Macmillan India

Approval under Section 212 (8) of the Companies Act, 1956 was received
 from the Ministry of Company Affairs exempting publication of the
 accounts of the subsidiary companies and therefore the accounts of MPS
 Technologies Limited, Charon Tec Limited, ICC India Private Limited,
 ICC-Macmillan USA, Macmillan ICC Publishing Solutions Private Limited
 and Frank Brothers and Company (Publishers) Limited are not attached.
 However, pursuant to Clause 41 of listing agreement and as prescribed
 by Accounting Standard 2 1 issued by the Institute of Chartered
 Accountants of India, the audited consolidated financial statement
 incorporating accounts of the subsidiary companies are attached.
 However, the Company will make available the Annual Accounts of the
 subsidiary companies and the related detailed information to the
 holding and subsidiary company investors seeking such information at
 any point of time. The annual accounts of the subsidiary companies will
 also be available for inspection by any investor in its Registered
 Office and in the offices of the concerned subsidiary company.
 
 Awards and Recognition
 
 The Company won the Top Export Award for 2006-07 from CAPEXIL for the
 highest exports in its category of products for the twenty-fifth year
 in succession.  The Federation of Indian Publishers awarded the Company
 the following prizes for excellence in publishing:
 
 - Kothakoli Book 1 : First Prize in Text Books - Schools (Regional
 Languages) category
 
 - Indian Feudalism (2/e): Second Prize in Text Books - Colleges
 (English) category
 
 - Business & Management Catalogue 2007: Certificate of Merit in the
 Price Lists, Catalogues & Brochures (English) category.
 
 - The book Supply Chain-Modelling and Solutions was awarded the
 consolation prize by Indian Society of Training & Development for the
 year 2005-2006.
 
 ScholarlyStats software product developed by the subsidiary MPS
 Technologies Limited which provides usage statistics to libraries, has
 won the Library Product of the year at the 2006 International
 Information Industry Awards, in 2007.
 
 The processes of ebusiness were assessed at CMMI level 3 by KPMG and
 were also certified for ISO 9001:2000 by DNV. The unit also became a
 Gold partner of Microsoft.
 
 Overall Company Aims
 
 The Companys current strategy remains unchanged:
 
 (a) To provide the highest quality educational materials and to
 maintain and grow undisputed leadership in school publishing. Also to
 be a frontrunner in innovation and digital content initiatives.
 
 (b) To increase the size, scope and technological advantage of its
 business as a global, high value added, IT-enabled service provider for
 publishers. Our intention is to be a leader in this area, and to play a
 major part in the harnessing of Indias skills, abilities and cost-
 advantages and to contribute to Indias domination of IT-enabled
 services in the coming years.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Out-go
 
 The provisions regarding disclosure of particulars in Form A with
 respect to Conservation of Energy is not applicable to the printing and
 publishing 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. 8,684 lacs as against Rs 9,841 lacs for the year ended 31st
 December 2006. The outgo of foreign exchange was Rs. 1,841 lacs as
 against the previous year outgo of Rs.2, 365 lacs. Thus the net foreign
 exchange earned by the Company was Rs. 6,843 lacs. The details of
 earnings and outgo are given in the Notes forming part of the Accounts
 for the year ended 31st December, 2007.
 
 Directors
 
 Under Articles 139 to 142 of the Articles of Association of the Company
 Mr. D.E Udwadia and Mr. R. R. Chari retire by rotation and being
 eligible, offer themselves for re- appointment. Mr. Michael Barnard who
 was earlier a director of the Company from November 29, 1 994 to
 October 13, 2006 and Mr. Hanson Farries were appointed as Additional
 Directors with effect from 24th October 2007, and Ms. Annette Thomas
 with effect from April 21, 2008 pursuant to Section 260 of the
 Companies Act, 1956 read with Article 125 of the Articles of
 Association of the Company, and hold office upto the date of the
 forthcoming Annual General Meeting of the Members of the Company. The
 Company has received notices from Members under Section 257 of the
 Companies Act, 1956 proposing the appointments of Mr.  Michael
 Barnard, Mr. Hanson Farries and Ms. Annette Thomas as Directors of the
 Company at the forthcoming Annual General Meeting.
 
 Mr. Richard Charkin resigned from the Board of Directors from 27th
 September 2007 consequent to his resignation from the services of
 Macmillan Ltd, UK. The Board placed on record its deep appreciation of
 the valuable services of Mr. Richard Charkin as a director for 10 years
 of which he was the Chairman for 3 years and the huge contribution made
 by him for the success and growth of the Company. The Board appointed
 Mr. Steven Inchcoombe as Chairman of the Board.
 
 Mr. Andrew May Miller resigned from the Board of Directors with effect
 from 24th October 2007. The Board placed on record its deep
 appreciation of the valuable services of Mr. Andrew May Miller as a
 director from 28th January 2006.
 
 Mr. Debasish Banerjee retired from the Board of Directors with effect
 from 31st October 2007 consequent to his superannuation. The Board
 placed on record its deep appreciation of the valuable services of Mr.
 Debasish Banerjee as a director from 1 st February 2001.
 
 Auditors
 
 M/s Fraser & Ross, Chartered Accountants, Chennai retiring Auditors
 have informed the Board that owing to administrative reasons they do
 not propose to offer themselves as Statutory Auditors of the Company
 for the year 2008.
 
 A Special notice in terms of Section 190 of the Companies Act, 1956 has
 been received from a member proposing the appointment of M/s Deloitte
 Haskins & Sells, Chennai as Auditors in place of M/s Fraser & Ross.
 
 M/s Deloitte Haskins & Sells, Chennai have expressed consent for their
 appointment as Statutory Auditors of the Company for the Financial Year
 2008 and have confirmed, the appointment if made, will be in accordance
 with the limits specified under Section 224(IB) of the Companies Act,
 1956.
 
 Particulars of Employees
 
 Information as per sub-section (2A) of Section 21 7 of the Companies
 Act, 1956 read with the Companies (Particulars of Employees) Rules 1
 975 forming part of the Directors Report for the year ended 31 st
 December 2007 is annexed to this Report.
 
 Employee Stock Option Scheme
 
 The Members at the Annual General Meeting on 30th June 2005 approved
 formulation of the Employee Stock Option Scheme forthe eligible
 employees including Directors of your Company and its subsidiaries. No
 stock option was granted until the year ended 31st December 2007.
 
 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 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..macmjllanindia.com_.
 
 Directors Responsibility Statement
 
 Pursuant to sub-section (2AA) of Section 21 7 of the Com- panies
 (Amendment) Act 2001, the Directors confirm 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.  (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 31 st December,
 2007 and the profit of the Company for the financial year ended 31 st
 December, 2007.
 
 (iii) The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companys Act, 1 956 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.
 
 Acknowledgements
 
 The Directors wish to place on record their deep appreciation of the
 support and guidance received from Macmillan, UK and Verlagsgruppe
 Georg Von Holtzbrinck, Germany. The Company is dependent for its
 success on the support of its Members, its authors, its customers and
 above all its management and staff, and the Directors wish to place on
 record their appreciation of this support during the year.
 
                          For and on behalf of the Board
 
 Mumbai,                  STEVEN INCHCOOMBE
 21st April 2008          CHAIRMAN