2010-2011

2020

th20 Annual General Meeting

Date : September 30, 2011Day : FridayTime : 9.00 a.m.

ndPlace : Hotel Chakra, Vidhi Hall, 2 Floor, P.R. House, Saki Naka, Andheri (E), Mumbai- 400 072.

Book Closure Dates: thMonday 26 September, 2011 to

thFriday 30 September, 2011 (both days inclusive)

ContentsKey Management Team………………………………………………….....……………………… 2

Business Model…………………………………………………………......………………………. 4

Directors' Report…………………………………………………………….......………………….. 5

Report on Corporate Governance……………………………………….………………………. 11

General Shareholder Information…………………………………………..……………………. 25

Management Discussion & Analysis Report….………………………………….…………….. 29

Auditors' Report on Consolidated Financial Statements……………………….……………… 33.Consolidated Financial Statements……………….………………………….…………………. 35

Auditors' Report ……………………………………………………………….....……………….. 53

Balance Sheet……………………………………………………………....……………………... 59

Profit and Loss Account…………………………………………………....……………………... 61

Schedules forming part of accounts…………………………………….……………………….. 63

Balance Sheet Abstract ……………………………………………..…………………………… 77

Cash Flow Statement………………………………………………...…………………………… 79

Statement U/S 212………………………………………………...……………………………… 81

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KEY MANAGEMENT TEAM

BOARD OF DIRECTORS

Mr. G. S. Chandrashekar Mr. Aniket JatharChairman and Managing Director Director – Technical & Whole Time Director

Mr. Rupesh Vishwanathan Mrs. Amita DesaiDirector Director

Mr. Dilip Parekh Mr. D. M ShirodkarDirector Director COMPANY SECRETARYMr. Mitesh Galani1/32, D. S. Nagar, Nursing Lane,Malad (West), Mumbai - 400064

AUDITORSVijay Tater & Co.Chartered Accountants105, Chartered House,293, Dr. Cawasji Hormasji Street,Near Marine Lines Church,Mumbai – 400 002

BANKERSUnited Bank of IndiaPunjab National Bank Axis Bank Ltd.,The Saraswat Co-op. Bank Ltd.

REGISTERED OFFICEC-409, Solaris 1, Opp. L & T Gate No. 6,Saki Vihar Road, Andheri (E), Mumbai - 400 072Tel: +91-22- 2857 8240/ 42 Fax: +91-22-2857 8239E-Mail: investors@tutistech.comWebsite: www.tutistech.com

REGISTRAR & TRANSFER AGENTLink Intime India Private LimitedC-13, Pannalal Silk Mills Compound,L. B. S. Marg, Bhandup (W), Mumbai - 400 078.Tel: +91-22-2596 3838 Fax: +91-22-2594 6969

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AUDIT COMMITTEEMr. Dilip Parekh - ChairmanDr. Uday Pai (till 07.07.2011) Mr. D. M. ShirodkarMr. G.S.Chandrashekar ( w. e. f. 29.07.2011)

REMUNERATION COMMITTEEMr. Dilip Parekh - ChairmanDr. Uday Pai (till 07.07.2011)Mr. D. M. Shirodkar

SHAREHOLDERS / INVESTORS GRIEVANCE AND SHARE TRANSFER COMMITTEEMr. Dilip Parekh - ChairmanMr. Aniket JatharDr. Uday Pai (till 07.07.2011) Mr. G.S.Chandrashekar ( w. e. f. 29.07.2011)

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BUSINESS MODEL· Software & Hardware Products· Software Development· Software Solutions· Software Consulting· IT Services

PRODUCTS Biometric Hardware Products (Exclusive India Partner with SecuGen Inc. of USA)Biometric Software Products (both PC & Embedded based)Biometric Enterprise & Desk Top Log onBiometric Time & Attendance SystemDMS (Document Management System)

SOLUTIONSImaging TechnologyBiometric Software Solutions

SERVICESIT Consultancy ServicesSoftware Development & MaintenanceData Digitization & Data ConversionBusiness Process Outsourcing Services (BPO services)Document Scanning, Indexing, Conversion & Data ExtractionCAD/CAE Conversion, Design & DraftingOffshore facilities

TARGET INDUSTRYBanking, Finance & Insurance CompaniesHealthcareUniversitiesPublishers & LibrariesUnited Nation Organizations & affiliated bodiesLogistics & Courier CompaniesMNCs / CorporatesExporters / ImportersISPs / ITSPSoftware Houses & IntegratorsLocal & Federal Government Bodies

FACILITIESIndia:- Mumbai, Delhi, Chennai, Pune, Banglore & AhmedabadUK:-London U.A.E.:-Sharjah

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DIRECTORS' REPORT

To: The members of Tutis Technologies Limited

Your Board of Directors (“the Board”) have pleasure in presenting the Twentieth Annual Report along with the Audited Accounts for the year ended on March 31, 2011 (“the year under review”, “the year”).

DIVIDEND:

In view of marginal profits generated by the Company your Board does not recommend any dividend for the year ended March 31, 2011.

OPERATIONS:

As per the accounts, the total income for the year ended March 31, 2011 is Rs. 1217.64 Lacs as against Rs. 1512.69 Lacs for the year ended March 31, 2010 registering decrease of about

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Consolidated Standalone

Particulars 31.03.2011

(Rs. in Lacs) 31.03.2010

(Rs. in Lacs) 31.03.2011

(Rs. in Lacs)31.03.2010

(Rs. in Lacs)

Total Revenue 2890.06 1512.89 1217.64 1512.70

Total Expenditure 2382.48 1200.09 945.62 1170.91

PBDT 507.58 312.80 272.02 341.79

Interest 123.02 117.85 122.93 117.72

Depreciation

46.99 132.99 46.31 132.64

Profit before Tax

337.57 61.96 102.78 91.43

Provision for Income Tax

20.96 0.00 20.96 0.00

Deferred payment against tax 0.00 0.00 0.00 0.00

Profit after Tax

316.61 61.96 81.82 91.43

Add: - Balance brought forward from previous year

914.48 852.52 943.94 852.52

Less: Misc. exp written off

0.00 0.00 0.00 0.00

Less: Prior year adjustments

1214.99 0.00 16.09 0.00

Profit carried forward to Balance Sheet

1674.70 914.48 1009.67 943.95

Equity Share Capital

1674.70 1674.70 1674.70 1674.70

Reserves

2760.89 2553.17 2644.28 2578.55

Shareholders fund

4435.59 4227.87 4318.97 4253.25

Book value

26.49 25.25 25.79 25.40

EPS

1.79 0.37 0.36 0.55

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19.51%. The cash profit was much higher than last year and it is mainly due to improved off-take of biometric products as the economy started showing signs of improvement during the year.

Biometrics Products & Solutions Provider:

Your company continues to concentrate on the Biometric product segment and the Tutis brand has been recognized as a Biometric Solutions Company especially in Time Attendance and Access Management segments. Currently your company concentrates on Finger Print Biometric products.

Your company has really done well in TA and Access Management products and solutions in India and abroad. It has acquired more than 1000 clients in the Indian and International market in almost all business Fingerprint Biometric products. Tutis Time Attendance solutions have penetrated the Indian market right from small enterprise to very large organizations with multiple offices across India.

Tutis has added 15 more Time Attendance, Access Control products in its offering. Your company has conducted several pilot projects in Biometric Time attendance system in several e-governance projects.

This year Tutis has added Enterprise Time Attendance software in its offering and has acquired many large size clients across the country. A number of International Schools, Multiplexes are using Tutis Attendance Solutions. Tutis has successfully executed orders of Biometric Attendance Solutions for educational institutes across India.

In respect of other Finger Print biometric solutions, Tutis is very active in many e-governance projects.

This year Tutis has successfully integrated its biometric product in one of the largest e-government project named as RSBY. Tutis has deployed its biometric product for RSBY in more than 25 districts across India.

Tutis has increased its presence in Financial Inclusion projects like conducting pilot projects with various Nationalized Banks especially in ATM, financial inclusion and registration process.

This year Tutis has started offering Annual Maintenance Services to its large client base for Biometric Product, Time Attendance and Access Control System.

FUTURE PROSPECTS:

Indian domestic market is likely to experience a steady growth rate, with national ID projects, e-Passports and other security projects spearheading market growth. So also increased use of biometrics in other applications like RSBY, NREGA, Insurance, crime identification, prevention of fraudulent transactions especially in e-commerce and other application especially Time Attendance in the government and semi government organisations.

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Trends indicate that the industry has evolved a great deal over the past 5 years due to the increased accuracy rates and performance levels of the technology. Biometric standards, cost versus performance benchmarks, and interoperability issues have enabled high uptake in civil and commercial applications even as fraudulent activities and identity thefts continue to cost institutions significant revenue losses.

As per Frost & Sullivan report "With the proliferation of crime due to the economic meltdown, the need for optimized security was apparent across government organizations, financial institutions, retail, and healthcare industries," "Initiatives by biometric vendors and continuous investments in R&D to offer highly accurate and affordable products will considerably enhance prospects for biometrics in the coming years."

Tutis endeavors to deliver highly accurate and cost-effective solutions to generate healthy profit margins. Innovative solutions with high performance levels and value-added customer service hold the key for company winning contracts.

Tutis will shortly come with additional capital raising to strengthen the company's foray into biometric and other security products market. All these efforts would create a niche market segment for the company.

DIRECTORS:

Mr. Rupesh Vishwanathan have been appointed as a Director of the Company with effect from st1 June, 2011. Mr. Dilip Parekh and Mr. G S Chandrashekar, Director and Chairman and

Managing Director of the Company, retire by rotation and being eligible, have offered themselves for re-appointment at the ensuing Annual General Meeting (AGM).

thDr. Uday Pai resigned as Director of the Company with effect from 7 July 2011. Your Board took this opportunity to place on record its appreciation of the services and advice extended by Dr. Pai during the tenure of his association with the Company as Board Member.

Pursuant to Clause 49 of the Listing Agreement, the detailed profile of the Director retiring by rotation is provided in the Notice convening the Annual General Meeting.

SUBSIDIARY COMPANIES: The Company has one Indian Subsidiary namely Tutis Innovative E- Solutions Private Limited (formerly known as Tutis Media Streaming Private Limited) and three foreign subsidiaries namely Global Software Technologies Limited, UK, Tutis FZE, UAE and Amex Information Technologies GmbH, Germany. The Company has also filed an application to Reserve Bank of India (RBI) to close-down its subsidiary in Germany namely Amex Information Technologies GmbH.

Pursuant to the provision of Section 212(8) of the Companies Act, 1956 the Ministry of Corporate Affairs vide its Circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial

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details of the Company's Subsidiaries for the financial year ended March 31, 2011 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company / its subsidiaries seeking such information at any point of time and are also available for inspection by any member of the Company /its subsidiaries at the registered office of the Company. The annual accounts of the said subsidiaries will also be available for inspection, as above, at the head offices / registered offices of the respective subsidiary companies. The Company shall furnish a copy of details of annual accounts of subsidiaries to any member on demand. Also the annual accounts of the Company's subsidiaries are posted on the website of the Company i. e www.tutistech.com

DEPOSITS:

The Company has not accepted any Public Deposits under section 58A of the Companies Act, 1956 during the year under review.

DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Director's Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for the year under review.

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the Directors had prepared the accounts for the year under review on a 'going concern' basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information relating to conservation of energy, technology absorption, foreign exchange earning and outgo required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are detailed as follows:

Conservation of Energy

The operations of the Company involve low energy consumption. Adequate measures have, however been taken to conserve energy.

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Research & Development (R&D)

Your Company continues to make investment in research and development, which is crucial to the continued success of any IT Company. The Company has been successful in developing certain Biometric products in-house by the R & D Section of your Company. The Company is also in the process of adequately protecting the Trade Marks pertaining to these products.

Technologies Absorption

Your Company continues to use the latest technologies for improving the productivity and quality of its services and products.

Foreign exchange earning and outgo

Full details of Foreign Exchange earnings and outflow are furnished under Schedule 17 Part B of Notes on Accounts.

PARTICULARS OF EMPLOYEES:

There are no employees covered under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

AUDITORS:

M/s Vijay R. Tater & Co, Chartered Accountants, Mumbai , Statutory Auditors of the Company, hold office in accordance with the provisions of the Companies Act 1956 upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

CONSOLIDATED FINANCIAL STATEMENTS:

As required under the Listing Agreements with the Stock Exchanges, a Consolidated Financial Statement of the Company and all its subsidiaries is attached. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 (“Act”). These financial Statements disclose the assets, liabilities, income, expenses and other details of the Company, its subsidiaries and associate companies.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, the Management Discussion and Analysis Report, the Report on Corporate Governance and the certificate from the Auditor of the Company regarding compliance of conditions of Corporate Governance are annexed to this Report and forms part of this Annual Report.

With a view to strengthening the Corporate Governance framework, the Ministry of Corporate Affairs has incorporated certain provisions in the Companies Bill, 2009. The Ministry had

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issued a set of voluntary guidelines in the second half of December, 2009 for adoption by the Companies. The Guidelines broadly provide for appointment of directors (including independent directors), guiding principles to remunerate directors, responsibilities of the Board, risk management, the enhanced role of Audit Committee, rotation of audit partners and firms and conduct of secretarial audit. Your Company while already complying by and large with these various requirements has already initiated appropriate action for compliance.

ACKNOWLEDGEMENTS:

Your Directors take the opportunity to thank all investors, business partners, clients, vendors, bankers and advisors for their continuous support during the year.

Your Directors also wish to place on record their appreciation for the dedication with which the employees at all levels performed their duties and for their cooperation and support during the years.

By order of the Board of Directors Sd/- Sd/-

(G. S. Chandrashekar) (Dilip C. Parekh) Chairman & Managing Director Director

PLACE: MumbaiDATE: 31st August, 2011.

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REPORT ON CORPORATE GOVERNANCE

1. Company's Philosophy on Code of Corporate Governance

The basic philosophy of Corporate Governance in the Company is to serve corporate purposes by providing a framework, within which the stakeholders can pursue the objectives of the organization most effectively. It signifies acceptance by the management, the inalienable rights of shareholders as the true owners of the organization and of their own role as trustees on behalf of the stakeholders.

The Company is committed to execute sustainable business practices and creating long – term value for all its stakeholders. To pursue this objective, the Company remains steadfast in its value systems that incorporate integrity, transparency and fairness across all its business activities. The Company will also continue to focus its resources, strengths and strategies to achieve its vision of becoming a truly global leader in software services while upholding the core values of excellence, integrity, responsibility, unity and understanding which are fundamental to the Company. The Company has a strong legacy of fair, transparent and ethical governance practices.

2. Board of Directors

Composition of Board of Directors and other provisions:

sti) As on 31 March 2011 the Board of Directors comprised of six Directors with an Executive Chairman, out of them four (67%) are Non Executive Directors and three are Independent Directors (50%). The composition of the Board is in conformity with Clause 49 of the Listing Agreement entered into with the Stock exchange.

ii) None of the Directors on the Board are Members of more than 10 Committees or Chairman of more than 5 Committees across all the Companies in which they are Directors.

iii) The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanships/Memberships held by them in other companies as on March 31, 2011 are given below:

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*Excludes alternate directorship and directorships in Indian Private Limited Companies, Foreign Companies, Companies under Section 25 of the Companies Act, 1956.

# Excludes Committees other than Audit Committee and Shareholders' Grievance Committee.

iv)Twelve Board Meetings were held during the financial year ended March 31, 2011 and the gap between the two meetings did not exceed four months. The dates on which the meetings are held are as follows:

th th rd th th15 May, 2010; 20 July , 2010; 3 August , 2010; 14 August , 2010; 27 September , 2010; th th th th12 October , 2010; 14 November, 2010; 15 November, 2010; 8 December, 2010; th th th20 December, 2010; 4 January , 2011; 14 February, 2011.

The necessary quorum was present for all the meetings. v) Agenda and Notes to Agenda are circulated to the Directors, in advance, in the defined Agenda format. All material information is incorporated in the Agenda for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the agenda, the same is tabled before the meeting. Information as mentioned in Annexure 1A to Clause 49 of the Listing Agreements have been placed before the Board for its consideration.

Name of Director

Category

(Executive/ Non-Executive/ Independent

No. of Board Meetings held during the year

-2010 2011

No. of Board

Attended

Attendance at previous AGM on 27th August, 2010

No. of outside Directorships Held *

No. of Committee Positions held in other Public Companies #

Mr.G.S. Chandrashekar

Executive (Promoter)

12 04 Present 5 Nil

Mr.Aniket Jathar Executive (Promoter)

12 12 Absent 1 Nil

Dr. Uday Pai Non- Executive & Independent

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12 Absent Nil Nil

Mrs.Amita Desai Non- Executive

12 12 Present

1 Nil

Mr.Dilip Parekh

Non-Executive & Independent

12 12 Present 2 Nil

Mr. D. M. Shirodkar

Non-Executive & Independent

12 0 Absent 1 Nil

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vi) The important decisions taken at the Board /Committee meetings are communicated to the departments/divisions concerned promptly. Action taken report on the decisions/minutes of the previous meeting(s) is placed at the immediately succeeding meeting of the Board /Committee for noting by the Board /Committee.

vii) All the independent Directors of the Company furnish declaration at the time of their appointment or re-appointment as also annually that they qualify the conditions of their being independent. All such declarations are placed before the Board.

viii) No Director is related to any other director on the Board in terms of definition of “Relative” given under the Companies Act, 1956. None of the Non Executive Directors have any material pecuniary relationship or transaction with the Company.

b) Code of Conduct

The Board of Directors of the Company has laid a Code of Conduct for its Board members and senior management personnel. This Code is available on the Company's web site. All the Board members and senior management personnel have affirmed compliance with the said

stCode of Conduct for the financial year ended 31 March, 2011. A declaration to this effect signed by Mr. G. S. Chandrashekar, Chairman and Managing Director, enclosed at the end of this Report forms a part of this Annual Report.

3. Board Committees

The Board has constituted the following three Committees of Directors: I. Audit Committee II. Remuneration Committee III. Shareholders / Investors Grievance and Share Transfer Committee

I. Audit Committee

a) Composition of Audit Committee & Attendance at Meeting: The Audit Committee of the Company is constituted in accordance with the provisions of Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956.

The Audit Committee comprises of three Non Executive and Independent Directors. Five Audit Committee Meetings were held during the year on the following dates:

th th th th th19 April, 2010; 29 May, 2010; 14 August, 2010, 15 November, 2010, 14 February, 2011;

The composition and attendance of the members at the Audit Committee Meetings are as follows:

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Mr. Dilip Parekh, Chairman of the Audit Committee was present at the last Annual General thMeeting held on 27 August, 2010 to answer the shareholders' queries.

Mr. Mitesh Galani, Company Secretary acts as Secretary to the Committee.

The minutes of the Audit Committee meetings form part of the documents placed before the meetings of the Board of Directors. In addition, the Chairman of the Audit Committee appraises the Board members about the significant discussions at Audit Committee meetings.

b) Terms of Reference:The Terms of reference / powers of the Audit Committee are broadly as under:

1. To investigate any activity within its terms of reference;2. To obtain professional advice from external sources;3. To oversee the Company's financial reporting process and the disclosure of its financial

information to ensure that the financial statement is correct, sufficient and credible;4. To recommend to the Board, the appointment, re-appointment and if required, the

replacement or removal of the statutory auditor and fixation of audit fees;5. To approve payment to statutory auditors for any other services rendered by the statutory

auditors;6. To review , with the management, the financial statement before submission to the Board for

its approval ;7. To review with the management, performance of statutory and internal auditors, the

adequacy of internal control; 8. To review the Company's risk management systems;9. To review the adequacy of the internal audit function;10.To have an independent back office support and other resources from the Company;11.To review and monitor the external auditor's independence and objectivity and the

effectiveness of the audit process;12.To have access to information contained in the records of the Company.

II. Remuneration Committee

a) Composition of Remuneration Committee & Attendance at Meeting:

Name of Director No. of Audit Committee

Meetings held

No. of Audit Committee Meetings Attended

Mr. Dilip Parekh – Chairman 5 5

Dr. Uday Pai – Independent Director 5 5

Mr. D.M. Shirodkar- Independent Director 5 Nil

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The Remuneration Committee comprises of three Non Executive and Independent Directors. There is no meeting of the Committee held during the financial year 2010-11. The composition and attendance of the members at the Remuneration Committee Meetings are as follows: -

Mr. Dilip Parekh, Chairman of the Remuneration Committee was present at the last Annual General Meeting of the Company held on August 27, 2010.

b) Terms of reference The Remuneration Committee of the Company reviews, assesses and recommends the performance of managerial personnel on a periodical basis and review their remuneration package and recommends suitable revision to the Board and such other matters as the Board may from time to time request the Remuneration Committee to examine and recommend/ approve.

c) Remuneration Policy

The Company's remuneration policy is driven by the success and performance of the individual employee and the Company. Through its compensation programme, the Company endeavors to attract, retain, develop and motivate a high performance workforce. Individual performance pay is determined by business performance of the individual measured through the annual appraisal process.

Remuneration to the Managing Director & Whole Time Director is paid in accordance with the provisions of the Companies Act, 1956 and the same is governed by the Letter of Appointment issued to them by the Company, the terms and conditions of which was approved by the Board and the Shareholders. The remuneration structure comprises of salary, perquisites and allowances, contributions to provident fund and gratuity fund. The Committee recommends the remuneration payable to Managing Director and Whole Time Director or any Executive Directors based on their contribution to the growth and development of the Company, keeping in mind the remuneration package of the industry.

d) Remuneration to Managing Director and Whole Time Director

Pursuant to the respective terms and conditions approved by the members of the Company, Mr. G. S. Chandrashekar was appointed as Chairman and Managing Director and Mr. Aniket

Name

No. of Remuneration

Committee Meetings Held

No. of Remuneration

Committee Meetings Attended

Mr. Dilip Parekh – Chairman NIL NIL

Dr. Uday Pai – Independent Director NIL NIL

Mr. D.M. Shirodkar- Independent Director NIL NIL

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Jathar was appointed as the Whole- time Director of the Company respectively w.e.f. October 1, 2006 for a period of five years i.e. till September 30, 2011 and have been paid remuneration as

thper terms of their contracts of appointment approved by the members in 15 Annual General Meeting held on September 29, 2006 and in accordance with the overall limits specified under Schedule XIII of the Companies Act,1956. The remuneration of Mr. G. S. Chandrashekar, Chairman & Managing Director and Mr. Aniket Jathar, Whole-time Director of the Company was revised by the Board of Directors of the Company in their Board Meeting and also was ratified by

th ththe members in 18 Annual General Meeting held on 29 September, 2009.

The details of remuneration paid to Mr. G. S. Chandrashekar, Chairman & Managing Director and Mr. Aniket Jathar, Whole-time Director of the Company for the financial year 2010-11 are as follows:

Compensation to Non-Executive Directors

The Non-Executive Directors neither draw any remuneration nor any sitting fees or any commission from the Company. However, one of the Non-Executive Directors, Mrs. Amita Desai is the proprietor of M/s Amita Desai & Co., a firm of Practicing Company Secretaries, Mumbai. The Company takes advice from the said firm relating to Company Law and has paid professional fees to the firm amounting to Rs.6,61,800/- during the financial year 2010-11.

Service Contract, Notice Period and severance fees

Mr. G. S. Chandrashekar and Mr. Aniket Jathar were appointed as Chairman Cum Managing Director and Whole Time Director of the Company respectively w.e.f October 1, 2006 for a period of five years i.e till September 30, 2011 on such terms and on such remuneration as per

thexplanatory statement to the Notice convening the 15 Annual General Meeting which was thsubsequently revised at the 18 Annual General Meeting.

Mr. G. S. Chandrashekar and Mr. Aniket Jathar is entitled to terminate the Agreement of their respective appointment by giving a prior notice of not less than three calendar months in writing to the Company. However the Company shall be entitled to terminate the employment of Mr. G. S. Chandrashekar and Mr. Aniket Jathar as Chairman and Whole Time Director of the Company respectively at any time by payment to them a severance fee of Rs.10 Crore to each namely Mr. G. S. Chandrashekar and Mr. Aniket Jathar.

Name & Designation Salary

(Rs. per month)

Perquisites and allowances

(Rs. per month)

Mr. G. S. Chandrashekar Chairman and Managing Director

2,75,000/- 25,000/-

Mr. Aniket Jathar Director Technical & Whole-time Director

2,75,000/- 25,000/-

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Stock Options

Presently the Company does not have a scheme for grant of stock options either to the working directors or employees. No. of Equity Shares held by Non- Executive Directors

III. Shareholders' / Investors' Grievance and Share Transfer Committee:

The Shareholders'/ Investors' Grievance and Share Transfer Committee comprising of total three Directors out of which two are Non-Executive & Independent Directors. No meetings of the Committee were held during the financial year 2010-11. The composition of the members at the Shareholders'/Investors' Grievance and Share Transfer Committee Meetings are as follows: -

Terms of reference

An investors' grievance committee was formed to look into various issues relating to shareholders including redressal of complaints from the shareholders.

1. Transfer and transmission of Shares 2. Issue of duplicate shares 3. Non Receipt of Dividend and Annual Report and other related matters

M/s. Link Intime India Private Limited is the Registrar and Share Transfer Agent of the Company and the Committee oversees the performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement in the quality of investors' services. The Committee also advises on the matter enabling better investor services and relations.

Name Number of Equity Shares held

as on March 31, 2011

Mr. Dilip Parekh 1,08,701

Dr. Uday Pai 2,22,500

Mrs. Amita Desai 1,13,575

Mr. D. M. Shirodkar 600

Total 4,45,376

Name Designation

Mr. Dilip Parekh Independent Director-Chairman of the Committee

Mr. Aniket Jathar Whole time Director

Dr. Uday Pai Independent Director

The Composition of the Shareholders/ Investors' Grievance Committee and the details of Meeting attended by its members

Meeting

Sixteen meetings of the Shareholders/ Investors' Grievance Committee were held during the year 2010-11 on the following dates:

th th th th th14 April , 2010, 14 June, 2010, 29 June, 2010, 16 August, 2010, 20 September 2010, th th th th15 October, 2010, 30 October , 2010, 15 November, 2010, 29 November, 2010, th rd th st15 December, 2010, 23 December, 2010, 15 January, 2011, 31 January, 2011, th th st16 February, 2011, 11 March, 2011 and 31 March, 2011.

Mr. Dilip Parekh, Chairman of the Shareholders/ investors Grievance Committee was present at ththe last Annual General Meeting of the Company held on 27 August, 2010.

Name and designation of Compliance Officer:

Mr. Dilip Parekh - Director C-409, Solaris I, Opp. L & T Gate No.6Saki Vihar Road, Andheri (East),Mumbai - 400 072.Tel: +91 22 2857 8240/ 42 Fax: +91 22 2857 8239Email : investors @tutistech.com

Status of complaints received for the year 2010-11

No. of Complaints received - NilNo. of Complaints resolved - NilNo. of Complaints pending - Nil

Quorum

Quorum for Board as well as Committee Meetings is one third or two directors/ members of committees, as the case may be, whichever is higher.

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Name Category Number of Meetings

during the year 2010- 2011

Held Attended

Mr. Dilip Parekh Independent Director-Chairman of the Committee

16 16

Mr. Aniket Jathar Whole time Director 16 16

Dr. Uday Pai Independent Director 16 16

Note on appointment or re-appointment of Directors

Particulars of Directors to be re-appointed at the ensuing Annual General Meeting is given under the heading Note No. I of the Notice convening the meeting.

4. Subsidiary Company

1. The Clause 49 defines a “Material Non–Listed Indian Subsidiary” as an unlisted subsidiary, incorporated in India, whose turnovers or net worth (i.e paid up capital and free reserves) exceeds 20 percent of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.

2. As per the above definition none of the subsidiaries of Tutis Technologies Limited are material non-listed Indian subsidiaries.

5. General Body Meetings:

I. Details of Special Resolution passed in the previous three Annual General Meetings (AGMs):

The Details of the last three Annual General Meetings are given in table below:

19

Year Venue Date & Time

Special Resolution Passed

2007-08 Hotel Chakra, Vidhi Hall, 2nd Floor, P.R House, Saki Naka, Andheri (E), Mumbai- 400072

September 30, 2008 9.00 a.m.

Nil

2008-09 Hotel Chakra, Vidhi Hall, 2nd Floor, P.R House, Saki Naka, Andheri (E), Mumbai- 400072

September 29, 2009 9.00 a.m.

1. Revision in term and remuneration of Mr. G. S. Chandrashekar as Chairman and Managing Director. 2.Revision in term and remuneration of Mr. Aniket Jathar as Whole Time Director

2009-10 Hotel Chakra, Vidhi Hall, 2nd Floor, P.R House, Saki Naka, Andheri (E), Mumbai- 400072

August 27, 2010 9.00 a.m.

1. Increase in Authorised Capital. 2. Alteration in Clause V of the

Memorandum of Association. 3. Alteration in Article 5(a) of the Articles

of Association. 4. Issue of Securities to Qualified

Institutional Buyer. 5. Further Issue of Securities. 6. Increase in borrowing powers of the

Board and mortgage / charge assets of the Company.

7. Corporate Guarantee and Security provided to IFCI Ltd. 8. Approval for increase in limit of

Investment by FIIs

All the resolutions were passed with requisite majority.

II Postal Ballot:Pursuant to the provisions of Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolutions by Postal Ballot) Rules, 2001 the Company had vide

rdPostal Ballot Notice dated 3 August, 2010 passed two Special Resolutions under section 372A of the Companies Act 1956 .

Mr. Dilip Parekh and Mr. Aniket Jathar, were appointed as Functional Directors to conduct postal ballot exercise and Mrs.Amita Desai, Practicing Company Secretary was appointed as Scrutinizer to scrutinize the completed Postal Ballot Forms received from the members and for conducting the Postal Ballot process in a fair and transparent manner. Both the resolutions were passed with requisite majority,

6. Other Disclosures:

a. Related Party Transaction

There are no materially significant related party transactions i.e transactions, material in nature, with its promoters, directors, their relatives or the management, subsidiaries of the Company etc. having potential conflict with the interest of the Company at large. All material transactions during the financial year ended March 31, 2011 either with related parties or others were at arm's length.

b. Statutory Compliance, Penalties and strictures

The Company has complied with the mandatory requirements of the Stock Exchange, SEBI and other statutory authorities on all matters related to capital markets during the last three years. No penalties or strictures have been imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets, during the last three years.

c. Whistle Blower Policy

Though the Company does not have a Whistle Blower Policy in place, the Company encourages the employees to freely express their views on various issues faced by them and the HR head follow up the same for necessary resolution of it. The Company also encourages the employees to report to the Company about unethical behavior, actual or suspected fraud or violation of the company's code of conduct. The employees have free access to the audit committee.

d. Accounting Standard

In preparation of the financial statements, the Company follows Accounting Standards issued by the Institute of Chartered Accountants of India.

e. Prohibition of Insider Trading

In compliance with the SEBI Regulation on prevention of Insider Trading, the Company has framed a code of conduct for insider trading regulations, which is applicable to all

20

directors and officers of the company who are expected to have access to unpublished price sensitive information relating to the Company. The Code lays down guidelines which advise them on procedure to be followed and disclosures to be made, while dealing with the shares of the Company.

f. Risk management

The Company has formulated and laid down the procedure on Risk Assessment and Minimization. These procedures have been considered by the Board and a properly defined framework is being laid down to ensure that executive management controls the identified risks. g. Proceeds from Public Issue, Rights Issue and/or Preferential Issue

During the financial year 2010-11, the Company did not raise any proceeds through Public Issue, Rights Issue and/or Preferential Issue.

h. Report on Corporate Governance

All the mandatory items of Clause 49 have been complied with and covered in this report. In respect of Non Mandatory requirements of Clause 49, the Company has complied with appointment of three Non Executive Directors as members of Remuneration Committee. The composition of this Committee has been detailed earlier in this report. Mr. Dilip Parekh, the Chairman of this Committee is an Independent Director. i. CEO/ CFO Certification:

The CEO and CFO certification of the financial statements and the cash flow statements for the financial year ended March 31, 2011 issued to the Board of Directors is enclosed at the end of this Report and forms part of this Annual Report.

j. Training of Board of Directors:

Directors of the Company are well informed about the Company's vision, strategic direction, core values including ethics, corporate governance practices, financial matters and business operations. They are also provided with the necessary documents / brochures, reports and internal policies from time to time to familiarize them with the Company's procedures and practices.

Periodic presentations are made at the Board and Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved.

Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are circulated to the Directors.

k. Meetings of Independent Directors

The Independent Directors of the Company meet management of the Company as and when they deem appropriate without the presence of Executive Directors. These meetings are

21

conducted in an informal manner to enable the Independent Director to discuss matters pertaining to the affairs of the Company.

7. Means of Communications

a. The channel of communication includes the annual report covering the Directors Report, Report of Board of Directors on Corporate Governance, Management Discussion and Analysis Report and the Audited Financial Results.

b. The quarterly, half yearly results and annual financial results are sent to the Stock Exchange immediately after they have been taken on record by the Board. The same are published in newspapers in Marathi (Navshakti) and English (Free Press Journal).

c. The full version of the Annual Report, Quarterly results and shareholding pattern of the Company were filed through the Electronic Data Information Filing and Retrieval System (EDIFAR) on the website maintained by the National Information Center (NIC) as stipulated by SEBI.

d. The Company has a website viz. www.tutistech.com. The quarterly and annual financial results as well as shareholding pattern and code of conduct of Board of Directors and senior management and Code of conduct for insider trading have been posted on the Company's website for the benefit of its shareholders.

e. Presentation, if made, to the Institutional Investors and analysts after the declaration of the quarterly, half yearly and annual results are also put up on the website for wider dissemination.

f. Whenever the Company issues any press release, it is sent to the Stock Exchange as well as posted on the company's website.

8. Management Discussion & Analysis Report

The Management Discussion and Analysis Report is appended to and forms part of the Annual Report.

9. General Shareholder Information

It is provided in the section styled as “General Shareholder Information” published in this Annual Report.

10. Auditors Certificate on Compliance of conditions of Corporate Governance

Certificate from the Auditors in respect of compliance of clause 49 of Listing Agreement with the Bombay Stock Exchange regarding Corporate Governance is enclosed in this Annual Report.

On behalf of the Board Sd/-

(Aniket Jathar) Whole Time DirectorPlace: MumbaiDate:31st August, 2011.

22

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER IN TERMS OF CLAUSE 49 (V) OF THE LISTING AGREEMENT WITH THE STOCK EXCHANGE

We, G. S Chandrashekar and Aniket Jathar, Chairman and Managing Director and Whole Time Director of the Company respectively, do hereby certify that for the financial year ending March 31, 2011on the basis of the review of the financial statements and the cash flow statement and to the best of our knowledge and belief that:-

1) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

2) These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations;

3) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year 2010-11 which are fraudulent, illegal or violative of the Company's Code of Conduct;

4) We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting. We have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls, if any, of which we are aware and the steps that we have taken or proposed to take to rectify this deficiencies;

5) We have disclosed based on our most recent evaluation wherever applicable to the Company's Auditors and Audit Committee of the Company's Board of Directors that:

a) there have been no significant changes in the internal control during this year;b) there have been no significant changes in the accounting policies during the year;c) there have been no instances of significant fraud of which we have become aware

and the involvement therein, of the management or an employee having significant role in the Company's Internal control System.

6) We affirm that we have not denied any personnel, access to the Audit Committee of the Company (in respect of matters involving misconduct, if any);

We further declare that all Board Members and Senior Management Personnel including us have affirmed Compliance with the Code of conduct, as applicable for the Financial Year ended March 31, 2011.

For Tutis Technologies Limited Sd/- Sd/-Place: Mumbai G. S. Chandrashekar Aniket JatharDate: 24th August, 2011. Chairman and Managing Director Whole Time Director

23

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

Corporate Identification Number : L30007MH1991PLC063382Nominal Capital : Rs.35,00,00,000/-

To,The Members,M/s. Tutis Technologies LimitedRegd. Off: C-409, Solaris 1,Opp. L&T Gate No.6,Saki Vihar Road, Andheri (E),Mumbai -400 072

We have examined all the relevant records of M/s. TUTIS TECHNOLOGIES LIMITED, having Registered Office at C-409, Solaris 1, Opp. L&T Gate No.6, Saki Vihar Road, Andheri (East), Mumbai – 400 072 for the purposed of Certifying Compliance of the conditions of Corporate Governance under Clause 49 of the Listing Agreement with the M/s. Bombay Stock Exchange Limited, Mumbai for the financial year ended March 31, 2011. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of certification.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the procedure and implementation thereof. This certificate is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

On the basis of our examination of the records produced, explanations and information furnished, we certify that the Company has complied with:

a) All the mandatory conditions of the said Clause 49 of the Listing Agreement with M/s. Bombay Stock Exchange Limited, Mumbai and;

b) Clause (2) of Non-Mandatory requirements relating to Remuneration Committee.

For Rakesh Kapur

Sd/-Sole ProprietorFCS No.3863CP No.2623

24

Place: MumbaiDate: 24th August, 2011

25

General Shareholder Information:

1) DATE, TIME AND VENUE OF AGM

:30

th September, 2011 at 9.00 a.m. at Hotel

Chakra, Vidhi Hall, 2nd

Floor, P. R. House, Saki Naka, Andheri (East), Mumbai-400 072.

2) FINANCIAL YEAR : April 1, 2010 - March 31, 2011

3) DATES OF BOOK CLOSURES

:

26th September, 2011 to

30th September, 2011

(both the days inclusive)

4) DIVIDEND PAYMENT DATE : N.A.

5) LISTING ON STOCK EXCHANGE

: Bombay Stock Exchange Limited

6) STOCK CODE : 532311 TUTISTECH

7) ISIN NO. : INE953A01012

8. STOCK PRICE DATA: (During 2010-11):

Month Share Price Share Price BSE Index BSE Index

HIGH LOW HIGH LOW

April, 2010 28.55 24.00 18047.86 17276.80

May, 2010 26.95 22.85 17536.86 15960.15

June, 2010 30.35 23.00 17919.62 16318.39

July, 2010 33.50 27.15 18237.56 17395.58

August, 2010 39.25 32.85 18475.27 17819.99

September, 2010 40.90 29.60 20267.98 18027.12

October, 2010 39.75 35.85 20854.55 19768.96

November, 2010 37.70 28.00 21108.64 18954.82

December, 2010 34.70 20.30 20552.03 19074.57

January, 2011 24.00 15.50 20664.80 18038.48

February, 2011 29.50 17.55 18690.97 17295.62

March, 2011 29.70 19.85 19575.16 17792.17

26

9. SHARE PERFORMANCE VIS-A-VIS BSE IT

Month Share Price Share Price BSE

IT

BSE

IT

HIGH LOW HIGH LOW

April, 2010 28.55 24.00 5584.60 5243.41

May, 2010 26.95 22.85 5361.83 4897.70

June, 2010 30.35 23.00 5467.87 5092.88

July, 2010 33.50 27.15 5562.57 5202.56

August, 2010 39.25 32.85 5707.35 5321.16

September, 2010 40.90 29.60 6097.80 5387.87

October, 2010 39.75 35.85 6369.82 5937.95

November, 2010 37.70 28.00 6252.32 5868.08

December, 2010 34.70 20.30 6845.09 6069.36

January, 2011 24.00 15.50 6921.41 6294.86

February, 2011 29.50 17.55 6459.24 6038.60

March, 2011 29.70 19.85 6593.47 5943.80

10. REGISTRAR & SHARE TRANSFER AGENT:

Link Intime India Private Limited carries out share transfer registration; all demat related activities and other investor related activities.

Address for communication: Shareholding related queries Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (W), Mumbai - 400 078. Tel: +91 -22- 2596 3838 Fax: +91-22- 2594 6969

11. SHARE TRANSFER SYSTEM:

Generally, Share Transfer Request received in physical forms are registered within an average period of 15 days and dematerialization requests are normally confirmed within an average period of 3 – 4 days. During the year, the Company have not received any Share transfer request.

27

12. DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, 2011

Distribution of shares (slab wise) No. of Shares

No. of shareholders

Percentage tototal No. of

shareholders

No. of Shares held

Percentage to total

share c apital

1 to 5000 5106 75.40 990558 5.91

5001 to 10,000 763 11.27 683633 4.08

10,001 to 20,000 306 4.52 501210 2.99

20,001 to 30,000 135 1.99 363828 2.17

30,001 to 40,000 72 1.06 267956 1.60

40,001 to 50,000 92 1.36 447872 2.67

50,001 to 1,00,000 121 1.79 953124 5.70

1,00,001 to and above 177 2.61 12538794 74.88

Total 6772 100.00 16746975 100.00

13. SHAREHOLDING PATTERN AS ON MARCH 31, 2011

Category No. of shares held Percentage to shareholding (%)

Foreign Companies NIL NIL

Non Resident (Individual & Companies) 1119094 6.69

Foreign Financial Institution NIL NIL

Financial Institutions NIL NIL

Mutual Fund NIL NIL

Promoters 2185303 13.05

Resident Individual 9298609 55.52

Nationalized Bank NIL NIL

Other Bodies Corporate 3130651 18.69

In Transit 261464 1.56

Independent Director & their Relatives 751854 4.49

Others NIL NIL

Total 16746975 100.00

14. DEMATERIALISATION OF SHARES AND LIQUIDITY:

thThe Company's shares are compulsorily traded in dematerialized form effective from 24 July, 2000 and are available for trading on both the depositories in India viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Equity Shares of the Company representing 99.03% of the Company's share capital are dematerialised as on – March 31, 2011.

The Company's shares are regularly traded on the Bombay Stock Exchange Limited in electronic form.

15. OUTSTANDING GDR'S/WARRANTS, CONVERTIBLE BONDS, ETC.:The Company has not issued any GDR/ ADR/ Warrants or any convertible instruments.

16. ADDRESS FOR GENERAL CORRESPONDENCE:

Mr. Dilip ParekhCompliance officerTutis Technologies Limited

C-409, Solaris 1, Opp. L & T Gate No.6, Saki Vihar Road, Andheri (East), Mumbai- 400 072

17. PHONE, FAX, E MAIL Phone : +91-22-2857 8240 / 42 Fax : +91-22-2857 8239 Email : investors@tutistech.com

Website : www.tutistech.com

For and on behalf of the Board of Directors

Sd/-

G. S. Chandrashekar Chairman and Managing Director

Place: MumbaiDate: 31st August, 2011

28

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Overview:

With the world economy getting back into shape from the recent meltdown, the IT industry has recovered impressively with a growth rate of 10.3 % globally to a market size of $ 64 Billion and India has been among those that has grown most rapidly during 2010-11 at 7% which is evident by the number of multinational giants that have plunged into the Indian IT market.

One of the major beneficiary countries of global outsourcing trend continues to be India whose expertise and capability in the area of IT and especially software has made it a favorable destination full of promising returns for foreign technology partners.

Software Industry being a major component of the Indian IT industry has been instrumental in driving the economy of the nation on to a rapid growth curve. Maintaining a consistent double-digit growth has been comparatively easy with the help of new liberal policies in India that has given immense opportunities and wide scope of expansion in the domestic as well as international market.

On the threshold of the software industry is the Biometric market which is used to protect highly sensitive facilities. Thanks to the improved awareness, advances in scanning technology leading to cost reduction, and favorable government projects biometric technologies are going to be making their foray into every sphere of urban and rural indian life thereby expanding the Indian software industry at a great scale.

Opportunities & Threats:

Tutis is a pioneer in Biometric technology especially in biometric finger print and we understand our clients' needs better than the others.

Tutis is actively participating in the proof of concept launched by UIDAI for the next stage on finger print authentication after the end of current enrollment process. This will have great impact on Tutis topline and bottom lines.

There is great opportunity in the offing for the company in terms of end to end services which can be offered in capturing finger prints of individuals for maintaining and updating Government data bases.

Tutis has also shown expression of interest in the authentication process by investing in servers and will earn revenue as SAS model.

Adoption of multi-factor authentication will provide stronger security by collectively overcoming the limitations of individual technologies and contributing to the long-term growth of the biometrics market.

Major threat will be competition from foreign players especially after the announcement of UID project by the government. To mitigate intensifying competition and ensure progress, small-

29

scale companies should form strategic alliances with large companies to ensure growth in their business.

Risks & Concerns:

Government-backed projects typically have long sales cycles and can sometimes stretch over a year before completion, depending on the complexity of the project. Budgetary constraints and delayed testing have also contributed to long sales cycles.

Attrition is impediment to company's progress and to mitigate this, company is in the process of introducing ESOP scheme.

Availability of skilled resources is matter of concern especially in biometrics as it requires very specific and highly skilled resources and company may have to incur higher cost to retain them.

Though good communication infrastructure is considered vital for the continued growth of the industry the data communication infrastructure in India is expensive and in limited supply which is a cause for concern.

Tutis is embarking on revenue sharing model with enrollment agencies and hence there are slight risks on the success of such model.

Segment-wise performance:

The company comes under one segment of providing IT Services and Solutions.

Future Outlook:

Please see the discussion on operations in the Directors' Report.

Internal Control Systems and their adequacy:

The Company has in place adequate system of internal control commensurate with its size and nature of its operations. The Company has budgetary control system to monitor all expenditure against approved budgets on an ongoing basis. The Company's accounting process is based on uniform accounting guidelines that sets out accounting policies and significant processes.

The Company has well established policy towards maintaining the highest standard of health, safety and environmental norms while maintaining operational integrity.

The Company has an internal audit function which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It is also responsible for assessing and improving the effectiveness of Risk Management, Control and Governance process.

The Company has an Audit Committee, the details of which have been provided in Corporate Governance Report. The Committee considers and takes appropriate action on the

30

recommendation made by the Statutory Auditors and keep the Board of Directors informed of its major observations from time to time.

Financial Position:

Share Capital:

As at the end of March, 2011, the Company's Issued and Paid-up Share Capital stood at Rs. 16,74,69,750/-(Previous year Rs. 16,74,69,750/-). There is no ESOP plan offered to the employees and accordingly there are no shares allotted under ESOP Scheme.

Reserves and Surplus:

The Reserve and Surplus of the Company as at March 31, 2011 amounted to Rs. 26,44,27,525/- as against Rs. 25,78,55,084/- as at March 31, 2010.

Fixed Assets:

During the year under report, the Company has made the following additions to its Fixed Assets:

Building Rs. NILComputers HW & SW Rs. 1,07,73,578/-Motor Car Rs. 7,91,066/-Office equipments. Rs. 58,792/-Furniture & fixtures Rs. NILAirconditioners Rs. 3,00,309/-Electrical equipments Rs. NIL

The details of Fixed Assets sold during the year are as under :

Motor Car Rs. 9,12,542/-

The company has credit limits with various banks to take care of regular working capital expenses. Since company is a net earner in foreign exchange & so it is vulnerable to foreign exchange appreciation/depreciation. Company does not speculate on foreign currency exchange rates.

Financial Highlights:

Operating Expenses:

Operating expenditure for the year ended March 31, 2011 has decreased by 20.69% over the same period last year. The decrease in expenditure is primarily on account of reduction in the scale of operations.

EBIDT:

The EBIDT was at 77.66% for the year ended March 31, 2011 as compared to 77.41 % for the same period last year.

31

Profit After Tax:

The Company had a profit of Rs.65.72 lacs for the year ended March 31, 2011 as compared to a profit of Rs.91.43 lacs for the same period last year.

Human Resources:

Development of human resources is the key to progress. In IT industry, good human resources policy ensures a sure success to growth & profitability. Tutis follows open door policy and employees have access to anyone in the senior management team including CMD to voice their opinions.

During the year, the Company had made substantial addition to human resources. The total number of employees as on March 31, 2011 was 55 (68 as on March 31, 2010 )

Cautionary Statement:

Statements in this “Management Discussion and Analysis Report” describing the Company's objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operation include changes in government regulations, rupee appreciation, non availability of working capital, tax regimes, economic developments in India and the countries in which the Company conducts business and other incidental factors

For and on behalf of the Board of Directors

Sd/- (G.S.Chandrashekar) Chairman and Managing DirectorPlace: MumbaiDate: 31st August, 2011

32

33

AUDITOR REPORT TO THE MEMBERS ON THE CONSOLIDATED FINANCIAL STATEMENT OF TUTIS TECHNOLOGIES LIMITED AND ITS SUBSIDIARIES

1) We have audited the attached Consolidated Balance Sheet of Tutis Technologies Limited and its subsidiary as at 31st March, 2011, the Consolidated Profit & Loss Account and also the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Tutis Technologies Limited's management. Our responsibility 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial 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 audit provides a reasonable basis for our opinion.

3) We did not audit the financial statements of subsidiary companies namely Tutis FZE, Tutis Innovative E-Solutions Private Limited, Global Software Technologies Limited and Amex Information Technologies GmbH. The financial statement of these

stsubsidiaries reflect total assets Rs594.41 Lacs as at 31 March,2011 and profit after tax of Rs272.05 Lacs for the year ended on that date. These financial statements have been audited by other auditors except in the case of Amex Information Technologies GmbH which is under liquidation and is unaudited. Those reports have been furnished to us, and our opinion in so far as it relates to the amounts included in respect of the subsidiary is based solely on the report of the other auditor.

4) We report that the consolidated financial statement have been prepared by the Tutis Technologies Limited in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of the Tutis Technologies Limited and its subsidiary included in the consolidated financial statements.

5) On the basis of the information and explanation given to us and on the consideration of the separate audit reports on individual audited financial statements of the Tutis Technologies Limited and its subsidiary, we are of the opinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India :-

(i) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Tutis Technologies Limited and its subsidiary as at 31st March 2011.

(ii) in the case of the Consolidated Profit and Loss account, of the consolidated results of operation of the Tutis Technologies Limited and its subsidiary for the year ended on that date

34

For Vijay R Tater & Co.,Chartered Accountants

FRN 111426W

Sd/-CA Suresh Kothari

PartnerM No. 047625

and

(iii) in the case of the consolidated cash flow statement, of the consolidated Cash Flow Statement of the Tutis Technologies Limited and its subsidiary for the year ended on that date.

Place : Mumbai, stDate : 31 August, 2011

35

Current Year Previous Year

Rs. Rs.

SOURCES OF FUNDS

SHAREHOLDERS' FUNDS

Share Capital 1 167,469,750 167,469,750

Reserves & Surplus 2 276,088,955 255,316,847

443,558,705 422,786,597

LOAN FUNDS

Secured Loans 3 56,853,123 105,901,709

Unsecured Loans 4 10,137,047 -

TOTAL 510,548,875 528,688,306

APPLICATION OF FUNDS

FIXED ASSETS 5

Gross Block 142,250,242 130,955,787

Less: Depreciation 85,421,074 56,829,168 81,018,635 49,937,152

Investments 6 152,386,456 168,202,834

Current Assets, Loans & Advances 7

Cash and Bank Balances 11,270,128 2,835,349

Inventories 23,886,924 3,777,611

Sundry Debtors 259,767,938 165,994,625

Loans & Advances 76,473,969 149,190,693

371,398,959 321,798,278

Less: Current Liabilities 8

Current Liabilities

Sundry Creditors 68,933,997 23,389,632

Provision for Taxation 2,096,111 891,124

71,030,108 24,280,756

Net Current Assets 300,368,851 297,517,522

Miscellaneous Expenditure 9 964,400 13,030,798

(to the extent not w/off or adjusted)

TOTAL 510,548,875 528,688,306

TUTIS TECHNOLOGIES LIMITED

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011

36

Notes forming part of Accounts 17

Sheet

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

37

Current Previous

Year Year

Rs. Rs.

INCOME

Software Development and Sale of Biometric

Solutions 10 268,636,128 108,305,122

Increase/Decrease in Stocks 11 20,109,313 2,094,411

Other Income 12 260,582 40,889,594

TOTAL INCOME 289,006,023 151,289,127

EXPENDITURE

Biometric Solutions Expenses 13 208,577,187 95,347,906

Administrative expenses 14 27,977,898 24,642,096

Financial Expenses 15 12,302,241 11,784,814

Loss on Sale of Investments 16 1,287,379 19,305

Loss on sale of Assets 165,891 -

Deferred Revenue Expenditure w/off 239,500 -

Depreciation 4,699,090 13,299,168

255,249,185 145,093,289

Profit Before Tax 33,756,838 6,195,838

Prior Period Expenses 1,609,524 -

(Refer notes Part A para 7)

Provision for taxation 2,096,111 -

Profit after tax 30,051,203 6,195,838

Add: Balance brought forward from previous year 91,447,633 85,251,795

Amount available for Appropriations 121,498,836 91,447,633

Balance Carried to Balance Sheet 121,498,836 91,447,633

Notes forming part of Accounts 17

TUTIS TECHNOLOGIES LIMITED

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD

ENDED MARCH 31, 2011

38

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

Sheet

39

Current Previous

Year Year

Rs. Rs.

1 SHARE CAPITAL

Authorised

3,50,00,000 Equity Shares of Rs. 10/- each 350,000,000 180,000,000 (Pr.yr. 180,00,000 equity shares of Rs. 10/- each)

350,000,000 180,000,000 Issued, Subscribed & Paid-up:

1,67,46,975 Equity Shares of Rs. 10 each fully paid up 167,469,750 167,469,750 (Pr. Yr. 1,67,46,975 equity shares of Rs. 10/- each) 167,469,750 167,469,750

2 RESERVES & SURPLUS

General Reserve:

As per last Balance Sheet 21,936,294

21,936,294

Add: Transferred from Profit & Loss Account -

-

21,936,294

21,936,294

Share Application Money 245,000

245,000

Share Premium Account

As per last Balance Sheet 141,524,750

141,524,750

Add: Received during the year -

-

141,769,750

141,769,750

Profit & Loss Account 112,382,911

91,610,803 276,088,955

255,316,847

3 SECURED LOANS

Cash credit facility from a Scheduled Bank 56,258,769

39,255,833 (Secured against hypothecation of Book Debts Cum Stocks and

Personal Guarantee of Directors)

Term Loan from a Scheduled Bank -

6,487,109 (Secured against hypothecation of Office premises & Fixed assets

and Personal Guarantee of Directors)

Term Loan from a Scheduled Bank 594,354

1,158,767 (Secured against hypothecation of Vehicles)

Loan from a State financial instutitions -

59,000,000 (Secured against pledge of financial assets)

56,853,123

105,901,709

4 UNSECURED LOANS

Inter Corporate Deposits 10,137,047

-

10,137,047

-

TUTIS TECHNOLOGIES LIMITED

40

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41

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Consolidated Balance Sheet as at March 31, 2011

6 INVESTMENTS

(Valued, verified & certified by the Management)

Investment in Shares

A) Long Term - Non Trade :

1) Unquoted

In subsidiary companies:

1,04,500 (Previous Year 1,04,500 ) Equity Shares of Global Software

Technologies Limited (Face Value GBP 1/- each) -

-

2,09,000 (Previous Year 2,09,000) Equity Shares of Amex Information

Technologies Gmbh (Face Value DM 1/- each) -

-

25,500 (Previous Year 25,500 )Equity Shares of Tutis Innovative

E-Solutions Pvt Limited (Face Value Rs. 10 each ) -

- 1 (Previous Year Nil ) Eqyity Share of Tutis FZE, Sharjah (Face Value

1,50,000 AED) -

-

Others:-

90,000 (Previous Year 90,000) Equity Shares of MediaIT Limited

(Face Value GBP 1 each ) 7,560,000

7,560,000 12,50,000 (Previous Year 12,50,000) Equity Shares of Essem

Capital Markets Limited (Face Value Rs. 10 each) 12,500,000

12,500,000

II) Quoted :

60,07,506 (Previous Year 672,60,930 - Face Value Re 1/- each ) of

Vishal Technologies Limited now Equity Shares of Coral Hub Ltd 132,232,675

148,049,053

(Face Value Rs. 10/- each )

584 (Previous Year 584) Equity Shares of United Bank of India Ltd 38,544

38,544

(Face Value Rs. 10 each )

5124 ( Previous Year 5124 ) Units of Prudential ICICI Balance Fund

(Previus year 5124 Units of Rs. 10 each ) 55,237

55,237

152,386,456

168,202,834

Notes: Book Value Mkt. Value Book Value Mkt. Value

as at as at as at as at

31.03.11 31.03.11 31.03.10 31.03.10

a) Aggregate of Quoted Investments 132,326,456 49,679,241 148,142,834 616,150,351

b) Aggregate on Unquoted Investments 20,060,000 20,060,000 20,060,000 32,767,320

7 CURRENT ASSETS, LOANS AND ADVANCES

a Cash and Bank Balances:

Cash on hand and balances with Banks 11,270,128

2,835,349

11,270,128

2,835,349

b Inventories

(As taken, valued and certified by the management)

Biometric Products 23,886,924

3,777,611

23,886,924

3,777,611

42

c Sundry Debtors:

(Unsecured, considered good)

Outstanding for a period exceeding six months

Other Debts

247,715,263

12,052,675

259,767,938

81,375,773

84,618,852

165,994,625

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Consolidated Balance Sheet as at March 31, 2011

d Loans and Advances:

(Unsecured, Considered good)

I) Advances to Subsidiary Companies - -

ii) Advances recoverable in cash or in kind

or for value to be received 73,140,338 146,436,444

iii) Advance to Suppliers 131,868 -

iv) Deposits 2,856,229 2,754,249

v) balances with Government Authorities - -

vi) Tax Deduction at Source 345,534 -

76,473,969 149,190,693

Total (a+b+c+d) 371,398,959 321,798,278

8 CURRENT LIABILITIES

Sundry creditors for :

For Expenses 39,975,720 22,631,277

Other Liabilities 18,192,408 -

Advance for Capital Goods 4,800,000 -

Advance from Customers 103,253 -

Expenses Payable 331,594 758,355

Duties and taxes 3,776,570 -

Gratuity payable 1,754,452 -

68,933,997 23,389,632

9 MISCELLANEOUS EXPENDITURE

Deferred Revenue Expenditure

Incurred during the year 1,203,900 1,422

Less : Written off during the year 239,500 1,422

964,400 -

10 INCOME

Income from Software Development & Sale of Biometric solutions 267,633,976 108,305,122

Income from 3D modelling 1,002,152 -

268,636,128 108,305,122

11 INCREASE / DECREASE IN STOCK

Opening stock of finished goods 3,777,611 1,683,200

Less : Closing stock of finished goods 23,886,924 3,777,611

20,109,313 2,094,411

43

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Consolidated Balance Sheet as at March 31, 2011

12 OTHER INCOME

Dividend received 1,168 -

Interest on FDR 136,123 -

Miscellaneous 57,147 40,889,594

Sundry Balances W/back 66,144 -

260,582 40,889,594

13 BIOMETRIC SOLUTIONS EXPENSES

Purchases - Biometric Devices, Salary and Allowances 205,456,698 92,587,472

Gratuity 144,928 -

Communication Expenses 2,975,561 2,760,434

208,577,187 95,347,906

14 ADMINISTRATIVE EXPENSES

Advertisement expenses 223,827 150,212

AGM Expenses 24,000 22,400

Auditors remuneration 202,450 177,450

Bad Debt written off 27,045 -

Books and Periodicals 16,474 17,363

Business Promotion Expenses 631,531 110,280

Car Hiring Charges 148,008 62,580

Computer Expenses 63,902 34,680

Conveyance 1,944,773 1,683,760

Directors' Sitting fees 27,500 10,400

Donation 642,119 271,814

Electricity charges 1,424,317 1,367,489

Entertainment expenses 518,574 496,791

House Keeping Charges 383,750 265,800

Insurance 154,835 276,560

Legal & Professional fees 8,797,510 6,399,335

Loss on foreign exchange fluctuation 187,901 -

Membership Subscription 267,174 569,430

Miscellaneous Expenses 102,497 304,666

Motor car expenses 244,249 452,874

Municipal Taxes 386,546 -

Office Expenses 778,009 724,078

Other Expenses 119,309 2,000

Printing & Stationary expenses 804,019 590,629

Rent 3,288,310 2,696,342

Repairs & Maintenance - Buildings 765,434 727,281

Repairs & Maintenance - Other Assets 426,137 877,620

ROC Charges 41,607 17,170

Security charges 554,156 422,086

Service Charges 74,061 46,250

Service tax paid 236,872 -

Shop and Establishment exp 16,780 9,480

Travelling Exp 4,420,890 5,836,877

Visa Fees 33,330 18,400

27,977,898 24,642,096

44

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Consolidated Balance Sheet as at March 31, 2011

15 FINANCIAL EXPENSES

Interest on Secured Loans 10,939,895 11,558,060

Interest Others 917,706 -

Interest on Vehicle Loans 91,614 -

Bank charges 353,026 226,754

12,302,241 11,784,814

16 LOSS ON SALE OF INVESTMENTS

Long Term Loss on Sale of Shares 5,267,195 19,305

Less : Long Term Profit on Sale of Shares 3,979,816 -

1,287,379 19,305

45

Consolidated Schedules forming part of the Accounts for the year ended March 31, 2011.SCHEDULE- 17

A. SIGNIFICANT ACCOUNTING POLICIES:

1. PRINCIPLES OF CONSOLIDATION :

1. The consolidated financial statement relates Tutis Technologies Limited and its subsidiary companies. The consolidated financial statement have been prepared in accordance with Accounting Standard – 21 “Consolidated Financial Statement” issued by the Institute of Chartered Accountants of India. The consolidated financial statements have been prepared on the following basis:

? The Financial statement of the Company & its subsidiary company have been combined on a line-by line basis by adding together the book value of like items of Assets, Liabilities, income and expenses, after eliminating intra-group balances, transactions and the resulting unrealized profit or loss.

? The financial statements of the Subsidiary Company used in the consolidation are drawn upto March 31, 2011 the same reporting dates as that of the Holding Company.

? The Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances except where stated otherwise, in the same manner as the Company's separate financial statement.

2. The Subsidiary Companies considered in the Consolidated Financial Statements are:

Name of the Company CountryIncorporation

Percentageof Holding

Tutis Innovative E-Solutions Private Limited India 100%

Global Software Technologies Limited United Kingdom 100%

Amex Information Technologies GmbH Germany 100%

Tutis FZE Sharjah, UAE 100%

2. Accounting Convention:The consolidated Financial Statements have been prepared under the historical cost convention, on accrual basis to comply in all material respect with all applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

3. Use of Estimates:The preparation of the financial statements are in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of

46

contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. Any differences of actual results to such estimates are recognized in the period in which the results are known/materialized.

4. Fixed Assets:

The fixed assets are stated at acquisition cost less accumulated depreciation.

5. Depreciation: a) Depreciation on fixed assets has been provided on straight line method and depreciation on

the assets acquired / sold during the year is provided on pro-rata basis. b) Depreciation is charged at one hundred percent in respect of the Individual assets costing

less than Rs.5,000.00 in the year of purchase.

6. Investments: The Investments are classified as Quoted & Unquoted Investments.

a) Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the Management.

b) There are no current investments.

7. Valuation of Inventories:Inventories are valued at lower of cost or net realizable value, on FIFO basis. Obsolete, defective and unserviceable stock are provided for wherever required.

8. Foreign Currency Transactions: Transactions in foreign currency are recorded at the exchange rates prevailing at the dates of the transactions. Gains / losses arising out of fluctuation in exchange rates on settlement are recognized in the profit and loss account.

Foreign currency monetary assets and liabilities are restated at the exchange rate prevailing at the period end and the overall net gain / loss is adjusted to the profit and loss account.

9. Retirement Benefits:(a) Provident Fund: Contribution to Provident Fund is made at the pre-determined rate, to

the appropriate authorities and is charged to revenue as expenditure. (b) Leave Encashment and Gratuity : As per Accounting Standard 15 issued by The Institute of

Chartered Accountants of India, the Company is required to provide for liability in respect of earned Leave Encashment and Gratuity on accrual basis. However the Company continue to follow the past practice of charging leave encashment on cash basis and Gratuity is provided in the books as per actuarial valuation done.

47

10. Income and Expenditure:All income and expenditure are accounted on accrual basis by the company as required under section 209(3) of the Companies (Amendment) Act, 1988.

11. Revenue Recognition:

(a) Sales are exclusive of VAT and net of returns, claims, rebates and discounts etc.,

(b) Other items of revenue are recognised in accordance with the Accounting Standard (AS9). Accordingly, wherever there are uncertainties in the ascertainment / realisation of income such as interest from customers (including the financial conditions of the person from whom the same is to be realized), the same is accounted for in the year in which it is realised.

(c) Deferred Revenue expenses: Rs. 11,91,100 was incurred during the year for increasing Authorised Capital. Looking to the nature of expenses, it is spread over a period of five

thyears. 1/5 being Rs. 2,38,220 is debited during the year as revenue expenses.

12. Borrowing Costs: Interest and other costs incurred in connection with borrowing of the funds are charged to revenue on accrual basis except those borrowing cost which are directly attributable to the acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use. Such costs are capitalised with the fixed assets.

B. NOTES TO ACCOUNTS

1. Contingent Liabilities not provided for :- (Rs. in Lacs):Income Tax Liability which are disputed and taken before the appellate authorities are pending for giving effect by the assessing officer upon which the disputed liability shown gets substantially reduced which is contingent in nature. The amount involving various assessment years is Rs. 892.72 Lacs (P.Y. 892.72 Lacs).

2. Retirement Benefit:Post employment benefit plan: The company has not provided for gratuity in the earlier years nor the actuarial valuation was done recognising the liability towards gratuity. During the year, the company got the valuation done from an independent actuarial valuer. The liability including current year provision of Rs. 1.45 lacs (P.Y. Nil) works out to Rs. 17.54 lacs (P.Y. Nil) Past liability is accounted for under prior period expenses as an item of appropriation. The gratuity provision is not funded.

3. Managerial Remuneration:-a) Managerial Remuneration paid to the Chairman & Managing Director and Whole Time

Director 2010-11 2009-10

i) Salary Rs.66,00,000 Rs.66,00,000ii) Perquisites & Allowances Rs. 6,00,000 Rs. 6,00,000

b) No computation of Profit under section 350 of the Companies Act, 1956 has been given since no commission is paid to Directors.

48

4. Units falling under Micro, Small and Medium Enterprises Development Act, 2006 who have been the suppliers to the company have no outstanding more than maximum stipulated period in the current year.

5. Disclosure requirements as per Accounting Standard 18 (AS-18) “Related Party Disclosure” issued by the Institute of Chartered Accountants of India.

I. List of Related Parties :

a) Parties Where Control Exists:

i) Subsidiary Companies1. Tutis Innovative E-Solutions Pvt. Ltd.2. Tutis FZE3. Global Software Technologies Limited4. Amex Information Technologies GmbH

b) Associate companies where managing directors or relatives of managing director are Directors.

(i) Coral Hub Limited(ii) Basiz Fund Service Pvt. Ltd.,

c) Key Management Personnel / Associates

(i) G S Chandrashekar– Managing Director (ii) Aniket Jathar – Whole Time Director(iii) Amita Desai – Director

49

Sr No

Name Nature of Transaction

Relationship For the year ended

31.03.2011 Rupees

For the year ended

31.03.2010 Rupees

1 Mr. G.S. Chandrashekar

Remuneration to Director

Chairman and Managing Director

36,00,000 36,00,000

2 Mr. Aniket Jathar Remuneration to Director

Whole-time Director

36,00,000 36,00,000

3 Tutis FZE Loan given Wholly Owned Subsidiary

6,36,043 -

4 Tutis Innovative E-Solutions Private Limited

Loan given Wholly Owned Subsidiary

63,63,990 18,51,475

5

Amex Information Technologies GmbH

Loan given

Wholly Owned Subsidiary

14,98,810 14,98,810

6

Global Software Technologies Ltd (UK)

Investment in shares

Wholly Owned Subsidiary

75,87,890 75,87,890

7

Amex Information Technologies GmbH

Investment in shares

Wholly Owned Subsidiary

48,64,430 48,64,430

8

Coral Hub Limited

Investment in shares

Group company

13,72,32,675 14,80,49,053

9

Coral Hub Limited

Corporate Guarantee

Group company

25,00,00,000 25,00,00,000

10

Tutis Innovative E-Solutions Private Limited

Sharing of common facilities

Wholly Owned Subsidiary

- 1,30,000

11

Coral Hub Limited

Corporate Guarantee

Group company

8,60,00,000 2,60,00,000

12

Basiz Fund Service Private Limited

Corporate Guarantee

Group company

2,10,00,000 2,10,00,000

13

Amita Desai

Professional Fees

Director

6,61,800 6,61,800

50

6.Auditor's Remuneration:

Particulars 2010-11 2009-10

Rs. Rs.

For Statutory Audit 140,300 110,300

For Tax Audit 33,090 33,090

For Income Tax matters 11,030 11,030

For Certificates 11,030 11,030

7. As per Accounting Standard 20 “Earning Per Share'' issued by Institute of Chartered Accountant of India the Company gives following disclosure for the year.

As at 31.03.11 As at 31.03.10a. Basic Earning's per share 1.79 0.38

8. The figures of the previous year have been regrouped and recast wherever necessary to confirm to the groupings of the current year.

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

51

Rs. Rs. Rs. Rs.

A CASH FLOW FROM OPERATING ACTIVITIES

Net Profits after tax 30,051,203 6,378,829

Adjustments for:

- Depreciation 4,699,090 13,264,216

- Deferred Revenue expenses w/off 238,220 -

- Prior year expenses 1,609,524

- Employee Stock Option Amortization - -

- Interest received (136,123) -

- Dividend received (1,168) 8,408,561

- Profit / Loss on Sale of Investments 1,287,379 32,481,033

- Profit / Loss on Sale of Fixed Assets 165,891 -

- Provision for Taxation 2,096,111 9,958,924 54,153,810

40,010,127 60,532,639

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

(Increase) / Decrease in Current Assets:

- Inventories (20,109,313) (2,094,411)

- Sundry Debtors (93,773,313) 15,494,268

- Loans & Advances 72,716,724 (62,424,084)

(41,165,902) (49,024,227)

Increase / (Decrease) in Current Liabilities:

- Liabilities 46,749,352 (18,035,791)

5,583,450 (67,060,018)

CASH GENERATED FROM OPERATIONS: 45,593,578 (6,527,379)

Minority Share of Interest in Profits - -

Direct Taxes Paid - -

NET CASH FROM OPERATING ACTIVITIES 45,593,578 (6,527,379)

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (11,543,758) (4,416,056)

Sale of Fixed Assets - 304,004

(Purchase) / Sale of Investments 15,816,378 -

Profit /(Loss) on sale of Investment / Assets (1,453,270) 32,436,825

Dividend Received 1,168 8,408,561

Interest Received 136,123 -

Tutis technologies Limited

Consolidated Cash Flow for the year ended March 31, 2011

Current Year Previous Year

52

NET CASH USED IN INVESTING ACTIVITIES 2,956,641 36,733,334

C CASH FLOW FROM FINANCING ACTIVITIES

- Issue of Equity Shares - -

- Unsecured Loan 10,137,047 -

- Change in Minority Interest - -

- Proceeds from Borrowings (49,048,586) (25,674,343)

- Deferred Revenue expenses (1,203,900) -

- Share Application Money Received - -

- Dividend / Interest Paid - (11,558,060)

NET CASH USED IN FINANCING ACTIVITIES (40,115,439) (37,232,403)

NET INCREASE / (DECREASE) IN CASH AND 8,434,779 (7,026,448)

CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS (OPENING BALANCE) 2,835,349 9,861,797

CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 11,270,128 2,835,349

1. The above cash flow statement has been prepared under indirect method set out in AS3 issued by the Institute of Chartered Accountants of India.

2. The balance with the bank for unpaid dividend is not available for use by the company and the money remaining unpaid will be deposited in Investors’ Protection and Education Fund after the expiry of seven years from the date of declaration of dividend.

3. Figures in bracket indicate outgo.4. Previous year’s figures are regrouped or recast wherever necessary.

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

53

Auditors ReportTo,The MembersTutis Technologies LimitedMumbai .

1. We have audited the attached Balance Sheet of Tutis Technologies Limited as at st31 March 2011 and the Profit and Loss Account and the Cash Flow Statement for

the year ended on that date annexed thereto. 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 audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. 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 in the financial 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 audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph (3) above:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were 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 as appears from our examination of those books

(c) The Balance Sheet, the Profit and Loss account and The Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet and the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors, as on st31 March, 2011 and taken on record by the Board of Directors, we report

stthat none of the directors is disqualified as on 31 March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

54

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(i) In the case of the Balance Sheet, of the state of affairs of the stCompany as at 31 March, 2011;

(ii) In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

For Vijay R Tater & Co.,Chartered Accountants

FRN No : 111426W

Sd/-CA Suresh Kothari

Partner M.No : 047625

Place: MumbaistDate: 31 August , 2011.

55

Annexure to the Auditors' Report

(Referred to in paragraph 3 of our report of even date to the Members of Tutis Technologies Limited)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) As explained to us, some of the fixed assets were physically verified during the year by the Management in accordance with a program of verification in terms of which all the fixed assets are physically verified over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its fixed assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) No substantial part of fixed assets of the company has been disposed off during the year.

(ii) In respect of Inventories:(a) As explained to us, inventories were physically verified during the year by the

management at reasonable intervals(b) In our opinion and according to the information and explanations given to us, the

procedure of physical verification of the inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and material discrepancies noticed are properly accounted.

(iii) (a) According to information and explanations given to us, during the year the company has granted interest free unsecured loan to two companies and a party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 163.18 lacs and the year end balance was Rs. 68.40 lacs.

(b) As informed by the management, the company has granted interest free unsecured loans to two companies and a party is in the ordinary course of the business. We are not in a position to comment whether the terms and conditions of the loans and advances are prejudicial to the interest of the company as there are no covenants with regard to the repayment of the loan.

(c) According to information and explanations given to us, in respect of such interest free loan given by the company, the same are repayable on demand and no stipulations have been made regarding repayment of principal amount.

(d) There is no overdue amount in respect of loan given to companies / parties under register maintained under section 301 of the Companies Act, 1956, as these are repayable on demand.

(e) According to the information and explanations given to us, the Company has taken interest free unsecured loan from a company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 720.59 lacs and the year end balance was Nil.

56

(f) As informed by the management, the company has taken interest free unsecured loans from a company is in the ordinary course of the business. We are not in a position to comment whether the terms and conditions of the loans and advances are prejudicial to the interest of the company as there are no covenants with regard to the repayment and other terms and conditions of such loan.

(g) In our opinion and as per the records examined by us, the payment of principal amount is regular.

(iv) In our opinion and according to the information and explanations given to us, it appears that there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanation give to us we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the afore said internal control system.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contract or arrangement exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public.

(vii) In our opinion, the system of internal audit of the company needs to be strengthened commensurate with the size and nature of its business.

(viii) According to the information and explanation given to us, the maintenance of cost records

has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

(ix) (a) As per the information and explanations given to us and according to our examination of the records of the company, the Company has generally been regular in depositing undisputed statutory dues on account of provident fund, employees' state insurance, income-tax, sales-tax, customs duty, excise duty, cess and other statutory dues as applicable to the company with the appropriate authorities during the year. There are no arrears of undisputed statutory dues outstanding for a period of more than six months from the date on which they became payable except for a sum of Rs. 92.55 lacs payable as penalty towards Income tax which is not accounted for as the management is of the opinion that it can invoke alternate remedial measures for mitigation of penal liability.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed dues in respect of sales tax, wealth tax, service tax, custom duty, excise duty or cess which have not been deposited on account of any disputes.

57

The following are the particulars of Income tax dues not deposited by the company on account of disputes.

A.Y. 1998-99 Rs. 30.26 lacs A.Y. 1999-00 Rs. 176.25 lacsA.Y. 2000-01 Rs. 496.80 lacsA.Y. 2001-02 Rs. 30.46 lacsA.Y. 2003-04 Rs. 158.95 lacs

All these disputes are on account of disallowance of Sec 80HHE claim made by the company. Income tax Appellate Tribunal has passed favourable order in all above cases which are pending for giving effect by the Assessing Officer.

(x) The company does not have accumulated losses at the end of the financial year. The company has not incurred any cash losses in the current financial year nor in the immediately preceding financial year.

(xi) According to the information and explanations given to us and the records of the Company examined by us, the company has not defaulted in repayment of dues to any Financial Institution or Bank. The Company has not raised any amount through debentures.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statutes applicable to Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other Investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given corporate guarantee to banks/ financial institutions for loans taken by group concerns amounting to Rs. 10.70 Cr as stated in note no. 9 of Schedule 17. The terms and conditions on which the company has given guarantees for loans taken by others from bank are not, prima facie, prejudicial to the interest of the Company.

(xvi) The company has not taken any term loans during the year.

(xvii)According to the Information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term-basis have been used for long term Investments.

(xviii)The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of companies Act, 1956

58

(xix) The Company has not issued any debentures and hence no securities are charges are required to be created in respect thereof.

(xx) The Company did not raise any money through a public issue during the year.

(xxi) On the basis of our examination and according to the information and explanations given by the management, no fraud, on or by the Company, has been noticed or reported during the year.

For Vijay R Tater & Co.,Chartered Accountants

FRN 111426W

Sd/-CA Suresh Kothari

PartnerM No. 047625

Place: Mumbai, stDate: 31 August, 2011

Current Previous

Sch Year Year

Rs. Rs.

SOURCES OF FUNDS

SHAREHOLDERS' FUNDS

Share Capital 1 167,469,750 167,469,750

Reserves & Surplus 2 264,427,525 257,855,084

431,897,275 425,324,834

LOAN FUNDS

Secured Loans 3 56,853,123 105,901,709

Unsecured Loans 4 7,138,400 3,919,000

TOTAL 495,888,797 535,145,543

APPLICATION OF FUNDS

FIXED ASSETS 5

Gross Block 141,428,458 130,417,255

Less: Depreciation 84,968,951 56,459,507 80,634,574 49,782,681

Investments 6 167,024,222 180,910,154

Current Assets, Loans & Advances 7

Cash and Bank Balances 9,602,119 2,133,066

Inventories 3,561,439 3,777,611

Sundry Debtors 224,703,447 165,994,625

Loans & Advances 83,898,463 143,649,483

321,765,468 315,554,785

Less: Current Liabilities & Provisions 8

Current Liabilities

Sundry Creditors 48,217,169 11,102,077

Provision for Taxation 2,096,111 0

50,313,280 11,102,077

Net Current Assets 271,452,188 304,452,708

Miscellaneous Expenditure 9 952,880 0

(to the extent not w/off or adjusted)

TOTAL 495,888,797 535,145,543

TUTIS TECHNOLOGIES LIMITED

BALANCE SHEET AS AT MARCH 31, 2011

59

60

Notes forming part of Accounts 17

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

61

Current Previous

Year Year

Sch Rs. Rs.

INCOME

Software Development and Sale of Biometric

Solutions 10 121,768,192 108,305,122

Increase/Decrease in Stocks 11 (216,172) 2,094,411

Other Income 12 212,168 8,408,561

Profit on Sale of Investments - 32,461,728

TOTAL INCOME 121,764,188 151,269,822

EXPENDITURE

Biometric Solutions Expenses 13 69,012,835 94,579,486

Administrative expenses 14 23,857,644 22,511,989

Financial Expenses 15 12,293,116 11,771,886

Loss on Sale of Investments 16 1,287,379 -

Loss on sale of Assets 165,891 -

Deferred Revenue Expenditure w/off 238,220 -

Depreciation 4,631,028 13,264,216

111,486,112 142,127,577

Profit Before Tax 10,278,076 9,142,245

Prior Period Expenses 1,609,524 -

(Refer notes Part A para 7)

Provision for taxation 2,096,111 -

Profit after tax 6,572,441 9,142,245

Add: Balance brought forward from previous year 94,394,040 85,251,795

Amount available for Appropriations 100,966,481 94,394,040

Balance Carried to Balance Sheet 100,966,481 94,394,040

TUTIS TECHNOLOGIES LIMITED

62

Notes forming part of Accounts 17

Sheet

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

63

Current Previous

Year Year

Rs. Rs.

1 SHARE CAPITAL

Authorised

3,50,00,000 Equity Shares of Rs. 10/- each 350,000,000

180,000,000

(Pr.yr. 180,00,000 equity shares of Rs. 10/- each)

350,000,000

180,000,000

Issued, Subscribed & Paid-up:

1,67,46,975 Equity Shares of Rs. 10 each fully paid up 167,469,750

167,469,750 (Pr. Yr. 1,67,46,975 equity shares of Rs. 10/- each) 167,469,750

167,469,750

2 RESERVES & SURPLUS

General Reserve:

As per last Balance Sheet 21,936,294

21,936,294

Add: Transferred from Profit & Loss Account -

-

21,936,294

21,936,294

Share Premium Account

As per last Balance Sheet 141,524,750

141,524,750

Add: Received during the year -

-

141,524,750

141,524,750

Profit & Loss Account 100,966,481

94,394,040

264,427,525

257,855,084

3 SECURED LOANS

Cash credit facility from a Scheduled Bank 56,258,769

39,255,833

(Secured against hypothecation of Book Debts Cum Stocks and

Personal Guarantee of Directors)

Term Loan from a Scheduled Bank -

6,487,109

(Secured against hypothecation of Office premises & Fixed assets

and Personal Guarantee of Directors)

Term Loan from a Scheduled Bank 594,354

1,158,767

(Secured against hypothecation of Vehicles)

Loan from a State financial instutitions -

59,000,000

(Secured against pledge of financial assets)

56,853,123

105,901,709

4 UNSECURED LOANS

Inter Corporate Deposits 7,138,400

3,919,000

7,138,400

3,919,000

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Balance Sheet as at March 31, 2011

64

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65

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Balance Sheet as at March 31, 2011

6 INVESTMENTS

(Valued, verified & certified by the Management)

Investment in Shares

A) Long Term - Non Trade :

1) Unquoted

In subsidiary companies:

1,04,500 (Previous Year 1,04,500 ) Equity Shares of Global Software

Technologies Limited (Face Value GBP 1/- each) 7,587,890 7,587,890

2,09,000 (Previous Year 2,09,000) Equity Shares of Amex Information

Technologies GmbH (Face Value DM 1/- each) 4,864,430 4,864,430

25,500 (Previous Year 25,500 )Equity Shares of Tutis Innovative 255,000 255,000

E-Solutions Pvt Limited (Face Value Rs. 10 each )

1 (Previous Year Nil ) Eqyity Share of Tutis FZE, Sharjah (Face Value 1,930,446 -

1,50,000 AED)

Others:-

90,000 (Previous Year 90,000) Equity Shares of MediaIT Limited

(Face Value GBP 1 each ) 7,560,000 7,560,000

12,50,000 (Previous Year 12,50,000) Equity Shares of Essem

Capital Markets Limited (Face Value Rs. 10 each) 12,500,000 12,500,000

II) Quoted :

60,07,506 (Previous Year 672,60,930 - Face Value Re 1/- each ) of

Vishal Information Technologies Limited now Equity Shares of Coral Hub Ltd 132,232,675 148,049,053

(Face Value Rs. 10/- each )

584 (Previous Year 584) Equity Shares of United Bank of India Ltd 38,544 38,544

(Face Value Rs. 10 each )

5124 ( Previous Year 5124 ) Units of Prudential ICICI Balance Fund

(Previus year 5124 Units of Rs. 10 each ) 55,237 55,237

167,024,222 180,910,154

Notes: Book Value Mkt. Value Book Value Mkt. Value

as at as at as at as at

31.03.11 31.03.11 31.03.10 31.03.10

a) Aggregate of Quoted Investments 132,326,456 49,679,241 148,142,834 616,150,351

b) Aggregate on Unquoted Investments 34,697,766 34,697,766 32,767,320 32,767,320

7 CURRENT ASSETS, LOANS AND

ADVANCES

a Cash and Bank Balances:

Cash on hand 6,753,388 1,631,537

Balances with Scheduled Banks in Current Accounts 673,218 501,529

FDR with Bank 2,175,513 -

9,602,119 2,133,066

66

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Balance Sheet as at March 31, 2011

b Inventories

(As taken, valued and certified by the management)

Biometric Products 3,561,439 3,777,611

3,561,439 3,777,611

c Sundry Debtors:

(Unsecured, considered good)

Outstanding for a period exceeding six months 212,650,772 71,559,964

Other Debts 12,052,675 94,434,661

224,703,447 165,994,625

d Loans and Advances:

(Unsecured, Considered good)

I) Advances to Subsidiary Companies 8,338,843 3,350,285

ii) Advances recoverable in cash or in kind

or for value to be received 73,125,989 138,444,949

iii) Advance to Suppliers 131,868 -

iv) Deposits 1,956,229 1,854,249

v) Tax Deduction at Source 345,534 -

83,898,463 143,649,483

Total (a+b+c+d) 321,765,468 315,554,785

8 CURRENT LIABILITIES

Sundry creditors for :

for Expenses 19,466,091 2,543,722

Other Liabilities 18,154,554 3,000,000

Advance for Capital Goods 4,800,000 4,800,000

Advance from Customers 103,253 -

Expenses Payable 165,450 758,355

Duties and taxes 3,773,369 -

Gratuity payable 1,754,452 -

48,217,169 11,102,077

9 MISCELLANEOUS EXPENDITURE

Deferred Revenue Expenditure

Incurred during the year 1,191,100 -

Less : Written off during the year 238,220 - - 952,880

67

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Balance Sheet as at March 31, 2011

10 INCOME

Income from Software Development & Sale of Biometric solutions 120,766,040 107,629,182

Income from 3D modelling 1,002,152 675,940

121,768,192 108,305,122

11 INCREASE / DECREASE IN STOCK

Opening stock of finished goods 3,777,611 1,683,200

Less : Closing stock of finished goods 3,561,439 3,777,611

(216,172) 2,094,411

12 OTHER INCOME

Dividend received 1,168 8,408,561

Interest on FDR 136,123 -

Miscellaneous 8,733 -

Sundry Balances Written Off 66,144 -

212,168 8,408,561

13 BIOMETRIC SOLUTIONS EXPENSES

Purchases - Biometric Devices 39,904,123 67,806,738

Salary and Allowances 26,632,412 24,095,326

Gratuity 144,928 -

Communication Expenses 2,331,372 2,677,422

69,012,835 94,579,486

14 ADMINISTRATIVE EXPENSES

Advertisement expenses 215,852 119,212

Auditors remuneration 165,450 165,450

AGM Expenses 24,000 22,400

Bad Debt written off 27,045 -

Books and Periodicals 16,474 15,495

Business Promotion Expenses 631,531 110,280

Car Hiring Charges 148,008 62,580

Computer Expenses 63,902 34,680

Conveyance 1,910,743 1,635,635

Directors' Sitting fees 27,500 10,400

Donation 642,119 271,814

Electricity charges 1,389,183 1,367,489

Entertainment expenses 518,574 496,791

House Keeping Charges 383,750 265,800

Insurance 154,835 276,560

Legal & Professional fees 5,525,167 5,200,065

Loss on foreign exchange fluctuation 22,817 -

Membership Subscription 267,174 569,430

Miscellaneous Expenses 92,985 303,666

Motor car expenses 244,249 439,915

Municipal Taxes 386,546 -

Office Expenses 778,009 594,078

Printing & Stationary expenses 793,570 583,995

Rent 3,248,270 2,620,200

Repairs & Maintenance - Buildings 765,434 727,281

Repairs & Maintenance - Other Assets 426,137 877,620

ROC Charges 41,607 17,170

Service Charges 74,061 46,250

Shop and Establishment exp 16,780 9,480

Security charges 554,156 422,086

Service tax paid 236,872 -

Travelling Exp 4,031,513 5,227,768

Visa Fees 33,330 18,400

23,857,644 22,511,989

68

Current Previous

Year Year

Rs. Rs.

TUTIS TECHNOLOGIES LIMITED

Schedules forming part of the Balance Sheet as at March 31, 2011

15 FINANCIAL EXPENSES

Interest on Secured Loans

Interest Others

Interest on Vehicle Loans

Bank charges

16 LOSS ON SALE OF INVESTMENTS

Long Term Loss on Sale of Shares

Less : Long Term Profit on Sale of Shares

10,939,895

917,706

91,614

343,901

12,293,116

5,267,195

3,979,816

1,287,379

10,434,693

994,056

129,311

213,826

11,771,886

-

-

-

TUTIS TECHNOLOGIES LTD.Schedules forming part of the Accounts for the year ended March 31, 2011

SCHEDULE- 17

A. SIGNIFICANT ACCOUNTING POLICIES:

1. Accounting Convention : The Financial Statements have been prepared under the historical cost convention, on accrual basis to comply in all material respects with all applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates:The preparation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any differences of actual results to such estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets : The fixed assets are stated at acquisition cost less accumulated depreciation.

4. Depreciation:

a) Depreciation on fixed assets has been provided on straight line method and depreciation on the assets acquired / sold during the year is provided on pro-rata basis.

b) Depreciation is charged at one hundred percent in respect of the Individual assets costing less than Rs.5,000.00 in the year of purchase.

5. Investments : The Investments are classified as Quoted & Unquoted Investments.

a) Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the Management.

b) There are no current investments.

6. Valuation of InventoriesInventories are valued at lower of cost or net realizable value, on FIFO basis. Obsolete, defective and unserviceable stock are provided for wherever required.

7. Foreign Currency Transactions : Transactions in foreign currency are recorded at the exchange rates prevailing at the dates of the transactions. Gains / losses arising out of fluctuation in exchange rates on settlement are recognised in the profit and loss account.

69

70

Foreign currency monetary assets and liabilities are restated at the exchange rate prevailing at the period end and the overall net gain / loss is adjusted to the profit and loss account.

8. Retirement Benefits :(a) Provident Fund: Contribution to Provident Fund is made at the pre- determined rate, to the

appropriate authorities and is charged to revenue as expenditure. (b) Leave Encashment and Gratuity : As per Accounting Standard 15 issued by The Institute of

Chartered Accountants of India, the Company is required to provide for liability in respect of earned Leave Encashment and Gratuity on accrual basis. However the Company continue to follow the past practice of charging leave encashment on cash basis and Gratuity is provided in the books as per actuarial valuation done. Refer note no 3.

9. Income and Expenditure

All income and expenditure are accounted on accrual basis by the company as required under section 209(3) of the Companies (Amendment) Act, 1988.

10. Revenue Recognition : (a) Sales are exclusive of VAT and net of returns, claims, rebates and discounts etc.,(b) Other items of revenue are recognised in accordance with the Accounting Standard (AS9).

Accordingly, wherever there are uncertainties in the ascertainment / realisation of income such as interest from customers (including the financial conditions of the person from whom the same is to be realised), the same is accounted for in the year in which it is realised.

(c) Deferred Revenue expenses: Rs. 11,91,100 was incurred during the year for increasing Authorised Capital. Looking to the nature of expenses, it is spread over a period of five

thyears. 1/5 being Rs. 2,38,220 is debited during the year as revenue expenses.

11. Borrowing Costs : Interest and other costs incurred in connection with borrowing of the funds are charged to revenue on accrual basis except those borrowing cost which are directly attributable to the acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use. Such costs are capitalised with the fixed assets.

12. Earnings per Share (EPS) :The earnings considered in ascertaining the Company's EPS comprises the net profit after tax (after providing the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of equity shares outstanding during the year.

13. Taxation :a) Current Tax: A provision for current income tax is made on the taxable income using the

applicable tax rates and tax laws.

b) Deferred Tax: Deferred tax arising on account of timing differences and which are capable of reversal in one or more subsequent periods is recognized using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are not recognized unless there is a virtual certainty with respect to the reversal of the same in future.

71

14. Impairment of Assets : Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is higher of the asset's fair value less costs to sell vis-à-vis value in use. For the purpose of impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.

15.Provisions and Contingencies : The company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

B. NOTES TO ACCOUNTS

1. Consolidated Financial Results :-Consolidated financial statements forming part of the accounts with the auditor's report thereon are attached herewith.

2. Contingent Liabilities not provided for :- (Rs. in Lacs)Income Tax Liability which are disputed and taken before the appellate authorities are pending for giving effect by the assessing officer upon which the disputed liability shown gets substantially reduced which is contingent in nature. The amount involving various assessment years is Rs. 892.72 Lacs (P.Y. 892.72 Lacs).

3. Retirement Benefit :Post employment benefit plan: The company has not provided for gratuity in the earlier years nor the actuarial valuation was done recognising the liability towards gratuity. During the year, the company got the valuation done from an independent actuarial valuer. The liability including current year provision of Rs. 1.45 lacs (P.Y. Nil) works out to Rs. 17.54 lacs (P.Y. Nil) Past liability is accounted for under prior period expenses as an item of appropriation. The gratuity provision is not funded.

4. Managerial Remuneration :-

a) Managerial Remuneration paid to the Chairman & Managing Director and Whole Time Director

2010-11 2009-10i) Salary Rs.66,00,000 Rs.66,00,000ii) Perquisites & Allowances Rs. 6,00,000 Rs. 6,00,000

b) No computation of Profit under section 350 of the Companies Act, 1956 has been given since no commission is paid to Directors.

72

5 Deferred tax:-The company is entitled to create deferred tax asset/liability in the books of account with respect to timing difference of carried forward business and depreciation losses as well as depreciation. However, in view of carried forward business and depreciation losses there is no reasonable certainty that the asset can be realised. Hence, the deferred tax asset is not recognised on the ground of prudence.

6 Expenditure, Earnings, and remittance in foreign currency

7 Units falling under Micro, Small and Medium Enterprises Development Act, 2006 who have been the suppliers to the company have no outstanding more than maximum stipulated period in the current year.

8 The Company is engaged in a single business segment of IT enabled services consisting of biometric solution and 3D modelling. Hence, segmental reporting is not required for primary segments.

Secondary segment information on the basis of geographical division are provided as under:

Current YearRupees

Previous YearRupees

Software Development & Biometric

Solution Services 6,29,01,429 6,78,25,271

Expenditure in Foreign Currency

Cost of Materials 2,01,32,942 4,49,82,076

Foreign Travelling 21,42,875 7,69,399

Current Year

RupeesPre. Year

RupeesRevenue from Indian operations

6,28,26,580 9,05,63,919

Revenue for Middle East

6,29,31,329 1,97,56,661

Revenue for Europe

NIL 3,43,38,432

Revenue for USA

NIL 45,35,704

73

9. Disclosure requirements as per Accounting Standard 18 (AS-18) “Related Party Disclosure” issued by the Institute of Chartered Accountants of India

I. List of Related Parties : a) Parties Where Control Exists:

(i) Subsidiary Companies1. Tutis Innovative E-Solutions Pvt. Ltd.2.Tutis FZE3. Global Software Technologies Limited4. Amex Information Technologies GmbH

b) Associate companies where managing directors or relatives of managing director are Directors.

(i) Coral Hub Limited(ii) Basiz Fund Service Pvt Ltd.

c) Key Management Personnel / Associates

(i) G S Chandrashekar– Managing Director (ii) Aniket Jathar – Whole Time Director(iii) Amita Desai – Director

Sr No

Name Nature of

Transaction

Relationship For the year ended

31.03.2011

Rupees

For the year ended 31.03.2010

Rupees

1 Mr. G.S. Chandrashekar

Remuneration to Director

Chairman and Managing Director

36,00,000

36,00,000

2 Mr. Aniket Jathar Remuneration to Director

Whole-time Director

36,00,000 36,00,000

3 Tutis FZE Loan given Wholly Owned Subsidiary

6,36,043 -

4 Tutis Innovative E-Solutions Private Limited

Loan given Wholly Owned Subsidiary

63,63,990 18,51,475

5 Amex Information Technologies GmbH

Loan given Wholly Owned Subsidiary

14,98,810 14,98,810

6 Global Software Technologies Ltd (UK)

Investment in shares

Wholly Owned Subsidiary

75,87,890

75,87,890

7 Amex Information Technologies GmbH

Investment in shares

Wholly Owned Subsidiary

48,64,430 48,64,430

8 Coral Hub Limited Investment in shares

Group company

13,72,32,675 14,80,49,053

9 Coral Hub Limited Corporate Guarantee

Group company

25,00,00,000 25,00,00,000

74

10 Tutis Innovative E-Solutions Private Limited

Sharing of common facilities

Wholly Owned Subsidiary

- 1,30,000

11 Coral Hub Limited Corporate Guarantee

Group company

8,60,00,000 2,60,00,000

12 Basiz Fund Service Private Limited

Corporate Guarantee

Group company

2,10,00,000 2,10,00,000

13 Amita Desai Professional Fees

Director 6,61,800 6,61,800

75

10. Auditor's Remuneration :

Particulars 2010-11 2009-10

Rs. Rs.

For Statutory Audit 110,300 110,300

For Tax Audit 33,090 33,090

For Income Tax matters 11,030 11,030

For Certificates 11,030 11,030

11 As per Accounting Standard 20 “Earning Per Share'' issued by Institute of Chartered Accountant of India the Company gives following disclosure for the year.

Basic & Diluted Earning Per ShareBasic Earning Per Share 2010-11 2009-10 Profit / Loss after tax (Rs. in lacs) (A) 65.72 91.42Weighted Avg. No. of Shares (No. in lacs) (B) 180 180Earning Per Share (Rs.) (A/B) 0.36 0.55

Diluted Earning Per Share Profit / Loss after tax (Rs. in lacs) (A) 65.72 91.42Weighted Avg. No. of Shares (No. in lacs) (B) 180 180Earning Per Share (Rs.) (A/B) 0.36 0.55

12 Diminution in Value of Long Term InvestmentThe diminution of Rs 53.25 Lacs in the value of long term investments in quoted equity shares and Mutual Fund Schemes has not been provided as in the view of the management such diminution is temporary in nature and as such there is no requirement of making any provision.

76

13 The company has pledged 488.93 lac equity shares (P.Y. 328.93 lac equity shares) of Rs 1 each of Coral Hub Limited (formerly known as Vishal Information Technologies Limited) with a leading financial institution as security for the loan availed by its group company. The company has issued a corporate guarantee to the Financial Institution equivalent to the amount of loan availed by the group company.

14 Balances shown in the accounts of loans and advances, unsecured loans and sundry creditors are subject to confirmation, reconciliation and consequential adjustment if any.

15 In the opinion of the Board, current assets, loans and advances have realisable value atleast equal to the amount stated in the books of account.

16 Additional information pursuant to the provisions of Part IV of Schedule VI of the Companies Act, 1956 is attached herewith.

17 The figures of the previous year have been regrouped and recast wherever necessary to confirm to the groupings of the current year.

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

77

Balance Sheet Abstract and Company's General Business Profile

1 Registration Details

Registration No. 63382

State Code 11

Balance Sheet Date 31.03.2011

2 Capital Raised during the year (Amount in Rs. Thousand)

Public Issue -

Right Issue -

Bonus Issue -

Private Placement -

3 Position of Mobilisation and Deployment of Fund

Total Liabilities 495,889

Total Assets 495,889

Source

Paid-up Capital 167,470

Share Warrants -

Reserves & Surplus 264,428

Secured Loans 56,853

Unsecured Loans 7,138

Deferred Tax Liability -

Application of Funds

Net Fixed Assets 56,460

Investments 167,024

Net Current Assets 271,452

Miscellaneous Expenditure 953

Accumulated Losses -

TUTIS TECHNOLOGIES LIMITED

78

4 Performance of the Company (Amount in Rs. Thousand)

Turnover 121,764

Total Expenditure 111,486

Profit/Loss Before Tax 10,278

Earning Per Share in Rs. 0.36

Dividend Rate % 0.00%

(As per monetary terms)

Item Code No. (ITC Code) 85249009.1

Products Description Biometric Solutions

As per our report of even date attachedFor Vijay R. Tater & Co.Chartered AccountantsFRN No.111426W

Sd/-

CA Suresh G. Kothari Partner (M.No.47625)

Place: MumbaistDate: 31 August, 2011

For and behalf of the Board

G S Chandrashekar Dilip C Parekh

Sd/- Sd/-

Managing Director Director

79

RUPEES RUPEES RUPEES RUPEES

A CASH FLOW FROM OPERATING ACTIVITIES

Net Profits after tax 6,572,440 9,142,245

Adjustments for:

- Depreciation 4,631,028 13,264,216

- Deferred Revenue expenses w/off 238,220 0

- Prior year expenses

- Employee Stock Option Amortization 0 0

- Interest received -136,123 0

- Dividend received -1,168 8,408,561

- Profit / Loss on Sale of Investments 1,287,379 32,481,033

- Profit / Loss on Sale of Fixed Assets 165,891 0

- Provision for Taxation 2,096,111 8,281,338 54,153,810

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 14,853,778 63,296,055

(Increase) / Decrease in Current Assets:

- Inventories 216,172 -2,094,411

- Sundry Debtors -58,708,822 -5,678,459

- Loans & Advances 59,751,020 -63,944,358

1,258,370 -71,717,228

Increase / (Decrease) in Current Liabilities:

- Liabilities 37,115,092 -39,059,217

38,373,462 -110,776,445

CASH GENERATED FROM OPERATIONS: 53,227,240 -47,480,390

Minority Share of Interest in Profits 0 0

Direct Taxes Paid 0 0

NET CASH FROM OPERATING ACTIVITIES 53,227,240 -47,480,390

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets -11,307,854 -3,877,524

Sale of Fixed Assets 0 304,004

(Purchase) / Sale of Investments 13,885,932 210,789

Profit /(Loss) on sale of Investment / Assets -1,453,270 0

Dividend Received 1,168 8,408,561

Interest Received 136,123 32,481,033

Tutis Technologies Limited

Cash Flow for the year ended March 31, 2011

YEAR ENDED ON 31.03.2011 YEAR ENDED ON 31.03.2010

80

NET CASH USED IN INVESTING ACTIVITIES 1,262,099 37,526,863

C CASH FLOW FROM FINANCING ACTIVITIES

- Issue of Equity Shares 0 0

- Unsecured Loan 3,219,400

- Change in Minority Interest 0 0

- Proceeds from Borrowings -49,048,586 -8,790,463

- Deferred Liability -1,191,100 0

- Share Application Money Received 0 0

- Dividend / Interest Paid 0 11,558,060

NET CASH USED IN FINANCING ACTIVITIES -47,020,286 2,767,597

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 7,469,053 -7,185,930

CASH AND CASH EQUIVALENTS (OPENING BALANCE) 2,133,066 9,318,996

CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 9,602,119 2,133,066

1. The above cash flow statement has been prepared under indirect method set out in AS3 issued by the Institute of Chartered Accountants of India.

2. The balance with the bank for unpaid dividend is not available for use by the company and the money remaining unpaid will be deposited in Investors’ Protection and Education Fund after the expiry of seven years from the date of declaration of dividend.

3. Figures in bracket indicate outgo.4. Previous year’s figures are regrouped or recast wherever necessary.

As per our report of even dateFor Vijay R Tater & Co.,Chartered Accountants For and on behalf of the BoardFRN No : 111426W

Sd/- Sd/-Sd/- G. S. Chandrashekar Dilip C. ParekhCA Suresh Kothari Managing Director DirectorPartnerMembership No: 047625

Place : MumbaiDate : 31st August 2011

81

TUTIS TECHNOLOGIES LIMITED

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Company's Interest

in Subsidiary Companies.

b. Extent of interest of holding company at the end of the financial year of the Subsidiary Companies

100% 100% 100% 100%

Name of Subsidiary

Company

Global

Software

Technologies

Limited

United

Kingdom

TUTIS (FZE)

Sharjah, UAE

Amex

Information

Technologies

GmbH

Germany

Tutis Innovative

E-Solutions Private

Limited (Formerly

known as Tutis

Media Streaming

Private Limited)

1. The financial year

of the Subsidiary

Companies ended

on

31.03.2011 31.03.2011 31.12.2010 31.03.2011

2. Date from which

they became

Subsidiary

Companies

02.08.1999 07.06.2010 10.11.1999 07.11.2009

3.a. Number of

shares held by Tutis

Technologies

Limited with its

nominees in the

Subsidiaries at the

end of the financial

year of the

Subsidiary

Companies

104,500

Equity Shares

of GBP 1 each

fully paid up

1 Equity

Share of

AED150,000

fully paid

up

209,000 Equity

Shares of DM 1

each fully paid up

25,500 Equity

Shares of Rs.10/-

each fully paid up

82

4. The net aggregate

amount of the

Subsidiary

Companies

Profit/(Loss) So far

as it concerns the

members of the

Holding Company

a. Not dealt with in

the Holding

Company’s

accounts:

i) For the

subsidiary’s financial

year

(Rs.0.41 Lacs) Rs.338.48

Lacs

NIL (Rs.65.27 Lacs)

ii) For the previous

financial years of the

Subsidiary

Companies since

they became the

Holding Company’s

subsidiaries

(Rs.1.17Lacs) NIL (Rs.0.05 Lacs) (Rs.26.76 Lacs)

b. Dealt with in

Holding Company’s

Accounts:

i) For the

subsidiary’s financial

year

NIL NIL NIL NIL

ii) For the previous

financial years of

the Subsidiary

Companies since

they became the

Holding Company’s

subsidiaries

NIL NIL NIL NIL

83

Notes:1. Figures in bracket represent losses2. Interim period means the period between the end of the financial year of the

subsidiary and the end of the holding Company's financial year.

Place: Mumbai,

Date: 31st August, 2011 By order of the Board of Directors

Registered Office: Sd/- Sd/-C-409, Solaris I, Opp. L & T Gate No. 6, Saki Vihar Road, (G. S. Chandrashekar) (Dilip C. Parekh)Andheri (East), Chairman & Managing Director DirectorMumbai-400 072

5. a) Change in

holding Company’s

interest in the

subsidiary between

the interim period

NIL NIL NIL NIL

b) details of material

changes, which have

occurred between

the interim period in

respect of subsidiary

company’s

NIL NIL NIL NIL

(i) fixed assets

(ii) investments

(iii) moneys lent

84