
 
 RESULTS OF OPERATIONS
 
                                                          (Rs. in Lacs)
 PARTICULARS                                   2010-11        2009-10
 
 Total Operational Income                    52,190.79      47,051.06
 
 Other Income                                   695.32         421.55
 
 Total Income                                52,886.11      47,472.61
 
 Less: Operating Expenditure                 43,978.89      34,642.76
 
 Profit before Interest, Depreciation, 
 Amortization Tax & Exceptional Item          8,907.22      12,829.85
 
 Less: Interest                                 722.00         363.11
 
 Less: Depreciation                           1,176.14         656.58
  
 Profit before Tax                            7,009.08      11,810.16
 
 Less: Provision for Taxation (Net)             888.19       2,008.90
 
 Less: Deferred Tax Liability                   511.31         137.21
 
 Net Profit for the year                      5,609.58       9,664.05
 
 Add: Balance brought forward 
 from the Previous Year                      23,308.47      14,686.42
 
 Amount Available for Appropriation          28,918.05      24,350.47
 
 Less: Transfer to General Reserve                -            500.00
 
 Proposed Dividend Including Dividend Tax       271.60         542.00
 
 Short Provision of Tax of earlier years 
 (Net)                                          659.67           -
 
 Balance carried to Balance Sheet            27,986.78      23,308.47
 
 
 BUSINESS OPERATIONS
 
 Your Company is an IT Infrastructure Management and Technical Support
 Services Outsourcing Company with an objective to provide end to end IT
 Solutions, outcomes of which have always resulted into a positive
 change in the organization. Your Company is an experienced entity
 having sufficient knowledge of the local market which assists them in
 organizing manpower for diverse tasks and contractual works It has over
 more than two decades of experience in enterprise IT Infrastructure,
 Management and Implementation and Consulting on complex IT Solutions
 for different Business Verticals.
 
 The Company''s gross income for the financial year ended March 31st 2011
 increased to Rs. 528.86 crore, from Rs. 474.72 crore in the previous year,
 registering a growth of over 11 per cent. The operating profit (PBDIT)
 of the Company decreased to Rs. 89.07 crore during the year, from Rs.
 128.30 crore in the previous year. Interest and Depreciation was at Rs.
 18.98 crore as against Rs. 10.20 crore in the previous year. The
 provision for taxation during the year was Rs. 13.99 crore which includes
 Deferred Tax Liability for the year. The net profit for the year
 decreased by 42 per cent to Rs. 56.10 crore from Rs. 96.64 crore in the
 previous year. This was mainly on account of increase in
 Administrative, Sales and Other Expenses. The Company''s Net worth as on
 March 31st 2011, stood at Rs. 686.06 crore, as against Rs. 635.13 crore
 last year.
 
 Your Company provide credible, high class and customer oriented
 services and solutions to clients, actively participate to fulfill the
 needs and preferences of the customers, their requirements in a
 dedicated manner. We seek long - term partnership with clients while
 addressing their IT requirements. Our customer - centric approach has
 resulted in high levels of client satisfaction and retention. Moreover
 we encourage a warm and cordial environment in our organisation which
 will add to the skilled workforce and also improve the work culture.
 
 APPROPRIATIONS:
 
 a.  DIVIDEND:
 
 In recognition of the fact that the economy is recovering and in view
 of the Company''s profitable performance the Directors recommend a
 Dividend of Rs. 0.50 per Equity Share of Rs. 5/- each (last Year Rs. 1/- on
 the paid up value of equity share of Rs. 5/- each) of the Company for the
 financial year 2010-2011.
 
 LIQUIDITY:
 
 Your Company maintains sufficient cash to meet its strategic
 objectives. As on March 31st 2011, your Company has liquid assets
 including investment in mutual funds of Rs. 82.09 Crore as against Rs. 217
 crore at the previous year end.  These funds are lying in current bank
 accounts, fixed deposits with banks and in mutual funds.
 
 DIRECTORS:
 
 a.  RE-APPOINTMENT
 
 In accordance with the Articles of Association of the Company and
 provisions of the Companies Act, 1956 at least two-thirds of our
 Directors shall be subject to retirement by rotation. One- third of
 these retiring Directors must retire from office at each Annual General
 Meeting of the Shareholders. The retiring Directors are eligible for
 re-election.
 
 As stipulated under clause 49 of the Listing Agreement entered into
 with the stock exchanges, brief resumes of the Directors proposed to be
 appointed / reappointed, nature of their expertise in specific
 functional areas and the names of companies in which they hold
 directorships and membership / chairmanship of Board Committees, are
 provided in the Report on Corporate Governance forming part of the
 Annual Report.
 
 The Board recommends to the members the resolutions for appointment and
 re - appointment of the Directors mentioned above.
 
 SUBSIDIARIES
 
 Your Company has Seven subsidiaries and one Joint Venture:
 
 1.  Allied Digital Services, LLC. (USA)
 
 2.  Allied Digital, INC. (USA)
 
 3.  Allied Digital Singapore Pte. Limited
 
 4.  Allied Digital Asia Pacific Pty Limited (Australia)
 
 5.  Digicomp Complete Solutions Limited
 
 6.  En Pointe Technologies India Private Limited.
 
 7.  E-cop surveillance (India) Private Limited.
 
 8.  Digicomp Electronics Testing Services (Dets) Pte. Ltd. (50:50 Joint
 venture of Digicomp Complete Solutions Limited and TES-AMR PTE. LTD.).
 
 Pursuant to Section 212 of the Companies Act, 1956 (the Act), the
 Company is required to attach to its Annual Report, the Balance Sheet,
 Profit and Loss Account, Directors'' Report and the Report of the
 Auditors (collectively refereed to as the accounts and reports''), of
 its subsidiaries for the year ended March 31st 2011. Since the Company
 presents audited consolidated financial statements in its Annual Report
 and the Board of Directors in their meeting has given their consent for
 not attaching the accounts and reports of its subsidiaries to the
 Annual Report under the provisions of Section 212 of the Companies Act,
 1956. Hence, the accounts and reports of the subsidiary companies are
 not attached to the Annual Report.
 
 The Company will make available the accounts and related information of
 the subsidiary companies upon request by any member / investor of the
 Company or its subsidiaries. The accounts and related information of
 the subsidiary companies will also be kept open for inspection by any
 member, at its corporate office and that of the subsidiary companies
 concerned. The Company shall furnish a hard copy of the details of
 accounts of subsidiaries to any shareholder on demand.
 
 The statement containing the list of subsidiaries along with brief
 financial details of the subsidiaries is given on page numbers 77 of
 the Annual Report.
 
 UTILISATION OF FUNDS RAISED THROUGH QIP AND ISSUE OF SHARE WARRANTS:
 
 The Company has raised funds through the issue of shares to the
 Qualified Institutional Buyers pursuant to Qualified Institutional
 Placement and Issue of Share Warrants to Bennett Coleman and Company
 Limited. Out of the above issues proceeds as on March 31st 2011 the
 company is having balance of Rs. 46.35 crores pending for deployment.
 
 HUMAN RESOURCES:
 
 Employees are vital and valuable assets of the Company. We understand
 that the Company''s success depends largely upon the quality and
 competence of its management team and key personnel. A failure to
 attract and retain talented professionals, or the resignation or loss
 of key management personnel, may have an adverse impact on the
 Company''s business, its future financial performance and the price of
 its equity shares. We have created a favorable work environment that
 encourages innovation and meritocracy. We have also set up a scalable
 recruitment and human resources management process, which enables us to
 attract and retain high caliber employees. Attracting and retaining
 talented professionals is therefore a key element of the Company''s
 strategy and a significant source of competitive advantage. Therefore
 the Company has created a healthy and productive environment to
 encourage excellence. The Company''s HR policies and processes are
 aligned to effectively drive its expanding business and emerging
 opportunities.
 
 Our model of recruiting the best and brightest talent from top academic
 institutions across the country and providing intense training has
 contributed greatly in differentiating Allied Digital in the
 marketplace. Our culture of harmonious and constructive relations
 between the management and employees helped us to maintain a cordial
 work atmosphere and achieve business growth. Our training initiative
 offers the best and latest in technology, domain expertise and
 leadership.
 
 We added 255 employees, taking the total strength to 2230 up from 1975
 at the end of the previous year. We compete in a dynamic and evolving
 industry in which value and differentiation are defined at each turn by
 the Company''s most precious asset, i.e., its human capital.
 
 QUALITY & CERTIFICATION:
 
 We continue our excellence in journey with a critical focus on Quality
 and Processes with significant investment in efforts and in Quality
 Processes. Pursuant to our ISO 9001 certification experience since last
 12 years, we continued further certifications for our other activities.
 We have upgraded this certification to ISO 9001:2008 3 years ago. Your
 company''s Remote Management Services (RMS) centre at Navi Mumbai has
 got ISO 27001:2005 certification in year 2007 and has gone through two
 successful surveillance audits thereafter. By this certification, we
 have protected our IT infrastructure by means of right infrastructure
 and process deployment so the customers we service are in safe hands.
 We have further completed certification of this RMS by ISO 20000-1:2005
 which is certification for excellence in IT service management and has
 gone through one successful surveillance audit. The IT services that we
 thus provide from this RMS are certified to be one of the best in the
 world meeting requirements of that standard. We have further initiated
 movements towards Green IT and offer Green Data Center consultancy to
 our prospects. In this initiative we intend to voluntarily reduce
 energy consumption of hardware and offer consultancy to our prospects
 to reduce energy consumption of their Data Centers thus improving
 carbon footprint and one more step towards precious energy
 conservation. We have registered for getting our software activities
 certified under CMMI certification level 3 which is expected to be
 completed in a year''s time.
 
 SUSTAINABILITY INITIATIVES:
 
 We believe that growth and progress can only be measured in terms of
 the legacy we have behind for those who follow. Our focus is to provide
 technology, services and solutions that enhance the sustainability of
 our clients. Our constant endeavor is to transcribe our core value into
 our work, ensuring transparent stakeholder engagement at all levels.
 
 We are responsible for the services and products we offer to our
 clients and our steady Customer Satisfaction scores over an increasing
 customer base. Our business offerings continue to provide sustainable
 solutions for our customers, crafting a paradigm within which we
 operate at the highest levels of efficiency. We enable employees to
 educate themselves to achieve personal skills, engage in the business
 through various initiatives and seek to create awareness regarding
 diversity and inclusivity with specific aim to enhance awareness among
 our employees.
 
 INVESTMENTS
 
 The investments of the Company as on March 31st 2011 were to the tune
 of Rs. 171.94 crore as compared to the last year''s investment of Rs. 305.11
 crore.
 
 The Book value of the quoted investments for the year under review was
 Rs. 42.71 crore (previous year Rs. 186.64 crore) and the realizable value
 as at March 31st 2011 for this investments was same as book value.
 
 FIXED DEPOSITS
 
 In terms of the provisions of Section 58A of the Companies Act, 1956
 read with the Companies (Acceptance of Deposit Rules), 1975, the
 Company has not accepted any fixed deposits during the year and as
 such, no amount of Principal or Interest was outstanding as of the
 Balance Sheet date.
 
 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
 
 The information on Conservation of Energy required under 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 are not applicable to the Company. The Company requires minimum
 energy consumption and endeavor has been made to ensure the optimal
 utilization of energy, avoid wastage and conserve energy.
 
 PARTICULARS OF EMPLOYEES:
 
 The information required under Section 217 (2A) of the Companies Act,
 1956 read with Companies (Particulars of Employees) Rules, 1975 as
 amended are set out as under. The Department of Company Affairs has
 amended the Companies (Particulars of Employees) Rules, 1975 to the
 effect that particulars of employees of companies engaged in the
 information technology sector posted and working outside India, not
 being directors or their relatives, drawing more than Rs. 60 Lacs per
 financial year or Rs. 5 Lacs per month, as the case may be, need not be
 included in the statement under Section 217 (2A) of the Companies Act,
 1956, but such particulars shall be furnished to the Registrar of
 Companies. . In terms of Section 219(1) (b) (iv) of the Act, the Report
 and Accounts are being sent to the shareholders excluding the aforesaid
 Annexure. Any Shareholder interested in obtaining a copy of the same
 may write to the Company Secretary.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 To the best of their knowledge and belief and according to the
 information and explanation obtained by them, your Directors make the
 following statements in terms of Section 217(2AA) of the Companies Act,
 1956, that:
 
 a) in the preparation of the Annual Accounts for the year ended March
 31st 2011, the applicable accounting standards have been followed
 along with proper explanation relating to material departures, if any.
 
 b) the Directors 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 ended March 31st 2011
 and of the profit of the Company for that year.
 
 c) The Directors have 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.
 
 d) The Directors have prepared the Annual Accounts for the year ended
 March 31st 2011, on a going concern basis.
 
 STATUTORY AUDITORS
 
 M/s. K. M. Kapadia & Associates, Chartered Accountants, Mumbai,
 Statutory Auditors of your Company hold office till the conclusion of
 the forthcoming Annual General Meeting of the Company. He has signified
 his willingness to accept office, if re-appointed. The Company has also
 received his eligibility under Section 224 (1B) of the Companies Act,
 1956.
 
 COST AUDIT
 
 The Company is not required to undertake the Cost Audit as required
 under Section 233 B of the Companies Act, 1956.
 
 INTERNAL AUDITORS:
 
 Your Company has appointed HNT & Co. as the Internal Auditor for
 conducting the Internal Audit.
 
 EMPLOYEE STOCK OPTION PLAN (ESOP):
 
 At present the Company has two Option plans for its employees, ESOP
 2007 & ESOP 2010.
 
 The Company had granted total 4,96,600 options under ESOP 2007 to the
 eligible employees in tranches out of total 5,00,000 grants allocated
 under the ESOP scheme. The employees has exercised 1,03,850* Options
 under Growth plan during the year. Each option entitles the holder
 thereof to apply for and be allotted Equity Shares of the Company upon
 payment of the exercise price during the exercise period.
 
 ESOP 2010, was approved by the members at their meeting held on 29th
 September 2010, till the financial year ended March 31st 2011 no
 options were granted to employee or Directors of the Company or it''s
 Subsidiary.
 
 The exercise prices of ESOP 2007are as follows:
 
 During the year there were no options vested below the fair market
 value of the shares, and hence no expenses have been provided on the
 account of Employee Stock Option cost.
 
 * The Company had passed a resolution on September 23rd, 2009 at its
 fifteenth Annual General Meeting for sub - division of the Equity
 Shares of Rs. 10 each of the Company into Equity Shares of Rs. 5 each.
 
 CORPORATE GOVERNANCE
 
 The Company has taken appropriate steps and measures to comply with all
 the applicable mandatory provisions of Clause 49 of the Listing
 Agreement entered with the Stock Exchanges and section 292A of the
 companies Act 1956.  The Company''s governance practices are described
 separately in the Corporate Governance section from pages 17 to 32 of
 this Annual Report. We have obtained certification from a Practicing
 Chartered Accountant on our compliance with Clause 49 of the Listing
 Agreement with Indian Stock Exchanges, described in the separate
 section forming a part of this Annual Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchange in India, is presented in a separate section forming a part of
 this Annual Report.
 
 AWARDS AND RECOGNITION
 
 During the year, the Company has received various awards and
 recognitions. The awards are listed below:
 
 1.  Channel world Premier 100-2010 Award;
 
 2.  MSP of the year 2010;
 
 3.  Best VAR- Mumbai'' Award 2010; 4.'' Top Solution Provider''-Silver;
 
 5.  Solution Champ (Security)'' -Gold;
 
 6.  Best under a Billion Dollar Company.
 
 ACKNOWLEDGMENT
 
 Your Directors take this opportunity to thank the Company''s customers,
 vendors, investors and bankers for their continued support during the
 year. We also wish to thank the Government of India, Ministry of
 Communication and Information Technology, the State Governments,
 various government agencies and the Government of United States of
 America where we have operations, for their immense support.
 
 Your Directors also place on record their deep sense of appreciation
 for the excellent contribution made by employees of the Company through
 their co-operation, commitment, competence with the view to achieve
 consistent growth for the Company.
 
                         For and on behalf of the Board of Directors
 
                      sd/-                 sd/-
                      Nitin D. Shah        Prakash D. Shah
 
                      Chairman and         Chief Financial Officer and
 
                      Managing Director    Whole Time Director
 
 Mumbai
 August 22, 2011