It will be useful to review the year gone by in detail and have an
 understanding of the environmental factors that affected your Companys
 business, its growth in the just completed year and the market trends
 that will help your Company to grow in future.
 
 Aztecsoft growth in the year gone by
 
 Consolidated revenues for FY 2007-08 were at US $ 63.05 million (Rs.
 2,531.02 million), registering an annual growth of 9% in US $ terms (FY
 2006-07 consolidated revenues were at US $ 57.7 million) (If one were
 to compare FY 2007-08 revenues with FY 2006-07 revenues, without
 Dendrite business, the growth in US$ terms was 21%). During this year,
 your Company invested in new hires from campus, facilities and
 technology to meet the growing needs of its customers. Adverse exchange
 movement coupled with the transfer of the Dendrite Offshore Development
 Centre, to Dendrite International, Inc., affected the revenues and
 profits.  However tight control over operations, better utilization of
 resources and the rationalization of facilities ensured that the bottom
 line impact was limited. While your Company does have a reasonable
 level of hedging, operations were impacted by the sharp appreciation of
 the Rupee and its negative impact was felt on the bottom line of your
 Company.
 
 FY 2007-08 witnessed a complete strategic repositioning of your Company
 that re-aligned its processes, updated its services, enhanced
 technology offerings, restructured the organization, upgraded its brand
 image, and delivered superior value to its customers. Your Company
 today is much more focused and in executing at a much higher efficiency
 than a year ago. For example -
 
 While your Company grew only 9% in absolute terms over last year,
 sequential growth in the last four quarters were 2%, 6%, 4.5% and 7.6%
 in US$ terms.
 
 - Your Company was able to grow revenues by 8.5% in INR terms in QIV-08
 without adding incremental headcount and this was achieved by better
 utilization of resources and trainees moving to billable positions
 quickly. Investments in training and talent transformation are
 beginning to pay off.
 
 - To create a natural hedge against an appreciating rupee, your Company
 proactively started building its onsite business in FY 2007-08. This
 has yielded very good results and its onsite revenue has grown from 19%
 of total revenues in QIV-FY07 to 30% in QIV-FY08.
 
 - Earlier in FY2007-08, your Company decided to focus on higher quality
 revenue, and reduce its exposure to revenue from early stage companies.
 Your Company is happy to state it closed eight strategic accounts in FY
 2007-08 (2 of them in QIV-08) that can yield $ 1 mil+ next financial
 year. This stability in quality of revenue will help make our growth
 more predictable.
 
 The demand for the Companys services continues to look robust, and its
 niche focus of OPD and independent testing services continues to
 resonate with our target customers.  Your Company does not have any
 exposure to the subprime crisis, and has not seen a slowdown in demand
 from its customers.Your Company continues to believe its growth is
 dependent more on execution, than demand in the market.
 
 Improved sales mix, tight control on operations and expenses, better
 utilization has helped your Company to improve gross margins from 25%
 in QI-08 to 30% in QIV-08 and EBITDA from 12% in QI-08 to 14% in
 QIV-08.
 
 Major highlights
 
 Business restructuring - On the strategy side, restructuring of the
 Product Engineering business earlier this year is also beginning to
 yield results.As you may recall, your
 
 Company refocused on four specific sub-segments this fiscal year:
 
 1) Traditional Independent Software Vendors;
 
 2) Customers who have Portals and use Web 2.0 technologies - this
 includes transaction websites, content and collaboration sites,
 intranets and extranet portals for enterprises, and SaaS companies;
 
 3) Mobile and Wireless companies platform, application, and handset,
 wireless infrastructure companies;
 
 4) Financial services companies, especially focusing on banking and
 capital markets
 
 To these customers it sells the following services full life- cycle
 product engineering, independent testing, professional services, and
 sustenance engineering.
 
 With this refocusing, your Company is executing effectively on the
 sales and delivery strategy, and is seeing results in growth of its
 existing customers and closing of some key strategic large accounts.
 
 Updated Industry Focus Marketing Strategy - Our
 
 Company has revised its go-to-market strategy, and seeks to actively
 target technology companies that serve the following verticals:
 Application Software Companies, Infrastructure Software Companies, New
 Media & Internet, Online Commerce, Financial Services, and Life
 Sciences.
 
 Human capital -Your Companys human capital stands at 2,132 Aztecians
 as on March 31, 2008. Your Companys acknowledged and multiple-award
 winning HR practices and great work environment has made it relatively
 attractive to hire and retain talent.Attrition continues to be under
 control and below industry norms as per a recent study done by Data
 Quest-IDC Best Employers Award.
 
 Client base - During this year your Company added over 25 new strategic
 clients to take the total active client count to 84 by the end of the
 year. The client additions include business leaders in the data
 management, wireless domains, etc. and has a good mix of mature and
 early stage clients.  Your Company has a good sales engine and is
 confident of continuing its additions as demonstrated in the last
 twelve months. Given the deep partnerships we have with its customers,
 they have been open to sharing the margin challenges caused by the
 rupee depreciation, and have given us price increases from high single
 digits to low double digits.
 
 ISO 27001 certificates have been obtained for all locations in India -
 Our Company has implemented ISMS at all its locations and are certified
 on this global standard.  Your Company is one of the very few companies
 that have all its locations ISO 27001 certified in India.
 
 Infrastructure -,Your Company continues to invest in significant
 infrastructure growth for future needs. Your Companys capacity at
 Bangalore, Hyderabad, and Pune has grown to more than 3,000 seats. The
 first fully owned Pune Campus for 1,500 seats was completed and
 inaugurated during the year under review. Your Company has also
 announced the launch of its new facility under the SEZ scheme at
 Whitefield. Spread over 3.15 acres of land, the new SEZ facility will
 have a built-up area of approximately 2,30,000 square feet.
 
 Strong & liquid balance sheet - Cash and cash equivalents stand at Rs.
 75.14 crores as on March 3 I, 2008 and account for 42% of asset base as
 on March 3 1, 2008.
 
 Acquisition of equity shares by MindTree Limited (MindTree)
 
 MindTree has entered into a share purchase agreement dated May 2, 2008
 (the SPA) with e4e Holdings Limited, who is one of the Promoters of
 your Company, wherein it is agreed to purchase 1,46,55,280 fully
 paid-up equity shares of Rs. 3/- representing 32.57% paid-up equity
 share capital for a total purchase consideration of Rs. I
 17,24,22,400/-.
 
 MindTree has thereafter purchased 13,683,000 (30.05%) equity shares
 from the open market.
 
 MindTree is also making an Open Offer to acquire up to 93,06,381 equity
 shares of Rs. 3/- at a price of Rs. 80/- per equity share, payable in
 cash.
 
 Your Company has been informed that MindTree intends to subsequently
 merge your Company with itself, subject to shareholder and regulatory
 approvals.
 
 Future market trends
 
 Your Company remains confident of the overall business momentum and its
 recent client wins shall help us to continue to grow in subsequent
 quarters.
 
 Rapid evolution of technologies and internet applications, and the rise
 of pervasive computing are expected to drive a rapid and quantum
 increase in technology adoption by businesses and individuals. The
 proliferation of client devices and end- user or end-use devices at the
 network edge will result in the addition of billions of devices to the
 network edge, which will drive the need for more enterprise systems to
 deploy, manage, and m)ake use of them. The effects of the internet
 generation entering the working age population are also expected to
 further accelerate technology usage and adoption.
 
 In line with the above, the OPD market segment is expected to continue
 to be robust and witness similar growth rates of around 20% - 25%. With
 increased emphasis in Web 2.0 Technologies, SaaS, SOA and Wireless /
 Mobile Technologies, your Company is in for an exciting growth phase.
 Barring any challenges in the exchange rate front, it will continue to
 execute and drive more efficiency into the system.
 
 Your Company will continue to invest in emerging technologies, improve
 processes, and adopt latest execution technologies to deliver superior
 value to its customers.
 
 The global Software Engineering and Testing services industry is
 growing at a tremendous pace with immense opportunities.  Your Company
 is in a position of strong advantage to tap this immense potential.
 Your Companys objective is to partner clientsthat are long-term and
 this adds to long- term value to your Companys overall strategy.
 
 Sincerely thank you for your continued support and assure that we as a
 Company will always live up to your expectations.
 
                                             K. B. Chandrasekhar 
                                             Chairman.