To the members of the company
 
 The directors have great pleasure in presenting the annual report
 together with audited statement of accounts for the year ended
 September 30, 2012.
 
                              consolidated       standalone
 
 financial highlights    2011-12        2010-11      2011-12      2010-11
                         In Rs.         in Rs.       in Rs.       in Rs.
 
 net revenue 
 from
 operations     452,05,81,457  394,14,84,572  308,39,19,980 259,01,34,455
 
 less
 expenditure    351,72,78,952  315,19,23,741  232,52,57,512 196,42,22,961
 
 operating 
 profit 
 (pbidt)        100,33,02,505   78,95,60,831   75,86,62,468  62,59,11,594
 
 Interest        20,51,99,592   13,12,51,927   18,38,28,194  11,23,28,263
 
 profit
 before
 depreciation
 & tax (pbt)     79,81,02,913   65,83,08,904   57,48,34,274  51,35,83,331
 
 Depreciation    42,34,87,038   38,13,99,581   29,79,43,411  28,50,32,096
 
 profit before 
 tax             37,46,15,875   27,69,09,323   27,68,90,863  22,85,51,235
 
 provision
 for
 taxation         6,74,85,866    6,25,23,300    5,53,15,987   4,44,39,137
 
 profit
 after tax       30,71,30,009   21,43,86,023   22,15,74,876  18,41,12,098
 
 provision
 for
 deferred tax     1,30,14,433    1,33,65,153    1,12,54,813   1,18,15,561
 
 profit
 after
 deferred tax    29,41,15,576   20,10,20,870   21,03,20,063  17,22,96,537
 
 balance 
 brought forward 51,66,76,293   60,76,03,627   22,14,10,737  34,10,62,404
 
 Profit
 available
 for 
 appropriation   81,07,91,869   80,86,24,497   43,17,30,800  51,33,58,941
 appropriations
 
 proposed 
 final dividend   4,30,42,192    3,58,68,494    4,30,42,192   3,58,68,494
 
 dividend
 distribution
 tax                69,82,520      60,79,710      69,82,520     60,79,710
 
 general reserve 15,00,00,000   25,00,00,000   15,00,00,000  25,00,00,000
 
 balance 
 carried forward 61,07,67,157   51,66,76,293   23,17,06,088  22,14,10,738
 
 results of operation: consolidated
 
 income for the year ended September 30 2012 was Rs..452.06 crore as
 compared to Rs..394.15 crore for the previous year, net profit after
 tax wasRs.. 29.41 crore vis-a-vis Rs.. 20.10 crore for fy 2010-11.
 earningspersharewas Rs..12.30comparedto Rs..8.41 for the previous year.
 
 standalone
 
 income for the year ended September 30 2012 was Rs. 308.39 crore as
 compared to Rs.. 259.01 crore for the previous year, net profit after
 tax was Rs. 21.03 crore vis-a-vis Rs.. 17.23 crore for fy 2010-11.
 earnings per share was Rs..8.80 compared to Rs.. 7.21 for the previous
 year.
 
 share capital
 
 the paid up share capital of the company as on September 30 2012 stood
 at Rs. .23.91 cr and the reserves and surplus stood at Rs..206.18 cr
 and on consolidated level reserves and surplus stood at Rs.. 268.29 cr
 as against Rs.. 242.61 cr in the previous year.
 
 dividend
 
 your directors are pleased to recommend an enhanced dividend of re 1.80
 per share on a paid up capital of X 23,91,23,290 total dividend pay-out
 including dividend distribution tax is Rs..5.00 cr.
 
 allotment of convertible warrants on preferential basis in terms of the
 approval given by the shareholders of the company at the last annual
 general meeting held on 29.03.2012 and upon receipt of requisite
 statutory approvals, the board of directors of the company had, on
 23.05.2012, allotted 12.50 lakh nos of convertible warrants each on
 preferential basis to g muralikrishna and v ramachandran, two of the
 promoters of the company, these warrants are convertible upon exercise
 of the option by the allottees within 18 months from the date of
 allotment, the promoters have brought in Rs..1,82,75,000 towards
 application money as per sebi guidelines, they have further brought in
 Rs..2,74,12,500 upon exercise of option for allotment of first tranche
 of equity shares as per applicable guidelines.
 
 business and prospects
 
 the business focus continues to be on banking and financial services
 and insurance, healthcare and technology verticals.
 
 in the bfsi vertical, the company has seven of the top 20 global banks
 as its clients, clients in this vertical include universal banks,
 investment banks, capital market institutions, insurance companies etc.
 in the healthcare vertical the company caters to healthcare providers,
 healthcare payers and life sciences companies, the company works for
 multinational system integrators and technology companies, an iconic
 global automobile giant is another significant relationship in the
 manufacturing segment.
 
 the company has long-standing relationships with large multinational
 corporations, top 20 clients are all fortune 500 corporations.
 
 focus on a few large clients has helped the company to strengthen the
 relationship and gain increased traction from existing clients, the
 company derives more than 90% of revenues through repeat business,
 which is a result of established client relationships.
 
 the company has a strong deal pipeline and there is strong traction in
 the bfsi vertical.
 
 the time tested relationship the company enjoys with these marquee
 clients is the main driver propelling huge organic growth momentum, as
 a result of constant efforts in mining these accounts, the company is
 witnessing record growth rate over the last few quarters, the
 management feels this organic growth thrust would take the company into
 the big league during the current decade.
 
 this is endorsed by the credit rating agency crisil too. crisil in
 their report states that helios will continue to benefit over the
 medium term from its established customer relationships, crisil
 believes that as the scale of operations improves significantly through
 better client and geographical diversification of revenues, the company
 maintains healthy profitability levels.
 
 subsidiary companies and consolidated financial statements
 
 with the gradual easing of the global slowdown and with the USA economy
 looking up, all the subsidiaries have performed satisfactorily during
 the year as per section 212 of the companies act 1956, the company is
 required to attach directors report, balance sheet and profit and loss
 account of the subsidiaries, the ministry of corporate affairs,
 government of india, vide its general circular no: 2/2011 dated
 08.02.2011, has provided exemption to companies from complying with
 section 212, provided the board approves the proposal and such
 companies publish the audited consolidated financial statements in the
 annual report, accordingly, the annual report for 2011-12 does not
 contain the financial statements of the subsidiaries, the audited
 annual accounts and related information of the subsidiaries, where
 applicable, will be made available upon request, these documents will
 also be available for inspection during business hours at the
 registered office of the company at chennai. the same also will be
 published on the company''s website www.heliosmatheson.com.
 
 vMoksha - arbitration status
 
 as reported already, your company signed a definitive share purchase
 agreement (spa) to acquire 100% equity in three vmoksha entities based
 at bangalore, Singapore and usa in the month of may 2005. however, the
 sellers tried to renege the spa and hence your company initiated
 arbitration proceedings.
 
 arbitration proceedings were presided by hon''ble justice
 mr.k.venkataswami, judge, supreme court (retd) as the sole arbitrator,
 arbitration proceedings were conducted over a period of two years
 spread over 34 sittings, the first sitting was held on 28.10.2006 and
 thirty fourth sitting was held on 28.06.2008 and 5 volumes of 1370
 pages of documents were submitted before the arbitrator, the hon''ble
 arbitrator posted the matter for pronouncement of award on 20.09.2008.
 at the request of the advocates of the respondents the award date was
 rescheduled to 29.09.2008. unfortunately, hon''ble justice
 mr.k.venkataswami passed away on 26.09.2008 just 3 days before the
 revised pronouncement date, as the company wanted to settle the issue
 in a legally valid manner, the company decided to continue the
 arbitration proceedings, hence, the company has filed a petition before
 the hon''ble high court of madras seeking its directions for appointment
 of a new arbitrator for speedy disposal of the arbitration proceedings
 [o.p.no.336 of 2009]. the petition is pending before the honble high
 court for disposal.
 
 based on its present knowledge of facts and as per legal opinion
 obtained, the current legal proceedings, in the opinion of your
 management, will not have a material adverse effect on the results /
 operations of helios and matheson.
 
 particulars of employees
 
 as required by the provisions of section 217 (2a) of the companies act,
 1956, read with companies (particulars of employees) rules, 1975, as
 amended, the names and other particulars of the employees are set out
 in annexure to the directors'' report, however, as per the provisions of
 the section 219(1) (b) (iv) of the companies act, 1956, the report of
 the directors is being sent to all the shareholders of the company
 excluding the aforesaid information, any shareholder of the company
 interested in obtaining such information may write to the secretary at
 the corporate office of the company.
 
 share capital
 
 the company''s shares are listed on national stock exchange mumbai
 (nse), the bombay stock exchange ltd. (bse), and the madras stock
 exchange (mse). the company has paid the respective annual listing fees
 to all the stock exchanges and there are no arrears.
 
 directors'' responsibility statement
 
 pursuant to the requirement under section 217 (2aa) of the companies
 act, 1956, with respect to directors responsibility statement, it is
 hereby confirmed:
 
 that in the preparation of the annual accounts for the financial year
 ended September 30 2012 the applicable accounting standards have been
 followed along with proper explanation relating to material departures.
 
 that the directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that were 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 year under review.
 
 that the directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with
 provisions of the companies act, 1956, for safeguarding the assets of
 the company and for preventing and detecting fraud and other
 irregularities.
 
 that the directors have prepared the accounts for the financial year
 ended September 30 2012 on a going concern basis.
 
 directors
 
 avm (retd) srinivasa rao.sistla retires by rotation at this annual
 general meeting and is eligible for election, the tenure of mr
 g.muralikrishna, managing director & ceo, expires in january 2014. the
 board of directors at their meeting held on 05.02.2013 decided to
 reappoint him for another 5 years with effect from 01.04.2013 on terms
 and conditions stipulated elsewhere in this annual report,
 mr.muralikrishna has been the managing director of the company since
 its inception in 1991. necessary resolutions for approval of
 shareholders are proposed in the notice of the ensuing annual general
 meeting for the reappointment of avm(retd) sr sistla as director and mr
 muralikrishna as managing director & ceo for a period of five years
 with effect from april 1,2013.
 
 conservation of energy, research & development, technology absorption,
 foreign exchange earnings and outgo the provisions of subsection (1)
 (e) of section 217 of the companies act, 1956, read with companies
 (disclosure of particulars in the report of board of directors) rules,
 1988, are set out in the annexure to this report.
 
 auditors
 
 m/s.venkatesh & co., chartered accountants, chennai, retire at the
 ensuing annual general meeting and are eligible for reappointment, a
 certificate under section 224 (1-b) of the companies act, 1956, has
 been received from them.
 
 acknowledgement
 
 your directors thank the clients, vendors, investors, financial
 institutions and bankers for their continued support for the company''s
 growth, your directors place on record their appreciation of the
 contribution made by the employees at all levels, who, through their
 competence, hard work, solidarity, cooperation and support, have
 enabled the company to achieve rapid growth.
 
 your directors thank the government of india, particularly the
 department of electronics, software technology parks- chennai and
 bangalore, department of commerce (mepz special economic zone) chennai,
 ministry of information technology, ministry of commerce, the reserve
 bank of india, the department of telecommunications, the state
 governments, and other government agencies for their support during the
 year and look forward to their continued support in the future.
 
                                   for and on behalf of the board
 
 place: chennai                                   muralikrishna g.
 
 date: 05.02.2013                    chairman & managing director