The Directors have pleasure in presenting the Thirteenth Annual Report
 together with the Audited Accounts (including consolidated accounts) of
 the Company for the year ended 31st March 2012.
 
 Financial Results
 
                                                           (Rs. In Lakhs)
 
                    Year ended 31 March 2012     Year ended 31 March 2011
                    Standalone   Consolidated   Standalone  Consolidated
 
 Total Income         1777.70       3596.34        2484.33      2708.44
 
 Operating Profit 
 before 
 Depreciation & Tax    293.63       1969.34          13.23      (467.65)
 
 Less: Depreciation     56.43        190.74          83.01       486.14
 
 Profit before Tax     237.20       1778.60         (69.78)     (953.79)
 
 Less: Provision 
 for Tax                    0         42.81              0            0 
 
 Profit after Tax 
 before extraordinary 
 and prior period item 237.20       1735.79         (69.78)     (953.79)
 
 Less: Extraordinary 
 and prior period 
 item                 3036.47       3036.47           1.47         4.15
 
 Profit after tax 
 after extraordinary 
 and prior period 
 item                (2799.27)     (1300.68)        (71.26)     (957.94)
 
 Earnings per
 Share (EPS)
 
 Before 
 extraordinary 
 and prior period 
 item
 
 Basic                  (0.46)        (0.60)         (0.15)       (2.08)
 
 Diluted                (0.46)        (0.60)         (0.15)       (2.08)
 
 After extraordinary 
 and prior period 
 item
 
 Basic                  (6.08)        (2.83)         (0.15)       (2.08)
 
 Diluted                (6.08)        (2.83)         (0.15)       (2.08)
 
 Operations
 
 The consolidated income of the Company was Rs.35.96 Crores and the
 consolidated loss was Rs.13.01 Crores.
 
 MosChip India
 
 MosChip had very matured I/O product line and had been recording about
 M in revenues annually without much growth. The division was sold to
 ASIX Electronics Corporation, a listed company in Taiwan, at a
 consolidated amount of M and the inventory at cost. MosChip''s SOC
 (System On a Chip) line is fairly new and has a potential to increase
 revenues much more than the I/O line but will require additional
 investment for marketing/sales. The Company is leveraging its SOC
 design/development experience to go after Value added services such as
 Custom ASIC development. With the increase in Design Services
 opportunities world wide, MosChip has incorporated an office in
 Singapore to address the regional markets, MosChip decided to add
 another division to branch into Semiconductor Design Services. MosChip
 will focus on the SOC products and the Design Services.
 
 Subsidiaries
 
 MosChip Semiconductor Technology, USA
 
 MosChip Semiconductor Technology, USA (MosChip USA) the wholly owned
 subsidiary has recorded revenue of USD 7.03 million.
 
 MosChip Semiconductor Technology Pte. Ltd., Singapore
 
 MosChip Semiconductor Technology Pte. Ltd., Singapore (MosChip,
 Singapore) the wholly owned subsidiary was incorporated during the
 financial year 2011-12. The Company started generating revenues in the
 financial year 2012-13.
 
 Dividend
 
 The Company has not declared any dividend during the year under review.
 
 Increase in Share Capital
 
 The Company has only one class of shares. The Company has not allotted
 any shares during the year under review. The total paid-up equity share
 capital of the company is Rs.460,355,170 as on 31 March 2012.
 
 Marketing and distribution
 
 The sale of products developed by the Company is handled by MosChip
 USA, through its worldwide marketing and distribution networks. The
 distribution network has enabled a strong presence in China and North
 America. With the focus in marketing and our experience in SOC line,
 Company is looking to do few Joint Ventures with large Corporations
 worldwide to decrease capital outlay but increase revenues by supplying
 the custom silicon to these corporations utilizing the wealth of
 technical expertise that the Company has accrued over the 11 years.
 
 MosChip''s sales and marketing team focuses on end customers in the US &
 Asia Pacific regions as these areas are the most sophisticated to adopt
 new technologies quickly with a large base of companies developing
 complex SOCs. The Company continues to work with distributors, third
 party sales and marketing organizations and also with potential end
 customers to define the appropriate requirements for the products under
 development. These requirements will include technical specifications,
 timing of product availability and price points. The sales and
 marketing channels are initially customer and engineering centric in
 order to facilitate the development of the system-level components with
 the greatest market demand.
 
 Employee Stock Option Plan
 
 During the year under report the company has eight schemes in operation
 as mentioned below, for granting stock options to the employees and
 directors of the company and its wholly owned subsidiary in accordance
 with Securities and Exchange Board of India (Employee Stock Option
 Scheme and Employee Stock Purchase Scheme) Guidelines 1999.
 
 (a) MosChip Stock Option Plan - 2001
 
 (b) MosChip Stock Option Plan - 2002
 
 (c) MosChip Stock Option Plan - 2004
 
 (d) MosChip Stock Option Plan - 2005(MI)
 
 (e) MosChip Stock Option Plan - 2005(WOS)
 
 (f) MosChip Stock Option Plan - 2008
 
 (g) MosChip Stock Option Plan - 2008(ALR)
 
 (h) MosChip Stock Option Plan - 2008(Director) 
 
 Disclosures pursuant to para 12 of the above referred SEBI guidelines
 are set out as Annexure - A, to this report.
 
 Fixed Deposits
 
 The company has not accepted any fixed deposits in terms of Section 58A
 of the Companies Act, 1956 from the public.
 
 Directors
 
 Pursuant to the provisions of Article 133 of the Articles of
 Association of the company, Mr. G. Prasad and Mr. Vivek Bhargava retire
 by rotation in the ensuing Annual General Meeting and being eligible,
 offers themselves for re-appointment.
 
 Mr. G. Venkatesh was appointed as Additional Director of the Company
 effective 21 May 2012 to hold office up to the date of Thirteenth
 Annual General Meeting.
 
 The office of Mr. G. Venkatesh as Additional Director of the Company
 expires at the ensuing Annual General Meeting. The Company has received
 notice from a member along with Rs.500 as deposit, proposing his
 candidature, in accordance with the provisions of Section 257 of the
 Companies Act, 1956.
 
 Mr. A. Ramesh resigned from the Board on 14 October 2011. The Board
 expresses its appreciation of the valuable contribution made by Mr. A.
 Ramesh during the tenure of his directorship.
 
 The Board on the recommendation of Remuneration Committee has
 re-appointed Mr. K. Ramachandra Reddy as Chairman and CEO of the
 Company for a period of 3 years from 01 September 2012 and the
 resolutions for approval of his re-appointment and the terms of
 re-appointment have been included in the notice convening the
 Thirteenth Annual General Meeting of the Company.
 
 The Board on the recommendation of Remuneration Committee has
 re-appointed Mr. C. Dayakar Reddy as managing Director of the Company
 for a period of 3 years from 01 September 2012 and the resolutions for
 approval of his re-appointment and the terms of re-appointment have
 been included in the notice convening the Thirteenth Annual General
 Meeting of the Company.
 
 Pursuant to the provisions of Clause 49 of the Listing Agreement
 entered with BSE, brief particulars of these directors are provided as
 an annexure to Notice convening Annual General Meeting.
 
 Auditors
 
 The Auditors of the company M/s Gokhale & Co., Chartered Accountants,
 who retire at the ensuing Annual General Meeting of the company, are
 eligible for reappointment as Statutory Auditors of the company till
 the next Annual General Meeting. The company has received their
 willingness for re- appointment as auditors of the company and as
 required has furnished a Certificate under Section 224 (1B) of the
 Companies Act, 1956.
 
 Conservation of energy, research and development, technology
 absorption, foreign exchange earnings and outgo
 
 The particulars as prescribed pursuant to Section 217 (1) (e) of the
 Companies Act, 1956, read with the Companies (Disclosure of particulars
 in the report of Board of Directors) Rules, 1988, as amended from time
 to time, are set out as Annexure - B to this report.
 
 Particulars of Employees
 
 There are no employees in terms of the provisions of Section 217(2A) of
 the Companies Act, 1956, read with the Companies (Particulars of
 employees) Rules, 1975.
 
 Management Discussion & Analysis
 
 Pursuant to the provisions of Clause 49 of the Listing Agreement, a
 report on Management Discussion & Analysis is set out as Annexure - C
 to this report.
 
 Directors'' Responsibility statement as per Section 217 (2AA) of the
 Companies Act, 1956
 
 The Board of Directors of MosChip states that:
 
 a) in the preparation of the annual accounts, the applicable accounting
 standards had been followed along with proper explanation relating to
 material departures;
 
 b) they had 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 2011-12 and of the loss of
 the company for that period;
 
 c) they had taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the company and for
 preventing and detecting fraud and other irregularities; and
 
 d) the annual accounts were prepared on the basis of a going concern.
 
 Corporate Governance
 
 Pursuant to the provisions of Clause 49 of the Listing Agreement and
 Section 292A of the Companies Act 1956, a Report on the Corporate
 Governance, which, inter alia, includes the composition and
 constitution of audit committee, is featuring as a part of Annual
 Report. Your company will continue to adhere in letter and spirit to
 the good corporate governance policies.
 
 Acknowledgements
 
 Your Directors thank the company''s bankers, investors and vendors for
 their unstinted support during the year. Your Directors also appreciate
 the contribution made by the employees at all levels, who through their
 hard work, perseverance and competence, are taking the company in the
 right direction.
 
 Your directors also thank the Government of India, particularly the
 Customs and Excise Departments, Software Technology Park - Hyderabad,
 Department of Industrial Policy & Promotion under the Ministry of
 Commerce & Industry, Department of Company Affairs, Reserve Bank of
 India, Department of Telecommunications and all other agencies for
 their support, and wish their continued support in future.
 
                          For and on behalf of the Board of Directors
 
                                                 K. Ramachandra Reddy
 
 25 August 2012                                        Chairman & CEO