Mastek

Elixir, our solutions platform for the global Insurance industry, too
 is architected and designed to deliver maximum business impact that
 enables insurers to transform themselves into modem age players with
 significantly higher responsiveness and flexibility to effectively face
 the changed business environment that they now operate in.
 
 The kind of premium work we are already doing, when combined with the
 investments we have made over the past 26 years both in terms of
 efforts & resources, makes us a truly unique company especially when
 compared to other players in the Indian IT industry.  Mastek has been
 able to clearly differentiate itself as a high-end IT solutions
 provider out of India whom large organizations, wherever in the world
 they may be, turn to for strategic and high impact work.
 
 Our new corporate identity, drawing upon the idea of the prism, is
 reflective of our status as an enabler of transformation. It is our
 intent, over the next few years, to firmly establish Mastek as a
 bellwether for Wave 3 IT companies in India, place it among the top
 three companies in the world providing IT solutions to the insurance
 industry, and make it a consortium partner of choice for major
 greenfietd government programs in the UK and Europe.
 
 Delivering a strong performance through effective execution of strategy
 
 During the year under review, we made commendable progress in achieving
 the aforesaid goals by addressing opportunities in the global IP-led
 solutions space. In the Government vertical, for instance, we began
 implementing a solution based on an IP co-owned and developed by us, in
 partnership with Thales UK to transform the way in which the UK
 Ministry of Defence (MoD) manages and schedules the global air
 movements of troops and cargo. This solution, which will be deployed
 over UKs Defence Information Infrastructure (DM) is significant for
 several reasons; firstly, this project involves the design and
 development of a specialist system that handles complex military
 logistics & defense asset management, providing significant benefits in
 terms of process efficiencies, automation and information governance.
 Secondly, this new product will be a world first - no other player has
 invested in providing a military -targeted product for this particular
 domain. Similarly, in the Insurance vertical Elixir gained further
 traction. After successfully implementing the Policy Administration
 module of the Elixir platform for IDBI Fortis Life in the first phase,
 Masteks scope of work has now been expanded to cover all the modules
 of Elixir - Product Architect Suite, New Business/Underwriting, Policy
 Servicing, Point of Sale, Channel Management, Re-insurance, Claims and
 Finance. This is the first end-to-end Elixir implementation deal in
 the domestic market. Mastek also revised its agreement with Capita Life
 & Pensions to expand its license and service arrangement for Elixir.
 This initiative will enable Mastek to better support the customer base
 of Capitas growing operations in the UK Life & Pensions market and has
 the potential to cover majority of the millions of policies Capita
 currently administers. During the year under review, a key success in
 the Insurance operation was a direct win for Elixir in the UK market
 with Legal & General, one of its largest financial services majors,
 selecting Elixir for the administration of some of its products.
 
 In terms of financial performance, during FY2008 we achieved a revenue
 growth of about 34% in dollar terms, generating a total income of 7
 million or about Rs.9.2 billion. This surge in revenue was accompanied
 by an impressive improvement in margins, with EBITDA margin increasing
 from 16.1% in FY2007 to 17.9% in FY2008. The companys financial
 position remains strong, with cash and equivalents on our balance sheet
 at over Rs. 1.3 billion. The industry-leading performance during the
 year was driven by better revenues from existing customers, addition of
 new ones, and realization of the benefits of productivity and cost
 efficiency improvements initiated in early FY2008. The two acquisitions
 that we made, VectorMastek in July 2007 and STGMastek in March 2008,
 too contributed to overall performance.
 
 Looking forward
 
 FY2008 has proved to be a high growth period for Mastek, both in terms
 of financial as well as operational performance. The continuous
 improvements in our operating margin, returns on talent, order book,
 and other metrics demonstrate the effectiveness of our business model
 and growth strategy. We remain focused on the IP-led enterprise
 applications market and continue to implement our growth plans that
 include overseas acquisitions and expanding the order book, which has
 been growing. We are in the process of implementing additional
 initiatives that will support growth over the longer term by combining
 the benefits of people, processes, and intellectual property.
 
 Therefore, despite the prevailing macroeconomic environment, we believe
 Mastek is well positioned to grow faster than the markets it serves and
 the competitors it faces.
 
 On behalf of the Board of Directors, I would like to thank everyone —
 our customers, partners, shareholders employees, and vendors for their
 support as we continue relentlessly on our journey to create a high-end
 IT player out of India.
 
                                                            Sudhakar Ram
                                          Chairman and Managing Director