The Directors are pleased to present the Companys Twenty- Third
 Annual Report on the Business and Operations of HOV Services Limited
 (the Company or HOVS) together with the Audited Statement of
 Accounts for the year end March 31, 2011.
 
 HOVS is one of the largest end-to-end BPO Company, providing
 healthcare, finance and accounting, e-content management, document
 lifecycle, presentment, HR assist, and strategic consulting services
 across key verticals such as BFSI, Healthcare, Government, Telco,
 Publishing, Retail, Commercial and Industrial Manufacturing industries.
 
 FINANICAL RESULTS AND OPERATIONS:
 
 In the financial year 2010-11, your Company has recorded consolidated
 revenue of Rs. 7092.53 million and profit after tax was Rs. 537.30
 million. The brief financial highlights with comparison of previous
 year are as below:
 
 Particulars                         For the year end March 31,
 
                                         Rs. In Million
 
                                   Consolidated            Standalone
 
                                   2011        2010      2011      2010
 
 INCOME
 
 Income from Operation         7,092.53    8,483.93    247.40     74.91
 
 Other Income                     15.65       14.74      2.28      2.82
 
                               7,108.18    8,498.67    249.68     77.73
 
 EXPENDITURE
 
 Staff Cost                    3.607.22    4,474.60     56.31     32.05
 
 General and Administrative 
 Expenses                      2,374.87   4,133.09*     22.57      7.61
 
                               5,982.09    8,607.69     78.88     39.66
 
 Profit / (Loss) before 
 Interest, Depreciation
 and Tax                       1,126.09    (109.02)    170.80     38.07
 
 Less: Interest                  292.75      336.25         -         -
 
 Less: Depreciation              291.64      252.17      3.72      3.51
 
 Profit / (Loss) before Tax      541.70    (697.44)    167.08     34.56
 
 Less: Provisions for taxes
 
 Current Tax                       3.88       48.78      0.38      6.35
 
 Deferred Tax                      0.52       15.10      0.52    (1.02)
 
 Profit / (Loss) after Tax       537.30    (761.32)    166.18     29.23
 
 Less: Minority Interest              -      (2.92)         -         -
 
 Profit / (Loss) after Tax & 
 Minority Interest               537.30    (758.40)    166.18     29.23
 
 *Includes Exceptional items of Rs. 1327.64 Million.
 
 1.  RESULTS OF OPERATIONS:
 
 Consolidated Financial Performance for the Fiscal Year (FY) ended March
 31, 2011
 
 FY 2010-11 was the pivoting point for the industry – the current US
 Economy and Federal & State Budgets being at impasse caused drop in
 Revenues and EBIDTA, but the management is confident that their actions
 being taken will result in solid growth in the coming years.
 
 The performance of the year ended March 31, 2011 highlighted as
 follows:
 
 - Consolidated total Income for the current FY decreased 16.40% to Rs.
 7,092.54 million from Rs 8,483.94 million for the corresponding last
 fiscal year 2009-10
 
 - EBIDTA decreased by 7.8% for the FY to Rs. 1,110.4 million from Rs.
 1,203.9 million over the corresponding last fiscal year 2009-10
 
 - Net Profit was Rs. 537.3 million versus a Net Loss of Rs. 758.4
 million reported in the prior year.
 
 - The basic and diluted Earnings per share (EPS) were Rs 23.40 for the
 Year ended March 31, 2011.  
 
 Standalone Financial Performance for the Year ended March 31, 2011
 
 - Total Income for the current FY increased 230.26% to Rs. 247.40
 million from Rs 74.91 million for the corresponding last fiscal year
 2009-10
 
 - EBIDTA increased by 379.15% for the FY to Rs 168.47 million from Rs
 35.17 million over the corresponding last fiscal year 2009-10
 
 - Net Profit was Rs. 166.13 million versus a Net Profit of Rs. 29.24
 million reported in the prior year
 
 - The basic and diluted Earnings per share (EPS) are Rs 13.30 for the
 Year ended March 31, 2011.
 
 2.  SIGNIFICANT DEVELOPMENTS:
 
 (a) Key Highlights during the year were:
 
 - Added new business with over US .0 million in total contract value
 in the fourth quarter FY 2010-11.
 
 - Top 100 clients represent over 78% of total revenues with the largest
 customer representing only 19% of total revenues.
 
 - Company maintained strong liquidity position with –
 
 a.  DSO (Debt Sale Outstanding) of 56 days
 
 b.  Debt to Equity Ratio of 1.39
 
 c.  Net Bank Debt of US$ 113.6 million at March 31, 2011 as against US$
 102.8 million at March 31, 2010.
 
 (b) Key Accomplishment and Noteworthy Items:
 
 - International Association of Outsourcing Professionals (IAOP) ranked
 us:
 
 a.  Best 20 Leaders by Industry Focus: Health Care;
 
 b.  Best 10 Companies by Service Offered: Document Management;
 
 c.  Best 10 Leaders by Service Offered: Financial Management;
 
 d.  Best 20 Leaders by Region Served: India;
 
 e.  Best 20 Leaders by Region Served: Canada;
 
 - Global Presence and experienced team with over 8,357 associates,
 strategically located across the globe: India 5,851, North America
 1,440, China 655 and Mexico 411
 
 - HOVS is also nominated with the following recognition / awards during
 the year 2010-2011:
 
 1) Nasscom Annual Survey 2010 has ranked HOV Services amongst the Top
 15 BPO Exporters 2009- 10 in India.
 
 2) 2010 Global Services 100 (GS 100) Survey has awarded HOV Services as
 a Top BPO provider in three categories namely, Industry Specific BPO
 Vendors, Top BPO Vendors and Top FAO Vendors list.
 
 3) Government of Maharashtra has honoured HOV Services with
 Maharashtra Information Technology Support Services- BPO /KPO award
 2010.
 
 (c) Appropriations: 
 
 (i) Dividend:
 
 Your Board of Directors at the meeting held on May 27, 2011 recommended
 a final dividend of Rs. 2 per fully paid up equity share of Rs. 10/-
 each for the financial year 2010-11.
 
 Earlier, during the year under review, your Board had declared an
 interim dividend of Rs. 2/- per equity share of Rs. 10/- each of the
 Company for every quarter as detailed below;
 
 Quarter ended  Interim dividend   Record date       Payment Date
 FY 2010-11     declared
 
 Q1             1st                August 21, 2010   August 27, 2010
 
 Q2             2nd                November 3, 2010  November 18, 2010
 
 Q3             3rd                February 2, 2011  February 21, 2011
 
 For the financial year 2010-11 the Company does not have any unpaid
 dividend meant to be transferred to the Investor Education Protection
 Fund under Section 205C of the Companies Act, 1956.
 
 (ii) Transfer to Reserve: Your Company proposes to transfer Rs
 16,617,943/- to the general reserve.
 
 3.  Re structuring of subsidiary companies
 
 During the year under review your Board of Directors has consented the
 steps taken by HOV Services LLC for restructure of its subsidiary
 companies in order to maximize business operations efficiencies. The
 details of restructuring steps taken are as herein below:
 
 i) The Board of Directors in its meeting held on February 27, 2011
 accorded consent to incorporate a HOV SPV LLC in Delaware under the
 laws of Unites States of America as a wholly owned subsidiary of the
 Company.
 
 And, HOV SPV LLC in turn incorporated HOVS Corp., a Nevada corporation
 under the laws of Unites States of America as a step down subsidiary of
 the Company.
 
 Subsequently, the HOV SPV LLC name was changed to HOVS LLC on March 17,
 2011;
 
 ii) Thereafter, the Board of Directors of the Company in its meeting
 held on March 9, 2011 approved the merger of HOV Services LLC with HOVS
 Corp (a Nevada corporation and wholly owned subsidiary of HOVS LLC, a
 Delaware company as discussed in paragraph (i)
 
 above). As a result of the merger HOV Services LLC continued as the
 surviving entity and as a wholly-owned subsidiary of HOVS LLC.
 
 4.  Joint Venture (JV)
 
 On March 12, 2011 the Board of Directors of HOVS accorded consent for
 the merger of its indirect subsidiary of the company HOV Services LLC
 incorporated under the laws of Delaware, (HOV Services) with
 SOURCECORP, Inc., a portfolio company of Apollo Management V, L.P.
 incorporated under the laws of Delaware (SOURCECORP), a Texas-based
 BPO services and specialty consulting Services Company (the
 Transaction).
 
 Shareholders of HOV Services and SOURCECORP will each control 50% of
 the combined entity, i.e. SOURCEHOV, Inc., (SOURCEHOV), a Delaware
 corporation. The merger brings together two highly recognized companies
 and created one of the largest global business process outsourcing and
 professional consulting services entities in the world. The management
 team of SOURCEHOV has over 25 years of expertise in the Industry, with
 a proven track record of seamlessly integrating core M&A components and
 continuously innovating new technologies to create end-to-end services
 and new value for its customers.
 
 The new company SOURCEHOV, with approximately 0 million in revenue,
 is one of the largest pure play BPO and specialty consulting companies
 in the industry, serving customers in more than half of the Fortune
 100® with deep domain expertise, including document centric
 applications, in Healthcare Payer and Provider, Finance and Banking,
 Public Sector, Publishing, Legal, Insurance, Manufacturing and
 Commercial industries, including specialized consulting services for
 construction management, tax benefits, legal claims settlements and
 economic consultancy. With this combination, the Companys global
 workforce is now more than 14,200 employees operating from
 approximately 80 delivery centers in 6 countries viz U.S., Mexico,
 Canada, India, China and Philippines.
 
 As of April 29, 2011, the HOV Services completed previously announced
 merger of its indirect subsidiary HOV Services LLC (HOV Services)
 with SOURCECORP, Inc. The new name of the combined company is SourceHOV
 Inc., reflecting the union of our two companies and our expanded
 capabilities.
 
 Subsequent to aforesaid merger the Companys head office is relocated
 to 3rd Floor, Sharda Arcade, Pune Satara Road, Bibwewadi, Pune-411 037.
 
 5.  Class A preferred Units by HOV Services LLC
 
 Effective April 29, 2011, by virtue of the closure of the merger of its
 indirect subsidiary HOV Services LLC (HOV Services) with SOURCECORP,
 Inc. (SOURCECORP), the 10,467,532 Class A preferred Units issued by
 HOV Services LLC and outstanding as of March 31, 2011, have ceased to
 exist. Therefore, effective May 2, 2011 the fully diluted outstanding
 share capital of the Company on consolidated basis comprised of 12,
 491, 022 equity shares of Rs 10/- each only.
 
 6.  ADR/GDR
 
 In the earlier proposed 15,000,000 of ADR/GDR issue by the Company,
 none of the underlying equity shares are issued.
 
 7.  Employee Stock Option Plan (ESOP)
 
 a) The Company instituted HOVS Stock Option Plan 2007 and HOVS Stock
 Option Plan 2008 for its employees and for employees of its subsidiary
 companies as detailed below:
 
 Plan        Shareholders  No. of Options for  No. of Options   Total
             Approval Date  employees of the    for employees 
                            Company             of subsidiary 
                                                companies
 
 HOVS Stock 
 Option Plan  July 21, 2007      400,000        700,000       1,100,000
 
 2007
 HOVS Stock
 Option Plan  September 30, 
              2008                     0        750,000         750,000
 2008
 
 Options were issued to employees at an exercise price not less than
 closing price of the stock exchange where there is highest trading
 volume, prior to the date of meeting of the Compensation & Remuneration
 Committee in which options were granted. The options will vest in a
 phased manner within five years as 10% in each first to four years and
 balance 60% at the end of fifth year.
 
 No options have been granted under Plan 2008.
 
 i) The details of options granted and lapsed under Plan 2007 are as
 below:
 
                                        Plan 2007
                           Employees of the   Employees of
                           Company the        subsidiary     Total 
                                              Companies
 
 Approved Options           400,000           700,000      1,100,000
 
 Grant in 2007              141,500           526,000        667,500
 
 Grant in 2008               28,150           217,900        246,050
 
 Total Grant                169,650           743,900        913,550
 
 Options Lapsed as 
 of April 1, 2011           155,150           217,900        373,050
 
 Options in force            14,500           526,000        540,500
 
 Balance options available  385,500           174,000        559,500
 
 ii) Information of grant made to directors and employees:
 
 Options granted date         Directors      Other than     Total (A+B)
                                             Directors
                                 (A)             (B)
 
 July 21,2007                   7,500         640,000        647,500
 
 25-Oct-07                          0          20,000         20,000
 
 30-Jul-08                      7,500         183,550        191,050
 
 8-Oct-08                           0          55,000         55,000
 
 Total number of 
 Options Granted               15,000         898,550        913,550
 
 Options lapsed as of 
 April 1, 2011                  10000         363,050        373,050
 
 Options outstanding            5,000         535,500        540,500
 
 iii) The details of options granted under the two plans are given in
 the table.
 
                                                As of March 31, 2011
 
                                Plan 2007                  Plan 2008
 
 a.  Options Granted:            9,13,550                        Nil
 
 b. The Pricing formula:         Closing price of the 
                                 stock exchange
                                 where there is highest 
                                 trading volume, prior 
                                 to the date of the              Nil
                                 meeting of the 
                                 Compensation & 
                                 Remuneration Committee 
                                 in which options are 
                                 granted.
 
 c. Options Vested:              Nil                             Nil
 
 d. Options Exercised:           Nil                             Nil
 
 e. Total number of shares
 arising as a result of          9,13,550                        Nil
 exercise of options:
 
 f. Options lapsed:              3,73,050                        Nil
 
 g. Variation of terms of
 option:                         NA                              NA
 
 h. Money realized by
 exercise of options:            NA                              NA
 
 i.  Total number of options
 in force:                       5,40,500                        Nil
 
 j.  Employee wise details of                                    Nil
 Options granted to:
 
 i.  Senior Management           5,40,500
 personnel:
 
 ii. Employee receiving 5%       Nil 
 or more of the total 
 number of options
 granted during the year:
 
 iii. Employee granted 1%        Nil
 or more of the issued 
 capital:
 
 k. Diluted EPS on issue of
 shares on exercise calculated   NA                              NA
 in accordance with AS 20.
 
 b) The Compensation & Remuneration Committee in its meeting held on May
 27, 2011 have granted options out of the ESOP Plan 2007 as per detailed
 below:
 
 Grant Date    Independent   Employees of  Employee of      Total
               Directors     the Company   the subsidiary 
                                           company
 
 May 27, 2011     30,000     22,500        10,000           62,500
 
 c) The Compensation and Remuneration Committee and the Board of
 Directors in their respective meetings held on May 27, 2011 consented,
 in the best interest of employees of HOV Services LLC which is merged
 with SOURCECORP, to continue the options of all such employees whom the
 options were granted out of the HOVS ESOP Plan 2007 during the year
 2007 and 2008.
 
 8.  Conservation of Energy, Technology Absorption, and Foreign
 Exchange:
 
 Particulars furnished pursuant to Companies (Disclosures of Particulars
 in the Report of Board of Directors) Rules, 1998:
 
 Conservation of Energy: The operation of Company is not energy
 intensive. The Company conducted energy audit in some of the units and
 has implemented recommendations. This has resulted in reduction of
 energy consumption during this financial year.
 
 Research and Development: The Company has not undertaken any R&D
 activity in any specific area during the year under review, and hence
 no cost has been incurred towards the same. However, the Company
 believes technology is strategic to its growth and has invested heavily
 in hosted platforms, automation, capture, presentation and analytics.
 The Company has development teams in US, India and Mexico implementing
 this vision.
 
 Technology Absorption, Adaptation and Innovation: The Company has been
 focused on providing state-of-the-art end-to-end BPO services to
 Clients. In carrying out this mission, HOVS has invested heavily in
 technology innovation, while leveraging its global footprint that is no
 longer confined by traditional borders through the use of a globally
 stable and secure network infrastructure that conforms to the highest
 international standards including ISO, HIPAA and SAS70. The Company has
 adopted Six Sigma practices and LEAN techniques in a majority of its
 centers and processes; a significant number of our team member have
 gone through Six Sigma training and are certified at higher levels of
 competency. The Company is constantly developing and adopting modern
 technologies and standards to grow its competitive advantage, to better
 serve its clients, retain employees and improve productivity and
 performance.
 
 Foreign Exchange Earnings and Outgo: Almost the entire earnings of the
 Company are from the export of services since the Company has no
 domestic business. The foreign exchange earnings and outgo is contained
 in the Note number 16(b) of schedule 14B to the Accounts of the Annual
 Report.
 
 9.  Particulars of Employees:
 
 The Company has no employees drawing remuneration in excess of limits
 specified under Section 217(2A) of the Companies Act, 1956 read with
 the Companies (Particulars of Employees) Rules, 1975, as amended.
 
 10.  Human Resources:
 
 During the year the Company has taken utmost care of its employees
 deployed in wide- ranging cultures across the globe. The Company has
 well defined Human Resource Policies,
 
 excellent training facilities and a well established, healthy working
 environment. The Company organizes regular health checkups through
 recognized medical centers and the relationship of HOVS with its
 employees remained cordial throughout the year.
 
 11.  Directors Responsibility Statement:
 
 As stipulated in Section 217(2AA) of Companies Act, 1956, your
 Directors subscribe to the Directors Responsibility Statement and
 confirm as under:
 
 a) that in preparation of Annual Accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures; and
 
 b) that 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 and of the
 profit and loss account of the Company for that period; and
 
 c) that the directors have taken proper and sufficient care of 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; and
 
 d) that the directors have prepared the annual accounts on a going
 concern basis.
 
 12.  Fixed Deposit
 
 The Company has not accepted any deposits from the public within the
 meaning of Section 58A of the Companies Act, 1956, during the year
 under review.
 
 13.  Corporate Governance
 
 A separate section on Corporate Governance forming part of the
 Directors Report and the Certificate from the Companys Auditors
 confirming compliance of Corporate Governance norms as stipulated under
 Clause 49 of the Listing Agreement with the Stock Exchanges is included
 as a separate section in this Annual Report.
 
 14.  Management Discussion and Analysis
 
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges is presented as a separate section forming a part of this
 report.
 
 15.  Auditors
 
 The Statutory Auditors M/s Lodha & Co, Chartered Accountants, Mumbai,
 hold office till the conclusion of ensuing Annual General Meeting and
 have expressed their willingness and being eligible to continue, if
 re-appointed. You are requested to consider their re-appointment.
 
 16.  Directors
 
 There is no change in the Board of Directors during the year under
 review. Mr. B R Gupta, Director retires by rotation at ensuing Annual
 General Meeting and being eligible offers himself for reappointment.
 
 The Board of Directors in their meeting held on May 27, 2011 had
 subject to the approval of Central Government, approved re-appointment
 of Mr. Parvinder S Chadha, Mr. Sunil Rajadhyaksha and Mr. Surinder
 Rametra as whole-time directors of the Company w.e.f April 1, 2011 for
 a period of five years.
 
 17.  Subsidiary companies and consolidation of Accounts
 
 As per Section 212 of the Companies Act, 1956, the Company is required
 to attach the directors report, balance sheet, and profit and loss
 account of the subsidiary companies. The application was made to the
 Central Government of India for an exemption from such attachment as
 the Company presents the audited consolidated financial statements in
 the Annual Report. The Government of India has granted exemption to the
 Company from complying with section 212 for all the subsidiary
 companies vide its approval letter dated January 25, 2011. Pursuant to
 the conditions of Government of India approval the statement thereto is
 annexed to the Annual Report.
 
 Accordingly, the Annual Report does not contain the financial
 statements of the subsidiary companies. We will make available the
 audited annual accounts and related information of subsidiary
 companies, where applicable, upon request by any of our investors.
 These documents will also be available for inspection during business
 hours at our registered office.
 
 18.  Acknowledgement
 
 Your Directors express their appreciation for assistance and
 co-operation received from employees, shareholders, customers,
 suppliers, bankers and government authorities for their continued
 support to the Company during the year.
 
                           For and on behalf of the Board of Directors
 
                                         Parvinder S Chadha 
                                     Chairman & Executive Director
 
 Place: Mumbai 
 Date : May 27, 2011