Visesh Info - MPS infotecnics Ltd.

VISESH INFOVISESH INFOVISESH INFOVISESH INFOVISESH INFOTECNITECNITECNITECNITECNICS LCS LCS LCS LCS LTD.TD.TD.TD.TD.

Contents

Notice 3

Director's report 11

Annexure to Director's Report 20

Shareholder's Diary 24

Auditor's Report 27

Balance Sheet 30

Profit & Loss Account 31

Schedules to Balance Sheet and P&L Account 32

Balance Sheet Abstract 44

Cash Flow Statement 45

Accounts of

Opentech Thai Networks Specialists Ltd. (OTNS)

(A subsidiary of Visesh)

Independent Accountant's Report 46

Balance Sheet 47

Statement of Income 47

Notes to Financial Statement 48

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BOARD OF DIRECTORSMR. PEEYUSH AGGARWAL ChairmanMR. SANJIV BHAVNANI Managing DirectorMR. SUNIL KUMAR JAIN DirectorMR. S.N SHARMA DirectorMR. ADESH JAIN DirectorMR. KARUN JAIN Executive Director & Company SecretaryMR. BHASKAR SEN Director

STATUTORY AUDITORS TAX AUDITORS BANKERSM/s D.G. & Co. M/s H. C. GULECHA & Co. ALLAHABAD BANKChartered Accountants CHARTERED ACCOUNTANTS CITI BANK, N.A# 403, NO. 35, Annapurna Complex,4th Floor, Pratap Chambers, South End Road,Gurudwara Road,Karol Bagh., Bangalore- 560 004Delhi-110005 Ph. No. 080-26342729

E- Mail: [email protected]

REGISTERED & CORPORATE OFFICE5, Scindia House,1st Floor, Connaught PlaceNew Delhi-110001Ph. : 011-51514552 to 6Fax : 011-51514551E-Mail: [email protected]: www.viseshinfo.com

OVERSEAS OFFICES

Thailand8/5 Sukhumvit 28 KlongtonKlongtoey,Bangkok,-10110Thailand.Ph. : 662-261-6321E-mail:[email protected]: http://www.otns.co.th

Singapore24, Raffles Place,#18-00 Clifford Centre,Singapore 048621Tel. [Gen]: (65) 65332323Tel. [DID]: (65) 62301184Fax: (65) 65337029

BRANCH OFFICESBANGALORE325, 2nd & 3rd Floor, CMH Road, Indiranagar,BANGALORE – 560 038. KarnatakaPh. : 080-56984748

MUMBAI3085, Oberoi Tower Estate, Chandivili, AndheriEast, Mumbai – 400 072.E-Mail: [email protected]

HYDERABAD6/A, Amar Jyothi Colony, Bhavana Enclave,New Bowenpally, Secunderabad - 500 011(Andhra Pradesh)e-mail: [email protected]

NOIDAE-26, Sector-40,NOIDA-201301, Uttar PradeshE-mail: [email protected]

GURGAONB 20-21 Sector-18, Electronics City,Hartron, Gurgaon (Haryana) 122 016Email : [email protected]

MOHALISCO-130, 2nd Floor,Phase-VIII, Mohali, Punjab

JAIPURGround Floor, Akriti Appartments,552/7, Uday Marg, Tilak Nagar, Raja Marg,Jaipur, Rajasthan-2

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NOTICE

Notice is hereby given that the Sixteenth Annual General Meeting of the Company will be held on Thursday, 29thday of September 2005 at 9:30 A.M. at Banarasidas Chandiwala Sewa Smarak Trust Society, “Rang Mahal”,(Gate No.- II) Chandiwala Estate, Maa Anandmai Ashram Marg, Kalkaji, New Delhi-110019 to transact thefollowing business:

ORDINARY BUSINESS

1. To receive, consider, approve and adopt the Audited Balance Sheet of the Company as at 31st March, 2005and the Profit & Loss Account for the period ended as at that date and the report of Auditor’s and Director’sthereon.

2. To appoint a Director in place of Mr. Peeyush Aggarwal who retires by rotation and being eligible offershimself for reappointment.

3. To appoint a Director in place of Mr. Adesh Jain who retires by rotation and being eligible offers himself forreappointment

4. To appoint Auditors and to pass with or without modification, the following resolution as an ORDINARYRESOLUTION:

“RESOLVED THAT M/s D.G. & Co., Chartered Accountants, New Delhi, Company’s retiring Auditors, beingeligible and offering themselves for reappointment, be and are hereby appointed as the Statutory Auditors ofthe Company to hold the office until the conclusion of the next Annual General Meeting on such remunerationas may be decided by the Board of Directors of the Company.”

SPECIAL BUSINESS

5. To consider and, if thought fit, to pass with or without modification(s) the following Resolution as SPECIALRESOLUTION.

“RESOLVED THAT pursuant to the provisions of section 81 (1A) and all other applicable provisions, if any,of the Companies Act, 1956 and enabling provisions in the memorandum and Articles of Association of theCompany, the listing agreement entered into by the company with the Stock Exchanges where the shares ofthe Company are listed and in accordance with the guidelines issued by the Securities and Exchange Boardof India (SEBI), Foreign Exchange Management Act, 1999 (FEMA) and clarifications thereon issued from timeto time and subject to the approval of Reserve Bank of India (RBI) and other concerned authorities, if any, andall such approvals, permissions and sanctions as may be necessary and subject to such conditions andmodifications as may be prescribed or imposed by any of them while granting such approvals, permissionsand sanctions, which may be agreed to, by the Board of Directors of the Company (hereinafter referred toas ‘the Board” which term shall be deemed to include any duly authorized committee thereof for the timebeing exercising the powers conferred on the Board by this Resolution), the consent of the company be andis hereby accorded to the Board to create, issue/offer and allot 5,00,000 warrants with the option to thewarrant holders to acquire, for every warrant, one fully paid up equity share of Rs 10/- each at a price of Rs50/- per warrant including a premium of Rs 40/- per on Preferential Basis to M/s IndiaCo Ventures PrivateLimited, Pune, in compliance with all the applicable Laws and in the manner as may be decided by the Boardin this behalf and such preferential allotment will be made to the proposed allottees on such terms andconditions and in such manner as the Board may deem fit in this behalf and as given below:

i) One new Equity Share of the Company of the Face value of Rs. 10/- each at a price of Rs. 50/- per shareincluding premium of Rs. 40/- in lieu of one warrant shall be issued at a price calculated in accordance withthe existing SEBI (DIP) Guidelines, 2000.

ii) The ‘Relevant Date’ for the Preferential issue as per the SEBI (Disclosure and Investor) Guidelines, 2000 asamended upto date for the determination of applicable price for Equity Shares in lieu of the issue of theabove mentioned warrants is 30th of August 2005 which is 30 days prior to the date of this Annual GeneralMeeting i.e. 29th September 2005.

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iii) The amount of Rs. 25,00,000/- being 10% of the total warrant amount payable along with the application willbe kept by the Company as a deposit to be adjusted and appropriated against the price of the Equity Sharespayable by the warrant holder at the time of exercising the option.

iv) The option to acquire equity shares may be exercised by the warrant holders at any time before the expiryof 18 months from the date of allotment of warrants.

v) In the event the warrant holder does not exercise the option given under the warrants within 18 monthsfrom the date of allotment of warrants, the warrants shall lapse and the amount of deposit shall standforfeited by the Company.

vi) The Equity shares to be allotted on exercise of option by the warrants holder shall be in dematerialized fromand shall be subject to the provisions of the Memorandum and Articles of Association of the Company.

vii) The warrants shall be subject to a lock-in-period of one year from the date of allotment pursuant to the SEBI(Disclosure and Investor Protection) Guidelines, 2000 as amended upto date and would continue to belocked in till the exercise of option for conversion / exchange by the warrant holders for equity shares.

viii) The equity shares to be issued and allotted by the Company as a consequence of the conversion/ exchangeof the warrants in the manner aforesaid shall be subject to the Memorandum and Articles of Association ofthe Company and shall rank pari passu in all respects with the existing equity shares of the Company.

ix) The issue of the warrants as well as equity shares arising from the exercise of the option given under thewarrants shall be governed by the guidelines issued by SEBI or any other statutory authority as the casemay be or any modification thereof.

“RESOLVED FURTHER THAT for the purposes giving effect to the above resolution, the Board be and is herebyauthorized to do and perform all such acts, deeds and things as it may, in its absolute discretion deem necessary,desirable or appropriate to settle any question difficulty or doubt that may arise in regard to the issue ofwarrants as it may think fit and to accept on behalf of the Company such conditions and modifications, if any,relating to the issue of warrants which may be imposed, required or suggested by any regulatory authority andwhich the Board in its discretion thinks fit and proper”.

“RESOLVED FURTHER THAT the Board be and is hereby authorized to accept any modification(s) to or tomodify the terms of issue of the said new warrants subject to the provisions of the Companies Act, 1956 andSEBI Guidelines / Regulations, without being required to seek any further consent or approval of the Companyin general meeting”;

AND RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers tothe committee of Directors of the Company to the effect to the aforesaid Resolutions.

6. To consider and, if thought fit, to pass with or without modification(s) the following Resolution as SPECIALRESOLUTION.

Item NO 6(a)

“RESOLVED THAT in suppression of earlier resolutions passed by the members in the EGM held on 28th April2005 and pursuant to the provisions of Section 81(1A) and all other applicable provisions of the Companies Act,1956 (“the Act”), the provisions contained in the Securities and Exchange Board of India (Employees StockOption Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 (“the Guidelines”) (including anystatutory amendment, modification or re-enactment to the Act or the guidelines for the time being in force) andthe Articles of Association of the Company and subject to such approvals, permissions, sanctions and subjectto such conditions and modifications as may be prescribed or imposed while granting such approvals andconsent of the Company be and is hereby accorded to the Board (hereinafter referred to as “the Board” Inaddition to the existing ESOP Scheme of the Company which be and is hereby ratified and approved, to theproposed ESOP Scheme 2005 and to create, offer, issue and allot in one or more trenches under the saidproposed ESOP Scheme –2005 at any time to or for the benefit of employees and Directors of the Company suchnumber of equity shares and / or equity linked instruments including options and / or any other instrument s or

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securities which could give rise to the issue of equity shares (hereinafter collectively referred to as “Securities”)of the Company, initially not exceeding 13,50,000 Options (convertible into 13,50,000 equity shares) in aggregate,at such price and on such terms and conditions as may be fixed or determined by the Board in accordance withthe Guidelines or other applicable provisions of any law as may be prevailing at that time.

RESOLVED FURTHER THAT the Board be and is hereby authorized to formulate, evolve, decide upon and bringinto effect any Scheme (hereinafter referred to as “ESOP Scheme - 2005’’) on such terms & conditions ascontained in the relevant explanatory statement to this notice and to make any modification(s), change(s),variation(s), alteration(s) or revision(s)in the terms and conditions of the scheme from time to time including butnot limited to amendments with respect to vesting period, exercise price, eligibility criteria, vesting schedule orto suspend, withdraw or revive the ESOP Scheme.

RESOLVED FURTHER THAT the said securities may be allotted in accordance with the ESOP scheme - 2005through an existing trust or a trust, which may be set up in any permissible manner & that the Scheme may alsoenvisage for providing any financial assistance or subscribe securities of the Company.

RESOLVED FURTHER THAT the new equity shares to be issued and allotted by the Company in the manneraforesaid shall rank pari passu in all respects with the existing equity shares of the Company including dividend.

RESOLVED FURTHER THAT the Board be and is hereby authorized to take necessary steps for listing of thesecurities allotted under the ESOP Scheme – 2005 on the Stock Exchanges where the Securities of theCompany are listed as per the provisions of the Listing Agreements with the concerned Stock Exchange andother applicable guidelines, rules and regulations.

RESOLVED FUTHER THAT for the purpose of giving effect to the above resolution, the Board be and is herebyauthorized to do all such acts, deeds, matters and things as may be necessary or expedient and to settle anyquestions, difficulties or doubts that may arise in this regard at any stage including at the time of listing ofsecurities, without requiring the Board to secure any further consent or approval the members of the Companyin this regard”.

Item No 6(b)

“RESOLVED THAT pursuant to the provisions of Section 81(1A) and all other applicable provisions of theCompanies Act, 1956 (“the Act”), the provisions contained in the Securities and Exchange Board of India(Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 (“the Guidelines”)(including any statutory amendment, modification or re-enactment to the Act or the guidelines for the time beingin force) and the Articles of Association of the Company and subject to such approvals, permissions, sanctionsand subject to such conditions and modifications as may be prescribed or imposed while granting such approvalsand consent of the Company be and is hereby accorded to the Board (hereinafter referred to as “the Board”which terms shall be deemed to include any Committee including ESOP Compensation Committee of the Board)to extend the benefits of said ESOP Scheme – 2005 referred to in the Resolution under item no. 6(a) in thisnotice, to the Employees and Directors of the Subsidiary Companies and / or to such other persons, as may fromtime to time be allowed under prevailing laws, rules and regulations, and / or amendments thereto from time totime on such terms and conditions as may be decided of the Board.

RESOLVED FURTHER THAT the Board be and is hereby authorized to take necessary steps for listing of thesecurities allotted under the ESOP Scheme – 2005 on the Stock Exchanges where the Securities of theCompany are listed as per the provisions of the Listing Agreements with the concerned Stock Exchange andother applicable guidelines, rules and regulations.

RESOLVED FUTHER THAT for the purpose of giving effect to the above resolution, the Board be and is herebyauthorised to do all such acts, deeds, matters and things as may be necessary or expedient and to settle anyquestions, difficulties or doubts that may arise in this regard at any stage including at the time of listing ofsecurities, without requiring the Board to secure any further consent or approval the members of the Companyin this regard.”

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7. To consider and, if thought fit, to pass with or without modification(s) the following Resolution as OrdinaryRESOLUTION

“RESOLVED THAT in suppression of earlier resolutions passed by the members and pursuant to the provisionsof the Articles of Associations of the Company and Sections 198, 269 and 309 read with Schedule XIII andother applicable provisions, if any, of the Companies Act, 1956 and subject to such consents, approvals andpermissions as may be required, Mr. Karun Jain is hereby re-appointed as the Executive Director of theCompany for a period of Five Years with effect from 23rd July, 2005 on the Terms and conditions as set outin the agreement submitted to the meeting and for identification initialed by the chairman thereof.”

By Order of the BoardSd/-

Place : New Delhi Karun JainDate : 30-08-2005 Executive Director

NOTES :1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND

VOTE INSTEAD OF HIMSELF. A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES TO BEEFFECTIVE MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. Members attending the meeting are requested to complete the enclosed attendance slip and deliver the sameat the entrance of the meeting hall. Attendance at the Annual General Meeting will not be allowed without theproduction of the attendance slip duly signed. Members, whose shares are in the dematerialized form, arerequested to bring their Depository Account Number for Identification.

3. The Register of Members and Share Transfer Books of the Company will remain closed from 24th September,2005 to 29th September, 2005 (both days inclusive).

4. Members desiring any information with regard to accounts and operations of the Company are requested towrite to the Company atleast 10 days before the date of the meeting to enable the management to keep theinformation available at the meeting.

5. All members are requested to intimate any change of address to the Registered office of the Company at 5,Scindia House,1st Floor, Connaught Place, New Delhi-110001.

6. Members are requested to bring their own copy of Annual Report along with them.

7. Members are requested to intimate their e-Mail ID’s to the company for better communication in future and aspart of effective Corporate Governance.

Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956:

Item No. 5

Looking into the requirement for the long terms financial resources and working capital needs for smoothbusiness activities, your Board of Directors proposes to raise the capital by way of issuance of 5,00,000Warrants of Rs 10/- each at a price of Rs 50/- per warrant including a premium of Rs 40/- per warrant onPreferential Basis to M/s IndiaCo Ventures Private Limited, Pune, in compliance with all the applicable Laws andin the manner as may be decided by the Board.

The Preferential offer is made to M/s. India Co Ventures Private Limited, Pune. There is no intention of thePromoters to subscribe to the abovesaid warrants issued by the company on Preferential Basis. There is nosignificant change in the shareholding of the Promoters/ Directors after the proposed issue of 5,00,000 warrantson Preferential Basis before and after the issue.

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Share Holding Pattern Before and After the Issue:

Name Existing Shareholding Subsequent to proposed*Pattern preferential warrant issue

No. of % of Existing No. of % of IncreasedShares held Capital Shares held Capital

A -Indian Promoters 15176977 56.27 15176977 55.24

** Sub Total ** 15176977 56.27 15176977 55.24

B. NON-PROMOTER’S HOLDINGMutual Funds & UTIBanks, FIs, Insurance Companies, (Central/ 4250 0.02 4250 0.02State Govt. Institutions/ Non-Govt. InstitutionsForeign Investors/FIIs 1195900 4.43 1195900 4.35

** Sub Total ** 1200150 4.45 1200150 4.37

C. OthersPrivate Corporate Bodies 3425109 12.70 3925109 14.29Indian Public 6956094 25.78 6956094 25.32NRIs / OCBs 104083 0.39 104083 0.38

Clearing Member 110237 0.41 110237 0.40

** Sub Total ** 10595523 39.28 11095523 40.39

** GRAND TOTAL ** 26972650 100.00 27472650 100.00

*The percentages have been worked out after the conversion of warrants into equity shares had taken place.

The allotment of warrants pursuant to this resolution shall be completed with in a period of 15 days of thepassing of the resolution in compliance with SEBI guidelines.

A copy of the certificate of D.G. & Co. Chartered Accountants, New Delhi, the Statutory Auditors of the Companycertifying that the above said issue is made in accordance with the requirements contained in the SEBI (Disclosureand Investor Protection) guidelines and other regulations on preferential issue is being laid before the shareholdersat the meeting.

None of the Directors are interested in the Resolution.

Directors recommend the passing of the proposed resolution.

Item No 6(a) & 2(b)

ESOP Scheme -2005

Visesh has always believed in rewarding its employees for their continuous hard work, dedication and support,which has led the Company on a growth path. To enable more and more employees to enjoy the fruits ofphenomenal growth that the Company has witnessed in the recent past it is proposed to implement anotherESOP Scheme. The main objective of the Scheme is to give employees who are performing well, a certainminimum opportunity to gain from the Company’s Performance thereby acting as a retention tool and to attractbest talent available in the market.

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Stock Options have long been recognized internationally, as an effective instrument, to align the interest ofemployees with those of the Company and its shareholders, providing an opportunity to employees to share thegrowth of the Company and to create long -term wealth in the hands of employees.

The Board therefore proposed to evolve an employee Stock Option Scheme (hereinafter referred to as “ESOPScheme – 2005” for the benefit of permanent employees and Directors of the Company and its Holding orSubsidiary companies, and such other person/ entities as may be prescribed by SEBI from time to time, and inaccordance with the provisions of prevailing regulations.

The following is the explanatory statement, which sets out the various disclosures as required by clause 6 if theSecurities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines, 1999 (hereinafter referred to as “the Guidelines”)

The salient features of the ESOP Scheme are as under:

(A) Total number of options to be granted

a) The total number of options to be granted under the scheme shall initially not exceed 13,50,000options, convertible into equal number of equity shares of the Company.

b) The Board may with the approval of the shareholders increase the Maximum number of options underthe ESOP scheme – 2005 at any time.

c) One option entitles the holder of the options to apply for one equity share of the Company.

(B) Identification of classes of employees entitled to participate in the ESOP

a) The employees and Directors of the Company and its subsidiary company(ies).

(C) Requirements of vesting, period of vesting and maximum period of vesting

The continuation of the employee in the services of the Company shall be a primary requirement of thevesting. The Compensation Committee shall formulate the other requirements of vesting from time to time,which may inter alia include efficiency or productivity criteria. The vesting period shall commence on theexpiry of one year from the date of grant of the option and will extend to five equal annual installments of20% each, or such other time as may be decided by Board or Compensation committee.

(D) Exercise Price or Pricing Formula

The exercise price for the purpose of the grant of options will be decided by the ESOP compensationcommittee provided that the exercise price per option shall not be less than the par value of the equity shareof the Company.

(E) Exercise period and the process of exercise

a) Exercise period will commence from the vesting date and extend upto the expiry period of the optionsas decided by the ESOP Compensation Committee. The expiry period may extend up to 2 years from thedate of grant of options. The ESOP Compensation Committee will decide on the expiry period of optionsfor employees leaving the company after grant of options in their favour.

b) The options will be exercisable by employees by a written application to the designated officer of theCompany to exercise the options, in such manner, and on execution of such documents, as may beprescribed by the ESOP Compensation Committee under the scheme.

c) The options will lapse if not exercised within the specific exercise period.

(F) Appraisal Process for determining the eligibility of employees to the ESOP Scheme.

a) Employees and Directors would be granted options based on performance-linked parameters such aswork performance, technical knowledge, period of service, designation and such other parameters asmay be decided by the ESOP Committee from time to time.

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b) The ESOP Compensation Committee may at its discretion extend the benefits of the ESOP Scheme –2005 to a new entrant or any existing employee on such other basis as it may deem fit.

(G) Maximum number of options to be issued per employee and in aggregate.

a) The aggregate number of options to be granted to anyone employee in any one year shall not exceed1% of the total paid up capital of the company.

b) The total number of options to be granted under the scheme shall initially not exceed 13,50,000 options,convertible into equal number of equity shares of the Company.

(H) Accounting Methods

The Company and its Subsidiary Companies shall conform to the accounting policies specified in Clause13.1 of the Guidelines, and/or such other guidelines as may be applicable from time to time.

(I) Method of Valuation of these options

The Company shall use the fair value method for valuation of the options.

Clause 6 of the ESOP guidelines requires that any ESOP Scheme for offering stock options to the employees ofthe Company must be approved by the shareholders by way of a special resolution. Furthermore, as thescheme will entail further shares to be offered to person other than existing shareholders of the Company,consent of the members is required by way of a special resolution pursuant to the provisions of Section 81(1A)of the Companies Act.

Accordingly the resolution set as item 6(a) is being placed for the approval of shareholders pursuant to theprovisions of section 81(1A) of the Companies Act and clause 6 of the ESOP Guidelines and all other applicableprovisions of law for the time being in force.

As per the ESOP Guidelines, a separate resolution is required to be passed if the benefits of ESOP are to beextended to employees of the Holding or Subsidiary Companies. The separate resolution under item no 6(b) isbeing proposed accordingly, to cover those employees, and/or such other persons as may be permitted fromtime to time, under prevailing laws, rules & regulations, and/or amendments thereto from time to time.

The Board of Directors recommends the special resolution as set out in Item no 6(a) & 6(b) for the approval ofthe Members. None of the Directors of the Company is in any way, concerned or interested in the resolution,except to the extent of the shares that may be offered to him/her under the scheme.

Item 7.

Mr. Karun Jain, aged 45 years, is a Fellow Member of the Institute of Chartered Accountants of India andInstitute of Company Secretaries of India and an Associate Member of AIMA. He has vast experience of over20 years working at key positions in Companies like Indag Rubber Limited (Khemka Group), PanchshilaRubber Limited (Raunaq Group) and Vishal Lakto India Limited (Bagaria group), Mr. Jain has been withVisesh since 1996.He has always demonstrated a certain dynamism and foresight seen in the mostpragmatic of professionals.

As Executive Director of Visesh, he has been instrumental in taking the company from strength to strengththrough strategic planning, focus on result oriented techniques and synergetic alliances with key serviceproviders in IT industry. He is looking after the Corporate Planning, Finance, Legal and Secretarial aspects of thecompany.

The Board of Directors of the Company vide a resolution dated 23rd July, 2005 have re-appointed Mr. Karun Jainas Executive Director of the Company for a period of 5 years w.e.f. 23rd July, 2005 subject to the approval ofthe members in the Annual General Meeting.

The remuneration payable to Mr. Karun Jain have been determined by the Remuneration Committee constitutedby the Board of Directors. The following are the details of the remuneration and perquisites payable to Mr. KarunJain as Executive Director of the Company:

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I Period: Five years period with effect from 23rd July, 2005II Remuneration:(i) Salary: 40,000 (Basic)(ii) Perquisites: Mr. Karun Jain will be entitled to various perquisites, as set out herein under. Remuneration and

perquisites in aggregate as given below would be within the overall ceiling prescribed under Schedule XIIIto the Companies Act, 1956.

Category A :

(a) Housing: Furnished residential accommodation or in lieu thereof a house rent allowance upto a maximum50% of the Basic salary.

(b) Medical Reimbursement: as per the rules of the Company

(c) Leave Travel Concession: as per the rules of the Company

(d) Personal Accident Insurance: as per the rules of the Company

Category - ‘B’

(a) Motor Car: Free use of car for the Company’s business.

(b) Telephone/Mobile: Telephone Facility at residence.

Other Terms

The Executive Director shall be further entitled to: -

(i) Reimbursement of Entertainment Expenses: as per the rules of the Company

(ii) Reimbursement Books & Periodicals: Reimbursement of expenditure of Books & Periodicals requires forperformance of official duties.

(iii) Leave encashment and other benefits as per rules of the Company.

(iv) Commission: such remuneration by way of Commission, in addition to salary or perquisites, calculated withreference to the net profits of the Company in a particular financial year, as may be determined by the Boardof Directors of the company as stipulated in Section 198 and 309 of the Companies Act, 1956. The Exactamount payable will be decided by the Board of Directors / Remunerations Committee, based on certainperformance criteria and will be payable only after the Annual Accounts of the Company have beenapproved by the Board of Directors and adopted by the shareholders.

(v) Minimum Remuneration: Notwithstanding anything to the contrary contained herein, where in any financialyear, during the currency of the tenure of the appointee, the company has no profits or its profits areinadequate, the Company will pay salary and perquisites and allowances as specified above to Mr.KaunJain as minimum remuneration.

(vi) Other Conditions:

(a) The Executive Directors hold office as such, subject to the provisions of Section 283 (1) of the CompaniesAct, 1956.

(b) The terms and conditions of the said appointment and agreement may be altered and varied from time to timeby the Board of Directors as it may, in its discretion, deems fit within the maximum amount payable to theExecutive Director in accordance with Schedule XIII of the Companies Act, 1956 or any amendments madehereafter.

None of the Director except Mr. Karun Jain shall be considered to be interested or concerned in the resolution.Your Directors recommends the resolution for your approval. By the Order of the Board

Sd/-Karun Jain

(Executive Director)

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DIRECTOR’S REPORTDear Members,

Your Directors have pleasure in presenting the Sixteenth Annual Report of Visesh Infotecnics Limited togetherwith the Audited Accounts of the Company, for the year ended 31st March, 2005.

FINANCIAL RESULTS

The Financial Results of the Company for the period under review are as follows :-(Amount in Lacs)

PARTICULARS 2004-2005 2003-2004(01/07/03 - 31/03/04)

9 Months

Income from Operations 3546.67 1936.93Other Income 8.75 4.79Total Income 3555.42 1941.72Total Expenditure 3079.96 1716.14PBID & Tax 475.46 225.58Interest 33.93 19.19Depreciation 179.07 130.57Profit before Tax 262.46 75.82Provision for Taxation 19.00 6.50Deferred Tax 47.29 58.15Tax Adjustments 0.74 0.00Profit After Tax (PAT) 195.43 11.17Profit b/f from previous year 138.25 127.08Amount available forAppropriation 333.68 138.2Balance Carried toBalance Sheet 333.68 138.25Paid up Equity ShareCapital 1492.50 1492.5Reserve & Surplus 2512.92 2331.30

REVIEW OF OPERATIONS

During the under review your company registered all round improvement in terms of business growth, profitabilityand turnover. The total income during the year grew by 37.67% to Rs. 3555.42 Lacs from Rs. 2582.57 lacs(annualised) in the previous year. The Profit after tax increased to Rs. 195.43 Lacs from Rs. 14.89 Lacs(Annualised).The Company on account of expansion and diversification of its activities, needs capital to achieveits growth plan. The Board decided to retain the profit generated during the year. Therefore your companydecided not to declare any dividend for the year ended 31st March, 2005

MANAGEMENT DISCUSSION AND ANALYSISAs per the Clause 49 of the Listing Agreement.

Industry Structure and Development

Information Technology enables change in society, crossing new thresholds far more rapidly than any otherindustry. The gaining of momentum is what makes the business environment challenging and exciting. Every

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player tries to innovate and improvise, across technologies, across geographies. Clients and most importantlyend users strive to keep pace with change and with the breadth of capabilities on offer.

The Indian IT sector began the year with challenges on account of many events, such as, shift in strategies byglobal corporations and stiff appreciation of the Indian Rupee. However, as the year progressed, these formidablechallenges were met successfully by the Indian IT Industry. Indian Companies started adopting a balancedbusiness model with a clear focus on technology and strategic customer relationship.

The emerging importance of IT as a strategic tool will result in considerable growth opportunities for IT serviceProviders. According to Gartner and Dataquest survey, the worldwide IT service market is expected to registera compounded annual growth rate of over 6% and attain a figure of about US $ 728 billion by the year 2007.Despite continuing challenges, the Indian IT sector has growing rapidly and consistently. According to IDCestimates, the Indian IT Industry would grow from US$ 25 billion in 2004 to US$ 65 billion by 2009, therebyshowing a CAGR of 20.6%. In the same period it expects domestic IT business to grow from Rs. 38,303 croresto Rs. 84,878 crores, thereby showing a CAGR of 17.2%. It further estimates that exports from Indian IT Industrywould grow from Rs. 75,447 crores in 2004 to a level of Rs. 205,883 crores in 2009, thereby showing a CAGRof 22.2%. A major contributor to this growth will be IT-enabled services, which will consistently grow from basicBPO processes like out-bound sales campaigns, to more knowledge oriented processes requiring higher skill-sets like in-bound technical support. Inspite of the backlash in the western countries, it has become imperativefor foreign corporations to outsource their non-core activities and achieve efficiency in operations and cost-cutting.

In recent times, Information Technology Enabled Services and Business Process Outsourcing (ITES-BPO)segment have boomed and these have become a driving force for the Indian IT industry as well as the wholeeconomy. India has emerged as a leading destination for ITES and BPO activities over the past few years andis expected to maintain its lead as the preferred offshore outsourcing destination, particularly for the US andWest European Markets.

While India’s software and services exports have witnessed robust growth over the past few years, thegrowth in the domestic manufactured hardware market has been relatively staid. The hardware industry hasthe potential to grow and excel. As per a recent study of MAIT, conducted jointly with Ernst & Young, the Indianhardware industry has the potential to reach a size of $62 billion by 2010. However, the key to success is forIndian IT Companies to capture export opportunities that exist in the area of innovative new devices, contractmanufacturing and design services.

OPERATIONS AND FUTURE OUTLOOK

The mantra of the industry, today is ‘converging technologies.’ Deriving from the vast knowledge resource base,years of experience and skill quotients, new technologies are being mapped that assimilate and synthesizethese complex capabilities. New product lines and offerings in IT and Telecom convergence provide newimproved utilities to the consumer. Every new advantage that the technologies present is a fresh roadmap forbusiness; every new benefit we create for our clients is a new opportunity for growth. Against the backdropof such a scenario only those companies who dare to think differently and focus on change that enablesresults, will be leaders.

According to NASSCOM, the Indian IT service industry is expected to grow at an average annual growth rate of35% for the next few years. The survey indicates that software exports from India are likely to attain a figureof approximately US$ 28 billion, by the year 2008.

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In Rs MillionFoundations 2003 2004 2005 2006 2007 2008 2009 CAGR%System Integration 2025 2390 3004 3576 4234 4923 5725 19.1Hardware Deployment & Support 1396 1694 1997 2214 2446 2634 2837 10.9Custom Application Development 1093 1400 1711 1985 2259 2511 2792 14.8Network & Desktop Management 959 1197 1443 1732 2005 2210 2437 15.3Network Consulting & Integration 716 1011 1298 1600 1922 2280 2704 21.7Software Deployment & Support 538 669 835 1077 1319 1617 1982 24.2Enterprise-Wide Outsourcing 394 633 913 1275 1540 1858 2240 28.8IT Consulting 389 478 567 677 777 911 1067 17.4IT Education & Training 340 413 488 561 653 726 807 14.3System Infrastructure Service Providers 185 247 314 389 487 555 632 20.7Application Management 167 203 246 295 354 428 518 20.6Application Service Providers 22 27 31 36 40 45 50 13.6Grand Total 8223 10361 12847 15417 18037 20698 23791 18.1

IDC India’s Report for 2005, clearly brings out the Segment-wise growth estimates for Indian IT Industry, whichare reproduced below:

Some of IDC’s important and path-breaking predictions for 2005, based on its study are:India’s domestic market to be the fastest growing in the Asia- Pacific regionMobility, convergence & IT management will drive growth in 2005A decade of mobility: Wireless to go mainstream in 2005Offshore Services and BPO will accelerate in 2005End to End IT services model has really come of age and will become mainstream in 2005SMB focused enterprise application business will be driven by verticalisation

It is imperative to view your Company’s past business planning and execution against this backdrop, in order tounderstand how well your Company is geared up to grow in the fast changing IT industry scenario. The presentpositioning of the Company, which has happened through certain strategic acquisitions over the past couple ofyears, exemplifies the Management Vision and a true understanding of the global IT marketplace, due to which,your Company is now poised for its best growth phase, while a lot of others in the field are now trying toremodel themselves or risk extinction.

Starting in 1989, as India’s first Enterprise Business Applications Company, Visesh has a proud history ofProduct Development and that of an IP (Intellectual Property) Creator. Its flagship ERP product offering, BusinesSoftcontinues to run efficient business processes for several leading Indian Companies and many MultinationalCorporate Houses. The product has been continuously modified and upgraded to keep in line with technologychanges, ever since its inception thereby, making at as acceptable today, as it was then.

Your Company has come out with two more products in the ERP space subsequently, namely BusinessPro andpowERPro. While BusinessPro is a product directed at Manufacturing Enterprises in India and other developingeconomies; powERPro is targeted at the Small and Medium Business (SMB) segment globally. The product hasbeen tested and Certified by NSTL, the world’s largest independent technology testing laboratory (US based),thus readying it for its global launch.

To add to the IP created through the above products over its sixteen year history, your Company has createdapplications like Treasury Management, Value Added Tax (at Government Level) and several others, for whichwe are in the process of filing IP patents, copyrights etc. thus, creating a long term value for our stakeholders.

Your Company’s latest commercial launch, “TransXS”, in the emerging and high technology area of MobileTelematics, is yet another in-house developed product that exemplifies the Visesh Vision and capability of ourteam in identifying unfulfilled needs in the market and deploying cutting-edge technology to create and deliverinnovative products that solve business issues for our customers. The rapidly growing mobile communicationpenetration, coupled with higher Internet bandwidth availability have opened up myriad areas like remote mobileasset tracking through Internet, applications of GPS, GIS, GSM-GPRS technologies to improve upon logistic andtransaction efficiency and security, Distribution management through portable intelligent terminals and unobtrusivedata evacuation.

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A wide variety of customized applications have been created, which are available through ASP platform -thereby reducing high-risk burden on clients, high entry costs and trial barrier with easily and quickly demonstrablequantified results. Your Company has a complete portfolio of developed application programs matched withtested and rugged mobile hardware design, and data center servers with communication gateways - alltargeted to satisfy customer needs and generate customer delight, through comprehensive and fully managedservices. Needless to add, this is more IP created by your Company, for which we are in the process of filingglobal patents.

Your Company enhanced its focus on offering end-to-end solutions and new application development usinglatest technologies. During the year, your Company added many Fortune 500 clients to its portfolio, which arestrategic in nature and has increased its offerings in IT Solutions and Product Support. These two segmentscontinue to contribute a major share of revenue to your Company. With strategic vendor-customer relationship,your Company has confidently continued to achieve a volume growth in the business.

Your Company has planned its business strategy discreetly, taking the ground realities into account. Thesolutions business is growing at a consistent pace. The approach here is to combine technology, innovation andprocesses to bring value addition in the deliverables to the customers.

Your Company is planning to start its new KPO (Knowledge Process Outsourcing) Division, “VConnect” duringthe year. The facility with an initial capacity of 200 seats is being developed with the State of The Art Technologywith a view to catering exclusively to the high-end technical support requirements of global leaders, with whomyour Company has long relationships. With relentless efforts on the marketing front and a clear focus on theniche BPO market, your Company is set to achieve a breakthrough in the ITES Segment by establishing astrategic relationship with a US major.

Your Company comprehensively deals with all aspects of Information Technology right from feasibility studies,software development, hardware & software supply & installation, implementation of networks, to user training,maintenance, facilities management etc. thereby making it one of the few Companies in Asia-Pacific that canprovide the end-to-end services that IDC predicts will be the demand of 2005. Your Company has associationsand partnerships with global market leaders, which includes names like IBM, HP, Sun, Cisco, Nortel, 3Com,Oracle, Microsoft, Novell etc. Its successful track record of creating IT Infrastructure using the products &technologies of these global leaders through its “InfraServe” Division and its capability in the high growth areaof wireless networking will both ensure a business balance and growth for your Company over the years.

In an attempt towards giving a major boost to its overseas operations, your Company is also planning to set upnew Overseas Offices in the U.S.A and U.A.E, besides the offices it already has in Singapore and Thailand.Market growth is also being explored through strategic partnerships in Canada, Western Europe, Malaysia, SriLanka etc.

Your Company is well poised at the beginning of a new era of high growth and profitability, which holdstremendous promise for its bright future. We are gradually but firmly establishing our footprint in new marketsand making our presence felt in global markets. Diversification into new areas and innovative applications willlend stability and growth to your Company and make it future-proof.

BUSINESS ALLIANCE

The fast changing economic scenario has given a new definition to the entire Business Process and Approachtowards looking at Market Opportunities. The Technology revolution is on the roll and giving new, innovativefeatures is a key to growth and survival. Your Company, in a strategic move to enlarge its area of operation andto increase its asset base decided to merge (MPS) MPS Technosoft Limited (formerly Known as Polar SoftwareLimited) with your Company (VIL). The Honorable High Court of Delhi vide its order dated 10th May, 2005 hasapproved the merger of MPS Technosoft Limited with your Company.

The Merger of VIL and MPS as envisaged in the scheme, is driven by the objectives of focus on growing thebusiness and to synergise operational advantages, achieve economies of scale, optimum and efficient utilizationof capital, resources, assets and facilities and enhancement of competitive strengths including financialresources. Last but not the least it would result in consolidation of business and enhancement of economicvalue and shareholder value.

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MPS Technosoft Ltd. (formerly known as Polar Software Ltd.) came into being in 1998. Headed by highlyexperienced professionals who’ve been a part of the IT industry, MPS Technosoft Ltd. was a total“ web- presence” solutions player. It was India’s first ICANN Accredited Domain Registrar providing InternetDomain Registrations under the brand name “ Sign Domains”. It had been in the field of Web Hosting Solutions &Domain Name Registration; Web Site development; Graphic Art Design Services; Flash Animation; PERL/CGIScripting etc.

OPPORTUNITIES, THREATS, RISKS & CONCERNS:

Increased competition and deregulation in the domestic market will drive organizations towards achieving higherproductivity. This will lead to higher usage of technology to manage not only the day-to-day operations but alsothe use of technology as a strategic business tool to gain competitive advantage. Major investments are to bemade in the IT, Telecom, Banking, Insurance and Government Sectors in the domestic market.

The year under review has witnessed a welcome change in the business preferences of the customers. Thecustomers have started entering into more strategic master service agreements with a clear focus on strategicrelationships. The increased focus on offshore outsourcing and need for strategic relationships have offereda wide array of opportunities to Indian IT vendors.

Indian IT vendors enjoy a competitive edge in business because of the flexible business models and availabilityof highly skilled manpower. In addition, the continued support and patronage they enjoy from the governingauthorities enable them to meet the customer expectations to the maximum extent. Indian IT companies havestarted winning many partnership based assignments in the realm of Enterprise Application Integration, newapplication development, re-engineering of legacy applications, New Technology Development and SystemsIntegration.

The ITES- BPO industry has grown by leaps and bounds giving the Indian Economy an edge in terms ofincreased revenues, export opportunities, job creation (both direct and indirect), status of global player,opportunities for associated Enterprises etc.

The Government’s friendly posture towards the Industry has further helped the industry to gain the desiredthrust. Further, the lowering of Duties/Tariffs on components in the hardware sector will result in higherdemands and revenues.

The Company is moving towards a bright and stable future and will be benefited by the opportunities coming itsway. Your Company’s business model focuses on entering into strategic relationships with its customers andmeeting their business needs by offering value added services through its vast areas of operation, expertiseand experience. Adding to this, your Company operates in niche technology areas and offers solutions thatbenefit the customers on long-term basis.

Though the opportunities are multifarious, there are certain concerns pertaining to the Industry. Risks, concerns,up and downs are a part of all Industries and the IT Sector is not an exception to this.

The Indian IT industry has to meet the following challenges:

Multinational companies setting up offshore delivery centers in India, thereby putting a strain on availabilityand cost of trained manpower.Competition from neighbouring countries, which are becoming efficient in offshore delivery and have lowercost structures vis-à-vis India.The strengthening of the Indian Rupee versus global currencies, thereby resulting in imports from Indiaappearing less attractive.Availability of reliable infrastructure such as power, telecommunications, roads etc. that are a basic necessityfor growth.Uncertainties on account of global socio-economic environment.

However, your company has taken sufficient steps in setting up advisory groups, whose recommendations areperiodically reviewed and implemented to reduce the risks associated with the above. We are increasing ourmarket reach through a growth in our overseas operations and simultaneously studying other countries in theregion that could provide the infrastructure and trained manpower to address increased market opportunitiesmore efficiently and profitably. Such locations could also prove to be the much needed Disaster Recovery (DR)sites for our domestic operations.

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Security of Data and environment has been a major concern to global clients. There is an increased stress inimplementing enhanced security and back-up measures at both the customer and the vendor locations. Thisinvolves huge capital investments in IT infrastructure. Your Company has already taken adequate securitymeasures consistent with the industry practice. On- going reviews are being made on a continual basis formaking our systems foolproof.

SEGMENT WISE PERFORMANCE

The company is mainly dealing in following Segments:

Products & Technology Integration.

Software Development & Services.

Segment wise revenues are provided in Notes on Accounts forming part of Annual Report.

INTERNAL CONTROL SYSTEM

Your Company strictly adheres to the internal control systems established over the years. The Company haswell-documented Operational Plans & Policies and an Effective Internal Control System, which are key to anyorganization for operational efficiency at all levels. Your company has proper Plans and Procedures and InternalControl Systems commensurate with the need, requirements and size of the company. Your Company haseffective Management Information Systems for proper recording & dissemination of information, reports andfeedback at desired levels. These systems and procedures provide reasonable assurance of maintenance ofproper accounting records, reliability of the financial information, protection of resources and safeguarding ofassets against unauthorized use.

Your Company remains committed to maintain internal control systems and procedures designed to providereasonable assurance for orderly and efficient conduct of business and security of its assets.

DQCI Excellence Awards:

Your Company is proud to announce that it has bagged the ‘Best Deployment’ award i.e. DQCI Excellence Awardfor a project that it implemented for the Revenue Department of The Royal Thai Government. Visesh is one of thefew solution providers that have ventured overseas for the deployment of a full-scale large software developmentproject with a complete SDLC (Software Development Life Cycle). The Revenue Department is the highest taxcollection agency under the Ministry of Finance in Thailand. Its responsibilities are to collect and administer thetaxes and it was using IBM mainframe for over a decade for its IT requirements. Your Company did the entiresoftware project for a web-based VAT (Value Added Tax) and SBT (Specific Business Tax) implementationacross the country on a J2EE environment.

International WHO’S WHO’S Historical Society, U.S.A:

Your Company has been informed by International WHO’S WHO Historical Society, U.S.A. that Mr. Sanjiv Bahvnani,Managing Director of the Company is one of the newest professionals selected for the inclusion in InternationalWHO’S WHO Historical Society and will be listed in the 2005-2006 edition of International WHO’S WHO ofProfessionals.

Inclusion is an accomplishment in itself. International WHO’S WHO Historical Society recognizes the achievementsof qualified Professionals while simultaneously providing a practical, reference-quality, business-to businessdirectory of its exclusive memberships. New members are selected following an in-depth interview and biologicalreview.

BOARD OF DIRECTORS

The Board of Directors in its meeting held on 11th January, 2005 have appointed Mr. Bhasker Sen as Whole-timeDirector of the Company for a period of 3 years w.e.f 11th January, 2005 which was approved by the shareholdersof the Company in the Extra-Ordinary General Meeting of the Company held on 28th April, 2005.

Mr. Bhaskar Sen, aged 48 years, is a Bachelor of Engineering in Electronics & Telecommunications from CalcuttaUniversity, with a Post Graduation in Management from Indian Institute of Management, Calcutta.

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Starting his career in 1978 in Forbes Marshall Ltd. he moved on to Digital Innovations (an ORG Company) in 1981to get involved with real-time digital process control, power systems control and SCADA. In 1982 he joined AseaBrown Boveri Ltd. to gather wide experience in industrial automation, programmable controllers, drives, sensorsand instrumentation. He was selected as one of the first Engineers to work at ABB’s Swedish Design Center forTechnology Assimilation and the commencement of Design activities in India.

He moved on to Usha Martin Ltd. in 1988 as Manager (Development) and rose to become the Deputy GeneralManager by 1991 as founder In-charge of Corporate Applications (R&D). He then moved on to RPG Group wherehe headed the technical functions as Senior Manager (Technical) and initiated several revival efforts for OAproduct lines in association with IIT, Delhi and IBM. He moved on to another RPG Enterprise, Fujitsu-ICIM Ltd. inPune as Senior Manager (Business Development) in 1994 - before joining DSS Mobile Ltd. as Vice Presidentwhere remained till 2000.

He has vast experience in the field of SCADA, GSM, GPS and GIS, which he blends to perfection in the role ofhead of Operations for the Mobile Telematics Division of Visesh Infotecnics Ltd. Under his guidance and throughhis innovativeness, TransXs (Brand of VIL for Mobile Telematics) has fired the imagination of leading Corporatesin India for Fleet Management and other related applications.

Mr. Raakesh Bhhatia had resigned as the Director of the Company with effect from 31st March 2005. During hisassociation as the Director, Your Company has benefited immensely due to his rich experience and knowledge.The Board places on record its deep appreciation for the valued contribution made by him during his tenure asthe Director of Your Company.

Mr. Peeyush Aggarwal (Chairman), Director retires from the Board of Directors by rotation and being eligibleoffers himself for re-appointment.

Mr. Adesh Jain, Director retires from the Board of Directors by rotation and being eligible offers himself for re-appointment.

Preferential Issue

Your Company has allotted 10,00,000/- Equity Shares of Rs. 10/- each at a premium of Rs. 22/- per share onpreferential basis to M/s Duke Special Situations Funds, L.P., California, USA in the meeting of the Board ofDirectors held on 13th May 2005. In this regard, the Company has complied with all the legal/statutory provisionsand the requirements of the Listing Agreement with the various stock exchanges. The preferential issue and thepricing thereof was in accordance with the guidelines for preferential issue laid down by the SEBI and otherstatutory authorities.

Authorized capital of the Company.

Authorized capital of the company stands increased from Rs. 15,00,00,000 (Rupees Fifteen Crores only) toRs. 30,00,00,000 (Rupees Thirty Crores only) divided into 3,00,00,000 Equity Shares (Three Crore only) ofRs. 10/- (Rupees Ten) each. Since the IT sector is changing at a very fast pace, hence in order to remain in linewith the changing scenario in the Industry it was considered necessary that your Company should have astrong Capital Base. Keeping this in view it was decided to alter the capital structure by raising the authorizedcapital of your Company.

Shifting of Registered Office of the Company.

The Registered Office of your Company has been shifted from the state of Karnataka to the State of Delhi w.e.f.13th December 2004, to run the affairs of your Company more efficiently and economically. The Company hasalready been running operations in North India and a Development Center in the Heart of the National Capital.

Appointment of Statutory Auditors

M/s D. G. & Co., Chartered Accountants, Delhi, retiring as the Statutory Auditors, at the conclusion of theforthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointmentwhich, if made will be in accordance with section 224 (1B) of the Companies Act, 1956. Your Directorsrecommend their reappointment.

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AUDITORS REPORT

In respect of the Auditors report, relevant notes forming part of the accounts and referred to in the Auditor’sReport are self – explanatory.HUMAN RESOURCE AND DEVELOPMENTThe key to success of any organization is its investment in Human Resources. Your Company is privileged tohave the right blend of professionals both in field of technical & other professional areas. HR Departmentcontinues to be the virtual backbone of your Company. The HR Department is helping the Company in building theHuman Assets. The employees are put on vigorous training in the latest technologies on continual basis, creatingvalue addition to both employees and organizationInnovative HR initiatives implemented during the year proved beneficial to the employees in particular and theorganization at large, and have gone a long way in addressing manpower retention issue. Proactive measurestaken by the management towards appropriate manpower planning across the organization has helped theHuman Resource Team to address issues related to meticulous deployment of skilled resources on variousprojects/ customer sites with minimal lead-time and nil redundancy.Training activities have also shown an upward trend with the addition of large number of fresh and experiencedresources to the organization as regular training sessions were conducted to ensure that the employeesmaintained the required level of technical, process and soft skills to meet the ever growing customer demands.The HR Team is confident and fully equipped to meet any demand arising out of the strategic positioning ofVisesh on the IT map.CAUTIONARY STATEMENTStatements in the Management Discussion and Analysis describing company objectives, projections, estimatesmay be ‘forward looking statements’ within the meaning of the applicable security laws and regulations.Actual results could differ materially from those expressed or implied, depending upon economic conditions,changes in Government regulations and policies, demand, supply and price conditions, political and economicdevelopments within and outside the country and various incidental factors.The company assumes no responsibility to publicly amend, modify, or revise any forward looking statements, onthe basis of any subsequent developments, information or events.CORPORATE GOVERNANCEA detailed report on Corporate Governance and the certificate from the Auditors of the Company regardingcompliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement areattached and form part of the Annual Report.PUBLIC DEPOSITS

Your Company has no fixed deposits. Further it has neither accepted nor renewed any Fixed Deposits duringthe year under review.

PARTICULARS OF EMPLOYEES

There are no employees who are in receipt of remuneration aggregating to the sum prescribed under section217(2A) of the Companies Act, 1956 read with the companies (Particulars of employees) Rules, 1975 asamended.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The Company’s operations are not such as to require extensive energy usage. However, efforts are always ontowards the conservation and optimization of the use of energy through improved and latest technology andtechniques. The Company has not imported any technology during the year under review.

RESEARCH & DEVELOPMENT

Your Company’s Research & Development Focus has been on inventing solutions framework for leading-edgetechnology. The solutions frame work helps in meeting the challenge of faster time-to-market and implementingquality solutions for the customers. The Company’s R & D initiative has consolidated the Company’s image asleading-edge solution provider. The R & D efforts of your Company in developing frame works enabled it toprovide solutions to the clients at cost effective price at an accelerated pace. The prototypes developed by the

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Company in emerging technology have helped in acquiring new clients and contributing to company’s revenue.The process framework developed by the R & D Group has also helped in reducing the cost of implementingsolutions for the clients.

The Company in order to excel in new operations and activities focusing on continuous innovation and researchbased on market requirements and customers expectations. The core areas on which we are focusing areProduct Development, Web-Based Applications, Software Architecture and Performance Engineering. YourCompany’s R & D Group will focus on these issues and will continue to enhance the existing solutions and builtnext generation frameworks to enable customers to implement business driven solution and provide guidancein efficiently adopting opportunities available in technological change.Visesh is committed to achieve customer delight through cost effective and customer centric quality I.T. solutions,that are innovative and continuously upgraded in keeping with emerging technology trends by a motivatedworkforce that includes are R & D Group, on time, all the time; resulting in maximizing stakeholder’s value. TheCompany has been exerting itself in expanding the existing frameworks to incorporate evolving specificationsand standards.Your Company R & D Group is also working on enhancing the processed framework to optimize the solutionsdevelopment process and provide better value to the customer in terms of Cost, Quality and Time. The processwill encompass various tools to increase the productivity, quality and efficiency.Your Company will continue to focus on and invest in its R & D Activities in building next generation process andtechnology framework. Your Company leverages its excellence in leading-edge solutions provider to continuallyenhance itself to additional complexity on account of Technology Growth & Change. The continual exposure tonew technologies has created a positive impact on existing clients and helped in acquiring new clients. YourCompany is continued focus on new technologies has provided high quality solutions and increased servicequality to clients, resulting in high motivation levels in the employees.The expenditure on R&D has been charged under primary heads of accounts.FOREIGN EXCHANGE EARNINGS AND OUTGODuring the year under review the Company has earned total foreign exchange worth Rs. 257.20 lacs againstRs. 80.43 lacs of previous year. The total foreign exchange outflow during the year under review has beenRs.124.19 Lacs against Rs. 22.06 Lacs of previous year.DIRECTOR’S RESPONSIBILITY STATEMENTAs required under Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that:a) In the preparation of annual accounts, the applicable accounting policies and standards have been followed;b) The accounting policies are consistently applied and reasonable, prudent judgment and estimates are made

so as to give a true and fair view of the state of affairs of the Company as at the end of the financial yearended 31st March, 2005 and of the profit or loss of the Company for that period;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordancewith the provision of this Act, for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;

d) These annual accounts have been prepared on a ‘going concern basis.

Your Directors wish to convey their deep appreciation for the sincere efforts put in by the employees towardsthe sustained growth, success and development of the company.

Your Directors would also wish to thank the Customers, Vendors, Bankers, Government and Statutory Authorities,and last, but not the least to our Shareholders for their continuous support and their confidence reposed in themanagement.

For and on behalf of the Board of DirectorsSd/-

Peeyush AggarwalChairman

Place: New Delhi

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ANNEXURE “A” TO THE DIRECTOR’S REPORTREPORT OF THE DIRECTORS ON THE CORPORATE GOVERNANCE

COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

Visesh is committed to achieving the best standards of Corporate Governance with total commitment in managingaffairs with complete transparency. For Visesh Corporate Governance is to ensure quality, quantity, regularityof financial information and adherence with corporate laws, bye laws, rules & regulations, guidelines, notificationsand authorities governing it and acknowledging its accountability and responsibility towards shareholders,employees, various Government agencies, parties dealing with it and the society as a whole. The Companybelieves that good corporate governance practices enable the management to direct and control the affairs ofthe Company in an efficient manner and to achieve the Company’s goal of maximizing value for all its stakeholders.

BOARD OF DIRECTORS

The Board of your Company comprised of Seven Directors, of whom three are Executive Directors and othersare Non-Executive Directors. Composition of the Board of Directors, categories of the Directors, their attendanceat the Board Meetings and the number of Directorships and Committee Memberships held by them during theyear are given below :-

STATEMENT SHOWING THE COMPOSITION OF BOARD AND OTHER STATUTORY & RELAVANT INFORMATION

S. Name of Positions Category Attendance No. of other Membership ofNo Director Directorship* Committees

Board Last As AsMeeting AGM Chairman Member

1. Sh. Peeyush Chairman Non- Executive 17 Yes 3 2 2Aggarwal & Dependent

2. Sh. Sanjiv Managing Executive-& 15 Yes Nil Nil 3Bhavnani Diretor Dependent

3. Sh. Sunil Jain Director Non- Executive 5 Yes 2 Nil 2& Independent

`4. Sh. S.N Sharma Director Non- Executive 10 Yes 2 Nil 1& Independent

5. Sh. Adesh Jain Director Non- Executive 14 No 1 2 Nil& Independent

6. Sh. Karun Jain Executive Executive 17 Yes 1 Nil 3Director & Dependent

7. Sh. Bhasker Whole Time Executive 4 No Nil Nil NilSen (1) Director & Independent

8. Sh. Raakesh Director Non- Executive Nil No 3 Nil NilBhattia (2) & Independent

Notes:1. Shri. Bhasker Sen was appointed as the Whole Time Director of the Company on 11-01-2005.2. Shri. Rakesh Bhhatia resigned as the Director of the Company on 31-03-2005.*Alternate Directorship, Directorship with private & Foreign Companies are excluded.BOARD MEETINGS

During the period under review 17 Board Meetings were held on 28-04-2004, 08-06-2004, 26-07-2004,30-07-2004, 22-09-2004,05-10-2004,30-10-2004,11-12-2004,11-01-2005,31-01-2005,05-02-2005,16-02-2005,12-03-2005,18-03-2005,21-03-2005, 28-03-2005,31-03-2005.

COMMITTEE OF BOARD OF DIRECTORSA. AUDIT COMMITTEE

The functioning of the Audit Committee is as per the terms of reference as stipulated by the Board Directorsof the Company. The powers, responsibilities and duties of the committee are as prescribed under Section292A of the Companies Act, 1956 and stipulated in the Clause 49 of the Listing Agreement. The committee isheaded by an Independent Director.

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Audit committee is entrusted to perform the following functions:To review the functionality of the Internal Audit Department and to review Internal Audit Reports in terms oftheir adequacy and usage and advise the Board in its decision making functions based on the reports ofAudit Department.To ensure correctness and credibility of financial statements and to review the Company’s financial reportingprocess and financial information disclosure system.To Recommend the appointment and removal of external auditor, fixation of audit fees and also approval forpayment for any other services.To present the analytic Review of the Annual Financial Statements and to interpret them in terms of financialimplications and obligations to the Board.To comprehensively Review the adequacy and functioning of Internal Control System with the Management,External and Internal Auditors.To discuss and formulate a detailed activity schedule with External Auditors on the nature and scope of itsaudit functions before the commencement of audit.To review the auditors report on the financial statement and if required from the auditors to seek clarificationthereon, And,Generally to comply with all items listed in Clause 49 (II) (D) of the Listing Agreement.

COMPOSITIONThe Audit Committee of the Company comprises of the following:Mr. Adesh Jain ChairmanMr. Peeyush Aggarwal MemberMr. Sunil Jain MemberMr. Sanjiv Bhavnani MemberMr. Karun Jain MemberThe Committee met on 31-01-2005,30-10-2004,30-07-2004,28-04-2004.

B. REMUNERATION/COMPENSATION COMMITTEE:The Company has constituted the Remuneration Committee of Directors on 11th December, 2004.The broadterms of reference of the Remuneration Committee are as under:To recomment/approve Remuneration and commission/ incentive payable to the Managing Director, ExecutiveDirector and Wholetime Director for each financial year.The committee would also be administering the Employees Stock Option Scheme / plan of the Company.Such other matter as the Board may from time to time request the Remuneration Committee to examine andrecommend/ approve.The Remuneration Committee comprises of the following members:Mr. Adesh Jain ChairmanMr. Peeyush Aggarwal MemberMr. S.N. Sharma MemberMr. Sunil Jain MemberThe Remuneration of the Managing Director, Executive Director and Wholetime Director has been approvedby the Shareholders. The Company has paid Rs. 5,16,000/- (Rupees Five Lakhs Sixteen Thousand Only) toMr. Sanjiv Bhavnani, Managing Director, Rs. 5,16,000/- (Rupees Five Lakhs Sixteen Thousand Only) to Mr.Karun Jain, Executive Director and Rs.1,57,921/- (Rupees One Lakhs Fifty Seven Thousand Nine HundredTwenty One Only) To Mr. Bhasker Sen, Whole Time Director during the year under review.

C. SHARE TRANSFER COMMITTEE:In compliance with provisions of clause 49 of the Listing Agreements Company has the duly constitutedShare Transfer Committee. Meetings of the Committee held at regular interval with regard to the volume oftransfer requests received by the company. During the period committee met 18 times.Share Transfer committee comprises of Mr. Peeyush Aggarwal, Chairman, Mr. Sanjiv Bhavnani, Member,Mr. Karun Jain, Member.

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D. INVESTOR GRIEVANCES COMMITTEEWe regard our Investors as our partners in the development, success and functioning of the company,therefore, at Visesh we make it point to address the Investors Complaints in responsible and professionalmanner. In a step towards this your company has a duly constituted Investor Grievances Committee whileredressing the investors complaints and grievances, special care and efforts are put in to promptly resolvethe complaints.Your company has a separate department responsible for looking into shareholders complaints and grievancesand the said department is fully equipped with infrastructure and dedicated personnel and is responsible toput up the Investors Complaints received by it before the committee. Committee is responsible for addressingthe complaints and for ensuring their speedy redressal.During the year under review 38 Complaints were received by the Company from the shareholders. All thecomplaints were addressed promptly and redressed to the satisfaction of the shareholders. Generally, thecompany received following types of Investors Complaints/requests:

Pending Demat Requests Duplicate issue of Share CertificatesNon-Transfer of Shares Change of Address etc

Investor Grievances Committee comprises of Mr. Peeyush Aggarwal, Chairman Mr. Sanjiv Bhavnani,Member, Mr. Karun Jain, Member.

DETAILS OF ANNUAL GENERAL MEETINGS FOR THE LAST THREE YEARS

Date Location Time No of Special Resolution passed

04-11-2004 7th Mile , The Club, Mysore Road, 09.30 A.M. NilBangalore-560025

24-12-2003 7th Mile , The Club, Mysore Road, 09.30 A.M 1Bangalore-560025

24-10-2002 Hotel Woodland, Bangalore 09.30 A.M. 1l

DETAILS OF EXTRA-ORDINARY GENERAL MEETING HELD DURING THE YEAR UNDER REVIEW:

Date Location Time

05-02-2005 BIPIN CHANDRA PAL MEMORIAL 11.00 A.M.BHAWAN, A-81, Chittaranjan Park,New Delhi-110019

POSTAL BALLOTPursuant to the provisions of Section 192A of the Companies Act, 1956 read with the Companies (passing ofthe resolution by postal ballot) Rules, 2001 your Company passed the following resolutions:-1. Increase in Authorised capital of the Company2. Shifting of Registered Office of the Company from the State of Karnataka to NCT of Delhi;3. Appointment of Statutory Auditors.The Company highly appareciates the overwhelming response of its members in giving their assent to the saidproposals. Your immense response shows that its members are the partners of the Company it its pursuittowards excellence, growtrh and development.

DISCLOSURESTransaction of any material nature has not been entered into by the Company with related parties i.e.Directors or Management, their subsidiaries or relatives conflicting with Company’s interest.Company has fulfilled all statutory compliances and there were no penalties, strictures imposed on theCompany by Stock Exchanges or SEBI or any statutory authority on any matter related to Capital marketsduring the last three years.The Company has complied with all the mandatory requirements of Corporate Governance, as requiredunder the Listing Agreement.

22


MEANS OF COMMUNICATIONComplying with provisions of the Listing Agreement, Norms, Guidelines and Circulars etc. Company is regular inpublishing its quarterly and half yearly financial results in National and Regional Dailies within the statutoryperiod. Further the said results are promptly sent to Stock Exchanges where the securities of the Company arelisted and are available on the Official Web Site of said Stock Exchanges. The company has not defaulted on thisaccount and there is no discrepancy in this regard as such. Company is regular in posting its Quarterly, AnnualResults and other Statutory Documents/Reports on the Edifar website maintained by NIC.The Complete Quarterly, Half yearly and Annual Finacial Statements, press releases and presentations made toinstitutional investors or analysts, if any, are also posted on the Company’s Website at www. viseshinfo.com.The Management’s Discussion and Analysis Report which forms part of the Annual Report, is provided elsewherein this Annual Report.

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE.The Members of Visesh Infotecnics Ltd.We have examined the compliance of conditions of Corporate Governance by Visesh Infotecnics Ltd. for thefinancial year ended 31st March, 2005, as stipulated in Clause 49 of the Listing Agreement of the said Companywith the Stock Exchanges.The compliance of conditions of Corporate Governance is the responsibility of management. Our Examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance ofconditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.In our opinion and to the best of our information and according to the explanations given to us, we certify thatthe Company has complied with the conditions of Corporate Governance as stipulated in the above mentionedListing Agreement.We state that as per the records maintained by the Investor’s Grievances Committee, there were no investorgrievance matters against the Company remaining unattended/ pending for more than 30 days.We further state that such compliance is neither an assurance as to future viability of the Company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For M/s D.G. & Co.Chartered Accountants

Sd/-DineshGupta

Partner

23


GENERAL SHAREHOLDER’S INFORMATIONI. DATE, TIME AND VENUE OF ANNUAL GENERAL MEETING- YEAR 2004-2005:

29th September, 2005 at 9.30 A.M. at Banarsaidas Chandiwala Sewa Samarak Trust Society, “ Rang Mahal”,( Gate No.II) Chandiwala Estate, Maa Anadmai Ashram Marg, Kalkaji, New Delhi-110019.

II. FINANCIAL CALENDARFinancial Year : 1st April to 31st March,Financial Year (during period Under Review) : 1st April to 31st MarchFirst Quarter : 1st April to 30th JuneSecond Quarter : 1st July to 30th SeptemberThird Quarter : 1st October to 31st DecemberFourth Quarter : 1st January to 31st March

III. REGISTRARS & SHARE TRANSFER AGENTS (RTA’s)

Name Address ContactMAS Services (P) Ltd AB-4,Safdurjung Enclave Tel.No: 26104142, 26104292

New Delhi-110029 Fax No: 26181081e-Mail : [email protected]

IV. LISTING OF SHARES:Shares of company are listed on following stock exchanges:

Name Address Stock CodeNational Stock Exchange of India Ltd. Trade World Tower, Senapati Bapat VISESHINFO

Marg, Lower Parel, Mumbai 400 013

The Stock Exchange, Mumbai Phiroze Jeejeebhoy Tower, Dalal 532411Street, Mumbai- 400 001

V. EFFECTIVE 28TH AUGUST, 2000 VISESH INFOTECNICS SHARES ARE TRADED IN DE-MAT FORMONLY:

National Securities Depository Ltd. Code No. for Visesh shares:Central Depository Services (I) Ltd. INE861A01017

VI. BOOK CLOSURE

PERIOD# PURPOSEFROM TO

24th September, 2005 29th September, 2005 Annual General Meeting of Company

# both days inclusive

VII. INVESTOR SERVICE CELL, & ADDRESS FOR CORRESPONDENCE

Address 5, Scindia House, 1st Floor, Connaught Place, New Delhi-110001Telephone 91-11-51514552-6Fax 91-11-51514551e-Mail [email protected]

VIII. COMPLIANCE OFFICER

Mr. Karun Jain, Executive Director & Company Secretary

}

24


IX. STOCK MARKET DATA:

A. The Monthly high and low quotations and volume of shares traded at National Stock Exchange of India Limited( NSE) & Bombay Stock Exchange(BSE) are as follows:

Financial National Stock Exchange of India LimitedYearApril, 2004ToMarch, 2005 High Low No. of shares TradedApril 2004 5.10 4.68 259622May 2004 4.60 4.20 217612June 2004 4.02 3.70 130623July 2004 4.26 3.96 245162August 2004 4.13 3.92 123282September 2004 5.07 4.64 791504October 2004 6.74 6.19 411620November 2004 8.11 7.29 985535December 2004 9.13 8.21 1500728January 2005 13.23 11.80 2729167February 2005 16.50 15.48 2749729March 2005 24.37 23.55 3734096

B.Bombay Stock Exchange ( BSE)

Financial Bombay Stock ExchangeYearApril, 2004ToMarch, 2005 High Low No. of shares TradedApril 2004 4.99 4.71 59639May 2004 4.46 4.16 79670June 2004 4.03 3.70 53117July 2004 4.21 3.91 58627August 2004 4.09 3.94 67165September 2004 5.04 4.66 328893October 2004 6.60 6.19 213535November 2004 8.05 7.37 452847December 2004 9.08 8.21 682457January 2005 13.25 11.75 1210857February 2005 16.44 15.42 980016March 2005 24.28 23.55 1411158

25


26

X. DEMATERIALIZATION OF SHARES:Company has entered into the agreement with the NSDL & CDSL whereby the shareholders have the optionto dematerialize their shares with either of the depositories. Equity shares of the company are activelytraded at National Stock Exchange & Mumbai Stock Exchange.

Status of Issued Capital as on 31st March, 2005

Total Issued Capital (No. of Shares) % 0f Total CapitalDemat Form 13,623,440 91.28

Physical Form 13,01,560 08.72

Total 14,925,000 100.00

XI. DISTRIBUTION OF SHAREHOLDING AS ON 31st March, 2005

Upto 2,500 10052 74.021 11484130 7.692,501 - 5,000 1797 13.23 7162020 4.805001 - 10,000 902 6.64 7689980 5.1510,001 - 20,000 412 3.03 6562980 4.4020,001 - 30,000 136 1.00 3583500 2.4030,001 - 40,000 63 0.46 2253560 1.5140,001 - 50,000 48 0.35 2276870 1.5350,001- 1,00,000 71 0.52 5344520 3.581,00,001 & Above 99 0.73 102892440 68.94

** TOTAL ** 13580 99.98 149250000 100.00

XII. SHAREHOLDING PATTERN AS ON 31st March, 2005

CATEGORY NO. OF SHARES % of Total

A. Promoters

(including Directors, Relatives, Associates) 7,477,927 50.10

B. Non-Promoter’s Holding

Banks, FI’s Mutual Funds, Insurance Companies, 4,250 0.03

(Central /State Govt. Institutions/ Non-Govt. Institution)

a. Private Corporate Bodies 1,852,672 12.41

b. Indian public 54,90,183 36.79

c. NRI’s / OCB’s 61,321 0.41

d. Clearing Member 38647 0.26

Total 14,925,000 100.00


AUDITORS' REPORTThe Members,VISESH INFOTECNICS LIMITED

1. We have audited the attached Balance Sheet of VISESH INFOTECNICS LIMITED as at 31st March, 2005,the Profit & Loss account and Cash Flow statement of the company for the year ended on that dateannexed thereto. These financial statements are the responsibility of the Company's Management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditors'Report) (Amendment) Order, 2004 (together `the order'), issued by the Central Government of India interms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit ;

(b) In our opinion, proper books of account as required by law have been kept by the company so far asappears from our examination of such books ;

(c) The balance sheet, the profit & loss account and the cash flow statement dealt with by this reportare in agreement with the books of account ;

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by thisreport complies with the mandatory accounting standards referred to in section 211(3C) of the Compa-nies Act, 1956 ;

(e) On the basis of written representations received from the directors, as at 31.03.2005 and taken onrecord by the Board of Directors, we report that none of the directors is disqualified as on 31st March,2005 from being appointed as directors in terms of clause (g) of sub-section (1) of section 274 of theCompanies Act, 1956 ;

(f) In our opinion and to the best of our information and according to the explanations given to us, the saidfinancial statements together with the notes thereon and attached thereto give in the prescribed mannerthe information required by the Companies Act, 1956 and give a true and fair view in conformity with theaccounting principles generally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of the company as at 31st March 2005; and(ii) in the case of the profit & loss account, of the profit for the year ended on that date; and(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

for M/s. D. G. & Co.Chartered Accountants Sd/-

Place : New Delhi Dinesh GuptaDated : 30.08.2005 Partner

M. No. 86089

27


ANNEXURE TO THE AUDITORS' REPORT(Referred to in paragraph 3 of our report of even date to the members of M/s. Visesh Infotecnics Limited)

i) a) The company is maintaining proper records showing full particulars, including quantitative details andsituation of fixed assets.

b) These fixed assets have been physically verified at reasonable intervals by the management and nomaterial discrepancy was noticed on such verification.

c) The company has not disposed off substantial part of its fixed assets during the year.

ii) The management has conducted physical verification of inventory at reasonable intervals during theyear. The procedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business. The company ismaintaining proper records of inventory and no material discrepancies were noticed on physicalverification.

iii) a) The company has not granted loans, secured or unsecured, to companies, firms or other partiescovered in the register maintained under section 301 of the Act.

b) The company has not taken any loans, secured or unsecured from companies, firms or other PartiesCovered in the register maintained under section 301 of the Act. Loan taken in an earlier year wassquared off during the year.

iv) In our opinion and according to the information and explanations given to us, there is an adequateinternal control system commensurate with the size of the company and the nature of its business, forpurchase of inventory and fixed assets and for sale of goods and services. During the course of ouraudit, we have not observed any continuing failure to correct major weaknesses in internal controlsystem.

v) a) According to the information and explanations given to us, we are of the opinion that the particularsof contracts or arrangements referred to in section 301 of the Act have been entered in the registermaintained under that section.

b) In our opinion, transaction made in pursuance of such contracts or arrangements have been made atprices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposits from the public within the meaning of section 58A, 58AAor any other relevant provision of the Act.

vii) In our opinion, the company has an internal audit system commensurate with its size and nature of itsbusiness.

viii) Maintenance of cost records has not been prescribed by the Central Government under clause (d) ofsub-section (1) of section 209 of the Act.

ix) a) According to records of the company examined by us and information and explanations given to us,undisputed statutory dues including Provident Fund, Investor education and protection fund, Employees'State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Custom duty, Excise duty, cess andany other statutory dues applicable to it have been regularly deposited by the company with the appropriate authorities during the year.

b) Dues of Income-tax aggregating to Rs. 2,01,74,790 have not been deposited on account of disputewith income tax authorities. Appeals of the company for three assessment years 1999-2000, 2000-01& 2001-02 are pending before Income-tax Appellate Tribunal, Bangalore.

28


x) There are no accumulated losses at the end of the financial year. Accordingly clause 4(x) of the orderis not applicable.

xi) In our opinion and according to information and explanations given to us, the company has not defaultedin repayment of dues to any bank. The company has not taken any loan from a financial institution norissued any debentures.

xii) In our opinion and according to information and explanations given to us, the company has not grantedany loan or advance against the security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, theprovisions of clause 4 (xiii) of the Order is not applicable.

xiv) According to the information and explanations given to us, the company is not dealing or trading inshares, securities, debentures and other investments.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans takenby others from bank or financial institutions.

xvi) The company has not obtained any term loans. Accordingly, clause 4(xvi) of the order is not applicable.

xvii) According to the information and explanations given to us, short term funds raised by the company have not been usedfor long term investments.

xviii) According to the information and explanations given to us, the company has not made preferential allotment of sharesto parties and companies covered in the Register maintained under section 301 of the Act.

xix) The company has not issued debentures during the period covered by our audit.

xx) The company has not raised money by way of public issues during the period covered by our audit.

xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reportedduring the course of our audit.

for M/s. D. G. & Co.Chartered Accountants Sd/-

Place : New Delhi Dinesh GuptaDated : 30.08.2005 Partner

M. No. 86089

29


BALANCE SHEET AS AT 31st MARCH, 2005PARTICULARS SCHEDULE AS AT AS AT

31.03.2005 31.03.2004 Rs. Rs.

SOURCE OF FUNDSSHAREHOLDERS' FUNDSShare Capital I 149,250,000 149,250,000Share Appication Money 10,932,281 - (refer note 9(e))Reserves & Surplus II 251,291,730 233,129,895LOAN FUNDSSecured Loans III 23,758,775 17,887,934Unsecured Loans IV - 1,770,000DEFERRED TAXDeferred Tax Liability 23,169,160 18,440,371

Total 458,401,946 420,478,200

APPLICATION OF FUNDSFIXED ASSETS VGross Block 229,745,447 146,331,359Less: Depreciation 53,357,319 37,028,750Net Block 176,388,128 109,302,609Capital Work in Progress 233,556,410 409,944,538 226,722,308 336,024,917(including advances on capital account)

INVESTMENTS VI 12,020,053 4,878,748CURRENT ASSETS, LOANSAND ADVANCESSundry Debtors VII 62,175,331 58,601,998Cash and Bank Balances VIII 6,229,802 1,966,647Loans and Advances IX 9,812,530 29,860,560Stock-in-Hand 6,673,973 7,665,074Work-in-Progress - 2,550,619TOTAL CURRENT ASSETS (A) 84,891,636 100,644,898Less: CURRENT LIABILITIES AND PROVISIONS XCurrent Liabilities 47,144,747 20,840,751Provisions 2,455,615 1,307,630TOTAL CURRENT LIABILITIES (B) 49,600,362 22,148,381NET CURRENT ASSETS (A-B) 35,291,274 78,496,517MISCELLANEOUS EXPENDITURE XI 1,146,081 1,078,018(To the extent not written off or adjusted)

Total 458,401,946 420,478,200Significant Accounting Policies XVINotes to the Accounts XVIIAS PER SEPARATE REPORT OF EVEN DATEATTACHED

for M/s. D. G. & Co. FOR & ON BEHALF OF THE BOARD OF DIRECTORSChartered Accountants

Sd/- Sd/- Sd/- Sd/-DINESH GUPTA PEEYUSH AGGARWAL SANJIV BHAVNANI KARUN JAIN

PARTNER CHAIRMAN MANAGING DIRECTOR EXECUTIVE DIRECTOR

Place : New DelhiDated : 30th Aug., 2005

30


31

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2005PARTICULARS SCHEDULE FOR THE YEAR FOR THE NINE

ENDED MONTH's PERIOD 31.03.2005 ENDED 31.03.2004

Rs. Rs.

INCOMESales -Products & System Integration 310,594,009 159,898,939 -Software Development & Services 44,072,649 354,666,658 33,793,569 193,692,508Other Income XII 874,588 478,892(Decrease)/Increase in Stock (991,101) (175,570)Total 354,550,145 193,995,830

EXPENDITUREPurchases 282,637,570 148,347,529Employees Remunerationand Benefits XIII 12,890,828 10,281,193Administrative, Sellingand other Expenses XIV 9,891,655 9,572,165Financial Charges XV 3,392,802 1,919,411Depreciation/Amortisation V 17,907,140 13,057,413Miscellaneous Expenses XI 1,182,735 3,033,567Written offPrior Period Adjustments 401,631 202,164Total 328,304,362 186,413,442

Profit for the year before Taxation 26,245,783 7,582,388Less:Tax Expenses -Current 1,900,000 650,000 -Deferred Tax / (Benefit) 4,728,789 5,814,912 -Prior Period Tax Adjustments 74,881 -Profit for the year after Taxation 19,542,113 1,117,476Add: : Profit brought forward 13,825,644 12,708,168

Amount Available for Appropriations 33,367,757 13,825,644

APPROPRIATIONSBalance carried to Balance Sheet 33,367,757 13,825,644

Total 33,367,757 13,825,644

Significant Accounting Policies XVINotes to the Accounts XVII

AS PER SEPARATE REPORT OF EVEN DATEATTACHED






32

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31-03-2005

SCHEDULE 'I' - SHARE CAPITAL

PARTICULARS AS AT AS AT 31.03.2005 31.03.2004

Rs. Rs.

Authorised 30,000,000 Equity Shares of Rs. 10/- each 300,000,000 150,000,000 (Previous Year 15,000,000 Equity Shares of Rs.10/-each)

Issued, Subscribed and Paid up 14,925,000 Equity Shares of Rs. 10/- each 149,250,000 149,250,000 (Refer Note No - 9 (a)) (Previous Year 14,925,000 Equity Shares of Rs.10/- each)

TOTAL 149,250,000 149,250,000

SCHEDULE 'II' - RESERVES & SURPLUSShare Premium Account As per Last Balance Sheet 209,175,000 209,175,000

General Reserve As per Last Balance Sheet 10,129,251 10,129,251 Less: Adjustments (refer note 8 (a) & (b)) 1,380,277 8,748,974 - 10,129,251

Profit and Loss Account 33,367,757 13,825,644

Total 251,291,730 223,000,644

SCHEDULE 'III' - SECURED LOAN Allahabad Bank Working Capital Loan 22,037,701 16,230,886 (Refer note no 10 (a)) Other Banks 1,721,074 1,657,048 (Refer note no 10 (b))

Total 23,758,775 17,887,934

SCHEDULE 'IV' - UNSECURED LOAN

From Director - 1,770,000

Total - 1,770,000

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33


SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET ASAT 31-03-2005PARTICULARS AS AT AS AT

31.03.2005 31.03.2004 Rs. Rs.

CURRENT ASSETS, LOANS & ADVANCESSCHEDULE 'VII' - SUNDRY DEBTORS(Unsecured, Considered Good)

Outstanding for a period exceeding six months 7,347,867 22,657,245Others 54,827,464 35,944,753Total 62,175,331 58,601,998

SCHEDULE 'VIII' - CASH AND BANK BALANCESCash in Hand 236,487 258,277Cheques in hand 225,807Balance with Scheduled Banks- in Current Accounts 1,831,341 354,035- in EEFC Account 692,517 47,606- in Fixed Deposit Accounts 3,243,650 1,306,728 (pledged with Banks & Govt. Deptt.)Total 6,229,802 1,966,647

SCHEDULE 'IX' - LOANS AND ADVANCES(Unsecured, considered good)(Advances recoverable in cash or in kind or for valueto be received)

Security Deposit 379,413 481,491Prepaid Expenses 65,605 145,014Amount with Income Tax Authorities 4,449,056 4,235,553Deposit with Court (refer note : 16) 1,858,671 1,858,671Staff Advances & Other Imprest 319,590 1,895,570Other Advances 2,740,195 21,244,260Total 9,812,530 29,860,560

SCHEDULE 'X' - CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIESSundry Creditors- For Purchases 43,524,322 15,679,031- For Expenses 385,408 43,909,730 929,605 16,608,636Other LiabilitiesStatutory Dues 1,114,055 2,305,791Advance From Customers 672,143 -Expenses Payable 1,223,580 1,926,324Share Application Money 225,239 -Total (A) 47,144,747 20,840,751

PROVISIONS- For Taxation 1,900,000 1,103,190- For Leave Encashment 329,172 91,219- For Gratuity 226,443 113,221Total (B) 2,455,615 1,307,630

Total (A+B) 49,600,362 22,148,381

34


35

SCHEDULE 'XI' - MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)

Public Issue Expenses 627,757 2,511,028Less: Written Off 627,757 - 1,883,271 627,757

Deferred Revenue Expenditure 381,250 1,525,000Less: Written Off 381,250 - 1,143,750 381,250

Miscellaneous Expenditure 893,475 74,700Less: Written Off 173,300 720,175 6,225 68,475

Preliminary Expenses 536 857Less: Written off 428 108 321 536

Merger Expenses 425,798 -Less: Written off - 425,798 - -Total 1,146,081 1,078,018

SCHEDULES ANNEXED TO AND FORMING PART OF PROFIT & LOSS ACCOUNT FORTHE YEAR ENDED 31st MAR., 2005

PARTICULARS FOR THE For NineYEAR ENDED Months period

31-03-2005 ended 31.03.2004Rs. Rs.

SCHEDULE 'XII' - OTHER INCOME

Interest received 43,921 377,998Rent Received - 45,000Exchange Fluctuation Account 349,639 -Miscellaneous Income 481,027 55,894

Total 874,588 478,892

SCHEDULE 'XIII'- EMPLOYEES REMUNERATION AND BENEFITS

Salaries, Benefits and Allowances 12,007,617 9,144,130Employer's Contribution to ESI & PF 193,627 135,375Staff Welfare 689,585 1,001,688

Total 12,890,828 10,281,193


36

SCHEDULE 'XIV' - ADMINISTRATIVE , SELLING AND OTHER EXPENSES

Advertisement Expenses 392,260 116,534AGM / Board Meeting Expenses 91,201 88,268Auditors Remuneration 222,196 -Business Promotion 197,044 267,765Brockerage & Commission 23,382 432,815Conveyance 175,891 553,510Electricity & Water Expenses 393,179 297,173Entertainment 65,486 152,766Insurance 609,736 91,313Legal and Professional Charges 585,715 1,100,388Loss on Sale of Asset 295,000 1,222,755Freight & Cartage 185,072 88,180Membership Fee & Subscription 196,589 99,220Miscellaneous Expenses 235,037 381,924Communication Expenses 977,933 649,596Printing & Stationery 392,680 170,582Staff Training 683,700 -Project Expenses 102,070 127,310Product Development Charges - 102,814Rent, Rates and Taxes 568,374 212,323Repairs & Maintenance 641,751 535,046Security Charges 54,543 61,735Tours & Travelling - Directors 1,227,010 351,941 - Others 1,293,379 2,520,389 2,059,583 2,411,523Vehicle running & maintenance 282,427 408,626

Total 9,891,655 9,572,165

SCHEDULE 'XV' - FINANCIAL CHARGES

- Bank Interest 2,293,680 1,386,758- Bank Charges & Commission 783,500 162,762- Interest on Hire Purchase 186,621 149,274- Interest to HARTRON - 37,328- Interest to Others 129,001 183,288

Total 3,392,802 1,919,411


SCHEDULE ‘XVI’

STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements have been prepared under the Historical cost convention on accrual basis,in accordance with applicable accounting standards and the provisions of the Companies Act, 1956.

b) Accounting policies not specifically referred to otherwise are consistent with generally acceptedaccounting principles.

2. USE OF ESTIMATESThe presentation of financial statements requires estimates and assumptions to be made that effect thereported amount of assets and liabilities on the date of the financial statements and the reported amount ofrevenues and expenses during the reporting period. Differences between the actual results and estimatesare recognized in the period in which the results are known/ materialised.

3. REVENUE RECOGNITIONRevenue from(i) Fixed Price Software Contracts are recognised principally on the basis of completed Milestones

as specified in the contracts.(ii) Software Development and Services is recognized on Time Basis as per terms of specified

contracts.(iii) Sale of Software products is recognised on the dispatch of Goods form company’s premises. No

provision has been made for possible returns or expenses during the warranty period.(iv) Annual Maintenance Contracts is accounted for in the Ratio of period expired to the total period

of the contract and the amount received from the customers towards the un-expired portion ofsuch contract is treated as advance received.

4. FIXED ASSETSFixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight,duties, installation expenses and all incidental expenses related thereto. Computers and peripherals includePortals.

5. INTANGIBLE ASSETSIntangible assets are recognized only if it is probable that the future economic benefits that are attributableto the asset will flow to the enterprises and the cost of the asset can be measured reliably. Internallygenerated intangible asset arising from development activity is recognized only on demonstration of itstechnical feasibility, the intention and ability of the company to complete, use or sell it. The intangible assetsare recorded at cost and are carried at cost less accumulated amortisation.

6. DEPRECIATIONa) Tangible Assets: Depreciation on fixed assets is provided on the straight-line method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

b) Intangible Assets: Software Rights, Copyrights & Goodwill are being amortised over a period of 10 years, considering the useful life of assets & their obsolescence.

7. IMPAIRMENT OF ASSETSAll assets other than Inventories, Investments and deferred tax assets, are reviewed for impairment,wherever events or changes in circumstances indicate that the carrying amount may not be recoverable.

8. INVESTMENTSInvestments are Long term in nature and are stated at cost & any decline other than temporary, in the valueof such investments is charged to the profit & loss account.

37


9. INVENTORIESInventories are valued at lower of cost (determined on the basis of first in first out method) or net realizablevalue.

10. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at a rate, which approximates the exchange rate prevailingon the date of the transaction. Current Assets and liabilities denominated in foreign currencies are translatedat the rate of exchange as at Balance Sheet date. Any income or loss on account of exchange differenceis recognised in the Profit & Loss Account.

11. TAXATIONIncome tax is accounted for in accordance with Accounting Standard 22 “Accounting for taxes on Income”as issued by the Institute of the Chartered Accountants of India. Tax expenses comprise both Current andDeferred Tax. Current tax is measured at the amount expected to be paid to / recovered from the taxauthorities using the applicable tax rates. Deferred tax assets and liabilities are recogonised for future taxconsequences attributable to timing differences between taxable Income and Accounting Income that arecapable of reversing in one or more subsequent periods and are measured using the relevant enacted taxrates. At each Balance Sheet date, the Company reassesses the un-recognised Deferred tax Assets to theextent they have become reasonably certain or virtually certain of realization, as the case may be.

12. CONTINGENT LIABILITIESContingent liabilities are not provided for in the books of account and are disclosed separately by way ofnote in the balance sheet.

13. RETIREMENT BENEFITSa) Contribution to the Provident Fund and Employees State Insurance is deposited in accordance with the provisions of the relevant acts and is charged to profit and loss account.

b) Provision for Gratuity has been made and is charged to Profit & Loss Account.

c) Leave encashment and other retirement benefits are charged to revenue on accrual basis.

14. MISCELLANEOUS EXPENDITUREa) Public Issue Expenses have been written off in five equal annual installments.

b) Preliminary expenses have been written off on the basis as provided under section 35D of the Income Tax Act, 1961, as amended from time to time.

c) Deferred Revenue Expenditure has been written off by the company in five years.

SCHEDULE 'XVII'NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2005

1) Contingent Liabilities not provided for:-

i. Guarantees given by the company Rs. 462,700/- (Rs. 455,000/-)ii. Letter of Credits issued by Bank Rs. 27,801,823/- (Rs. 4,543,640/-)iii. Income tax demand for Assessment Years 1999-2000, 2000-01 and 2001-02 is Rs. 20,174,790/-(Rs.17,523,727/-). Company has filed an appeal against the demand before the Income Tax AppellateTribunal.

2) Expenditure in Foreign Currency :Foreign Travel Expenses Rs. 1,500,321/- (Rs. 2,205,891/-);Fixed Assets Rs. 376,517/- (NIL)Purchases Rs. 10,287,426/- (NIL)Administrative & Other Exp. Rs. 255,322/- (NIL)

38


3) Earning in Foreign Exchange include sale of software and services of Rs.5,116,500/-(Rs. 8,043,456/-) & against Other Exports 20,603,718/- (Rs. NIL)

4) Managerial Remuneration under section 198 of the Companies Act, 1956

Salaries and Allowance Rs. 1,189,921/- (Rs. 1,014,600/-)Contribution to Provident and other funds Rs. 158,310/- (Rs. NIL)

5) Balances of Sundry Debtors, Sundry Creditors, Current Liabilities, Loans and Advances are subjectto confirmation.

6) Sundry Debtors includes due from Opentech Thai Network Specialists Ltd., Thailand (Wholly OwnedSubsidiary of the Company) Rs. 5,116,500/- (Rs. 4,699,972/-) maximum outstanding during the year isRs. 5,116,500/-(Rs. 7,218,691/-)

7) Investments include one share held in the name of Infotecnics India Limited (Previous year 7200)

8) (a) Hitherto, till March 31, 2004 the company followed an accounting policy whereby copyrights wereamortized over a period of 14 years. During the year, in accordance with the requirement of AS-26,the company considering the expected future economic benefits, has revised the amortised rate to@10%. Accordingly, the carrying amount of such intangible assets as at April 01,2004 has beenrestated with a corresponding adjustment to the opening balances of revenue reserves aggregatingto Rs. 820277/- In accordance with the transitional provisions of AS-26. The restated carrying amountis being amortised over the revised remaining useful life.

(b) Hitheto, till March 31,2004 the company was not amortising the amount of Goodwill purchased twoyears ago. During the year, Goodwill is amortised as per the requirement of Accounting Standard-26.Accordingly, carrying amount is restated with the adjustment to revenue reserve aggregating Rs.560,000/- as at April 01, 2004. The restated carrying amount is being amortisrd over the revisedremaining useful life.

9) Out of the Issued, Subscribed & Paid up Capital, the following shares were allotted for considerationother than cash

a)871,700 Equity Shares were allotted as fully paid up bonus shares in the ratio of 1:1 shares held on28.06.1998 by capitalization of reserves;b) 2,283,300 Equity Shares were allotted as fully paid upbonus shares in the ratio of 1:2 shares held on 11.08.1999 by capitalization of reserves;c) 2,700,000Equity Shares were allotted as fully paid up equity shares pursuant to a swapping contract on26.09.2001;d) 2,225,000 Equity Shares were allotted as fully paid up equity shares pursuant to abusiness acquisition contract on 25.07.2002.;e) During the year the Company has received ShareApplication Money from Duke Special Situation Fund L.P., USA for issue of equity shares. The same ispending for allotment of shares.

10) a) Working Capital Loan from Allahabad Bank is secured against mortage of certain immovableproperty of the company, Hypothecation of Stock & Book Debts and other movable assets of theCompany, Personal Guarantee of certain Directors namely Mr. Peeyush Aggarwal, Mr. Sanjiv Bhavnani& Mr. Karun Jain and body corporates and others namely Infotecnics India Ltd., Omkam DevelopersPvt. Ltd and Peeyush Aggarwal (HUF).

b) Loans from other banks are against hypothecation of respective vehicles and includes Loans from(i) HDFC Bank Ltd. Rs. 347305/- (Rs. 843875/-),(ii) ICICI Bank Ltd. Rs. 665769/- (Rs. 787371/-),(iii) Kotak Mahindra Bank Ltd. Rs. 7,08,000/- (Rs. NIL)(iv) American Express Bank Ltd. Rs. NIL (Rs. 25802/-)

39


11) In the opinion of the Board, the realisable value of Current Assets, Loans and Advances, in theordinary course of business, would not be less than the amount at which these are stated in theBalance Sheet and provision for all known liabilities have been made.

12) Deferred TaxBreakup of the deferred tax assets / liabilities is as under :

Particulars 31st March, 2005 31st March, 2004

i) Deferred tax liability :Related to Fixed Assets 23,372,443 18,440,371

ii) Deferred tax Assets :Provision for Gratuity &Leave Encashment (203,313) NIL

Net Deferred taxLiability / (Assets) 23,169,160 18,440,371

13) Payments to AuditorsAudit Fee for

Statutory Audit Rs. 165,300/- (Rs. NIL) Tax Audit Rs. 25,000/- (Rs. 25,000/-) Branch Audit Rs. 31,896/- (Rs. NIL)

Statutory Audit Fees includes Rs. 82650/- for audit for the financial year 2003-04.

Rs. Lacs14) Earning Per Share (EPS) Current Year Previous Year

Net Profit before Tax 262.45 75.82Less: Provision for Tax 67.03 64.65Profit/(Loss) attributable to the equity shareholders 195.42 11.17Basic/Weighted average no. of Equity Shares 14925000 14925000Outstanding during the year (Nos.)Nominal value of shares 10.00 10.00Basic/diluted Earning per share Rs. 1.31 0.08

15) The Company has entered into contracts with companies for upgradation of ERP & Development /upgradation of other products. The amount is pending capitalization under capital work in progress.

16) There was a dispute between Mr. P.R. Sheshadri, sole proprietor of Visesh Technologies and Pro DataDistribution Pte Ltd., Singapore in which M/s Pro Data Distribution Pte Ltd. Singapore made ViseshInfosystems Limited a party to the dispute and filed a case against the company and Mr. P.R. Sheshadri,Proprietor of Visesh Technologies. Hon’ble High Court of Karnataka has passed an adverse orderagainst the Company on 17.10.2001. The Company has filed an appeal with the Hon’ble High Court ofKarnataka to recall the order. The Company has deposited a sum of Rs 1,858,671/- with Hon’ble HighCourt of Karnataka against the same. In view of the deposit made, corresponding liability / contingentliability has not been provided in the books of accounts.

17) Additional information pursuant to the provisions of para 4, 4A, 4C and 4D of part-II of Schedule VI tothe Companies Act, 1956 to the extent applicable are given below;

40


Particulars Opening Stock Purchases Sales Closing Stock

SOFTWARE Quantity (Nos.)* 430 8,050 8,030 450(90) (603) (607) (86)

Value (Rs.) 3,976,000 23,450,621 26,800,710 3,527,987(3,926,962) (50,745,625) (65,998,765) (3,976,000)

HARDWARE &PERIPHERALS Quantity (Nos.) 250 10,453 10,458 245

(289) (2,534) (2,573) (250)

Value (Rs.) 3,689,074 259,186,949 283,793,299 3,145,986(3,913,662) (97,601,904) (93,900,174) (3,689,074)

TOTAL Quantity (Nos.) 680 18,503 18,488 695(379) (3,137) (3,180) (336)

Value (Rs.) 7,665,074 282,637,570 310,594,009 6,673,973(7,840,644) (148,347,529) (159,898,939) (7,665,074)

* No. of User License

18) As per information available with the company there are no outstanding dues to small scale undertakingsas at 31.03.2005 (Rs. NIL)

19) SEGMENT REPORTING (Rs. In Lacs)

Particulars Software Development Products & Total& Services System Integration

Segment Revenue 440.73 3,105.94 3,546.67(337.94) (1,598.99) (1,936.93)

Inter-segmental Revenue - - -- - -

Profit Before Tax & Interest 147.43 344.60 492.03(118.45) (135.91) (251.14)

Less Interest - - 33.93- - (19.19)

Less un-allocable expenditure - - 204.39- - (160.91)

253.71- - (71.03)

Add: un-allocable Income - - 8.75- - (4.79)

Profit Before Tax - - 262.46- - (75.82)

Note: Primary segmentation has been done according to the nature of products and services. The company’soperations predominantly relate to the following segments:

a) Products & System Integration;b) Software Development & Services.

There is no Inter-divisional or inter-segmental transfer of Goods.

41


Since fixed assets used in the company’s business cannot be specifically identified with any of the reportablesegments as these are used inter changeably among segments, therefore segment wise disclosure on capitalemployed has not been furnished.

The company caters mainly to the domestic market and the Export turnover is not significant in the context of thetotal turnover. As such, there are no Geographical Segments.

20) Related Party Discolsures as per Accounting Standard 18 "Related Party"

A. List of related parties with whom the Company has transacted:a. Subsidiary1: Opentech Thai Network Specialists Ltd.

b. Key Managerial Personnel1: Mr. Peeyush Aggarwal2: Mr. Sanjiv Bhavnani3: Mr. Karun Jain4: Mr. Bhaskar Sen

c. Parties in which the Key Managerial Personnel or the relatives of the Key ManagerialPerson Interested1: Astra Enterprises2: One97 Communications Pvt. Ltd.3: Infotecnics India Ltd.4: Omkam Developers Pvt. Ltd.5: Peeyush Aggarwal (HUF)6: Shubha Bhavnani

Amt In Rs.Sr. No. Nature of Transactions Party of whom the Key Parties in which Total

company is an Managerial Key Managerialassociate and its Personnel Personnel of he

Subsidiaries Company areinterested

1 Sale of Goods 5,116,500 NIL 6,597,300 11,713,800(8,043,456) (NIL) (NIL) (NIL)

2 Services Received NIL NIL 757,069 757,069(NIL) (NIL) (1,253,569) (1,253,569)

3 Sales of Vehicles NIL 622,000 165,000 787,000(NIL) (NIL) (NIL) (NIL)

4 Guarantees NIL NIL 80,000,000 80,000,000(NIL) (NIL) (NIL) (NIL)

42


Outstanding Balances with related partiesReceivables Payables Receivables Payables

As at As At AsAt As At31.03.2005 31.03.2005 31.03.2004 31.03.2004

Party of which the Company is an 5116500 NIL 4699972 NIL associate and its subsidiaries Key Managerial Personnel NIL NIL NIL NIL Parties in which Key Managerial 1543850 6458 NIL 19164 Personnel of the Company are Interested

* Related party relationship is as identified by the Company and relied upon by the Auditors

21) Figures have been rounded off to the nearest rupee.22) Figures in brackets represent the previous year.23) Previous year figures have been regrouped / rearranged wherever considered necessary to

correspond with current year figures.






43


BALANCE SHEET ABSTRACT & COMPANY'S GENERAL BUSINESS PROFILEPURSUANT TOPART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956

Amount in Lacs.I Registration Details

Registration No. 131190 State Code 55 Balance Sheet Date 31st Mar., 2005

Date Month Year

II Capital raised During the year

Public Issue NIL Right Issue NIL Bonus Issue NIL Private issue NIL

III Position of Mobilisation and Deployment of Funds

Total Liabilities 4584.02 Total Assets 4584.02

Source of Fund

Paid- Up Capital 1492.50 Share Application Money 109.32 Reserves & Surplus 2512.92 Secured Loan 237.59 Unsecured Loans 0.00 Deferred Tax Liability 231.69

Application of Funds

Net Fixed Assets 4099.45 Investment 120.20 Net Current Assets 352.91 Miscellaneous Expenditure 11.46

IV Performance of Company

Turnover 3555.41 Total Expenditure 3292.95Profit /Loss Before Tax 262.46 Profit /Loss After Tax 195.42Earning Per Share (In Rs.) 1.31 Dividend NIL

V Generic Names of Three Principal Product/Services of the Company (as per monetary term)

Item Code No. (ITC Code) N.A. N.A. Product Description Products & System Software Development &

Integration Services






44


CASH FLOW STATEMENT FOR THE PERIOD FROM 1st Apr., 2004 to 31st Mar., 2005(Rupees in Lacs)

AS AT AS ATPARTICULARS 31-03-2005 31-03-2004A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax 262.46 75.82 Adjustment for : Depreciation and Amortisation 179.07 130.57 Misc. Expenses Written off 11.83 30.34 Income Tax (19.75) (6.50) Interest & Other Costs 33.93 19.19 Loss on Sale of Fixed Assets (net) 2.95 12.23 Interest Received (0.44) (3.78) Operating Profit Before Working Capital Changes 470.05 257.87 Adjustment for : (Increase)/Decrease in Current Assets 200.16 (54.99) Current Liabilities and Provisions 274.52 39.84 Cash from / (used) in Operating Activities 944.73 242.72 Interest Received 0.44 3.78 Net Cash from / (used) in Operating Activities (A) 945.17 246.50

B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets & Advances on capital Account (962.45) (699.14) Preliminery Expenses Incurred (12.51) - Sale of Fixed Assets 27.43 42.60 Investment in Wholly Owned Subsidiary in Thailand (71.41) (47.96) Sale of Investment - 367.45 Net Cash used in Investing Activities (B) (1,018.94) (337.05)

C. CASH FLOW FROM FINANCING ACTIVITIES Share Application Money Received 109.32 - Increase / ( Decrease) in Secured Loan 58.71 103.21 Increase (Decrease) in Unsecured Loans (17.70) 17.70 Interest Paid (33.93) (19.19) Net Cash inflow from Financing Activities (C) 116.40 101.72 NET INFLOW / (OUTFLOW) {(A)+(B)+(C)} 42.63 11.17

D. NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS Add: Opening Cash Balance 19.67 8.50 Closing Cash Balance 62.30 19.67Notes :1)Cash and cash equivalents include cash and bank balances in current accounts and deposit accounts (referschedule VIII of the Balance Sheet.2)Proceeds from borrowings reflect the increase in secured/Unsecured loans and is net off repayments.3)Interest received on deposit is classified as cash flow from operating activities.4)Addition to fixed assets and sale of fixed assets are considered as part of Investing activities.5)The Cash Flow Statement has been prepared under the indirect method as set out in the (AS-3), "Cash FlowStatement" issued by the Chartered Accountants of India.AS PER SEPARATE REPORT OF EVEN DATEATTACHED





45


INDEPENDENT ACCOUNTANT’S REPORT

TO : THE SHAREHOLDERS

OPENTECH THAI NETWORK SPECIALISTS LTD

We have audited the accompanying balance sheets of OPENTECH THAI NETWORK SPECIALISTS

LTD. as of December 31, 2004 and 2003, and the related statements of income and change in shareholders equity

for the years then ended. These financial statements are the responsibility of the Company’s Management. Our

responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts

and disclosures the financials statements. An audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating the overall financial statement presentation. We

believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the

financial position of OPENTECH THAI NETWORK SPECIALISTS LTD. as of December 31, 2004 and 2003, the

results of its operations for the years then ended in conformity with generally accepted accounting principles.

VINET CO. LTD. CPAs

Sd/-

(Miss Renu Ruangsiri)

April 12, 2005

OOOOOPPPPPENTECH ENTECH ENTECH ENTECH ENTECH THAI NETTHAI NETTHAI NETTHAI NETTHAI NETWOWOWOWOWORKRKRKRKRKSPSPSPSPSPECIALISTECIALISTECIALISTECIALISTECIALISTS LS LS LS LS LTD.TD.TD.TD.TD.

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BALANCE SHEETS As of December 31, 2004 and 2003

ASSETS Unit : BahtCURRENT ASSETS 2004 2003Cash and deposits at financial institutions 73,934.57 422,048.57Current investments (Note 3.1) 444.00 444.00Trade account receivables, net (Note 3.2) 93,090.00 5,029,411.15Inventories 84,100.00 0.00Other current assets 56,256.96 41,300.72TOTAL CURRENT ASSETS 307,825.53 5,493,204.44

NON-CURRENT ASSETSOther long-term investments (Note 3.3) 2,000.00 2,000.00Property, plant and equipment, net (Note 3.4) 664,403.40 695,851.35Other non-current assets (Note 3.5) 625,343.23 446,587.24Total non-current assets 1,291,746.63 1,144,438.59TOTAL ASSETS 1,599,572.16 6,637,643.03

LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESTrade account payables 0.00 4,199,720.30Other current liabilities (Note 3.6) 1,866,961.84 462,881.77Total current liabilities 1,866,961.84 4,662,602.07Total liabilities 1,866,961.84 4,662,602.07

SHAREHOLDERS' EQUITYShare capital (Note 3.7) Authorized share capital 130,000 Common stocks of Baht 100 each 13,000,000.00 13,000,000.00

Issued and paid-up share capital 100,000 Common stocks of Baht 100 each, paid at Baht 40 per share 4,000,000.00 4,000,000.00 30,000 Common stocks of Baht 100 each, fully paid 3,000,000.00 3,000,000.00Retained earnings (Deficit) (7,267,389.68) (5,024,959.04)Total shareholders' equity (267,389.68) 1,975,040.96

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 1,599,572.16 6,637,643.03(The accompanying notes are an integral part of these statements.)

STATEMENTS OF INCOME Unit : BahtYears ended December 31, 2004 and 2003REVENUES 2004 2003 Revenues from sales and rendering of services 7,532,826.16 8,639,288.35 Other incomes 58,852.60 17,458.80 Total revenues 7,591,678.76 8,656,747.15

EXPENSES Costs of sales and rendering of services 4,818,293.14 7,107,572.75 Selling and administrative expenses 5,015,816.26 3,035,572.84 Total expenses 9,834,109.40 10,143,145.59

NET PROFIT (LOSS) (2,242,430.64) (1,486,398.44) Earnings per share Net profit (loss) (32.03) (43.93) (The accompanying notes are an integral part of these statements.)


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STATEMENTS OF CHANGE IN SHAREHOLDERS' EQUITYYears ended December 31, 2004 and 2003 Unit : Baht

Issued and paid-up Retained earnings Totalshare capital (Deficit)

Beginning balance of 2003 3,000,000.00 (3,538,560.60) (538,560.60)Capital increase 4,000,000.00 - 4,000,000.00Net loss (1,486,398.44) (1,486,398.44)Ending balance of 2003 7,000,000.00 (5,024,959.04) 1,975,040.96Net loss - (2,242,430.64) (2,242,430.64)Ending balance of 2004 7,000,000.00 (7,267,389.68) (267,389.68)(The accompanying notes are an integral part of these statements.)

NOTES TO FINANCIAL STATEMENTS Years ended December 31, 2004 and 2003

1. COMPANY'S OPERATIONS AND BASIS FOR FINANCIAL STATEMENTS PRESENTATION

1.1OverviewThe Company was formed under Thai law on August 27, 1996. The first established name was OlympiaThai Network Specialist Limited. Then, on May 25, 2001, the Company has changed its name to OpentechThai Network Specialists Limited.The Company’s office is located at 8/5, Sukhumvit 28, Sukhumvit Road, Klongton, Klongtoey, Bangkok.The Company currently conducts its business on trading of computer and peripheral devices, communication equipment; and, providing after sales services and consultancy services concerning computerand communication network.At the year-end, the Company employed 6 persons in 2004 and 11 persons in 2003.

1.2 Basis for Financial Statements PresentationBalance sheets, statements of income and statements of change in shareholders’ equity are presentedin accordance with an announcement, dated September 14, 2001, issued by Department of CommercialRegistration, Ministry of Commerce concerning the regulations of concise financial statements presentation for 2001.In accordance with the announcement No. 004/2544 - 2546 dated December 21, 2001 issued by theInstitute of Certified Accountants and Auditors of Thailand, subjected “Exception of Thai AccountingStandard (TAS) for Non-listed Companies,” the Company’s financial statements have not complied withthe following accounting standards.

TAS No. 25 Cash Flow StatementsTAS No. 36 Impairment of AssetTAS No. 47 Related Party DisclosuresTAS No. 48 Financial Instruments : Recognition Measurement

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Recognition of Revenues and ExpensesThe Company recognizes its revenues and expenses on an accrual basis.

2.2 Inventories PricingFinished goods are valued at the lower of average cost or net realizable value.

2.3 Investments

2.3.1 Investments in marketable equity securities, considering to be securities for trading, are stated atfair value. Gain or loss on the investment will be taken up to profit and loss in income statement.

2.3.2 Investments in held-to-maturity debt instruments are stated at amortized cost.


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2.4 DepreciationDepreciable assets are depreciated by the straight-line method over estimated useful lives of the assetsfor 5 years in accordance with the Revenue Code.

2.5 Translation of Foreign CurrencyAssets and liabilities denominated in foreign currencies are translated into Baht at the exchange rateprevailing on the transaction date. Balance of those assets and liabilities as at the year-end are translated into Baht at the average commercial banks' buying and selling rates respectively, ascertained bythe Bank of Thailand.

2.6 Earnings per ShareIn 2004, earnings per share is represented basic earnings per share stated in terms of net incomedivided by the number of fully-paid equivalent shares of common stock outstanding as at the year-endIn 2003, earnings per share is represented basic earnings per share stated in terms of net incomedivided by the weighted-average number fully-paid equivalent shares of common stock outstanding asat the year-end.

3. ADDITIONAL INFORMATION

3.1Current Investments Unit : BahtSecurities for trading

2004 2003Common stock 800.00 800.00Less Allowance for change in value of investment 356.00 356.00Total 444.00 264.00

3.2 Trade Account Receivables, net Unit : Baht2004 2003

Trade account receivables 986,647.10 5,029,411.15Less Allowance for doubtful accounts 893,557.10 -Total 93,090.00 5,029,411.15

3.3 Other Long-term InvestmentsIn both years, the other long-term investments are the Sweden Motor Public Company Limited’s debentures which the Company intends to hold them to the maturity.

3.4 Property, Plant and Equipment, net Unit : Baht2004 2003

Acquisition Accumulated Acquisition AccumulatedOffice equipmentBeginning balance 3,988,446.88 3,306,033.15 3,373,960.74 3,238,388.12Increase 163,120.75 185,259.57 621,575.40 70,426.28Decrease 8,785.05 4,875.92 7,089.26 2,781.25Ending balance 4,142,782.58 3,486,416.80 3,988,446.88 3,306,033.15

Tools and equipmentBeginning balance 391,796.00 378,358.38 391,796.00 372,958.38Increase -- 5,400.00 -- 5,400.00Decrease -- -- -- --Ending balance 391,796.00 383,758.38 391,796.00 378,358.38Total 4,534,578.58 3,870,175.18 4,380,242.88 3,684,391.53


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3.5 Other Non-current Assets Unit : Baht

2004 2003Deposits and guarantee 86,300.00 157,300.00Withholding income taxes 539,043.23 289,287.24Total 625,343.23 446,587.24

3.6 Other Current LiabilitiesUnit : Baht

2004 2003Accrued payable 86,244.14 138,029.51Dues to Revenue Department 4959.84 124,503.64Money received in advance to increase capital1,766,642.86 30,783.62Other current liabilities 9115.00 169,565.00Total 1,866,961.84 462,881.77

3.7 Share CapitalOn November 26, 2003, the extraordinary shareholders’ meeting (no. 3/2546) of the Company haspassed a resolution to increased registered share capital for Baht 10 million divided into 100 shares ofcommon stock at par value of Baht 100 per share, The shares were partially called and paid-up for Baht40 per share. The Company has registered the capital increase to the Ministry of Commerce on November 27, 2003.


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VISESH INFOTECNICS LTD.Registered Office: 5, Scindia House,1st Floor, Connaught Place, New Delhi-110 001

ATTENDANCE SLIP: 16th Annual General Meeting

To be handed over at the entrance of the meeting venue.

Name of the attending member in block letters)

Name of the proxy (in block letters to be filled in by Proxy attending instead of the member)

No. of shares held: Ledger Folio No.

Dp. Id No.* Client Id: *

I hereby record my presence at the Annual General Meeting on Thursday, 29th day of September 2005 at 9:30A.M. At Banarasidas Chandiwala Sewa Smarak Trust Society, “Rang Mahal”, (Gate No.- II) Chandiwala Estate,Maa Anandmai Ashram Marg, Kalkaji, New Delhi-110019.

Member’s Signature Proxy’s Signature

Shareholders/proxies are requested to bring the attendance slip with them. Duplicate slips will not be issued.*Applicable for investors holding shares in electronic form.**ABOVE SIGNATURE(S) SHOULD TALLY WITH THE SPECIMEN SIGNATURE(S) REGISTERED WITH THE COMPANY------------------------------------------------------------ Tear Here----------------------------------------------------------

PROXY FORMVISESH INFOTECNICS LTD.

Registered Office: 5, Scindia House,1st Floor, Connaught Place, New Delhi-110 001

I/We of being a member/Members ofVisesh Infotecnics Ltd. hereby Appointas my/our proxy to attend and vote for me /us on my/our behalf at the Annual General Meeting on Thursday, 29thday of September 2005 at 9:30 A.M. At Banarasidas Chandiwala Sewa Smarak Trust Society, “Rang Mahal”,(Gate No.- II) Chandiwala Estate, Maa Anandmai Ashram Marg, Kalkaji, New Delhi-110019.


Dp. Id No.* Client Id:*


Dp. Id No.* Client Id:**Applicable for investors holding shares in electronic form.** EATABLES, BRIEF CASES AND HAND BAGS WILL NOT BE ALLOWED TO BE CARRIED INSIDE THEMEETING HALL

ATTENDENCE SLIP

AffixRe.1

RevenueStamp

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Visesh Info - MPS infotecnics Ltd.

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