Report of the BOARD OF DIRECTORS
 
 The Directors present the Forty First Annual Report together with the
 Accounts for the year ended 31st December 2010
 
 The Profit & Loss Account for the year is as under:
 
                                                   Rs in lakhs
 
                                      Year ended    Year ended
 Particulars                          31.12.2010    31.12.2009
 
 Profit / (Loss) for the year after     (880.71)        712.65 
 depreciation and taxation
 
 Surplus brought forward from           8,666.82      8,650.99
 previous year 
 
                                        7,786.11      9,363.64
 
 Adjustments /Appropriations:
 
 Proposed Dividend                             -        168.23
 
 Corporate Tax on Dividend                     -         28.59
 
 Transfer to General Reserve                   -        500.00
 
 Surplus carried forward                7,786.11      8,666.82
 
                                        7,786.11      9,363.64
 
 
 Dividend
 
 In view of the loss for the year, the Board has not declared any
 dividend for the year.
 
 Merger of the Subsidiary Companies
 
 A Scheme of Amalgamation (Scheme) of the wholly owned subsidiaries of
 the Company, namely, MPS Technologies Ltd. and MPS Content Services
 Inc. and its wholly owned subsidiary MPS Content Services (India) Pvt.
 Ltd. with the parent company, MPS Limited, with effect from 31st
 December 2010 (the Appointed Date under the Scheme) was approved by
 their respective Board of Directors in January 2011. As required under
 the Listing Agreements between the Company and the Madras Stock
 Exchange, the Bombay Stock Exchange and the National Stock Exchange,
 the requisite approvals of the Stock Exchanges to the scheme was
 obtained.  Legal proceedings were thereafter initiated in the High
 Court at Madras, pursuant to the applicable provisions of the Companies
 Act, 1956 towards seeking its sanction to the Scheme. The Madras High
 Court granted dispensation from holding Shareholders'' meetings in view
 of the fact that the amalgamation contemplated by the Scheme was of two
 wholly owned subsidiaries and one indirect wholly owned subsidiary and
 directed the Companies, namely MPS Content Services India Private
 Limited and MPS Technologies Limited (petitioner Companies) to file the
 Company petitions. The Company petitions were filed and admitted by the
 Madras High Court and directions were issued to the Official Liquidator
 to appoint an Auditor to scrutinize the books of accounts of the
 petitioner Companies and to submit his report. The matter was heard by
 the Madras High Court on 15th June 2011 and after hearing the Counsel
 for the Company and the standing Counsel of the Central Government, the
 Madras High Court was pleased to sanction the Scheme of Amalgamation as
 submitted to the Madras High Court for merger of the Companies with MPS
 Limited.  Consequent to the same, the Subsidiary Companies financials
 have been drawn upto 30lh December 2010 being one day earlier to the
 appointed date. Your Company''s financials have been drawn on a
 standalone basis consequent to the above sanction and only the profits
 / losses of the subsidiary companies have been dealt with in the
 reserves as per the Scheme sanctioned by the High court.
 
 Extension of time for holding Annual General Meeting
 
 In view of the merger application of MPS Content Services India Private
 Limited, MPS Technologies Limited and MPS Content Services Inc. before
 the Honorable Madras High Court, which has now been sanctioned with the
 appointed date of 31st December 2010, the Company had to place before
 you the Financials with the profits / losses of the subsidiary
 companies dealt with in the reserves as per the Scheme sanctioned by
 the High Court. Since the Honorable Madras High Court sanctioned the
 Company petitions on merger only on 15th June 2011, the Company sought
 extension of time for holding the Annual General Meeting from the
 Registrar of Companies, Tamil Nadu, which was granted upto 30th
 September 2011.
 
 Progress of the Business
 
 The sales for the year were Rs 127.42 crores as against a figure of Rs
 139.95 crores for the corresponding previous year in respect of the
 Publishing Services business. The Loss After Tax was Rs. 8.81 crores
 giving an EPS of Rs (5.24) per Rs. 10 share.
 
 The lower profitability as compared to the previous year is mainly due
 to the following reasons:
 
 - Continuing commoditization of the core journals and books services
 markets coupled with strong competition amidst pricing pressure
 
 - Strengthening of the Indian Rupee versus the US dollar;
 
 - Higher debtors provisioning due to bankruptcy filing by a client in
 USA
 
 Business Outlook
 
 With the merger of all the subsidiary companies, the Company is now
 uniquely positioned and is being considered as a complete solutions
 provider and this has opened up more opportunities to cross-sell
 services across all publishing verticals and solution types.
 
 The current year has seen an expansion of our client base into new
 segments. The Company is continuing its partnership with large IT
 Companies to bid for new clients jointly; we expect such initiatives to
 grow in the next year. With the availability of better reading devices,
 the demand for digital and online content has seen a healthy growth.
 This has forced publishers to change their digital strategies and focus
 on enhanced learning and new media offerings that are expected to grow
 significantly next year.
 
 Your Company evolved during the year in response to market changes and
 adopted a new sales process. This process puts greater responsibility
 and accountability on the production teams for maintaining existing
 clients. This is expected to increase our sales focus in bringing in
 new business.
 
 In addition to the above, the Company had embarked to reduce its costs
 and close down one of the subsidiary company''s offices in USA and also
 closed down one office space each in Gurgaon and Bengaluru. In addition
 to the above, the Company is taking further steps to rationalize cost
 and increase the bottom line.
 
 Detailed analysis, discussion and progress reports are available in the
 Management Discussion and Analysis Report of the Annual Report.
 
 Awards and Recognition
 
 The Company won the Special Export Award for 2009-10 from CAPEXIL in
 its category of products.
 
 Overall Company Aims
 
 The Company''s current strategy remains:
 
 To increase the size, scope and technological advantage of its business
 as a global, high value-add, IT-enabled service provider for publishing
 activities and be a leader in this area. The strategic intent is to
 play a major part in the harnessing of India''s skills, abilities and
 cost-advantages and to contribute to India''s domination of IT-Enabled
 Services in the coming years.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Out-going
 
 The provisions regarding disclosure of particulars in Form A with
 respect to Conservation of Energy are not applicable to the Publishing
 Services industry as the operations are not energy-intensive. However
 constant efforts are made to make the infrastructure more energy
 efficient. Particulars regarding Technology Absorption, Research and
 Development in Form B are annexed to this report.
 
 During the year under review, foreign exchange earned through exports
 was Rs. 12,742 lakhs as against Rs 13,995 lakhs for the year ended 31st
 December, 2009. The outgo of foreign exchange was Rs. 2.131 lakhs as
 against the previous year outgo of Rs. 1,695 lakhs. Thus the net
 foreign exchange earned by the Company was Rs. 10,611 lakhs. The
 details of earnings and outgo are given in the Notes forming part of
 the Accounts for the period ended 31st December, 2010.
 
 Directors
 
 Mr. R R Chari, Director and Audit Committee Chairman resigned during
 the year due to advanced age. He was a Director of the Company for over
 a decade. The Company and the Board benefitted from the wisdom and
 advice during his tenure as a Director. The Board places on record its
 appreciation of the tremendous work done by Mr. R R Chari, both as a
 Director and erstwhile Chairman of Audit Committee. The Board also
 wishes Mr. R R Chari a very happy retired life.
 
 Mr. Ardeshir Contractor also resigned from the Board of Directors due
 to personal reasons. The Board places on record the valuable advice and
 guidance received during his tenure as a Director of the Company.
 
 Following Mr. R R Chari''s resignation, the Board appointed Mr. Ashish
 Dalai as an Additional Director effective from 28th October, 2010 under
 Section 260 of the Companies Act 1956 read with Article 125 of the
 Articles of Association of the Company.  Mr. Ashish Dalai retires at
 the ensuing Annual General Meeting and being eligible offers himself
 for appointment as a Director. Notice has been received from a member
 signifying his intention to propose Mr. Ashish Dalai as a Director of
 the Company.
 
 Under Articles 139 to 142 of the Articles of Association of the
 Company, Mr. Hanson Farries retires by rotation and being eligible,
 offer himself for reappointment.
 
 Auditors
 
 The Company''s Auditors, Messrs. Deloitte Haskins & Sells, Chartered
 Accountants, retire at the forthcoming Annual General Meeting and being
 eligible, offer themselves for re-appointment.
 
 As required under the provisions of section 224(1 B) of the Companies
 Act, 1956, the Company has obtained a written certificate from Messrs.
 Deloitte Haskins & Sells, Chartered Accountants, to the effect that
 their re-appointment, if made, would be in conformity with the limits
 specified in the said section.
 
 Observations in the Auditors'' Report
 
 With reference to para 4(e) of the Auditors'' Report, it is clarified
 that the Company has submitted necessary application with the Ministry
 of Corporate Affairs, New Delhi, with respect to the payment of Bonus
 for the year 2010 as approved by the Remuneration Committee and the
 Board of Directors, which is within the overall remuneration approved
 by the Shareholders at the 39th Annual General Meeting held on 23rd
 June, 2009. The approval of the Central Government is awaited.
 
 With regard to the Auditor''s observation in para 4(f) of their Report
 on Note no. 5(a) in Schedule 19, the Company has filed appeals with the
 concerned authorities against the service tax demands and disallowance
 of service tax refund. Detailed Note no. 5(b) & (c) of Schedule 19 to
 the accounts is self explanatory.
 
 Particulars of Employees
 
 Information as per sub-section (2A) of Section 217 of the Companies
 Act, 1956 read with the Companies (Particulars of Employees) Rules 1975
 forming part of the Directors'' Report for the year ended 31st December,
 2010 is annexed to this Report.
 
 Employee Stock Option Scheme (ESOP)
 
 Since the ESOP scheme as approved by the members of the Annual General
 meeting held on 30th June, 2005 was not implemented, it was withdrawn.
 
 Clause 49 Requirement
 
 Pursuant to Clause 49 of the Listing Agreements with the Stock
 Exchanges, a compliance report on Corporate Governance together with a
 certificate from the Statutory Auditors confirming compliance with the
 conditions of corporate governance stipulated in the said Clause, is
 annexed to this report.
 
 The Board has laid down a Code of Conduct for all Board members and
 senior management of the Company and the Code of Conduct has been
 posted in the website of the Company
 www.macmillanpublishingsolutions.com.
 
 CEO / CFO Certification
 
 Mr. Rajiv K Seth, Managing Director and Mr. Gautam Mukherjee, Chief
 Financial Officer of the Company have given a certificate to the Board
 as contemplated in Clause 49 of the Listing Agreement.
 
 Director''s Responsibility Statement
 
 Pursuant to Sub-section (2AA) of Section 217 of the Companies
 (Amendment) Act 2001, the Directors confirm, to the best of their
 knowledge, that:
 
 i) In preparation of the annual accounts, the applicable accounting
 standards have been followed and proper explanations have been provided
 for material departures, wherever applicable.  The profit / loss of the
 subsidiaries have been dealt with in the accounts in pursuance of the
 Scheme of Amalgamation as sanctioned by the Honorable Madras High Court
 by its order dated 15th June, 2011.
 
 ii) The Directors have selected such accounting policies and applied
 them consistently, and made judgements and estimates that are
 reasonable and prudent, so as to give a true and fair view of the state
 of affairs of the Company as at 31s'' December, 2010andthe profit of the
 Company for the financial year ended 31st December, 2010.
 
 iii) The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Company''s Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities.
 
 iv) The Directors have prepared the annual accounts on a ''going
 concern'' basis.
 
 Acknowledgments
 
 The Directors with to place on record their deep appreciation of the
 support and guidance recieved from Macmillan-UK and veriagsgruppe Georg
 Von Holizbrinck Germany. The Comapny is dependent for its success on
 the support of its members, its customers and above all its management
 and the Directors with to place on record their deep appreciation of
 this support during the year.
 
                          For and on behalf of the Board of Directors
 
 
                                                    LAWRENCE JENNINGS
                                                             CHAIRMAN
 
 Place: Mumbai 
 Date: 13th July, 2011