AGS Infotech Ltd Directors Report

Dear Shareholders,

Yours Directors have pleasure in presenting the Fourteenth Annual Report of the Company for the financial year ended 31^st March, 2011.

FINANCIAL RESULTS:

The performance of the Company for the financial year ended 31st March, 2011 is summarized below:

OPERATIONS:

As can be seen from the above, the company made a turnover of Rs.3119.32 Lakhs during the year as against Rs. 2974.59 lakhs during the previous year registering growth of a 4.86%. The net profit of the company has increased from Rs.148.48 lakhs to Rs153.25 lakhs, registering growth of 3.21%. The management has reoriented its strategies in the line of business and has inducted new director on the board with talent and good contacts in the industry. The management is hopeful of confident of earning more and more profits in the current year and in the years ahead.

INDIAN & GLOBAL ECONOMY:

We are witnessing a reverse trend in innovation and the emerging economies making an impact on business in the advanced markets.

The global economy seems to be recovering after the recent economic shock. The global economies including Indian economy are expected to continue to sustain themselves in the short-term, as the effect of stimulus programs is yet to bear fruit and tax cuts are working their way through the system in 2010. Due to the strong position of liquidity in the market, large corporations now have access to capital in the corporate credit markets and the innovation hub markets; growth momentum is the order of the day in emerging economies like India despite of global financial crisis.

In order to keep up the economic growth during times of the worst recession, government authorities in India have announced the stimulus packages to bolster economic growth. To finance the stimulus packages, the Indian government has raised over $100 billion over the last four quarters. The countrys public debt, according to the Reserve Bank of Indian (RBI), has zoomed to more than 50% of the total GDP.

FUTURE OUTLOOK:

Your Company has plans to diversify in to non-conventional energy activities and with the overall sectorial growth indices forecast future growth of your company.

DIVIDEND:

Your directors express their inability to recommend any dividend for the financial year 2010-2011.

INCREASE IN AUTHORIZED AND PAID-UP EQUITY CAPITAL:

During the year under review there is no changes in the Authorized Equity share capital of your company. The paid-up Equity capital of your company is 1,24,48,100 Equity shares of Rs.10/- each.

CHANGE OF REGISTRAR AND TRANSFER AGENTS:

There is no changes in the Companys Registrar and Share Transfer agents: Venture Capital and Corporate Investments Pvt. Limited 12-10-167, Bharatnagar, Hyderabad-500018. Phone: 040-23818475/476.

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

LISTING:

The Equity Shares of your company are listed on The Bombay Stock Exchange Limited.

DIRECTORS:

In accordance with the Companies Act, 1956 read with Articles of Association of the company the Director Mr. G Dhananjaya Reddy and Mr. R Venkatesh retires by rotation and is eligible for reappointment.

Your Board recommends the re-appointment of the Director above.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Sec.217 (2AA) of the Companies Act, 1956 the Board of Directors of your Company hereby certifies and confirms that:

i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgment 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;

iii. The Directors have 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;

iv. The Directors have prepared the Annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

The required information as per Sec.217 (1) (e) of the Companies Act 1956 is provided hereunder:

A. Conservation of Energy

Adequate measures have been taken to reduce energy consumption, wherever possible. Total energy consumption and energy consumption per unit of production is not applicable as company is not included in the industries specified in the schedule

PARTICULARS OF EMPLOYEES

As the Company is not having any employee during the year under review which attracts provisions of Section 217 (2A) of the Companies Act, 1956, the disclosures required to be made under the said section.

CODE OF CONDUCT

The Code has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them.

AUDITORS

M/s Hariharan & Associates., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible have expressed their willingness for re-appointment. Your directors propose the appointment of M/s Hariharan & Associates, Chartered Accountants, as statutory auditors to hold office until the conclusion of the next Annual General Meeting of the company.

CORPORATE GOVERNANCE

As a listed company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, Forms part of this Report as Annexure.

ACKNOWLEDGEMENTS

Your directors would like to express their grateful appreciation for assistance and co-operation received from clients, banks, investors, Government, other statutory authorities and all others associated with the company. Your directors also wish to place on record their deep sense of appreciation for the excellent contribution made by the employees at all levels, which enabled the company to achieve sustained growth in the operational performance during the year under review.

Declaration by Managing Director of affirmation by Directors and senior Management personnel of compliance with the code of conduct

The shareholders

I, M Manivannan, Managing Director of the Company do hereby declare that the Directors and Senior Management of the Company have exercised their authority and powers and discharged their duties and functions in accordance with the requirements of the code of conduct as prescribed by the company and have adhered to the provisions of the same.