Dear Shareholders,
 
 The past year was another tough year for Mastek. The economic downturn
 as well as the changes in the UK Government continued to impact
 spending on transformation initiatives – impacting both the private
 sector and the public sector. Consequently, as a provider of IT
 platforms that support our clients’ transformation programs, we
 continued to operate in a challenging demand environment.
 
 We ended the year under review with total income of Rs. 614.2 crore, a
 net loss of Rs. 55.9 crore and cash and cash equivalents (including
 investment in Mutual Funds) of Rs. 159.02 crore. The net loss for the
 year included an exceptional item of Rs. 27.2 crore towards write off
 of goodwill of Vector Insurance services. A combination of factors
 including the increasing strain on the UK economy where government
 spends have been reduced, a key client of ours ramping down its
 business and sales cycles getting increasingly elongated had an impact
 on the financial performance of the Company for FY 2011.
 
 Despite strain on the revenue, we continued to make substantial
 investments in our insurance product portfolio. We believe these
 investments are necessary to consolidate our position as an IP-led
 solutions provider. During the year under review, the product
 development spends were Rs. 39.8 crore as compared to Rs. 38.9 crore in
 the previous year. Other investments were in form of greater than
 normal salary hikes to retain the best talent that drives the Mastek
 engine as well as greater S G & A costs in terms of sales and marketing
 expenses in order to be able to address the available opportunity.
 
 To enable our customers to realise business impact, we have aligned our
 business units into 8 distinct verticals or value corridors across 3
 geographies. Value Corridors operate as a business unit that is
 responsible for a set of value propositions that are taken to a target
 market in a consistent, scalable fashion – enabling delivery of
 superior differentiated value to our clients and partners by aligning
 all aspects of value delivery namely – marketing, sales,
 engagement/solutioning, delivery and our platforms, products and
 productized services.
 
 We started the year with a clear objective of building our order book.
 The multiple steps mentioned above have been a step in that direction.
 We are beginning to see improvements being realised as a result of
 these steps even though it has taken a while to see tangible results.
 Our 12 month order backlog now stands at Rs. 309 crore. We have been
 able to make significant additions to our client portfolio in both the
 insurance and government verticals. During the last financial year, we
 added 14 new clients which is a clear indication of increased traction
 that we are witnessing in the markets. The effort now would be to build
 on these relationships and scale them up to meaningful proportions.
 
 During the year, we also acquired SEG Software, LLC, a leading provider
 of policy administration systems covering individual and group life,
 health & annuity insurance products. This acquisition reinforces our
 commitment to the North American insurance market and will expand our
 presence and capabilities in the life and annuity policy administration
 arena.
 
 Mastek is working with Foresters, a life insurance provider, as a
 technology partner in their major transformational initiative to
 modernise Foresters infrastructure. The Foresters partnership will
 leverage our insurance technology solutions in three major areas of
 business transformation – New Business and Underwriting, Policy
 Administration and Producer Portal. This is a clear example of a
 business impact solution where Foresters will be able to derive
 dramatic cost savings in both policy acquisition and inforce
 maintenance.
 
 Mastek was also selected as partner of choice by the Social Justice
 Department of the State of Maharashtra to implement the e-scholar -ship
 programme which will benefit over 32 lakh students in the state. Apart
 from enabling granting procedures, the solution caters to processes of
 scholarship suspension, renewal and cancellation.  The system also
 provides the department with MIS to monitor and analyse the scholarship
 distribution and disbursement. This is another example of a solution
 that benefits the end customer by ensuring complete transparency and
 thereby eliminating fraud in the system. These are but just a few
 examples of instances where Mastek has delivered business impact to
 customers.
 
 Our focus remains on sustaining the momentum we have achieved and
 starting the new financial year with a strong order backlog position.
 We are committed to restoring the margins and bringing back revenue
 growth and we are already seeing some signs of the same through the new
 wins in the last two quarters. We are confident that this momentum will
 continue and the company’s performance would slowly but surely refect
 the same in the foreseeable future.
 
 On behalf of the board, I would like to place on record my heartfelt
 appreciation to all our investors, employees and customers who have
 stood by us in these tough times. I am sure that your support will
 ensure that Mastek regains its pre-eminent position as a provider of
 high-end IP leveraged solutions to its customers.
 
 Sudhakar Ram
 Chairman and Managing Director