NIIT Technologies

The Board of Directors of your company take pleasure in presenting the
 Annual Report of NIIT Technologies Limited for the fnancial year ended
 March 31, 2008.
 
 Financial Results
 
 The highlights of the fnancial results for the fnancial year 2007-08
 are as follows -
 
                                                           (Rs. Mn.)
 Particulars                             FY 2007-08     FY 2006-07
 
 Consolidated Revenues                      9,415           8,859
 Standalone fnancials:
 Income from operations                     4,447           2,972
 Other Income                                 510             121
 Total Income                               4,957           3,093
 Proft before deprecation and taxes         1,722           1,356
 Depreciation                                 230             218
 Provision for tax & (deferred tax)            61              32
 Proft After Tax                            1,431           1,106
 Earning Per Share (Basic) (In Rs.)         24.39           18.99
 
 Review of global operations
 
 Your Company and its subsidiaries (Groups) total revenue grew by 6%
 from Rs.8,859 Mn in the previous year to Rs.9,415 Mn for the year
 2007-08. The proft before taxes for the same period is down from
 Rs.1,516 Mn to Rs.1,509 Mn. The consolidated net proft after taxes for
 the year 2007-08 attributable to equity shareholders after minority
 interest stood at Rs.1,353 Mn.
 
 During the year, your Groups focus on the chosen industry verticals &
 endeavor to improve its performance in businesses in all geographies,
 helped ensure moderate growth rates in revenue & maintain proftability
 despite adverse global macroeconomic conditions. It has also added to
 the robust list of clients including a few large global corporations.
 
 The revenue profle of the Company is well diversifed across the three
 main geographic areas with Europe contributing 50 percent to revenues,
 32 percent from Americas and the balance from Asia and Australia.
 
 Outlook
 
 Your Group continues to pursue its strategy to focus on its offerings
 in three chosen verticals - BFSI, transportation
 
 and retail services. Continuous innovation in newer service offerings,
 strong domain capabilities and inorganic initiatives to expand its
 market access shall be the key to the growth of the Group in the future
 years. In the last couple of years, we have undertaken a number of
 initiatives to turn our business model from a linear IT
 Services-centric one to a non-linear one. We believe these initiatives
 will be the key growth drivers & will also aid in improving
 proftability in the future.
 
 Your Company continues to scale up its infrastructure to support its
 long term strategy for growth, including setting up a SEZ in Greater
 Noida, phase I of which is expected to be operational in the coming
 fscal year.
 
 Inorganic Growth
 
 During the year under review your Company acquired a controlling stake
 in SofTec GmbH, a German based company having a focus on providing IT
 solutions and services worldwide in the airline revenue accounting and
 operations space and having a major market share of about 40 ‘small to
 medium airlines’ within Europe, Africa and Asia. Founded in 1982, by
 Intro Group Softec today is a leader in the airline revenue accounting
 space for ‘small to medium sized airlines’ with a market leadership in
 this segment. This acquisition will strengthen the Company’s domain
 leadership to reinforce its position in the Travel, Transportation and
 Logistics space.
 
 Share Capital
 
 During the year, 38,400 equity shares of the Company of Rs. 10/- each,
 fully paid up, were allotted under the Employee Stock Option Plan 2005
 of the Company on exercise of stock options.
 
 During the year under review your Company also issued 19,559,465 equity
 shares to its members as bonus shares as was approved by the members in
 the Annual General Meeting held on July 25, 2007.
 
 As on March 31, 2008, the issued and paid up share capital of the
 Company was Rs. 586,983,950 (previous year: Rs. 391,005,300) comprising
 of 58,698,395 (previous year: 39,100,530) equity shares of Rs. 10/-
 each fully paid up.
 
 Further, on June 11, 2008, 7,300 equity shares of the Company of Rs.
 10/- each fully paid up were allotted under the Employee Stock Option
 Plan 2005 of the Company on exercise of stock option.
 
 Reserves
 
 The Company has transferred an amount of Rs. 143 Mn to General Reserve
 (Rs. 111 Mn last year) and has transferred an amount of Rs. 18 Mn from
 the Debenture Redemption Reserve (last year Rs. 24 Mn).
 
 Dividend
 
 In view of the confdence in the future, the Board is pleased to
 recommend a dividend of Rs. 6.50 per equity share of Rs.  10/- each
 (previous year Rs. 6.50 per equity share) on the enhanced capital,
 subject to approval of the shareholders at the ensuing Annual General
 Meeting.
 
 Particulars of subsidiaries
 
 During the year under review your Company incorporated a subsidiary in
 Canada.
 
 As on March 31, 2008, your Company had subsidiaries in the United
 States of America, Japan, United Kingdom, Netherlands, Belgium,
 Germany, Switzerland, Austria, India, Singapore, Thailand and
 Australia.
 
 NIIT SmartServe Limited (NSSL) is the BPO arm of the group and enables
 your Company to provide and offer the customers a whole array of ITES
 services. This not only gives the Company an extra advantage in
 positioning itself as an end-to-end IT services company but is also
 vital for composite offerings to the customers
 
 A statement containing brief fnancial details of the subsidiaries is
 included in the Annual Report. As required under the Listing Agreement
 with the stock exchange(s) a consolidated fnancial statement of the
 Company and all its subsidiaries has been prepared and attached hereto.
 The Company has been granted exemption, for the year ended March 31,
 2008 by the Ministry of Company Affairs vide its letter
 No.47/185/2008-CL-III dated April 11, 2008 from attaching the audited
 accounts of the subsidiaries to the annual accounts of your Company. In
 accordance with the terms of the aforesaid exemption letter, a
 statement containing brief fnancial details of the subsidiary companies
 for the year ended March 31, 2008 is included in the Annual Report. The
 annual accounts of the subsidiary companies and related detailed
 information will be made available to any member of the Company or
 subsidiary company upon request and are also available for inspection
 by any member of the Company, during business hours, at the registered
 offce of the Company and that of the subsidiary company concerned.
 
 Corporate Governance and Management Discussion and Analysis Statement
 
 In order to enhance customer satisfaction and stakeholder value, the
 Company continues to benchmark its corporate governance practices with
 the best in the industry, at par with international norms.
 
 The Company has complied with all the mandatory requirements regarding
 corporate governance as stipulated under Clause 49 of the listing
 agreement with the stock exchange(s). For the fnancial year ended March
 31, 2008, the compliance report is included in the Corporate Governance
 Report which forms part of the annual report.  The certifcate issued by
 the statutory auditors of the Company on compliance of the conditions
 of corporate governance stipulated in clause 49 of the listing
 agreement with the stock exchange(s) forms part of the Corporate
 Governance Report.
 
 The Company’s philosophy on Corporate Governance envisages the
 attainment of the highest levels of transparency, accountability and
 equity in all facets of its operations and in all interactions with its
 stakeholders including shareholders, NIITians, lenders and the
 regulatory authorities.
 
 The report on Corporate Governance and Management
 
 Discussion and Analysis statement is included in the annual report.
 
 Delisting of Shares
 
 The Equity shares of your Company are currently listed at Bombay Stock
 Exchnage Ltd., National Stock Exchange of India Ltd, Ahmedabad Stock
 Exchange Ltd., Madras Stock Exchange Ltd., The Delhi Stock Exchange
 Association Ltd. and The Calcutta Stock Exchange Association Ltd.  As
 per the available data, the Company’s equity shares are being mostly
 traded at National Stock Exchange of India Limited and the Bombay Stock
 Exchange Ltd., which have nationwide trading terminals. In view of the
 above and also considering the cost beneft analysis, it is proposed,
 subject to the approval of the shareholders, to delist the Company’s
 share from the following stock exchanges –
 
 1.  Ahmedabad Stock Exchange Ltd.
 
 2.  Madras Stock Exchange Ltd.
 
 3.  The Delhi Stock Exchange Association Ltd.
 
 4.  The Calcutta Stock Exchange Association Ltd.
 
 The proposed delisting shall not in any way affect the interest of the
 investors in respective regions in view of the continued listing at
 National Stock Exchange and the Bombay Stock Exchange. A resolution in
 relation to the above forms part of the notice of the ensuing annual
 general meeting for the approval of the shareholders.
 
 Directors
 
 As per the provisions of the Companies Act, 1956 and Articles 67, 68
 and 69 of the Articles of Association of the Company, Mr. Surendra
 Singh and Mr. Subroto Bhattacharya, directors of the Company, retire by
 rotation at the forthcoming Annual General Meeting and being eligible,
 offer themselves for reappointment.
 
 Directors responsibility statement
 
 As required under Section 217 (2AA) of the Companies Act, 1956, your
 Board of Directors of the Company hereby states and confrms -
 
 a) That in preparation of Annual Accounts for the fnancial year,
 applicable Accounting Standards have been followed along with the
 proper explanations relating to material departures;
 
 b) That they have selected the accounting policies described in the
 notes to accounts, which have been consistently applied, except where
 otherwise stated 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 as at March 31, 2008 and of the proft or loss of the
 Company for that year;
 
 c) That they have taken proper and suffcient 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) That the Annual Accounts have been prepared on the historical cost
 convention, as a going concern basis and on accrual basis.
 
 Information relating to Conservation of Energy, Technology Absorption,
 Research and Development and Exports and Foreign Exchange Earnings and
 Outgo and other information forming part of the Directors’ Report in
 terms of Section 217(1)(e) of the Companies Act, 1956, and Rules made
 there-under.
 
 - Conservation of energy
 
 The operations of the Company involve low energy consumption. However,
 adequate measures, wherever possible, have been initiated to conserve
 energy. The Company is continuously evaluating new technologies and
 invests in them to make its infrastructure more energy effcient.
 
 - Technology absorption
 
 In today’s world, perpetually evolving technologies and increasing
 competition defne the global market space. In order to maintain its
 position of leadership, the Company has continuously and successfully
 developed innovative methods for absorbing, adapting and effectively
 deploying new technologies.
 
 - Research & Development
 
 During the year, the Company continued its research in software
 engineering. These efforts have resulted in innovative products in
 software engineering to support both maintenance and development
 projects. Expenditure on research and development is not signifcant in
 relation to the nature and size of operations of the Company.
 
 - Export and Foreign Exchange Earnings and Outgo
 
 The details of foreign exchange earnings and outgo are mentioned in
 Note Nos.11 to 13 contained in the Notes to Accounts (Schedule No.18)
 forming part of the Balance Sheet as at March 31, 2008 and Proft and
 Loss Account for the year ended on that date.
 
 Public Deposits
 
 The Company has not accepted any fxed deposits and as such, no amount
 of principal or interest was outstanding on the date of the Balance
 Sheet.
 
 Human resources Initiatives and Employee Stock Option Scheme
 
 The human resource functions and initiatives of the Company are driven
 by a strong set of values and policies. In the year under review many
 of the key HR initiatives taken focused on the critical issue of
 meeting career aspiration of staff members. Policies enabling job
 rotation and processes to facilitate career growth were instrumental in
 ensuring better productivity and retention. This also resulted in
 improvement in the overall employee satisfaction scores as compared to
 the previous year. There was a quantum decrease in the attrition rate
 and the average days of training per staff member was increased in the
 year under review.
 
 Your Company has maintained a competitive, healthy and harmonious work
 environment at all levels. Your Company has taken new initiatives to
 strengthen the Company’s recruitment process, values and vision
 programmes, leadership and performance management.
 
 In view of your Companys continuous endeavour to provide learning and
 development to its staff members your Company added behavioral,
 Technical & Management courses to its existing bouquet of online
 courses. Your Company also institutionalized new modes of training like
 Synchronous learning through NIIT Imperia, mentoring programs and tie
 ups with leading management institutes and technology providers
 
 Your Company was felicitated at the Employer Branding Awards for
 Excellence in HR through Technology and for Innovation in Career
 Development by the Asia Pacifc HRM Congress.
 
 The statement of employees pursuant to Section 217(2A) of the Companies
 Act, 1956, read with Companies (Particulars of Employees) Rules, 1975
 is appended as Annexure A hereto and forms an integral part of this
 report.
 
 Details of options granted under ESOP 2005 are annexed to this Report
 in accordance with SEBI (Employee Stock Option Scheme & Employee Stock
 Purchase Scheme) Guidelines, 1999 and any modifcations thereto as
 Annexure B.
 
 Auditors
 
 M/s. Price Waterhouse, Chartered Accountants, the Auditors of the
 Company, retire at the conclusion of the ensuing Annual General Meeting
 and being eligible, offer themselves for re-appointment.
 
 Auditors Report
 
 The Report of the Auditors’ on the Annual Accounts of your Company
 forms part of the Annual Report and is self explanatory.
 
 Acknowledgement
 
 Your Directors take this opportunity to thank all investors, business
 partners, clients, technology partners, vendors, fnancial
 institutions/banks, regulatory and government authorities, media and
 Stock Exchanges for their continued support during the year. Your
 Directors place on record their appreciation of the contribution made
 by NIITians at all levels for their commendable teamwork, dedicated and
 wholehearted efforts, without which your Company’s consistent growth
 would not have been possible.
 
                                      For and on behalf of the Board
 
 Place : New Delhi                             Rajendra S Pawar
 Dated : June 18, 2008                            Chairman