Cambridge Solutions

Dear Shareholder,
 
 India has been hogging the limelight for its sustained GDP growth rate
 of over 9%. In the last four years, the country has recorded a
 compounded annual growth rate at 8.5% led primarily by its services and
 infrastructure sector. Your company too took a giant leap forward,
 building on the foundation it laid last year post the merger of its ITO
 and BPO services companies. The financial results for financial year
 2007 demonstrate not just the confidence of the customers, but the
 increasing value they derive from the integrated services that are
 offered and the efficiencies of a well orchestrated integrated global
 delivery model. In fact, Integration and partnerships have been the
 hallmark of our success this year.
 
 Your companys success is reflected in its financial numbers for
 2006-07. Its business revenues grew by 24.5% over the previous year.
 The consolidated revenues of almost Rs 1470 crores for the year ended
 March 2007 were reported. For a company that is all of five years old,
 it has had a great growth trajectory with a compounded annual growth
 rate of 122% since inception. M.ore importantly, the initiatives that
 have been taken to grow the businesses by increasing productivity,
 through globally acknowledged quality processes and cost optimization,
 are reflected in the profits after tax. Your company has moved the
 needle from a loss of Rs 18.6 crores last year to a profit of Rs. 65.7
 crores in FY 2007, a positive swing of Rs. 84.3 cores, an effort worth
 appreciating.
 
 Other quick highlights of FY 2007 performance are that:
 
 - The BPO segment, with a share of 68.2%, continued to contribute
 significantly to the companys consolidated turnover
 
 - The IT business segment grew 43.8% year on year, with a share of just
 below one third in overall revenues
 
 - On a geographic basis, Arnericas contributed 77.5% of the
 consolidated revenues followed by Australia at 13.1% and the balance
 9.4 % from Europe and Asia Quite a few million dollar clients were
 added during the year, taking the total number of million dollar
 clients to 55.
 
 Additionally, in the ITO Services segment, we made a significant
 decision in FY 2007 to re-focus our efforts on the core high growth
 global off-shoring business; hence, we decided to sell the onsite
 centric government vertical, operating under Albion in the Americas.
 This will allow us to drive more growth in our core Manufacturing and
 Logistics, Banking, Financial Services, Insurance and Emerging Market
 verticals which will further strengthen us.
 
 Your company is truly global in nature with a footprint in 9 countries
 across 4 continents and with a multi-cultural, multi-national workforce
 of about 4400 as of year end. About 60% of the employee strength is
 located overseas, building and delivering value closer to a blue chip
 roster of clients which include many Fortune 500 companies.
 
 I am proud to share that the BPO business had some outstanding industry
 achievements, last year. Global Service media and neoIT, a leading
 offshore outsourcing advisory firm, has for the second year in
 succession ranked Cambridge as one of the top three BPO companies in
 the world. We were also ranked by them as one of the top three leaders
 in human capital management. This award validates the commitment to
 developing the best and brightest workforce in the industry and one
 that has contributed significantly to our performance in 2006-07.
 
 Further your company has improved- considerably on its ranking in the
 International Association of Outsourcing Professionals (lAOP)s 2007
 Global Outsourcing 100 list, and emerged as the 10th leading
 outsourcing company based on its executive leadership. The list which
 appeared in a special section in Fortune Magazine ranked us at 28th
 last year.
 
 These awards and accolades and the customer successes during the year
 reiterate not just Cambridges market leadership, but also the success
 of its ensile-offshore model along with the cross selling strategies
 between its two business segments.
 
 As you are aware, your company operates at the high end of the
 knowledge and transaction processing outsourcing segment, one that
 calls for a high degree of skill and vertical expertise, The management
 feels confident that the building blocks necessary for profitable
 growth in the future have been laid down. Your company will continue to
 strive to generate more revenue growth not just from its existing
 clients but also through increased penetration of its diversified
 service offerings which are truly unique. The stronger global platform
 will enable all the Cambridge resources, especially the ones at the
 frontline, to do what they have committed to do, by serving our
 customers flawlessly, at the appropriate time, and with utmost
 integrity. It is my belief that such a concerted effort will further
 enhance profitability and shareholder value for all the stake holders.
 
 I thank you for your continued support and faith in your Company.
 
 Christopher A Sinclair
 
 Executive Chairman and Chief Executive Officer