Financial Technologies (India) Ltd

To,

The Members,

Your Directors present the Twenty Second Annual Report of your Company together withthe Audited Statement of Accounts for the year ended 31st March, 2010.

FINANCIAL PERFORMANCE

(Rs. in Millions except per share data)

Consolidated Financials

On a consolidation basis, for the year ended 31st March, 2010, your Company hasreported a total income of Rs.6,535.37 million and net profit available after MinorityInterest of Rs.1,401.10 million.

Standalone Financials

On a stand-alone basis, your Company has reported a total income of Rs. 6,481.78million and net profit of Rs. 3,443.66 million.

• Technology Business:

Your Company is one of the leading providers of end-to-end straight through processing("STP") technology solutions. Your Company offers packaged STP products, whichprovide transaction automation solutions for all stages of the trade life cycle forequity, foreign exchange, commodity markets, and derivative markets for clients in Indiaand the Middle East.

Your Company provides exchange solutions, brokerage solutions including front officeand back-office solutions, and messaging solutions that provide online interface betweenthe market constituents. The current clients for technology business primarily include theexchanges and related constituents including brokers, fund houses and custodians.

• Exchange Business:

Your Company is involved in the incubation of exchanges in under-penetrated assetclasses and markets, such as South East Asia, Middle East, Africa and India, and has builta network of exchanges in diversified asset classes such as equities, fixed income,currency, etc.

The exchange network of your Company provides transaction opportunities that aretransparent and regulated, providing mark-to-market valuation, clearing house guarantees,fungibility of deliveries and liquidity. It will provide the opportunity for hedging,cross-listing, margin credits, carry-forward positions across exchanges, and will createliquidity across the exchange network based on regulatory framework.

• Ecosystem Ventures Business:

Your Company's ecosystem ventures create upstream and downstream solutions to supportits exchanges, including those related to clearing, depository operations, warehousinginfrastructure, information vending, and payment gateways.

Your Company is one of the leading providers of end-to-end STP technology solutions forexchanges and related constituents. In fiscal 2010, your company implemented DOME and CnSat the Singapore Mercantile Exchange Pte. Limited, Bahrain Financial Exchange Limited andGlobal Board of Trade Limited. The ninth version of DOME was also released in fiscal 2010with additional modules for improved performance and functionality of the trading systemsoftware.

Your Company believes that the ODINTM 64-bit version has delivered an increase inperformance, scalability and compatibility of our flagship product and it was extended toprovide support to the currency derivatives segment.

While the revamped flagship products continue to drive growth, your Company expect Itsnew products such as ODINTM Greek Neutralizer, ODINTM ATS, Advanced Charting, ODINTM Xplaza, FTNET and DMA LIVE to contribute to growth in the future. Other product offeringsinclude CnS, STP-Gate , FX-Direct , Net.net , iWin , MATCHTM, e-Hastakshar andProtector .

Your Company constantly pursues opportunities to enhance its existing product portfolioto be able to deliver value-added solutions appropriate to the changing businessenvironment. For example, in fiscal 2010, your Company developed new products and launchednew version as outlined below:

• Technical Alerts - An advanced functionality in ODINTM TWS and ODINTM Dietapplications that provides customized alerts on regular as well as advanced collection ofTechnical indicators to support the trading decision process.

• Net.net on Low Bandwidth - A unique trading platform that allows users to tradeon low bandwidth internet connections like data cards, GPRS Connections etc. at fasterspeed.

• Two Factor Authentication support of IBT Products.

• ODINTM - Support for NSEL (Spot) and NMCE Exchanges in ODINTM Suite of Solution.

• ODINTM ATLAS - A special trading application with following functionalities

- EzJobber - A unique functionality that allows Jobbers to effectively and efficientlyexecute orders at lightening speed in various market segments.

- EzTrader - A functionally that allows traders to program their execution to capture afavorable price movement in underlying stocks / contracts effectively based on theprogression parameters defined by the user.

• ODINTM ATS - An automated trading application with "EzTracker"functionality that allows users to create and reverse positions in the selected underlyingstock / contract automatically based on the parameters set.

• Match - Support for NSE’s Interest Rate Futures (IRF) segment in MatchSuite of solution.

• STP-Gate - This year we have launched new Version / optimized version ofSTP-Gate for handling of Volumes along with speed and upgraded Hardware / Software at ourbackend.

• Enhanced version of STP-Gate product suite for superior connectivity,operational efficiency and complete automation.

• ESG - Enterprise Solutions Group has the following verticals; TechnologyConsulting, Process Consulting, Quality Assurance Services and Facility Management. Wehave started a new service which offers our clients Co-location along with FMS.

For this service, called EQS (Enterprise Quality Services), we have tied up withNetmagic to provide the datacenter facilities. A dedicated team of engineers sits out ofthe Netmagic office in Vikhroli to support our clients who have availed this service.Within seven months of incorporation of this service, we have three clients viz. Bonanza,R. K. Global and Celebrus Capital

• DOME - During fiscal 2009-10, our flagship product suite for exchange solutions,DOME (Distributed Order Matching Engine) and clearing and settlement solution - CnS,released its new versions with enhanced performance and functionalities. The upgraded DOMEapplication was deployed at MCX and was also installed at MCX-SX and NSEL. As part ofexchange suite, new solutions like FIX Engine, Exchange Direct and eXchange weresuccessfully launched at various exchanges.

- During the fiscal 2009-10, FTIL joined the STAC Benchmark Council to help defineindustry-standard performance metrics for trading technology solutions. The STAC BenchmarkCouncil is a global industry body consisting of leading trading organizations and vendors,facilitated by the Securities Technology Analysis Center (STACR). The Council developsstandard benchmarks for technology used in the capital markets. End-user firms such asbrokers, hedge funds, exchanges, and alternative trading systems control the STACBenchmarks through their votes, keeping the benchmarks tied to real business needs.

Your Company’s experience, knowledge and domain understanding of technology, thefinancial services industry and exchanges along with its relationships with various marketconstituents provides a strong platform for incubation of exchanges. These exchanges havefacilitated better price discovery, risk management and structured finance.

The key components of your Company’s exchanges business are companies promoted byit, its subsidiaries, associates and joint venture companies, including; Multi CommodityExchange of India Limited ("MCX"), Dubai Gold & Commodities Exchange("DGCX"), IBS Forex Limited ("IBS Forex"), National Spot ExchangeLimited ("NSEL"), Indian Energy Exchange Limited ("IEX"), MCX StockExchange Limited ("MCX-SX"), Singapore Mercantile Exchange Pte. Limited("SMX"), Global Board of Trade Limited ("GBOT"), Bahrain FinancialExchange B.S.C. Closed ("BFX") and Bourse Africa Limited ("BourseAfrica").

DIVIDEND

During the year under review, your Company paid three interim dividends totaling to Rs.275.72 million (Rs. 6 per share on par value of Rs. 2/- per share). The Directorsrecommended a final dividend of Rs. 2/- per share i.e. 100% on par value of Rs. 2/-,subject to the approval of the shareholders at the ensuing Annual General Meeting. Thetotal dividend- including interim and final-aggregated to Rs. 8/- per share i.e. 400% onpar value of Rs. 2/- each for the financial year ended 31st March, 2010, (previous yearRs. 10/- per share on par value of Rs. 2/- each i.e. 500%). The total appropriation onaccount of interim and final dividend and tax thereon amounts to Rs. 430.37 million.

The final dividend, if approved, will be paid to those members whose names appear inthe Register of Members as on the date of the Annual General Meeting.

The break up of the dividend payouts are as under:

(Rs. in Million except dividend per share data)

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 350 million to General Reserve out of the amountavailable for appropriations and an amount of Rs. 13,759.28 million is proposed to beretained in Profit and Loss Account.

a) Equity

As on 31st March, 2010, the paid-up Share Capital of your Company was at Rs. 92.16million comprising of 46,078,537 equity shares of Rs. 2/- each. During the year underreview, the Company made allotment of 194,900 equity shares of Rs. 2/- each, consequentupon exercise of stock options issued under the Employees Stock Option Plan-2005.

b) Zero Coupon Foreign Currency Convertible Bonds (ZCCBs)

As on 31st March, 2010, 90,500 ZCCBs having face value of US$ 1000 each areoutstanding. During the previous financial year 2008-09, your Company had repurchased9,500 Zero coupon FCCBs of the face value of US$ 1000 each at a discount of an average37.56% on book value and repurchased 9,500 ZCCBs were cancelled.

INVESTMENT

During the year, your Company’s Investment stood at Rs. 20,019.48 million, ascompared to Rs. 14,444.65 million in the previous year. The total investment comprised ofinvestment in mutual funds, subsidiaries, joint venture and associate companies.

INFRASTRUCTURE

Your Company is consolidating its facilities to increase productivity and rationalizecost. The state-of-the-art development center, admeasuring around 120,000 square feet,situated at Andheri (East) Mumbai, will be operational by fiscal 2011 and will accommodateapprox 1400 seats.

HUMAN RESOURCE DEVELOPMENT

As a technology sector company, your Company’s technology business is prone tohigh employee attrition. Your Company constantly aims to devise strategies to attract thebest talent available in the market and to ensure their retention by building trust andinstilling loyalty in them. Constant review and redesigning of human resource processes,including compensation structures, are therefore a continuous process. Annual payrevisions and other benefits are designed in such a way as to compensate for goodperformance of employees of your Company. In addition to a base salary, which is based onthe industry standards; your Company provides a number of benefits to its employees, suchas employee stock options, awards and training etc. As of 31st March, 2010, the totalemployee strength (excluding group Company) was at 1,137.

AWARDS / RECOGNITION

Your Company received the following awards and recognition during the year:

• Financial Technologies was ranked No.1 in terms of 10-year profit growth byBusiness Today’s ranking of India’s 500 Most Valuable Companies in 2009

• Financial Technologies Group won the 4th Employee Branding Award for Innovationin Retention Strategy-Global HR Excellence Award in March 2010.

• Marcomm Awards, USA - Market Communications team at Financial

Technologies won Platinum award for its commendable contribution to financial marketsthrough its campaign "Future of Financial Markets" (FOFM) and Gold award for itsonline community "FT Community" in January 2010.

Group Companies received the following awards and recognitions during the year:

• MCX was awarded the NASSCOM Social Innovation Honours: for Gramin SuvidhaKendra, a CSO initiative with India Post, for exemplary use of IT in areas of socialtransformation, social change and development in February 2010.

• Indian Energy Exchange (IEX) won the "Best E-enabled customerplatform"at the India Power Awards on 17th November,2009inNew Delhi.

• Best Commodity Exchange Award: MCX was honored as the "Best CommodityExchange for the Year 2009" in the 6th India International Gold Convention 2009(IIGC) held at Goa in September 2009.

SUBSIDIARIES

During the year your Company incorporated / set up / de-registered the followingsubsidiary / stepdown subsidiary Companies namely:

I) Financial Technologies Singapore Pte Ltd. (FTSPL)

FTSPL was incorporated on 15th April, 2009, as a wholly owned subsidiary of yourCompany. Financial Technologies Singapore Pte Ltd. was mainly incorporated as an approvedInvestment Holding Company of Singapore Mercantile Exchange Pte Limited for complying withlocal Regulatory requirements .viz., Monetory Authority of Singapore (MAS).

II) BFX Clearing and Development Corporation (BCDC)

A step-down subsidiary viz., BCDC was incorporated on 29th March, 2010. Being the firstfinancial year of BCDC which will end on 31st March, 2011, the financial statements ofBCDC are not attached.

III) Financial Technologies Middle East, FZ LLC (FTME FZ LLC)

Your Company’s Step-down subsidiary viz.,FTME FZ LLC, Dubai, was de- registeredwith effect from 28th February, 2009 as per the De-registration certificate dated 25thNovember, 2009, issued by Dubai Technology and Media Free Zone Authority.

The Company has been granted exemption for the year ended 31st March, 2010, by theMinistry of Corporate Affairs from attaching to its Balance Sheet, the individual AnnualReports of its subsidiary companies. In terms of the approval, Balance Sheet, Profit andLoss Account, Report of the Board of Directors and Auditors of the Subsidiaries have notbeen attached with the Annual Report of the Company.

These documents will be made available upon request by any member of the Companyinterested in obtaining the same. However, as directed by the Central Government, thefinancial data of the subsidiaries has been furnished under 'Statement RegardingSubsidiary Companies', which forms part of the Annual Report. Further, pursuant toAccounting Standard AS-21 issued by the Institute of Chartered Accountants of India,Consolidated Financial Statements presented by the Company includes financial informationof its subsidiaries.

The statement pursuant to Section 212 of the Companies Act, 1956, containing details ofsubsidiaries of the Company, forms part of the Annual Report.

RELATED PARTY TRANSACTIONS

As a matter of strategy to promote and invest in new venture in domain area and as amatter of policy, your Company carries out transactions with related parties on armslength basis. Statement of these transactions given in the Notes to Accounts attached incompliance of Accounting Standard No. AS-18.

EMPLOYEES STOCK OPTION PLAN (ESOP)

The ESOP Scheme 2005 was formulated and implemented according to the SEBI guidelines,and are in accordance with the provisions of the Securities and Exchange Board of India(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 asamended. The issuance of equity shares pursuant thereto will be subject to compliance withall applicable laws and regulations.

The total numbers of options in force and outstanding under ESOP 2005 at the end of theyear are 12,525.

Requisite disclosure in respect of the Employee Stock Option Scheme in terms ofGuidelines of the Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Share Purchase Scheme) Guidelines 1999 has been provided in Annexure"B" in this Report.

QUALITY

Your Company has a comprehensive "Quality Framework" that addresses theentire software engineering life cycle and operational processes.

With respect to software development, your Company’s quality framework is designedto support projects of different sizes and complexities. This framework, which yourCompany refer to as "FTQM" (Financial Technologies Quality Management) isaligned to the business objectives of the organization.

FTQM (Financial Technologies Quality Management) consolidates decades of softwaredevelopment and operational experience in delivering and supporting products and projects.Your Company’s mature Quality

Management Framework effectively reduces risks and unpredictability across theoperations of the organization.

Reinforcing its commitment towards high levels of quality, best-in-class servicemanagement processes, and robust information security practices, your Company has attaineda number of milestones during the year. Your Company was recommended for the latest andupgraded version of the ISO 9001 standard:- ISO 9001:2008 certification.

Further, your Company was also recommended for continuation of the ISO/IEC 27001:2005(Security Management) certification, thus ensuring that information security standards areadopted and adhered to.

The above certifications are a testimony to your Company’s commitment to achievethe highest standards of quality.

The basis of these certifications is the in-house developed comprehensive QualityManagement System (FTQM) - a vibrant, process-driven, and people-oriented QualityManagement System, which is focused on continual improvements, in an environment of rapidgrowth.

RISK MANAGEMENT

A Risk Management Committee (RMC) has been constituted to assist the Board inoverseeing the responsibilities with regard to identification, assessment, control /mitigation and escalation / monitoring of risks. The RMC is mandated to review, upgradeand penetrate the process to address and minimize the operational and other risksassociated with the Company, its group entities and business units on continuous basis.

INSURANCE

Your Company’s land and building, equipments, automobiles, stores and spares etc.are adequately insured against major risks. Your Company also has appropriate insurancecover primarily for error & omission, commercial general liability and directors &officers liability apart from life, mediclaim and accident insurance for all employees.

INTERNAL AUDIT AND CONTROLS

During the year, your Company continued to implement the recommendations of InternalAuditors to improve internal controls.

The findings of the Internal Auditors are discussed with the process owners, andsuitable corrective actions are taken as per the directions of the Audit Committee on anon-going basis to improve operational efficiencies.

OUTLOOK

Your Company is focused on developing intellectual property rights catering tofinancial markets and trading industry. Globalization, deregulation, advances intechnology, innovation in products, and increasingly sophisticated market participantsoffer significant opportunities for expanding our Company’s markets and are expectedto remain key determinants for sustainable growth.

Technology infrastructure has emerged as one of the key determinants of efficiency intransaction processing within exchange markets.

Your Company intends to continue to expand its customer base by introducing newproducts and new technologies and capabilities.

Your Company's flagship product, ODINTM Suite, has evolved over last 10 years and hasmade transactions between market participants efficient and technologically advanced.

Your Company's philosophy is to transform markets by creating technology enabledexchange trading platforms that offer a transparent pricing mechanism to mitigatecounterparty risks associated with nontransparent products traded off-exchange.

By working closely with various domestic and international associations and exchanges,your Company intends to introduce global products customized to the local needs ofindividual markets.

Your Company believes that through technology, its exchanges will achieve cost and timeefficiency for various settlements and other day to day operations in the exchanges. YourCompany believes that there is a growth potential for its ecosystems applications inIndia, Africa and other emerging economies.

Your Company intends to use its ecosystem applications to improve and enhance theexchange business. Your Company also intends to leverage its relationships with itsinstitutional participants to expand its customer base, and use its ecosystem applicationsto facilitate access to exchanges, information and payment modes in underpenetrated ruralareas.

CORPORATE GOVERNANCE

Your Company is committed to good Corporate Governance practices. The report onCorporate Governance, stipulated by Clause 49 of the Listing Agreement, is annexed hereto,and forms a part of this Annual Report.

A Certificate from the Auditors of the Company regarding compliance with CorporateGovernance norms as stipulated in Clause 49 of the Listing Agreement is annexed to thereport on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Management Discussion and Analysis Statement is attached separately with this Report.

CORPORATE SOCIAL OPPORTUNITY

Corporate Social Opportunities (CSO) is at the core of your Company’s vision andmission. We make markets accessible to the masses and help bring about a more equitabledistribution of wealth in the emerging economies of the world. In addition to the CSRingrained in our business model, we have target-specific CSR activities. These includeactivities like:

• Environment

In 2009, your Company tied up with two e-waste recyclers i.e. Ecoreco & Attero forthe safe disposal of electronic items. An internal e-waste disposal system was put inplace to achieve the same. In the year 2009, seven of our group companies have disposedoff e-waste through Ecoreco. This initiative reaffirms your Company’s commitment toenvironmental protection.

As always, we celebrated the World Environment Day with full vigor and enthusiasm.Along with Attero Recycling, your Company launched the first ever E-waste drive foremployees at Mumbai and other locations and encouraged them to dispose electronic scrapitems. E-waste collected was disposed in a safe and environment friendly manner inAttero's E-waste recycler factory based at Roorkee, Uttrakand. Objective of the drive wasto create employee awareness towards Environment issues.

• Savings Week

In association with Department of Post, Maharashtra, FT Group launched Savings Week(08-12 March 2010) for employees and their families to enable them to develop a habit ofsaving directly through their salaries. The response from employees and the amount ofdeposit per month in the postal savings was overwhelming.

• Mumbai Marathon

Your Company have been regularly participating in the Mumbai Marathon for varioussocial causes. This year, we took up the cause for the Deaf & Deafblind by supportingthe NGO, Helen Keller Institute for Deaf & Deafblind. Marathon runners also visitedHelen Keller Institute and interacted with the beneficiaries.

• Blood Donation Drive

Your Company organizes blood donation drives annually in the office premises inassociation with Rotary Blood Bank, Mumbai. The blood donation drive was carried outacross all locations in India and saw very active participation from employees of theCompany. Special low hemoglobin drive was conducted for employees detected with lowhemoglobin.

• Gramin Suvidha Kendra (GSK)

This initiative focuses on empowering farmers to adopt a market-oriented cropping /selling / warehousing strategy by disseminating information, expert advice and highquality farming. GSK operates across five states, 22 locations, across 2219 villages andhas more than 7000 farmers registered with it.

GSK-related developments in 2009-10

- GSK won the NASSCOM Social Innovation Honors - 2010

- Education vertical was introduced in partnership with Pratham Books.

- Adult literacy through Computer Based Functional Literacy (CBFL) program wasconducted in association with Tata Consultancy Services Limited (TCS)

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company'sArticles of Association, Mr. Ravi K. Sheth and Mr. C. Subramaniam, Directors of theCompany, retire by rotation at the ensuing Annual General Meeting (AGM). Mr. Ravi K.Sheth, being eligible, offers himself for reappointment. Mr. C. Subramaniam will not beseeking re-election and will be resigning from the Board at the conclusion of the ensuingAGM of the Company. Your Directors place on record their appreciation of the valuableadvice and guidance provided by Mr. C. Subramaniam during his long association with theCompany. The

Board of Directors at its meeting held on 11th August, 2010, appointed Mr. P. R.Barpande as additional Director. As per the provisions of Section 260 of the CompaniesAct, 1956, Mr. Barpande holds office upto the date of the forthcoming AGM of the Company.The Company has received notice under Section 257 of the Act, along with requisite depositin respect of Mr. Barpande, proposing his appointment as Director of the Company.

None of the Directors of the Company are disqualified for being appointed as Directoras specified in Section 274 of the Companies Act, 1956, as amended.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors herebyconfirm:

a. that applicable accounting standards have been followed along with the explanationrelating to material departures during the preparation of the annual accounts

b. that they have selected such accounting policies and applied them consistently andthey have made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the Company affairs, and profit or loss of the Company, at the endof the financial year

c. that they have taken proper and sufficient care to maintain adequate accountingrecords in accordance with the provisions of the Companies Act, 1956, for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities

d. that they have prepared the annual accounts on a going concern basis.

AUDITORS

M/s. Deloitte Haskins & Sells - Chartered Accountants, the Statutory Auditors, willhold office until the conclusion of the ensuing Annual General Meeting. The Company hasreceived necessary certificate from the Auditors, pursuant to Section 224 (1B) of theCompanies Act, 1956 regarding their eligibility for re-appointment. The members arerequested to consider appointment of M/s. Deloitte Haskins & Sells as the StatutoryAuditors at the ensuing Annual General Meeting.

i. Fixed Deposits

Your company has not accepted any deposits, and no principal or interest wasoutstanding as on the date of the Balance Sheet.

ii. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975, as amended, the name and otherparticulars of the employees are required to be set out in the Annexure to theDirectors’ Report. However, as per the provisions of Section 219(1)(b)(iv) of thesaid Act, the Annual Report, excluding the aforesaid information is being sent to all theMembers of the Company and others entitled thereto. Members who are interested inobtaining such particulars may write to the Company at its Registered Office.

iii. Conservation of Energy,

Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1)(e) of Section 217 of the CompaniesAct, 1956, read with Companies (Disclosure of particulars in report of the Board ofDirectors) Rules, 1988, are given in Annexure "A" of this Report.

iv. "Group" for Inter-se Transfer of Shares

As required under Clause 3(e) of the Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting“Group” (within the meaning as defined in the Monopolies and Restrictive TradePractices Act, 1969) for the purpose of availing exemption from the provisions ofRegulations 10 to 12 of the aforesaid SEBI Regulations. The list of Group companies /Associates / joint Ventures is enclosed and forms part of this Annual Report.

v. Special Business

As regards the items mentioned in the Notice of the Annual General Meeting related toSpecial Business, the resolutions incorporated in the Notice and the Explanatory Statementrelating thereto, fully indicate the reasons for seeking the approval of members to thoseproposals. Members' attention is drawn to these items and Explanatory Statement annexed tothe Notice.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Central Government, StateGovernment, clients, vendors, financial institutions, bankers and business associates fortheir assistance, co-operation and encouragement they extended to the Company.

For the continuing support and unstinting efforts of Investors, business associates andemployees in ensuring an excellent all round operational performance, your directors alsowish to place on record their sincere thanks and appreciation.

ANNEXURE "A" TO THE DIRECTORS’ REPORT

The Information required under Section 217(1)(e) of the Companies Act 1956, read withthe Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988.

Conservation of Energy

Your Company is committed to the adoption of various energy saving methods forconservation of energy, and has taken adequate measures to use equipment, which wouldentail cost efficiency. It continues its endeavor to improve energy conservation andutilization.

Technology Absorption, Research & Development

The Research & Development activity of your Company is mainly focused ondevelopment of new software products to meet customer requirements. Since your Companyoperates in a sector, which witnesses rapid technological change and quality upgradation,product improvement is given special attention.

The future plan of action also lays stress on introduction of new Software products forboth Domestic and export markets.

Amount spent: Revenue Expenses Rs. 105,532,436/-

Foreign Earnings & Outgo

The details of foreign exchange earnings and outgo are mentioned in Note 11(a) &11(b) of Schedule 15-II on significant accounting policies and notes to the accounts.

ANNEXURE "B" TO THE DIRECTORS’ REPORT

Pursuant to the applicable requirements of the Securities and Exchange Board of India(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999("the SEBI Guidelines"), following disclosures are made in connection with the"Financial Technologies (India) Limited - Employee Stock Option Scheme 2005".

List of persons constituting "Group" as required under Regulation 3 (1) (e)of the Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations, 1997

(I) PROMOTERS

1) La-Fin Financial Services Pvt. Ltd. (Promoter)

2) Jignesh Shah (Promoter)

3) Dewang Neralla (Promoter)

(II) ENTITIES WHERE CONTROL EXISTS (Subsidiaries, Including Step Down Subsidiaries)

1) Tickerplant Limited (Tickerplant)

2) IBS Forex Limited (IBS)

3) atom Technologies Limited (atom)

4) Riskraft Consulting Limited (Riskraft)

5) National Spot Exchange Limited (NSEL)

6) National Bulk Handling Corporation Limited (NBHC)

7) Financial Technologies Middle East-DMCC (FTME)

8) Global Board of Trade Ltd. (GBOT)

9) Singapore Mercantile Exchange Pte. Ltd. (SMX)

10) Knowledge Assets Pvt. Ltd. (KAPL)

11) FT Group Investments Pvt. Ltd. (FTGIPL)

12) Financial Technologies Communications Ltd. (FTCL)

13) Global Payment Networks Ltd. (GPNL)

14) FT Knowledge Management Company Ltd. (FTKMCL)

15) Indian Bullion Market Association Ltd (subsidiary of NSEL)

16) Trans-Global Credit & Finance Ltd. (TGCFL)

17) Singapore Mercantile Exchange Clearing Corporation Pte Ltd. (Subsidiary of SMX)(SMX-CCL)

18) Financial Technologies Middle East FZ-LLC. (Subsidiary of FTME) (Deregistered /liquidated on 25th November, 2009 w.e.f. 28th February, 2009)

19) Capricorn Fin-Tech (Pvt). Ltd. (Subsidiary of FTME)

20) Bourse AfricaLimited(Subsidiary of FTGIPL) (w.e.f. 15th October, 2008)

21) Boursa India Ltd. (w.e.f. 16th February, 2009)

22) ICX Platform (Pty) Limited (w.e.f. 7th April, 2008)

23) Credit Market Services Ltd. (CMSL) (w.e.f. 23rd May, 2008)

24) Takshashila Academia of Economic Research Ltd. (TAER) (w.e.f. 9th June, 2008)(Takshashila)

25) Apian Finance and Investments Limited (w.e.f. 25th April, 2008)

26) Grameen Pragati Foundation (Subsidiary of atom) (w.e.f. 25th July, 2008) (up to 2ndFebruary, 2009)

27) Bahrain Financial Exchange BSC (c) (BFX) (Subsidiary of FTME) (w.e.f. 18thSeptember, 2008)

28) Financial Technologies Singapore Pte. Ltd. (w.e.f. 15th April, 2009)

29) BFX Clearing & Depository Corporation BSC(c) (Subsidiary of BFX) (w.e.f. 29thMarch, 2010)

(III) ASSOCIATE COMPANIES:

1) Multi Commodity Exchange of India Limited (MCX)

2) MCX-SX Clearing Corporation Ltd. (MCX-SX CCL) (w.e.f. 7th November, 2008)

3) Indian Energy Exchange Ltd. (IEX)

4) ACE Group (Audit Control and Expertise Global Ltd.)

5) MCX Stock Exchange Limited (MCX-SX) (w.e.f. 8th September, 2008 to 18th March,2010)

(IV) JOINT VENTURE COMPANIES

1) Dubai Gold and Commodities Exchange (DGCX)