Directors Report of Nextgen Animation Mediaa Ltd.

Jun 30, 2011

The Directors are pleased to present you the Fifth Annual Report with the Audited Accounts for the fiscal year from 1st July 2010 to 30th June 2011.

Performance

Your Company has been performing satisfactory. During the year your Company has reported revenues at Rs. 68.36 million compared to Rs. 64.67 million during the previous year.

The net profit during the period increased to Rs. 14.18 million compared to Rs. 7.58 to the previous year ended June 30, 2010.

The review of the performance for the period ended June 30, 2011 and the business outlook of the Company is included in section on Management Discussion and Analysis included in Annexure "B" to this report.

Fixed deposits

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Directors:

Dr. Narayan Raman retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment.

Auditors:

The auditors M/s. CNGSN & Associates, Chartered Accountants, Chennai retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re- appointed.

Qualification from the Audit report

The Board would like to clarify on the two comments of the Auditors thus:

Your directors place on record their appreciation of the support extended by Customers, Investors, Bankers, Business Associates, Vendors, Share Holders and various Government Agencies. Your directors would also like to place on record the contribution made by the employees / consultants who have together contributed for the success of your Company.

1. The provision for the impairment would not be required as the value to be earned through the Intellectual property is more than the carrying cost of IPRs and accordingly no provision for the write-off is made during the current year.

2. The provision for the Deferred Tax is not required by the Company as per the advice given to the Company.

The Qualification of the auditor is as follows:

In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C of section 211 of the Companies Act, 1956 subject to non- provision for impairment of the intellectual property rights as required under AS-26 and Your Directors confirm:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; the management maintains that the Intellectual Property Rights created through the process of digital animation techniques have perpetual value and hence is not subject to the amortization or impairment as per the AS 26.

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that they had prepared the annual accounts on a going concern basis

Corporate Governance:

Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, a report on Corporate Governance is given in Annexure.

Management Discussion and Analysis

Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, a report on Management Discussion Analysis is given in Annexure "B".

Employee Particulars

Particulars of employees as required under section 217(2A) of the Companies Act, 1956, and the Companies (Particulars of Employee) Rules, 1975, as amended, forms part of this report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars as prescribed under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are as follows :-

A. Conservation of Energy:

The Company's operations are not power intensive. Nevertheless, your Company has introduced various measures to conserve and minimize the use of energy.

B. Research & Development (R & D):

a) Specific areas in which R & D is carried out by the Company:

R&D activities include tools development with the object of devising efficient methods of pre- production phase. The Company has in place a quality assurance team to ensure adherence to stringent quality norms.

b) Benefits derived as a result of the above R&D: Reduction in cost and improvement in quality adaptability of Software Systems and Packages.

C. Technology Absorption, Adaptation & Innovation:

No technology has been imported. Indigenous technology available is continuously being upgraded to improve overall performance.

D. Foreign Exchange Earnings & Outgo:

Activities relating to Exports & Export Plans:

The Company is making continuous efforts to explore new foreign markets and to enlarge its shares in the existing markets for export of digital animation content. Information on Foreign Exchange earnings and outgo are specified in the notes to the accounts.

Acknowledgements

Your directors place on record their appreciation of the support extended by Customers, Investors, Bankers, Business Associates, Vendors, Share Holders and various Government Agencies. Your directors would also like to place on record the contribution made by the employees / consultants who have together contributed for the success of your Company.

On behalf of the Board of Directors

Krishnakumar Subramanian

Chairman and Managing Director

Mumbai, 29th February 2012

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Jun 30, 2010

The Directors are pleased to present you the Fourth Annual Report with the Audited Accounts for the fiscal year from 1st July 2009 to 30th June 2010.

Financial Results

Year Ended Year Ended 1/7/2009 to 1/7/2008 to 30/6/2010 30/6/2009 Rs. In million Rs. In million

Income 64.67 57.51

Total Income gross Profit (PBDIT) 19.97 27.01

Depreciation 10.12 19.25

Preliminary and Deferred Revenue Expenses 0.77 -

Profit before Taxes 9.08 7.76

Less: provision for Taxation 1.5 0.92

Net profit/Loss 7.58 6.84

Profit available for appropriation- brought Forward 21.43 14.58

Profit available for appropriation 29.01 14.59

Share Capital 619.94 119.94

Reserve Account 824.57 641.99

Less: Miscellaneous Expenses (deferred) 3.08 0.02

TOTAL 1441.45 761.90

Transfer from General Reserve to Balance Sheet 1441.45 761.90

Performance

Your Company has been performing satisfactory. During the year your company has reported revenues at 64.67 million.

The Post-tax profit during the period increased by 10.86% to Rs. 7.58 million approximately as compared to the previous year ended June 30, 2009.

The review of the performance for the period ended June 30, 2010 and the business outlook of the company is included in section on Management Discussion and Analysis included in Annexure "C" to this report.

Fixed Deposits:

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the balance sheet date.

Directors:

Mr. Mohan Subramanian retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment.

Auditors:

The Auditors M/s. CNGSN & Associates, Chartered Accountants, Chennai retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

Directors Responsibility Statement:

Your Directors confirm:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; the management maintains that the Intellectual Property Rights created through the process of digital animation techniques have perpetual value and hence is not subject to the amortization or impairment as per the AS 26.

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that they had prepared the annual accounts on a going concern basis.

Qualification from the Audit report

The Board would like to clarify on the two comments of the Auditors thus;

1. The provision for the impairment would not be required as the value to be earned through the Intellectual property is more than the carrying cost of IPRs and accordingly no provision for the write-off is made during the current year.

2. The provision for the Deferred Tax is not required by the Company as per the advice given to the Company, as the liability as per the Income Tax Act is similar to the provision of the Income Tax.

The Qualification of the auditor is as follows;

d) In our opinion, the Balance sheet and Profit and loss account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 subject to non- provision for impairment of the intellectual property rights as required under AS-26 and non provisioning of deferred tax liability under AS-22.

Corporate Governance:

Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, a report on Corporate Governance is given in Annexure "B"

Management Discussion and Analysis

Pursuant to clause 49 of the Listing Agreement with Stock Exchanges, a report on Corporate Governance is given in Annexure "B"

Employee Particulars

Particulars of employees as required under section 217(2A) of the Companies Act, 1956, and the Companies (Particulars of Employee) Rules, 1975, as amended, forms part of this report.

However, in pursuance of section 219(a)(b)(iv) of the Companies Act, 1956, this report is being sent to all the shareholders of the Company excluding the aforesaid information. The members interested in obtaining such particulars may write to the Company at the Registered Office of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed under section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, are set out in Annexure "A" included in this report.

Acknowledgements

Your directors place on record their appreciation of the support extended by Customers, Investors, Bankers, Business Associates, Vendors, Share Holders and various Government Agencies. Your directors would also like to place on record the contribution made by the employees / consultants who have together contributed for the success of your Company.

On behalf of the Board of Directors

Place: Mumbai Krishnakumar Subramanian

Date: 9th November 2010 Chairman