Mascon Global

The Directors are pleased to present their report on the business and
 operations of the Company together with the Audited Consolidated and
 Standalone Accounts of your Company tor the year ended March 31, 2008.
 
 Financial Results
 
 The following tables give the consolidated and standalone financial
 performance of the Company for the year 2007-08 as compared to the
 previous financial year.
 
 Consolidated 
 
                                                    Rs. in thousands
 Year ended March 31                             (2008)         (2007)
 
 Revenues                                       89,194,54     5,663,064
 
 Cost of revenue                                6,461,335     4,244,561
 
 Gross margin                                   2,458,119     1,418,503
 
 Other income                                      25,211         8,869
 
 Selling, general and administration expenses   1,150,610       746,850
 
 Operating profit (PBTDT)                       1,332,720       680,522
 
 Interest & finance charges                       262,343       127,287
 
 Exchange Loss/(Gain)                             172,162        64,317
 
 Depreciation & amortization                      197,331       128,851
 
 Profit before prior year adjustment and tax      700,884       360,067
 
 Prior year adjustments                              -          (34,967)
 
 Provision for tax                    
 
 - Current year                                   100,015        21,672
 
 - Previous year                                  (10,488)        1,509
 
 - Deferred tax                                    (3,310)       22,842
 
 Profit after tax                                 614,667       349,011
 
 
 Standalone                
 
                                                       Rs. in thousands
 Year ended March 31                               (2008)       (2007)
 
 Revenues                                       2,846,388     1,406,868
 
 Cost of revenue                                1,562,091       805,225
 
 Gross margin                                   1,284,297       601,643
 
 Other income                                       5,808         6,587
 
 Selling, general and administration expenses     357,487       230,607
 
 Operating profit (PBIDT)                         932,618       377,623
 
 Interest & finance charges                       116,484        58,496
 
 Exchange Loss/(Gain)                             174,858        63,676
 
 Depreciation & amortization                       31,719        30,337
 
 Profit before prior year adjustment and tax      609,557       225,114
 
 Prior year adjustments                              -          (34,967)
 
 Provision for tax                     
 
 - Current year                                    76,701         7,733
 
 - Previous year                                     -            1,509
 
 - Deferred tax                                    (3,310)       22,842
 
 Profit after tax                                 536,166       227,997
 
 Year in Retrospect
 
 a.  Consolidated
 
 Total Revenues during 2007-08 at Rs.89,195 lakhs registered an increase
 of 58% over the previous year revenue of Rs.  56,631 lakhs. The gross
 margin during the year was Rs.24,581 lakhs ( 28% of Revenue) as
 compared to Rs 14,185 lakhs (25 % of Revenue) in the previous year. The
 operating profit during the year increased to Rs. 13,328 lakhs as
 compared to Rs. 6,806 lakhs during the previous year. The profit after
 tax for the year increased to Rs.6,147 lakhs against a net profit of
 Rs. 3491 lakhs during the previous year.
 
 b.  Standalone
 
 Total Revenues during 2007-08 at Rs.28,464 lakhs registered an increase
 of 102 % over the previous year revenue of Rs. 14,069 lakhs, mainly on
 account increased off shore efforts during the year. The gross margin
 during the year has increased to Rs.12,843 lakhs (45% of Revenue) as
 compared to Rs. 6,016 (43% of Revenue) in the previous year. The
 operating profit during the year has also increased to Rs. 9,326 lakhs
 as compared to Rs.3,776 lakhs during the previous year. The profit
 after tax for the year amounted to Rs. 5,361 lakhs as against a net
 profit of Rs.2,280 lakhs during the previous year.
 
 Dividend
 
 The Board has not recommended any dividend for the year 2007-08, in
 order to conserve financial resources.
 
 Share Capital
 
 The Company has raised an amount of Rs. 2,413 lakhs during the year
 under review by issue of 12,700,000 no. of equity shares on
 preferential basis at Rs. 19 per share (including premium). As a result
 of the above, the paid-up capital has increased from Rs. 31,211 lakhs
 to Rs. 32,481 lakhs. The Company has also issued 43,500,000 no. of
 warrants during December 2007/January 2008 on a preferential basis at
 Rs. 19 each (including premium) with an option of converting into
 equity shares of the Company within 18 months. The Company collected
 upfront payment of 10% amounting to Rs. 827 lakhs during the year under
 review.
 
 The Company has issued 10,500,000 Global Depository Receipts (GDRs),
 each GDR representing 4 underlying equity shares of the Company, for an
 aggregate amount of Rs.8,425 lakhs (USD 21 million) on March 25, 2008,
 including Rs.8,024 lakhs (USD 20 million) issued towards payment of
 part of the cost of acquisition of overseas companies. As a result of
 the above the paid-up capital has increased from Rs. 32,481 lakhs to
 Rs. 36,681 lakhs as on March 31, 2008.
 
 Acquisitions
 
 The Company has decided to achieve inorganic growth by strategic
 acquisition of companies/accounts, which have strong fundamentals and
 synergy with Mascons operating philosophy. With this objective, your
 company has acquired Jass & Associates Inc., USA and SDG Corporation,
 for a total consideration of $ 55 Million; $ 20 million by issue of GDR
 and balance of US $ 35 million in cash.  The acquisitions have become
 effective in the year 2008-09 and the impact on financials will be
 reflected accordingly.
 
 As regards the earlier acquisitions, the following developments took
 place during 2007-08:
 
 a.  Versatech Consulting Inc., USA.: Acquisition of this company became
 effective during 2007-08 and accordingly its financials are
 consolidated with the parent company for the financial year ended March
 31, 2008.
 
 b.  Ebusinessware Inc., USA. : Acquisition of this company became
 effective during 2007-08 and accordingly its financials are
 consolidated with the parent company for the financial year ended March
 31, 2008.
 
 c.  Comtel Holdings Pte Limited, Singapore: Due to certain commercial
 reasons this acquisition could not be completed in 2007-08. The Company
 had taken necessary steps and the acquisition will be completed and
 will become effective in the year 2008-09 and the impact on the
 financials will be reflected accordingly.
 
 Human Resource Development
 
 The market for IT talent is buoyant. Thus attracting and retaining
 employees is a challenge. The emerging trends in global software market
 require innovative strategies for Human Resource Development.
 Recognizing this, Mascon has taken several initiatives during 2007-08
 to ensure readiness of the organization for the next phase of growth.
 
 The total number of employees as on March 31, 2008 was 3,750. During
 the year 2007-08, the company added a net of 1,450 persons through
 recruitment and acquisitions. The attrition rate was 22 % which is
 comparable to the current industry benchmarks. Mascon envisages major
 growth from new business areas such as Healthcare & Life Sciences,
 Banking Finance, Telecom, Infrastructure Management, Identity
 Management etc. The requirement of manpower for these segments is
 significantly different than that of the conventional IT services due
 to strong domain focus. Steps have been initiated to identify suitable
 resources for these areas as well as to retrain the existing staff.
 
 The Companys HR policies and processes are being aligned to
 effectively deal with the requirements of expanding business and
 emerging opportunities. The Company encourages innovation and has also
 evolved schemes for rewarding outstanding performances.
 
 Quality Initiatives
 
 At MGL, commitment to continuous improvement of quality practices and
 building robust information security practices are an integral part of
 our business operation. MGL has attained a number of quality related
 milestone during this year.
 
 - Chennai Development Center is SEI-PCMM level 3 assessed
 
 - Chennai Development Center is SEI-CMMI level 5 assessed
 
 - Chennai & Bangalore Development Center is certified for ISO
 27001:2005
 
 - Bangalore Development Center continues to remain certified for
 TL9000-S
 
 The above certifications are testimony to MGLs unstinting commitment
 to achieve the highest standards of quality and the expertise that the
 company brings to clients globally. The corner stone of these
 certifications is the in- house developed Mascon Quality System (MQS) -
 an agile, process driven, people oriented and customer focused quality
 management system which is continuously evolving to cater to the
 requirements of the companys varied business offerings.
 
 Certification and Partnerships
 
 During the year, MGL signed partnership agreements with:
 
 a.  SAS Institute in US (www.sas.com) for offering services in Business
 Intelligence/ Datawarehousing services
 
 b.  SAP to become their All-in-One partner for the Plastics Industry
 
 c.  Lynuxworks to provide solutions and services to the Medical
 Industry
 
 d.  HP. Vignette and BEA through its subsidiary and associate companies
 
 Subsidiaries
 
 Your Company has five direct subsidiaries as on March 31, 2008, viz.
 MGL Americas Inc., USA, Mascon Global (Europe) Ltd., UK, Versatech
 Consulting Inc., USA, Ebusinessware Inc., USA and Mascon International
 Limited, Mauritius.
 
 In order to have an effective control over the operations of the US
 based subsidiaries Emerging Software Consulting Inc., USA and Mascon
 Global Consulting Inc., USA have been merged with MGL Americas Inc.,
 USA effective from April 01, 2007 to reflect MGL Americas as surviving
 entity.
 
 MGL Americas Inc. has its own subsidiaries, details of which are given
 in the statement pursuant to the provisions of Sec.212 of the Companies
 Act, 1956. All the direct and step-down subsidiaries are engaged in
 software related business only.
 
 MGL Americas Inc., USA
 
 MGL Americas Inc., USA, a mo % subsidiary of the Company achieved total
 revenue of Rs 53,124 lakhs and EBITDA of Rs. 3,060 lakhs. The above
 results include the performance of Emerging Software Consulting Inc.,
 USA and Mascon Global Consulting Inc., USA. The above results also
 include the performance of Mascon Global Information, S.DE.R.L.DE.C.V.
 (Mexico), step-down subsidiary of the Company. Mascon Global GmbH.,
 Germany another step down subsidiary of the Company did not have any
 operations during the year and steps are being taken for its revival.
 
 Versatech Consulting Inc., USA
 
 Versateeh Consulting Inc., USA, a too % subsidiary of the Company
 achieved total revenue of Rs 14,483 lakhs and EBITDA of Rs 63 lakhs
 
 Ebusinessware Inc., USA
 
 Ebusinessware Inc., USA, a 100 % subsidiary of the Company achieved
 total revenue of Rs 10,497 lakhs and EBITDA of Rs 856 lakhs
 
 Mascon Global (Europe) Limited., UK
 
 Mascon Global (Europe) Limited, UK, a 100 % subsidiary of the Company
 achieved total revenue of Rs. 698 lakhs and EBITDA of Rs. 71 lakhs.
 
 Mascon International Limited, Mauritius
 
 Mascon International Limited, Mauritius, a too % subsidiary of the
 Company is a Special Purpose Vehicle (SPY) for making investments and
 it is not engaged in any operations during the year.
 
 As per Sec. 212 of the Companies Act, 1956, your Company is required to
 attach the Directors Report, Balance Sheet and Profit & Loss Account
 of these subsidiaries. However, the Ministry of Corporate Affairs (MCA)
 has given its approval for exemption from such attachment to the
 Company, as it presents the audited consolidated accounts of the
 Company and its subsidiaries in the Annual Report. A brief summary of
 these subsidiaries is given in the Annual Report. The annual accounts
 of these subsidiary companies along with related information are
 available for inspection during business hours at the registered office
 of the Company.
 
 Corporate Governance and Management Discussion and Analysis
 
 As required under clause 49 of the Listing Agreement, reports on
 Corporate Governance along with Auditors certificate and Management
 Discussion and Analysis are attached as a part of the annual report.
 
 The Chief Executive Officer and the Chief Financial Officer have given
 a certificate to the Board as per the provisions of clause 49 of the
 Listing Agreement.
 
 Directors
 
 Appointment
 
 Mr. Joseph Methusalah Scaly was appointed as additional director of the
 Company with effect from May 14, 2008 to hold the office till the
 conclusion of the ensuing Annual General Meeting. The Company has
 received requisite notices under section 257 of the Companies Act,
 1956, proposing the appointment of Mr. Joe Sealy as director liable to
 retire by rotation.
 
 Mr.M.N. Ahmed was appointed as additional director of the Company with
 effect from June 15, 2008 to hold office till the conclusion of the
 ensuing Annual General Meeting. The Company has received requisite
 notices under section 257 of the Companies Act, 1956, proposing the
 appointment of Mr. M. N. Ahmed as director liable to retire by
 rotation.
 
 Reappointment
 
 Mr. K. R. Paramesvar, and Mr. K.N.Bhat, Directors of the Company,
 retire by rotation at the forthcoming Annual General Meeting and being
 eligible, offer themselves for re-appointment. The Board of Directors
 has also recommended their reappointment for consideration of the
 shareholders.
 
 Resignation
 
 Dr. Nandu Thondavadi, Director has resigned with effect from October
 27, 2007. Mr. Kishore Soni and Mr. Dinesh Sood, Directors of the
 Company resigned with effect from May 14, 2008. Mr. Pankaj Sehgal,
 Alternate Director to Mr. Dinesh Sood is deemed to have vacated the
 office as the original Director has resigned. The Board places on
 record its appreciation for the valuable contribution made by them
 during their tenure as directors of the Company.
 
 Directors Responsibility Statement
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm that, to the best of their knowledge and belief;
 
 (i) in the preparation of the Annual Accounts for the Financial Year
 ended March 31, 2008, the applicable accounting standards have been
 followed along with proper explanation relating to material departures,
 if any;
 
 (ii) they have selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at March 31, 2008 and its profit for the year ended on
 that date;
 
 (iii) proper and sufficient care has been taken 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) the annual accounts have been prepared on a going concern basis.
 
 Statutory Auditors
 
 The existing statutory auditors M/s G. Balu Associates, Chartered
 Accountants, shall retire at the conclusion of the ensuing Annual
 General Meeting and have confirmed their eligibility within the limits
 specified in sub-section (IB) of section 224 of the Companies Act, 1956
 and willingness to continue in office as statutory auditors, if
 re-appointed.
 
 Pursuant to recommendation of the Audit Committee, the Board of
 Directors have approved the reappointment of M/s G.Balu Associates as
 the statutory auditors of the Company for the financial year 2008-09,
 subject to the approval of the shareholders of the company at the
 ensuing Annual General Meeting.
 
 Auditors Report
 
 In the Auditors Report, the auditors have drawn attention to the
 balance unpaid dividend amount of Rs. 40,677 due and the same had been
 subsequently remitted to the designated account. Further, no diminution
 in value for the investments made in the subsidiaries had been provided
 by the Company. The Company has not considered diminution in
 investments as it is not of a permanent nature.
 
 In the annexure to the Auditors Report, it has been observed at clause
 (ix) that there were few delays in the remittances of provident fund
 and tax deducted at source in India. The Company has since cleared the
 aforesaid provident fund dues and the tax deducted at source.
 
 Further it has been observed at clause (xi) of the Annexure to the
 Auditors Report that the company has during the year, defaulted in
 repayment of dues to the banks to the extent of Rs.464 lakhs. The
 company has initiated steps to clear the entire dues as on date.
 
 Secretarial Audit
 
 Secretarial Audit of the Company for the financial year ended March 31,
 2008 has been carried out through M/s S. Srinivasan & Co., Company
 Secretaries, Chennai. The Secretarial Audit Report confirms that the
 company has complied with all the applicable provisions of the
 Companies Act, 1956, Depositories Act, 1996, Listing Agreement with the
 Stock Exchanges and all the regulations of SEBI as applicable to the
 company.
 
 Corporate Social Responsibility
 
 Mascon being a responsible corporate entity has continuously been
 taking initiatives to address the societal problems and uplifting the
 underprivileged. During the year, the Company has established Mascon
 Community Service(MCS) which is actively carrying out the following
 activities:
 
 Voluntary blood camps by employees of Mascon
 
 Financial assistance for old age homes
 
 Regular visit by MCS volunteers to orphanages to impart education and
 promote social and moral values.
 
 Providing free education to street children in New Delhi
 
 Particulars of employees
 
 As per provisions of Section 219(i)(b)(iv) of the Companies Act, 1956,
 the report and accounts are being sent to all shareholders of the
 Company excluding the statement of particulars of employees under
 Section 217(2A) of the Act. Any shareholder interested in obtaining a
 copy of the said statement may write to the Company Secretary at the
 registered office of the Company.
 
 Conservation of energy, technology absorption and foreign exchange
 earnings and outgo
 
 Particulars required under Section 217(i)(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 the Annexure B to
 this Report.
 
 Acknowledgements
 
 The Board of Directors acknowledges the consistent support from the
 Companys clients, vendors, bankers, Government agencies, shareholders
 and investors. The Directors also place on record their sincere
 appreciation for the significant contribution made by the employees at
 all levels through their hard work, dedication and commitment.
 
                            For and on behalf of the Board of Directors
 
 Place: London                                      K. Chandra
 Dated: June 19, 2008                                Chairman