2010-11 reaffirmed that in terms of the business environment, the worst
 is clearly behind us and Info Edge is back on its growth momentum.
 India clocked a GDP growth of 8.5% in 2010-11, on the back of 8%
 registered in 2009-10. Fundamentally, with growth firmly back on track,
 business and market sentiments became positive.  While, macro-economic
 parameters suggested that, while there might be the odd shock, the rise
 in income levels in India would be sustained over a period of time.
 These developments led to a notable growth in activity in two of our
 markets – recruitment and real estate.
 
 You would recall that in the period of depressed markets in 2009 and
 early 2010, we at Info Edge had focussed on looking within and
 improving the internal systems and processes of the Company. During
 those months, we had rolled up our sleeves and put considerable efforts
 on streamlining the fundamentals of our business – sales management,
 customer analytics and technology. The emphasis was on better targeting
 of activities to generate higher value from every rupee spent. With
 these initiatives, Info Edge emerged a much stronger Company from the
 market downturn and was even better positioned to traverse a high
 growth path, once demand conditions improved. In fact, 2010-11
 signalled the beginning of this new phase of growth.
 
 We are primarily a consumer, technology and sales driven company. The
 two large elements of cost in our business are people and
 brand-building. Given the fundamental principles of pursuing profitable
 growth that govern the Companys operations, these expenses are tightly
 controlled and undertaken in a well planned and calibrated manner.  The
 requirement for investments in physical capacity expansion is not very
 predominant, so there is not much requirement of capital expenses on
 this front. In addition, the operations are streamlined to function
 with a negative working capital. In this set up, a healthy top-line
 growth, coupled with improving margins contribute to good cash
 accretion. In FY2011, on a consolidated basis,
 net cash generated from operations was Rs.1,037.9 million. The cash and
 cash equivalents at the end of the year was Rs.4,582.9 million of which
 Rs.1,981.1 million was invested in bank fixed deposits and, around
 Rs.2,601.8 million was invested in debt schemes of mutual funds.
 Clearly, with the performance in FY2011, the Company has further
 strengthened its balance-sheet position, which is a war chest that can
 be utilised for various investments at appropriate points in time.
 Also, this provides a strong security cover for the business. I always
 believe in maintaining sufficient cash balance to meet at least twelve
 months of operating expenses, in case of a contingency.
 
 In terms of the different businesses, with over 80% share in total
 revenues, the recruitment solutions businesses with its flagship brand
 naukri.com is the Companys primary source of revenues and profits
 today. The other businesses, mainly 99acres.com, jeevansathi.com and
 shiksha.com are in a developmental phase. While their revenues are
 growing, they still generate losses or insignificant profits. Having
 said so, over the last five years, through steady progress, the share
 of these ‘other businesses in the Companys total standalone revenues
 has increased from 5% to 17%.
 
 TODAY, WE CONTINUE TO FOCUS ON FOUR BASIC BUSINESS GROWTH DRIVERS.
 
 FIRST, IS TO GROW THE CORE BUSINESS.
 
 Naukri.com has developed into a sizeable & well positioned business
 that has attained the critical virtuous cycle of self-sustenance that
 all our businesses are striving to achieve. Let me explain.  Being the
 market leader, naukri.com has the largest client base. As this large
 client base uses the site, it posts jobs and results in the largest job
 list in India. This, in turn, promotes higher traffic share leading to
 increased customer response.  Such customer response further increases
 the client base, and growth becomes self-sustaining.  naukri.com has
 attained the critical market size and leadership position required to
 further propel profitable growth with lower new investments.
 Consequently, in FY2011, with improved market demand, the recruitment
 vertical witnessed a 24% growth in net sales, and, in terms of traffic
 share, it has further gained its leadership position over both its
 nearest competitors. We continue to focus on aggressively growing this
 brand profitably. In
 addition, the core business is supported by related businesses that
 focus on specific segments within the recruitment space. These include
 naukrigulf, which focuses on recruitment specifically in the gulf
 region. With the growth in the education sector, campus placements have
 grown significantly and there is a trend of this moving to the online
 platform. Firstnaukri is well positioned to leverage these
 opportunities. In the first year of commercial operations in FY2011,
 the business has got good response. There is also the professional
 networking site – brijj.com
 
 SECOND, Is TO CAPITALISE ON THE GROWTH OF THE REAL ESTATE BUSINESS -
 99acres.
 
 The business gained good momentum in FY2011. With net sales growing by
 71%, the business broke even. More importantly, it gained significant
 traffic share over its nearest rivals, while some competitors have
 fallen far behind. It is strengthening its leadership position. While
 focus is on growing and scaling up the business, there is equal
 emphasis on improving quality of traffic and improving site hygiene in
 terms of content. In the real estate industry for long term growth, it
 is very important to filter usage and focus on better quality of data
 and site visitors.
 
 THIRD, Is TO SCALE UP THE OTHER EXISTING BUSINESSES.
 
 Amongst the other businesses Allcheckdeals.com, which is the real
 estate brokerage business (and is a subsidiary), leveraged the growth
 in the real estate market in India and registered healthy growth. The
 education portal Shiksha.com is also gaining traction and we are
 investing in TV commercials to take the business to the next level.
 The market for offline placement services is becoming rather
 attractive. We have been reworking on the quadrangle business. Already,
 in FY2011 the number of clients has increased to 130 and we intend to
 grow this business. The matrimonial portal-, jeevansathi.com continues
 to focus on developing optimal solutions for its target market in north
 India.
 
 All the growth objectives are well supported by a large and widely
 spread out sales team network. There are around 1,470 sales and client
 facing staff working through 48 offices across 31 cities in India. We
 are the only online Company in India with such a widespread physical
 sales force. I believe this will help us push all our brands more
 efficiently to customers and add impetus to our online presence. We are
 working on further improving the efficiencies of this team through
 adoption of sophisticated analytics tools and implementation of a new
 ERP system.
 
 FOURTH, IS TO INVEST IN START UPs (I.E. BUSINESSES WHICH ARE EARLY
 STAGE).
 
 We strongly believe that the online business domain is about innovation
 and entrepreneurship. In order to create a Company that will be a
 leader in India across different spaces in the internet medium, it is
 very important to tap into new ideas being developed. We, at Info Edge,
 had already started investing in start-ups in the last few years. Our
 philosophy for these investments is fairly clear. We invest where we
 have considerable faith in the capability of the promoters, business
 idea and model of execution. Post investments, we support the
 businesses with our vast domain expertise to help it in strategy,
 positioning and growth. In the longer run, we shall either leverage the
 value enhancement of the business or merge the business into Info Edge.
 In FY2011, we put in more focused attention to this part of our
 business.  The Founder and Executive Vice Chairman, Mr Sanjeev
 Bikhchandani, has now taken focused charge of identifying and nurturing
 such investments. We have increased investments into policybazaar.com
 and made new investments into zomato.com, mydala.com, nogle
 technologies and 99labels.com.
 
 The details of these businesses are given in the chapter on management
 discussion and analysis. While the number of investments has increased
 the quantum of investments is still fairly low and focused on
 incubating these companies. With these investments, we expect to
 considerably widen our business base in the Indian online space and, we
 are convinced of this approach for growth.
 
 Across the business, Info Edge continues to focus on attracting and
 retaining talent.  Even, as we diversify into more brands and products,
 we remain primarily a people and knowledge driven business. We realise
 that it is our people who have been behind our success so far, and they
 will define our future. At Info Edge, we have promoted a fairly flat
 organisation structure where the predominant culture is to promote
 ownership and freedom of operations with broad objectives and controls
 defined by the Company. There is a large element of variable pay that
 promotes enhanced performance. This includes stock based payments like
 Employee Stock Option Plans (ESOPs) and Stock Appreciation Rights
 (SARs).
 
 We also continue to build teams to develop our businesses. In FY2011,
 there was around 22% growth in manpower in the standalone business.
 Most of which was to foster scaling up of the other businesses like
 99acres and shiksha.
 
 While we have improved our positioning in the online business space in
 India during FY2011, it is heartening to note some of the external
 developments specific to internet in India.  Estimates suggest that by
 December 2010, internet penetration in India had increased to 8.5%and
 broad-band connections continue to
 
 grow. By March 31, 2011, the number of broadband connections in India
 has further increased to 11.87 million.
 
 In a global context, a recent study by the Mckinsey Global Institute
 has highlighted how internet is now an important part of global GDP.
 The study that analysed 13 leading global economies including India,
 concludes that the internet is now used in every country, in every
 sector, by most companies, and by more than 2 billion people and its
 usage is still growing. Internet related consumption and expenditure is
 now larger than agriculture or energy and its contribution to GDP in
 these countries is growing. In their sample set, internet account for
 7% of GDP growth over the last 15 years and 11% over the last five
 years. It is also inferred that internet correlates with higher living
 standards. While at one level it has taken away jobs, at another it has
 created more jobs and is a net job creator. Mckinseys global SME
 survey suggests that the internet has created 2.6 jobs for every job
 destroyed. India and China are strengthening their position in the
 global internet ecosystem by recording growth rates of over 20%. The
 study also suggests that internet in India accounted for lower
 contribution of GDP vis-a-vis developed countries. Imagine the
 opportunities that will be there in India as GDP grows and internets
 contribution to GDP reaches closer to levels seen in developed
 countries. As a leader in this space, Info Edge is well-positioned to
 leverage these opportunities.
 
 We will have to continue to focus on excellence in innovation &
 execution and I am confident of my team and its ability to deliver on
 these fronts in the coming years.
 
 Finally, I would like to take this opportunity to thank you for your
 continued support.  Our business is well placed for big-ticket growth.
 With the dedication of our employees and your encouragement, Info Edge
 is confident of delivering sustained value.
 
 
 
 
 Regards
 Hitesh Oberoi