Dear Members
 
 I am very pleased to welcome you to the sixteenth Annual General
 Meeting of your company.
 
 We have had a very successful year. The consolidated revenue for the
 year ended 31 March 2011 stands at Rs 1,916 crores, an increase of 95%
 over the prior year. EBITDA stands at Rs 298 crores, an improvement of
 66% over the previous year.Net Profit after tax has reached Rs 145
 crores — growth ot 42% over the previous 12 months.
 
 We have a suite of 35 solutions that have been built up over the years
 from inception of the company. We see increasingly more traction
 created by this part of our business which has contributed Rs 674
 crores, 35.2% of the total revenue for the year ended March 201 l.To
 make this rate of progress possible, we have been continuously
 investing substantially in R&D efforts. So today, we stand as one of
 the few products and solutions- based companies that have presence in
 many verticals and the core of these products and solutions emanate
 from our business knowledge, not just the technology knowledge.
 
 Our Products & Solutions business is steaming ahead and armed with
 ever-expanding competencies, it is able to navigate a course for Zylog
 that defines our differentiated pitch in the market place for IT
 products, solutions and services.This segment is now at a mature stage
 of development of products & solutions and delivering superior profit
 margins in contrast to rudimentary IT services. Therefore, our business
 model has always taken cognizance of this fact and effectively tried to
 marry the two wings of our business, i.e.  products & solutions and IT
 services in a mutually complementary fashion. One of the enablers of
 our products & solutions business in its development and reach is our
 existing client relationships. We have already commenced doing business
 in newer regions such as Saudi Arabia, Trinidad & Tobago, South Africa
 and Australia and this was made possible by arranging tie- ups with
 companies with a local presence.
 
 When we enter newer areas of the world or lines of business, it
 transpires to us of many opportunities to bring our tremendous
 experience and brand to bear.  This applies equally, be it a particular
 niche space hitherto uncovered in our portfolio or a different
 geographical region with its own unique norms of work culture, ethos
 etc. In such cases, ours has always been a methodology with its core
 values defined by partnerships and partnering arrangements. Few of our
 acquisitions in recent years underwent such working arrangements prior
 to coming on our books as fully- fledged subsidiaries. This methodology
 has been extremely effective in helping us to decide whether these
 businesses can fit in with Zylog''s philosophy and work culture. A
 certain degree of conservatism in the modus operandi coupled with very
 aggressive intent to fully exploit the latest cutting edge
 technological tools, strategic fit of offerings and unique access to
 markets, is the route chosen by your company in all its endeavors.
 
 One of the reasons for the buoyancy in our growth as illustrated in the
 above numbers is due to acquisitions made by your company in the
 previous year. It has been the first complete year following the
 acquisition of Brainhunter Inc, Canada. This company is now fully
 recognized under the brand ot Zylog Systems (Canada) Limited. We have
 engineered and put into place a complete turnaround in the operations
 and sound financial housekeeping. Zylog Canada has made EBITDA and PAT
 of CAD 4.2 Mn and CAD 524,000 respectively for FY 2011, compared to
 losses for 5 consecutive years prior to Zylog''s takeover. We approached
 the first year as one of consolidation and the plan is to take
 appropriate steps to cross sell our products & solutions services in
 due course and gradually build up the profitability of the business. A
 local company, Mindwire Inc. was acquired during the year for CAD 1.25
 Mn which would greatly help with access to doing business with
 Government Departments which account for 30% of revenue.
 
 There has been tremendous growth in offshore part of our business. We
 have carried out major recruitment of staff resources this year. Over
 80% of employee additions during the year have been in offshore — be it
 Chennai, Bangalore or Hyderabad. We have contracted to take on 27,000
 sq. ft. of additional office space in a SEZ location in Siruseri,
 Chennai. This underpins our core belief that offshore optimization
 remains the key to many of our long term objectives and overall
 profitability of the company but it has to be done in a structured
 manner.  High onsite presence, in proportional terms, is essential and
 will continue as it remains the central plank of your company''s vision.
 
 OurWi5 business in India is surging ahead in line with expectations. We
 are now present in 170 towns across the states of Tamil Nadu, Andhra
 Pradesh, Karnataka, Gujarat, Punjab and Goa with a clientele numbering
 30,000 subscribers. This includes retail customers, corporate
 customers, hotels, as well as universities and colleges where our
 broadband devices have met with huge appetite. As described above, we
 are focusing on several revenue streams within the broadband space,
 though concentration is most acute on the retail population and
 especially in rural and semi-urban areas of the country. This was the
 result of our strategic business model of going into secondary towns,
 where the ARPU (average revenue per user) is much higher and the towns
 represent a much better entry point in terms of profitability and
 optimization of hardware investment.Very shortly, it will be offering a
 bouquet of added value services like for example, Antivirus software,
 Web builder services etc. We are on course to achieve 100,000
 subscribers by the end of current financial year, as Wi5 is committed
 to expand its retail operations to 3 more states by then.
 
 In E-Governance, Zylog has a strong global and Indian presence in the
 fields of Home affairs and Police, Immigration, Healthcare, tourism and
 Road Transport sector. In the Indian Sphere, Zylog takes pride in its
 implementation strength.
 
 In India, Zylog has successfully implemented complete system
 integrating 55 RTOs in Karnataka and till date have issued around 2
 million smart card based driving licences and Registration Certificates
 in a period of one year. In Gujarat, through our Subsidiary we have
 integrated 28 RTOs and have been issuing smart card based driving
 licences. We have implemented RSBY Project (Rashtriya Swasthya
 BimaYojna) in the States of Kerala, Karnataka, UP and Haryana.
 
 We have also signed an MOU with the Gujarat Urban Development
 Corporation during the Vibrant Gujarat programme for implementing a
 project to provide necessary infrastructure to create an accounting
 database in and integrate all the urban bodies that state.
 
 Overall, as can be clearly seen from the above synopsis, your company
 is on a mission to go from strength to strength. Our focus, drive and
 determination backed up by resourcefulness are legendary. We have every
 reason to believe FY 2012 will be hugely successful and lay the path
 for sustained prosperity to all the stakeholders of the company in the
 coming years.
 
 Warm Regards
 
 Sudarshan Venkatraman
 
 Chairman and Chief Executive Officer