Mphasis

Welcome to a new year. A new beginning means new opportunities and new
 avenues for your Companys growth
 
 In my previous note to you, I had envisaged that 2008 would be a very
 interesting year, offering us unique opportunities and challenges. Time
 has reconfirmed this for us.
 
 The financial crisis and the ensuing recessionary tendencies have
 created a sense of uncertainty among corporate entities and their
 clients. The financial tsunami has cascaded to other sectors of the
 economy and has affected industries ranging from automotive and
 manufacturing to retail. The effect has been felt across mature and
 developing markets alike, effectively disproving the myth about
 decoupling between economies.
 
 As you are aware, the MphasiS Board had approved a change in the
 financial year from April-March to November-October, effective from the
 1 November 2008. To facilitate this transition, the current financial
 period closed at the end of October 2008 - making it a seven month
 financial period.
 
 In the last 7 months, despite the macroeconomic challenges, your
 company has registered a commendable 41% top line growth and 111%
 growth in net profits over the corresponding 7 month period in 2007.
 
 In this period, the MphasiS Group consolidated revenues were at Rs.
 1,907 crores, a growth of Rs. 554 crores over the corresponding period
 in 2007. During the same period, Net Profit increased from Rs. 140
 crores to Rs. 295 crores. EPS increased from Rs. 6.72 to Rs. 14.16 over
 the same period, representing a growth of 111%.
 
 During the 7 month period ended 31 October 2008, the group added 47 new
 clients including 38 relationships through EDS. Our client
 relationships have not only grown in size but also become more
 broad-based. The group now has 96 clients with an annualized run rate
 of more than USD 1 million including 9 clients in excess of USD 20
 million. The billing rates have remained steady and manpower
 utilization improved significantly across all the businesses.
 
 Our sustained performance has been made possible because of our aligned
 focus and relentless execution.  Now, it is time to look back with
 delight at what we have accomplished.
 
 A snapshot of the high accolades awarded to your company includes:
 
 Ranked as No. 4 Fastest Growing Mid-Size company by Business Today
 
 Ranked at No. 187 by Economic Times in the annual ET 500 2007-08
 rankings; this represented an upward movement of 90 places from last
 years ranking in the same survey
 
 Ranked among the Top 100 Outsourcing Companies in the world by Global
 Outsourcing Survey 2008 compiled by the International Association of
 Outsourcing Professionals
 
 - Won the Amity HR Retention Award for the second year running in
 recognition of our achievements in employee retention
 
 - Won the Government of Indias 2008 National Award for Best Employer
 for the empowerment of persons with disabilities
 
 Won the National Center for Promotion of Employment for Disabled People
 (NCPEDP) - Shell Helen Keller Award 2008 for being A Company that
 demonstrates its belief in equal rights and gainful employment for
 persons with disabilities, through its policies and practices
 
 We at MphasiS believe that more than the cost arbitrage advantage, the
 main value proposition for India lies in its young and talented
 workforce. We have worked hard to put our people first and in turn were
 more than rewarded by our employees. Our top talent retention stood at
 98%. To further harness the creative potential of our employees, we
 have established a dedicated Office of Technology and IP Strategy to
 focus on innovation and drive our high margin business.
 
 To further streamline the process of strategy to execution, your
 Company has initiated a metrics driven performance management system.
 The intended purpose is to drive employee behaviour that would in turn
 have an effect on the financial results.
 
 By all indications, the year 2009 is going to be a demanding one.
 However, we have held out against the tide and would strive to keep up
 the momentum.
 
 Increasing customer satisfaction, raising internal efficiency, building
 domain and technological expertise would continue to be our business
 priorities. Our service portfolio would continue to be closely aligned
 with industry verticals that we serve.
 
 Your Company believes that now, more than ever, is the time to leverage
 on the power of innovation.  To this end, we have initiated a host of
 non-linear initiatives, including a centre for incubation of product
 ideas, creation of Intellectual Property (IP) and platform BPOs. The
 maturing of these new non-linear initiatives and generation of
 higher-than-average EBIT per employee will provide the necessary leeway
 in these uncertain times.
 
 I also wish to take this opportunity to thank you for the cooperation
 extended in my brief but eventful tenure. Rest assured that the
 processes established and strong leadership that is in place would
 continue to guide your Company to march ahead with the momentum gained.
 
 To realize MphasiS vision of being the Best Business Ally Globally,
 we remain committed to proactively identifying customer needs and
 creating value for them. In the coming year, MphasiS would continue to
 take the lead and thrive on the spirit of entrepreneurship; innovating
 wherever we see challenges, finding simple answers to what may seem
 like complex questions.
 
 Thank you for your continued support in our quest for sustainable
 growth.
 
 Best Regards
 Jeya Kumar