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Directors Report of Mastek Ltd.

Mar 31, 2015

Dear Shareholders,

The Board of Directors has pleasure to forward the following Report for the year ended March 31, 2015.

1. FINANCIAL RESULTS - CONSOLIDATED RESULTS OF MASTEK LIMITED AND ITS SUBSIDIARIES

Rs. in Lakhs Year Ended Year Ended PARTICULARS March 31, March 31, 2015 2014

Revenue

Income from IT Services 100,196.28 90,956.76

Other operating revenue 1,062.11 1,345.53

Total Operating Revenue 101,258.39 92,302.29

Other Income 1,711.34 1,125.91

Total Revenue 102,969.73 93,428.20

Expenses 95,695.96 83,298.20

Depreciation and amortization expenses 3,733.43 3,287.28

Finance costs 147.10 67.98

Exceptional items 1,166.12 -

Profit before tax 2,227.12 6,774.74

Tax expense 454.07 1,595.18

Profit after tax 1,773.05 5,179.56

FINANCIAL RESULTS - MASTEK LIMITED

Year Ended Year Ended PARTICULARS March 31, March 31, 2015 2014

Revenue

Income from IT services 66,048.24 54,459.34

Other operating revenue 463.73 598.00

Other Income 2,305.40 2,129.94

Total Revenue 68,817.37 57,187.28

Expenses 58,769.70 49,766.64

Depreciation and amortization 2,702.38 2,566.34 expenses

Finance costs 27.43 26.87

Exceptional Items - (gain) / loss,net (494.95) 1,555.01

Profit before tax 7,812.81 3,272.42

Tax expense 374.06 575.31

Profit after Tax 7,438.75 2,697.11

Add:Profit brought forward from 29,311.97 28,157.93 Previous year

Profit available for appropriation 36,750.72 30,855.04

Dividend (563.94) (1,040.59)

Dividend Distribution Tax* (30.37) (17.52)

Transferred to General Reserve 180.00 520.00

Balance carried to Balance Sheet 36,037.15 29,311.97

* Net of credit received in respect of tax paid under Section 115BBD of Income Tax Act, 1961

2. RESULTS OF OPERATIONS

A) Mastek Consolidated Operations Financials

On a consolidated basis, the Group registered total operating revenue of Rs. 101,258.39 lakhs for the year ended March 31, 2015 as compared to Rs. 92,302.29 lakhs for the year ended March 31, 2014, i.e. a growth of 9.7%.. The Group registered a net profit of 1,773.05 lakhs in the year ended March 31, 2015 as compared to Rs. 5,179.56 lakhs in the year ended March 31, 2014, i.e. a de-growth of 65.8%.

Breakup of the Operating Revenue by regions

Region Year ended Year ended March 31, 2015 March 31, 2014 Rs. in Lakhs % of Rs. in Lakhs % of Revenue Revenue

UK 52,788.62 52.1 43,225.73 47.5

North 40,494.73 40.0 41,949.20 45.1 America

Others 7,975.04 7.9 7,127.36 7.4 (India/ Asia Pacific)

Total 1,01,258.39 100.0 92,302.29 100.0 Operating Revenue

The U.K. operations contributed Rs. 52,788.62 lakhs in total operating revenue as compared to Rs. 43,225.73 lakhs during the year ended March 31, 2014, representing an increase of 22.1%. This was due to 28.0% growth in revenues from the UK government vertical which constituted 53.8% of UK operations.

The North America operations, on the other hand, registered a decrease in its total operating revenue by Rs. 1,454.47 lakhs (3.5%), primarily on account of 8.21 % decrease in revenues from the traditional IT services business and a drop of 8.18% in the insurance vertical linked to a project being put on hold as guided at the beginning of year.

The share of total operating revenue of other Regions, i.e. India and Asia Pacific as a percentage of total operating revenue of the Group increased by 0.5%.

Breakup of the Operating Revenue by Verticals

2014-15 % of 2013-14 % of Vertical (in Rs. Lakhs) Revenue (in Rs. Revenue Lakhs)

Insurance 45,716.4 45.6 44,865.0 49.3

Government 29,902.3 29.8 23,868.1 26.3

Financial 11,296.5 11.3 9,732.3 10.7 Services

IT & Other 13,281.1 13.3 12,491.4 13.7 Services

Total - IT 1,00,196.3 100.0 90,956.8 100.0 services revenue

Other operating 1,062.1 1,345.5 Revenue

Total 1,01,258.4 92,302.3

The insurance vertical as a proportion to total IT services revenue dropped by 3.7% in FY 2014-15 as compared to the previous year primarily due to the drop in the insurance revenue in North America linked to a project being put on hold at the start of the year. However, in rupee terms the revenues grew marginally by 1.9%. The government vertical witnessed a robust growth in the UK region which resulted in the overall share of revenue growing by 3.5% in FY 2014-15 as compared to the previous year. In rupee terms the government revenue grew at a healthy rate of 25.3% helped by a better exchange rate in FY 2014-15. The IT and other services vertical grew by 6.3% in rupee terms with good growth in the retail clients in the UK region.

Profitability

During the year ended March 31, 2015, the Group earned a profit of Rs. 1,773.1 Lakhs as compared to Rs. 5,179.6 lakhs for the year ended March 31, 2014, reflecting a drop of 65.8% largely on account of:

1. Exceptional costs on account of reorganization and merger related expenses of Rs. 1166.1 lakhs.

2. Share of loss from the Legal Practice Technologies (LPT) JV in the UK region of Rs. 1,127.0 lakhs.

3. Higher product development expenses by Rs. 509.0 lakhs and increase in amortization of expenses by Rs. 119.0 lakhs on account of the acquisition of the insurance consulting business ofAgile technologies.

4. And balance due to lower operating margins in the UK region with requirement to service onsite clients with security cleared resources in the government vertical.

Mastek standalone operations

On a stand-alone basis, Mastek reported an operating income of Rs. 66,512.0 lakhs for the year ended March 31, 2015, as compared to Rs. 55,042.7 lakhs for the year ended March 31, 2014. The Company made a Net profit of Rs. 7,438.8 lakhs for the year ended March 31, 2015 as compared to Net Profit of Rs. 2,697.1 lakhs for the year ended March 31, 2014, representing a growth of 176%, on account of higher revenues, better margins on offshore projects in FY 2014-15 and the exceptional loss incurred in the previous year of Rs. 1555.0 lakhs due to provision for other than temporary decline in value of investments in Majesco Canada Limited.

Update on progress of Demerger

Pursuant to the Scheme of Arrangement (the "Scheme") under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions, if any, of the Companies Act, 1956 and other applicable provisions, if any of the Companies Act, 2013, the Board of Directors of Mastek Limited (the "Company" or "Mastek"), in its meeting held on September 15, 2014, had approved the demerger of the Insurance Products and Services business of the Company, into a new company, Minefields Computers Limited ("Minefields"), to be renamed as Majesco Limited ("Majesco India"), to be followed by transfer by Majesco India of the offshore insurance operations business in India to Majesco Software and Solutions India Private Limited ("MSSIPL"), a wholly owned subsidiary of Majesco Software and Solutions Inc., USA ("MSSUS"). The Appointed date of the Scheme will be April 1, 2014 or any other date as decided by the Board of Directors and the appointed date for the offshore insurance operations business transfer will be November 1, 2014 or any other date as decided by the Board of Directors - both these dates will be subject to approval by the Hon''ble High Court of Bombay and Hon''ble High Court of Gujarat. On approval of the Scheme by the respective High Courts, Mastek shareholders will get one equity share of Majesco India for every share held in Mastek, over and above their existing Mastek shares. Majesco India is proposed to be listed on the BSE and NSE, being exchanges where Mastek is currently listed. Under the proposed restructuring, Mastek will continue with the Solutions business. The company has obtained necessary approval for the scheme under Clause 24 (f) of the Listing Agreements with BSE and NSE from SEBI on December 9, 2014 and is in the process of obtaining requisite approval from the respective High Courts.

The Insurance Products and Services business of the Company as well as its investment in Majesco, USA will be transferred to Minefields on approval of the Scheme from the respective High Courts (Collectively the "Transferred Undertakings").

3. HOLDING AND SUBSIDIARIES

Your Company continues to be the Holding Company of Mastek UK Limited, Majesco USA and newly created Minefields Computers Limited.

During the year under review, as part of the demerger plan approved for the Insurance Products and Services business, Majesco Canada Ltd and Majesco Msc Sdn Bhd, Malaysia, ceased to be the Subsidiary Companies of your Company. Further during the year, Minefields Computers Limited became a subsidiary Company of your Company. Statement containing salient features of the financial statement of subsidiaries/ associate companies/ joint venture are given in Annexure 1

4. INDUSTRY SCENARIO

In FY2016, NASSCOM expects the industry to add revenues of $20bn to the existing industry revenues of $146bn. Export revenues for FY2016 is projected to grow by 12-14% and reach $110-112 bn. Domestic revenues (including ecommerce) for the same period will grow at a rate of 15-17% and is expected to reach $55-57 bn during the year.

According to Gartner''s latest quarter forecast, worldwide IT spending in 2015 is expected to shrink by 1.3%, down from 2.4% growth forecast in last quarter''s update; recent depreciation ofGBP, Euro and AUD against USD has led to drop in the forecast. On a constant currency basis, growth figure is 3.1%, only off 0.6% from last quarter''s update. IT services spending is expected to contract slightly to $942 bn in CY 2015; down from $948 bn in CY 2014.

Gartner stated that emphasis on ''Digital India'' initiative and use of technology to deliver citizen services is expected to help IT spending in the government sector in India to grow 5% to touch $7.2 bn in CY 2015.

IT & Outsourcing Trends for the North American Insurance Industry

The past few years have been challenging for the insurance industry as it tries to grow in spite of economic, regulatory and business challenges. Despite these challenges, many industry experts indicate that there are growth opportunities on the horizon. By looking at IT as a strategic enabler, insurers are continuously investing in people, processes, and technologies that can help them streamline operations, improve their value proposition, and support robust growth strategies.

IT Spending: Market Size

The U.S economy continues to recover and the insurance industry witnessed overall business growth in 2013. To capture growth opportunities, insurers are investing in operating technologies that can drive down frictional costs and help them stay ahead. According to a recent industry study by SMA of U.S. insurers, more than 70 percent predict that their IT spending will increase in the next two years. According to Celent, IT spending in the insurance industry across North America was USD 51.1 bn in 2013, contributing approximately 37 percent of the total worldwide insurance IT insurance spending. These figures are expected to reach USD 58.4 billion in 2015 at a CAGRof five percent as North American insurance firms are looking to modernize business systems in a race to address current market challenges.

In the North American insurance industry, the lines of businesses that spend the most on IT are Life and P&C. P&C insurers account for nearly half of total North American IT spending and are also the biggest buyers of insurance industry outsourcing. On average insurers spend between 3 to 4 percent of their direct written premiums (DWP) on IT. Insurers of all sizes are looking to better align IT investments with business objectives to address current challenges as well as capitalize on growth opportunities, evidenced by the finding that half of all contract signings during the last three years were made by small/mid-sized insurers.

A major growth impediment for the entire insurance industry is legacy systems. Many carriers are still running on systems that are 15 to 25 years old that cannot keep up with current evolving business demands. In the past five years, the insurance industry has experienced a new wave of modernizing or replacing policy administration, billing, and claims systems and insurers view this core replacement as an opportunity to position their carrier for the future. Celent reports that replacing core systems is one of the top priorities for insurers and more than 50 percent of North American insurers plan to do this in the next 12 to 18 months.

The insurance industry is also looking to leverage data and analytics to grow bottom line profits. Insurers are investing in internal data and systems capabilities to yield information advantage, improve decision-making capabilities, and streamline business processes such as underwriting, claims, and risk management and compliance. In addition, in an effort to become more customer centric, insurers need to build an agile IT framework that leverages technologies such as mobile, analytics, and cloud computing.

Many insurers have aggressive plans to develop mobile tools for agents and intermediaries that can lead to product innovation, faster time to market, enhancing distribution channels, and improving sales and marketing tactics. Many CIOs are requiring an integrated service delivery model that combines technology solutions, operational excellence, and analytics-led insights.

5. BUSINESS OUTLOOK

The demerger is a win-win as the insurance and solutions businesses will get enhanced management focus and operational flexibility apart from independently pursuing their growth plans through organic/ inorganic means. The arrangement also creates a platform for both businesses to enhance their financial flexibility.

The two acquisitions on the insurance business will strengthen the overall portfolio of products to cater to the growing market in North America and will enable Majesco to actively compete for larger and more complex assignments in the future.

On the solutions side, Mastek sees traction building up in the UK through the G-Cloud framework. This is largely a Uk government initiative to structure smaller deals and procure directly through the small medium players rather than go on for large huge programs which have had a high failure rate which plays to our advantage. On the UK retail front too where apart from a large marquee client, the company has plans to service other Tier-I accounts. On the UK financial services side, the focus is on micro-lending clients.

The Joint Venture with The Law Society of England and Wales (TLS), United Kingdom named Legal Practice Technologies Limited (LPTL) is in the process of building a platform which is a conveyancing portal branded as "Veyo" to be used by solicitors on real estate transactions and it has already garnered sufficient interest from the legal community in the UK. The Veyo portal should do well in terms of getting a good market share of all the real estate transactions happening in the UK.

In India, the business was a bit slow last year due to the elections but the new government has announced its intentions of bolstering the IT framework and we do believe that there will be a lot of large unbundled opportunities that Mastek can address.

6. RESERVES

The Company proposes to carry Rs. 180 lakhs to reserves.

7. DIVIDEND

An Interim Dividend of Rs. 1.50 per Equity Share of Rs. 5/- was declared by the Board of Directors and was paid in February 2015. Your Directors are pleased to recommend a final dividend of Re. 1/- per Equity Share for the year ended March 31, 2015 on the paid up Equity Share Capital ofthe Company, payable to those shareholders whose names appear in the Register of Members as on the book closure date. The total dividend for the year amounted to Rs. 2.50 per share (Previous Year- Rs. 4.50 per share).

8. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENT UNDER SECTION 186.

Details of Loans, guarantees, Investments covered under provisions of Section 186 of the Companies act 2013 are given in the notes 11 and 20 to the financial statements.

9. DISCLOSURES UNDER THE COMPANIES ACT, 2013

i) Extract of Annual Return:

Pursuant to section 92(3) of the Companies Act, 2013 (''the Act'') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return is Annexed as Annexure 2.

ii) Number of Board Meetings:

The Board of Directors met 9 (nine) times during the year 2015. The details ofthe board meetings and the attendance of the Directors thereat are provided in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual report.

iii) Change in Share Capital:

During the year, the Company allotted 3,85,992 Equity Shares at face value of Rs. 5/- each with aggregate nominal value of Rs. 1,929,960/- to the employees/ Directors of the Company, who exercised their vested Employee Stock Options as per the approved employee stock option plans. These Equity Shares rank pari passu in all respects with the existing Equity Shares of the Company.

As on 31st March, 2015, the issued, subscribed and paid up share capital of your Company stood at Rs. 112,733,360 /-, comprising 22,546,672 Equity shares of Rs. 5/- each.

iv) Composition of Audit Committee

Mastek has an Audit Committee that currently comprises of three Independent Directors and one Non-Executive Promoter Director. The Chairman of the Audit Committee is an Independent Director. The Independent Directors are accomplished professionals from the corporate fields. The Managing Director and Group CEO, the Group CFO and Finance Director and the Chief Financial Officer ofthe Company attend the meetings on invitation. The Company Secretary is the Secretary of the Committee.

During the year ended March 31, 2015 the Audit Committee met 6(six) times. The attendance of the members at the meetings is stated below:

Name of Member Status No. of Meetings attended

Mr. S. Sandilya Chairman 5

Mr. Ashank Desai Member 5

Ms. Priti Rao Member 6

Mr. Venkatesh Chakravarty Member 6

The other details of the Audit Committee are given in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual report.

v) Related Party Transactions:

All the Related Party Transactions are entered into on arm''s length basis and are in compliance with the applicable provisions of the Act and the Listing Agreement. There are no material significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large.

All the Related Party Transactions are presented to the Audit Committee and Board for their approval. Omnibus approval is given by Audit committee for the transactions which are foreseen and repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee and Board on quarterly basis, specifying the nature, value and terms and conditions of the transactions. The said transactions are approved by Audit Committee as well as by Board.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company''s website at the web link:http://www.mastek.com/images/pdf/Related-Party- Transactions-Policy- Detailed explanation on transactions with related parties is given in Annexure 3.

10. MANAGEMENT OF RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS PRACTICES.

Whistle Blower Policy/ Vigil mechanism

In compliance with the requirement of the Companies Act, 2013 and Listing Agreement guidelines, the Company has established a Whistle Blower Policy /Vigil mechanism and the same is placed on the web site of the Company, viz http://www.mastek.com/investors/ corporate-governance.

The employees of the company are made aware of the said policy at the time of joining the Company.

11. AWARDS AND RECOGNITION

Your Company has received an award as Prolific Industry Performer, Technology from Patch for excellence in the field of I.T. Innovation and Consulting.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement clause (c) of sub-section (3) of Section 134 ofthe Companies Act, 2013, your Directors confirm that:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively.

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS

At the last Annual General Meeting(AGM) held on July 23, 2014, M/s. Price Waterhouse, Chartered Accountants, LLP. have been appointed as the Statutory Auditors of the Company for a period of 3 years. Ratification of appointment of Statutory Auditors is being sought from the members ofthe Company at the ensuing AGM.

Further, the report of the Statutory Auditors is enclosed to this report. The observations made in the Auditors'' Report are self-explanatory and does not contain any qualification. Therefore it does not call for any further comments.

14. SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, M/s. V. Sundaram & Co., Practicing Company Secretary, Mumbai has been appointed Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure 4 to this report. The report is self-explanatory and does not contain any qualification. Therefore it does not call for any further comments.

15. HUMAN RESOURCES

Mastek Group deploys its intellectual capability to create and deliver intellectual property (IP)-led solutions that make a positive business impact for its global clients. For this, the key success enabler and most vital resource is world-class talent. Mastek Group continually undertakes measures to attract and retain such high quality talent.

As on March 31, 2015, Mastek Group had a total Head count of 3252. The Directors wish to place on record their appreciation for the contributions made by employees to the Company during the year under review.

Information as per Section 197 of the Companies Act, 2013 and the rules thereunder forms part of this report. However, as per the provisions of Section 136 (I) of the Companies Act, 2013 the report and accounts, excluding the Statement of Particulars are being sent to all members. Any member interested in obtaining a copy of the Statement of Particulars may write to the Company Secretary at its Registered Office.

16. EMPLOYEE STOCK OPTIONS

Nature and extent of employee share-based payment plans that existed during the year:

i. Plan III

The Company passed special resolutions at its Annual General Meeting held on September 20, 2004 approving the allocation of 700,000 stock options to the eligible employees of the Company and its subsidiaries.

The Company subsequently established a new scheme in 2004 for granting 700,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current year. In April, 2006 the Company issued Bonus Shares in the ratio of 1:1 and the number of unvested and unexercised options and the price of the said options have been adjusted accordingly.

(No. of Options) Year ended Year ended March 31, March 31, 2015 2014

Opening Balance - 42,125

Granted during the year - -

Exercised during the year - -

Cancelled during the year - (42,125)

Balance unexercised options - -

ii. Plan IV

The Shareholders of the Company through Postal Ballot on August 9, 2007 approved the allocation of 1,000,000 stock options to the eligible employees of the Company and its subsidiaries.

The Company subsequently established a new scheme in 2007 for granting 1,000,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. During the year ended June 30, 2011, the Company has extended the vesting period from two years to seven years. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current year.

(No. of Options) Year ended Year ended March 31, March 31, 2015 2014

Opening Balance 411,707 412,986

Granted during the year - -

Exercised during the year (15,118) -

Cancelled during the year (25,564) (1,279)

Balance unexercised options 371,025 411,707

iii. Plan V

The Company introduced a new scheme in 2008 for granting 1,500,000 stock options to the employees, each option representing one equity share of the Company. The exercise price as may be determined by the Nomination & Remuneration Committee ("Committee") and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. During the financial year ended June 31,2011, 50,000 options were granted at price less then the market price. There is no compensation cost in the current year, as the cost of discounted options has been charged off in earlier years.

(No. of Options) Year ended Year ended March 31, March 31, 2015 2014

Opening Balance 673,514 853,514

Granted during the year - -

Exercised during the year (91,575) -

Cancelled during the year (273,000) (180,000)

Balance unexercised options 308,939 673,514

iv. Plan VI

The Company introduced a new scheme in 2010 for granting 2,000,000 stock options to the employees, each option representing one equity share of the Company. The exercise price as may be determined by the Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. During the year ended March 31, 2015, 256,957 options have been granted under the scheme at below market price. Consequently, the amortised compensation cost for the exercisable options is Rs. 96.06 lakhs, out of which Rs. 82.67 lakhs have been charged to the subsidiaries based on the employees where they are employed and balance of Rs. 13.39 lakhs have been charged to the statement of profit and loss during the current year.

(No. of Options) Year ended Year ended March 31, March 31, 2015 2014

Opening Balance 1,892,300 1,123,800

Granted during the year 326,957 1,003,750

Exercised during the year (279,299) (6,500)

Cancelled during the year (624,519) (228,750)

Balance unexercised options 1,315,439 1,892,300

v. Plan VII

The Company introduced a new scheme in 2013 for granting 2,500,000 stock options to its employees, employees of its subsidiaries and its Independent Directors, each option giving a right to apply for one equity share of the Company on its vesting. The exercise price as may be determined by the Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. During the year ended March 31, 2015, 46,373 options have been granted under the scheme at below market price. Consequently, the amortised compensation cost for the exercisable options is Rs. 35.69 lakhs. The entire cost have been charged to the subsidiaries based on the employees where they are employed and Rs. Nil have been charged to the statement of profit and loss during the current year.

(No of Options) Year ended Year ended March 31, March 31, 2015 2014

Opening Balance - -

Granted during the year 1,069,373 -

Exercised during the year - -

Cancelled during the year (172,000) -

Balance unexercised options 897,373 -

Disclosure required under SEBI (ESOS& ESPS) Guidelines, 1999

In order to enable the Company to continue with its ESOP, the Company passed special resolutions through postal ballot in January, 2002 for issue of 700,000 stock options to its employees. At the Annual General Meeting held on September 20, 2004, the Company passed special resolutions to issue 700,000 stock options to its employees. The Company passed special resolutions through postal ballot in August 9, 2007 for issue of 1,000,000 stock options to its employees. On March 20, 2009, the shareholders of the Company approved the further issue of 1,500,000 options to the employees. At the Annual General Meeting of the Company held on October 1, 2010, the shareholders of the Company approved the further issue of 2,000,000 options. At the Annual general Meeting of the Company held on July 17, 2013, the Shareholders of the Company approved further issue of 2,500,000 options.

a) Options granted: Opening 29,77,521

b) Issued during the year 13,96,330

c) Pricing formula Market Price as defined by SEBI from time to time or face value or such price as may be decided by the Compensation committee from time to time

d) Options vested: 10,99,691

e) Options exercised 385,992

f) Total Number of shares arising as a result of exercise of option 385,992

g) Options lapsed: 10,95,083

h) Variations of terms of options NIL

i) Moneyrealizedbyexerciseofoptions Rs. 558.80 lakhs

j) Total number of options in force 2,892,776

k) Employee-wise details of options granted to

(1) Senior managerial personnel: 3

(2) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year Prahlad Koti - 75,040 options Anil Chitale - 82,710 options Prateek Kumar - 1,08,770 options

(3) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

NIL

Diluted EPS pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 Rs. 31.75

m) The impact of this difference on profits and on EPS of the Company.

(Rs. in Lakhs) Year Ended Year Ended March 31, March 31, 2015 2014

Profit After Tax (PAT) 7,438.75 2,697.11

Less : Change in Employee (90.18) (36.49) compensation cost based on Fair value

Add : Employee stock compensation 13.39 - expenses based on intrinsic value

PAT as per Fair value method 7,361.96 2,660.62

Proforma Basic EPS (in Rs.) 32.98 10.83

n) Weighted-average exercise price and fair value of Stock Options granted during the year:

Stock options Weighted Weighted Closing market granted on average Average fair price at BSE exercise price value on the date of (in Rs.) grant (in Rs.)

May 23rd 2014 179.00 82.76 178.35

May 23rd 2014 5.00 150.38 178.35

July 24th 2014 5.00 172.81 201.00

Oct 21st 2014 261 128.89 260.90

(o) Description of the method and significant assumptions used during the year to estimate the fair value of the options, including the following weighted average information:

: The Black Scholes option pricing model was developed for estimating fair value of traded options that have no vesting restrictions and are fully transferable. Since Option pricing models require use of substantive assumptions, changes therein can materially affect fair value of options. The option pricing models do not necessarily provide a reliable measure of fair value of options.

The option pricing models do not necessarily provide a reliable measure of fair value of options.

The main assumptions used in the Black-Scholes option-pricing model during the year were as follows:

Serial Grant Date May 23rd July 24th Oct No. 2014 2014 22nd 2014

1 Risk Free Interest Rate 8.75% 8.75% 8.47%

2 Expected Life (years) 6 6 6

1 Expected Volatility 47.81% 47.50% 47.58

4 Dividend Yield 2.52% 2.24% 1.72%

17. RISK MANAGEMENT POLICY

In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the Audit Committee, Governance Committee of the Board quarterly reviews the risks and remedial measures taken.

The risks are identified and discussed by Risk Committee at its meeting at regular intervals. The various risks are categorized as High risk, Medium risk and Low risk and appropriate steps/measures are taken/initiated to mitigate the identified risks from time to time.

18. DECLARATION BY INDEPENDENT DIRECTORS

Mr. S. Sandilya, Mr. Venkatesh Chakravarty, Ms. Priti Rao, Dr. Rajendra Sisodia, Mr. Atul Kanagat and Dr. Arun Maheshwari have been the Independent Directors on the Board of your Company, during the year under review.

In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in section 149 of the Act and the Rules made thereunder about their status as Independent Directors of the Company.

Dr. Rajendra Sisodia, resigned as a Board member with effect from April 17, 2015. The Board places on record its sincere appreciation of the valuable services rendered by him during his tenure as a Board member.

19. COMPANY''S POLICY ON APPOINTMENT AND REMUNERATION

The Company has a policy on remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination & Remuneration Committee and the Board. The policy covers:

1. Directors'' appointment and remuneration; and

2. Remuneration of Key Managerial Personnel and other employees.

The more details on the same are given in the Corporate Governance Report.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations.

21. INTERNAL CONTROLS SYSTEM

A strong internal control system is pervasive in the Company. The Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Ashank Desai, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment.

During the year, as approved by the Shareholders at their Extra Ordinary General Meeting held on March 05, 2015 Mr. S. Sandilya, Ms. Priti Rao and Mr. Atul Kanagat were appointed as Independent Directors of the company for a term of four (4) years from April 1, 2015 to March 31, 2019.

Pursuant to provisions of section 203 of the Companies Act, 2013 which has come into effect from April 1, 2014 the appointment of Mr Sudhkar Ram, Managing Director & Group CEO, Mr. Farid Kazani, Group CFO & Finance Director and Mr. Bhagwant Bargawe, Company Secretary as key managerial personnel were formalised.

23. EVALUTION OF THE BOARD''S PERFORMANCE

In compliance with Companies Act, 2013, and Clause 49 of the Listing Agreement, the performance evaluation of the Board as a whole and of the Individual Directors was carried out during the year under review.

With the help of an external consultant, a structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc.

The Directors expressed satisfaction with the evaluation process.

24. PUBLIC DEPOSITS

Your Company has not accepted any deposits from public in terms of Section 73 and/or 74 of the Companies Act, 2013.

25. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis comprising an overview of the financial results, operations / performance and the future prospects of the Company forms part of this Annual Report.

26. DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

(a) Conservation of energy

Conservation of Energy: As a software Company, energy costs constitute a small portion of the total cost and there is not much scope for energy conservation.

(i) the steps taken or impact on conservation of energy

(ii) the steps taken by the company for utilizing Not

alternate sources of energy Applicable

(iii) the capital investment on energy conservation equipments

(b) Technology absorption: Not Applicable

(i) the efforts made towards technology absorption

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution

(iii) in case of imported technology (imported during the

last three years reckoned from the beginning of the financial year)-_ Not

(a) the details oftechnology imported; Applicable

(b) the year of import;

(c) whether the technology been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof;_

(iv) the expenditure incurred on Research and Development

(c) Foreign exchange earnings and Outgo

Total foreign Exchange used and earned by Mastek Limited

Rs. in Lakhs Particulars Year ended Year ended March 31, 2015 March 31, 2014

Exchange used 28,154.30 22,001.45

Exchange Earned 63,172.14 54,386.98

27. CORPORATE GOVERNANCE

The Company has complied with Corporate Governance requirement under the Companies Act, 2013 and as per Listing Agreement. A separate section on Corporate Governance practices followed by the Company together with the Certificate from M/s. V. Sundaram & Co. Practicing Company Secretary, Mumbai, appearing elsewhere in this report, forms an integral part of this report.

28. Corporate Social Responsibility

In compliance with the provisions of Section 135 of the Companies Act, 2013 the Board of Directors of the Company have formed a Corporate Social Responsibility Committee vide Board Resolution dated April 24, 2013. A detailed report about Corporate Social Responsibility is given in Annexure 5.

The Committee has formulated and recommended to Board a Corporate Social Responsibility Policy. The contents ofthe policy are as follows:-

Mastek CSR programmes shall fall under the following categories:

1. Promoting education, enhancing skills of children, and development of children of women working in red-light areas. We are also involved in special education and employment- enhancing vocation skills especially among women, elderly and the differently abled, and livelihood enhancement projects.

2. Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making safe drinking water available.

3. Promoting gender equality and empowering women. Activities include setting up homes/ hostels for women and orphans, old age homes and other such facilities for senior citizens, day care centres, and measures to reduce inequalities faced by socially and economically backward groups.

4. Protection and up gradation of environmental conditions. These include ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro- forestry, conservation of natural resources and maintaining the quality of soil, air and water.

5. Any other projects with the approval of the board. Corpus:

The corpus of the CSR policy includes:

- 2% of the average net profit of the preceding three years

- Any income arising therefrom

- Surplus arising out ofthe above activities

- Payroll contribution from the employees

- Fund-raising events

Mastek may pool its resources and CSR spending with other groups or associate companies as a collaborative effort that qualifies as CSR spend.

Roles and Responsibilities:

- Decide CSR projects or programmes or activities to be taken up by the company.

- Place before the board the CSR activities proposed to be taken up by the company for approval each year.

- Oversee the progress of the initiatives rolled out under this policy every quarter.

- Define and monitor the budgets for carrying out the initiatives.

- Submit a report to the Board of Directors on all CSR activities during the financial year. This will be displayed on the company''s website -- www.mastek.co.in

- Monitor and review the implementation of the CSR policy. CSR Committee Composition:

The Chairperson of the Committee is Ms. Priti Rao, an Independent Director. The other members are Dr. Rajendra Sisodia, Mr. Sudhakar Ram and Mr. Ashank Desai. The Company Secretary is the Secretary of the Committee.

During the year, the Company gave Donations totaling to Rs. 84.94 lakhs. Of this, a sum of Rs. 67.32 Lakhs was spent on Projects approved under Section 135 of the Companies Act 2013 on CSR activity and Rs. 17.67 lakhs was towards the salary and other Administrative Expenses of Mastek Foundation.

As per provision of Section 135 of the Companies Act, 2013, the Company has to spend, in every financial year, at least 2% of the average net profits ofthe Company made during three immediately preceding financial years, in pursuant of Corporate Social Responsibility policy.

Based on the Average net profit of the Company for three immediately preceding financial years, the amount to be spent on CSR activities during the year 2014-15 was Rs. 47.84 Lakhs. However, it spent Rs. 84.94 lakhs on CSR activities..

The said expenditure is within the prescribed limits and the company is in compliance of the provisions of Section 135 of the Companies Act 2013.

29. Transfer of Amounts to Investor Education and Protection Fund

Your Company has transferred a sum of Rs. 10.23 Lakhs during the financial year 2014-15 to Investor Education and Protection Fund (IEPF), established by Central Government in compliance with section 125 of the Companies Act 2013.The said amount represents unclaimed Dividends which were lying with the company for a period of 7(seven) from their respective due dates of payment.

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. July 23, 2014), with the Ministry of Corporate Affairs.

30. ACKNOWLEDGEMENT

Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.

Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support.

Your Directors also thank the Central and State Governments, and other statutory authorities for their continued support.

For and on behalf of the Board MASTEK LIMITED

Sudhakar Ram S. Sandilya Managing Director & Group CEO Non-Executive Chairman & Independent Director

Date : April 22, 2015 Place : Mumbai


Mar 31, 2014

The Board of Directors has pleasure to forward the following Report for the year ended March 31, 2014.

1. FINANCIAL RESULTS - CONSOLIDATED RESULTS OF MASTEK LIMITED AND ITS SUBSIDIARIES



Rs. in lakhs

Year Ended Nine month PARTICULARS March 31, period 2014 ended

March 31, 2013

Revenue

Income from IT Services 90,956.76 67,376.60

Other operating revenue 1,345.53 959.81

Other Income 1,125.91 910.68

Total Revenue 93,428.20 69,247.09

Expenses 83,298.20 62,623.47

Depreciation and amortization expenses 3,287.28 2,203.13

Finance costs 67.98 39.65

Profit before tax 6,774.74 4,380.84

Tax expense 1,595.18 948.59

Profit after tax 5,179.56 3,432.25



FINANCIAL RESULTS - MASTEK LIMITED

Rs. in Lakhs Year Ended Nine month PARTICULARS March 31, period 2014 ended March 31, 2013

Revenue (including Other Income) 57,187.28 43,101.23

Profit before Exceptional Item and Tax 4,827.43 3,249.62

Exceptional Item 1,555.01 -

Profit before tax 3,272.42 3,249.62

Tax expense 575.31 230.65

Profit after Tax 2,697.11 3,018.97

Add: Profit brought forward from 28,157.93 26,353.73

Previous Period

Profit available for appropriation 30,855.04 29,372.70

Dividend 1,040.59 739.15

Corporate Dividend Tax* (17.52) 125.62

Transferred to General Reserve 520.00 350.00

Balance carried to Balance Sheet 29,311.97 28,157.93



* indicates Net of credit received in respect of tax paid under section 115BBD of Income Tax Act, 1961

2. RESULTS OF OPERATIONS

A) Mastek Consolidated Operations

Continuing on the traction witnessed last year particularly in the Insurance segment in North America, the current fiscal saw the company improve its operational performance. This coupled with uptick in the UK with direct wins in the Government segment through the G-cloud aided the improved performance. The only exception being the drop in revenue primarily due to re- prioritization of a North America client during the fourth quarter.

The Group consolidated its leadership position in the insurance space in North America with key wins in the billing as well as the policy admin areas in the Property & Casualty (P&C) Insurance segment. During the year ended March 31, 2014, the Group has added 13 new logos as compared to 13 in FY2013 and ended the year with a twelve month order backlog of Rs. 54,180.0 lakhs as compared to Rs. 47,800.00 lakhs as at March 31, 2013.

Financials

On a consolidated basis, the Group registered total operating revenue of Rs. 92,302.29 lakhs in the year ended March 31, 2014. The Group registered a net profit ofRs. 5,179.56 lakhs in the year ended March 31, 2014 as compared to Rs. 3,432.25 lakhs in the nine month period ended March 31, 2013.

Break up of the Operating Revenue by regions



Region Year ended March Nine month period 31, 2014 ended March 31, 2013 Rs. in Lakhs % of Rs. in Lakhs % of Revenue Revenue

UK 43,225.73 46.8 32,461.11 47.5

North America 41,949.20 45.4 30,846.50 45.1

Others (India/ 7,127.36 7.8 5,028.80 7.4 Asia Pacific)

Total Operating 92,302.29 100.0 68,336.41 100.0 Revenue



The U.K. operations contributed Rs. 43,225.73 lakhs in revenue as compared to Rs. 32,461.11 lakhs during the nine month period ended March 31, 2013. Even though the overall revenues from BT reduced with the anticipated drop in the onsite project, the company was able to make good the gap with business in the retail and financial services. The company''s strong presence in the government sector has helped in winning strategic deals in the Home Office of department of the UK Government through the G-cloud framework. The company has also witnessed growing opportunities in the Retail space with one of its existing customer. The pipeline for the UK geography is much stronger than last year and the company is making necessary investments for the same.

The North American operations, registered an annualized growth of 1.9 % primary due to growth in the insurance segment both in the Life & Annuity (L&A) and Property & Casualty (P & C) space. The company''s continued investments in the insurance segment in North America has resulted in the company attaining the top 3 vendor status. Going ahead, this segment will continue to drive growth for the company

The annualized growth of 6.3% in the India Asia Pacific region was driven by good level of wins from the India Government side. The Company''s strong IP-based solutions for Government and Insurance business verticals continue to drive new client wins and deeper engagements with existing clients.

Breakup of the Operating Revenue by Verticals

Vertical 2013-14 % of 2012-13 % of (Rs. in Revenue (9 months) Revenue Lakhs) (Rs. in Lakhs)

Insurance 44,865.0 45.0 27,718.6 41.1

Government 23,868.1 26.2 20,006.1 29.7

Financial 9,732.3 10.6 10,569.9 15.7 Services

IT & Other 12,491.4 18.2 9,082.0 13.5 Services

Total - IT 90,956.8 100.0 67,376.6 100.0 services revenue

Other operating 1,345.5 959.8 revenue

Total 92,302.3 68,336.4



The key driver for the 21.4% annualized growth in the insurance segment has been the North America market i.e. both P&C and L&A.

The Government vertical de-grew by 10.5% on an annualized basis, primarily due to the anticipated drop in the Revenues from BT

The Financial Services de-grew significantly with the anticipated drop in the services revenue in North America, whereas the IT and other services vertical grew by 3.2% on annualized basis with expansion of business with the retail segment in UK and travel business in India.

Profitability

During the year ended March 31, 2014, the Group earned a profit of Rs. 5,179.6 lakhs as compared to Rs. 3,432.3 lakhs for the nine month period ended March 31, 2013. The strong profitability was driven by the following:

- Higher proportion of Insurance revenue from North America.

- Improved operating efficiencies and higher utilization levels.

- Higher foreign exchange realizations as compared to previous period.

On an annualised basis, while operating revenues grew 1.3%, the employee benefits expense together with consultancy charges paid to sub-contractors decreased by 2.1%. Travel costs grew by 11.3%. Other operating expenses increased by 8%, depreciation and amortization expenses increased by 11.9%. Forex loss during the year ended March 31, 2014 was Rs. 141.6 lakhs as compared to a Forex gain of Rs. 29.7 lakhs during the nine month period ended March 31, 2013.

(A more detailed discussion of the Company''s strategy and performance appears in the Management Discussion & Analysis section of this annual report.)

B) Mastek standalone operations

On a stand-alone basis, Mastek reported an operating income of Rs. 55,042.7 lakhs for the year ended March 31, 2014, as compared to Rs. 40,101.8 lakhs for nine month period ended March 31, 2013. The Company made a Net profit of Rs. 2,697.11 lakhs for the year ended March 31, 2014 as compared to Net Profit of Rs. 3,019.0 lakhs for the nine month period ended March 31, 2013.

C) Update on Board of Directors

Mastek Board currently has 10 members, of which 6 are Independent Directors and the remaining 4 are Promoter Directors.

During the year under review, Dr. Arun Maheshwari was appointed as an Additional Director of the Company with effect from October 24, 2013 and is proposed to be appointed as an Independent Director in the ensuing Annual General Meeting. He is an Independent Director on the Board.

Mr. Ashank Desai - Approval from Ministry of Corporate Affairs, New Delhi.

As approved by Shareholders in the Annual General Meeting held on October 05, 2012, the Company had made an application to Ministry of Corporate Affairs, New Delhi for approval to make payment of certain benefits/ Perquisites to Mr. Ashank Desai, Non- Executive Director of the Company for a period of 3 years from July 01, 2012 up to June 30, 2015.

The Company has received approval thereto from Ministry of Corporate Affairs, New Delhi vide their letter no. SRN B64202435/4/2012-CL-VII dated September 19, 2013.

3. BUSINESS OUTLOOK

The Company''s strategy of sustained product development in the insurance segment (both in P&C and L&A) seems to be paying off. It expects growth to be led by improved business opportunities in the insurance vertical in North America. The opportunities in the Government segment in the UK and India continue to remain attractive and the company will continue its sales & marketing spends to take advantage of the upcoming opportunities.

4. BUY BACK OF SHARES OF THE COMPANY

During the year, the Company had initiated a share buyback scheme intending to buy a maximum of 3,200,000 equity shares of the Company at a price not exceeding Rs. 250/- per share for a total amount not exceeding Rs. 5,450 lakhs. The company under the said scheme bought back 2,484,007 equity shares for an average price of Rs. 218.08 per share at a total value of Rs. 5,417.09 lakhs. All the shares bought back have been extinguished and necessary returns have been filed with the respective authorities.

5. LIQUIDITY

The Group continues to maintain a reasonable level of Current Investments and Cash and Bank balances which enable it to not only eliminate short and medium-term liquidity risks but also provide the leverage to scale up operations at a short notice. As at March 31, 2014 the amount of Current Investments and Cash and bank balances stood at Rs. 17,113.3 lakhs (Rs. 15,904.5 lakhs) which amounted to 71 (68 days) of expenses and Rs. 77.2 (Rs. 64.5) per share.

During the year, Mastek invested surplus funds in Liquid Schemes and Fixed Maturity Plans of leading Mutual Funds.

6. OTHER THAN TEMPORARY DECLINE IN VALUE OF INVESTMENT IN MAJESCOMASTEK CANADA LIMITED

The Company continuously evaluates the carrying value of its investments in its Subsidiaries. During the year, based on the review of the operations of its wholly owned subsidiary viz. Majescomastek Canada Limited (MCAN), it has determined and accounted for other than temporary decline in the carrying value of the Investment amounting to Rs. 1,555.01 lakhs.

7. AUDITED ACCOUNTS OF SUBSIDIARY COMPANIES

In view of the Circular No.2/2011 dated February 8, 2011 issued by the Government of India, Ministry of Corporate Affairs, New Delhi, the accounts of subsidiary companies are not attached to the audited accounts of the Company. The Board of Directors of the Company at its meeting held on April 23, 2014 has given its consent for not attaching the Balance Sheets of the subsidiaries. We, hereby, undertake that the Annual Accounts of subsidiary companies and related detailed information shall be made available to the shareholders at any point of time. Copies of the annual accounts of subsidiary companies shall also be available for inspection by any shareholder at the registered office of the Company. The Annual Accounts of subsidiary companies can be downloaded from Company''s website www.mastek.com.

8. DIVIDEND

An Interim Dividend of Rs. 1.75 per Equity Share of Rs. 5/- was declared by the Board of Directors and was paid in November 2013.

Your Directors are pleased to recommend a final dividend of Rs. 2.75 per Equity Share for the year ended March 31, 2014 on the paid up Equity Share Capital of the Company, payable to those shareholders whose names appear in the Register of Members as on the book closure date.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

i. that in preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the Directors made judgments 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 on March 31, 2014, and of the profit/(loss) of the Company for year ended on that date.

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the Company''s assets and prevent and detect fraud and other irregularities.

iv. that the annual accounts have been prepared on a going concern basis.

10. DIRECTORS RETIRING BY ROTATION

As per Section 152 of the Companies Act, 2013 read with Article 134 of Articles of Association of the Company, Mr. Ashank Desai, Non- Executive Director of the Company retires by rotation and, being eligible, offers himself for re-appointment subject to retirement by rotation.

Mr. Venkatesh Chakravarty, Director retires by rotation at the forthcoming Annual General Meeting and is proposed to the members for appointment as an Independent Director of the Company under Section 149 of the Companies Act, 2013 and would not be subject to retirement by rotation.

11. AUDITORS

You are requested to appoint Auditors and fix their remuneration. The retiring auditors, M/s. Price Waterhouse, Chartered Accountants, (Firm Registration No. 012754N) have confirmed their availability within the limits of section 139(1) of the Companies Act, 2013.

12. HUMAN RESOURCES

Mastek deploys its intellectual capability to create and deliver intellectual property (IP)-led solutions that make a business impact for its global clients. For this, the key success enabler and most vital resource is world-class talent. Mastek continually undertakes measures to attract and retain such high quality talent.

As on March 31, 2014, Mastek Group had a total of 3123 employees. The Company has resumed recruitment of fresh talent for its different projects.

The Directors wish to place on record their appreciation for the contributions made by employees to the Company during the year under review.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the report and accounts, excluding the Statement of Particulars under Section 217(2A), are being sent to all members. Any member interested in obtaining a copy of the Statement of Particulars may write to the Company at its Registered Office.

13. EMPLOYEE STOCK OPTIONS

Plan III

The Company passed special resolutions at its Annual General Meeting held on September 20, 2004 approving the allocation of 700,000 stock options to the eligible employees of the Company and its subsidiaries.

The Company subsequently established a new scheme in 2004 for granting 700,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current period. In April, 2006 the Company issued Bonus Shares in the ratio of 1:1 and the number of unvested and unexercised options and the price of the said options have been adjusted accordingly.

(No. of options) Year Ended Nine month period Particulars March 31, ended March 31, 2014 2013

Opening Balance 42,125 94,750

Granted during the year - -

Exercised during the year - -

Cancelled during the year (42,125) (52,625)

Balance unexercised options - 42,125

Plan IV

The Shareholders of the Company through Postal Ballot on August 9, 2007 approved the allocation of 1,000,000 stock options to the eligible employees of the Company and its subsidiaries.

The Company subsequently established a new scheme in 2007 for granting 1,000,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. During the year ended June 30, 2011 the Company has extended the vesting period from two years to seven years. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current year.

(No. of options) Particulars Year Ended Nine month period March 31, ended March 31, 2014 2013

Opening Balance 277,915 319,834

Granted during the year - -

Exercised during the year - -

Cancelled during the year (1,279) (41,919)

Balance unexercised options 276,636 277,915

Plan V

The Company introduced a new scheme in 2008 for granting 1,500,000 stock options to the employees, each option representing one equity share of the Company. The exercise price as may be determined by the Compensation Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. During the financial year ended June 30, 2011, 50,000 options were granted at a price less than the market price. Consequently, amortized compensation cost of Rs. NIL (Previous Year Rs. 35.0 Lakhs) in respect of options granted in earlier periods has been charged to the Profit and Loss account.

(No. of options) Particulars Year Ended Nine month period March 31, ended March 31, 2014 2013

Opening Balance 853,514 895,458

Granted during the year - -

Exercised during the year - -

Cancelled during the year (180,000) (41,944)

Balance unexercised options 673,514 853,514

Plan VI

The Company introduced a new scheme in 2010 for granting 2,000,000 stock options to the employees, each option representing one equity share of the Company. The exercise price as may be determined by the Nomination and Remuneration Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently there is no compensation cost in the current year.



(No. of options) Particulars Year Ended Nine month period March 31, ended March 31, 2014 2013

Opening Balance 1,123,800 1,054,200

Granted during the year 1,003,750 84,600

Exercised during the year (6,500) -

Cancelled during the year (228,750) (15,000)

Balance unexercised options 1,892,300 1,123,800

PLAN VII

The Company introduced ESOP VII scheme in 2013 for granting 2,500,000 stock options to its employees, employees of its subsidiaries each option giving a right to apply for one equity share of the Company on its vesting. The exercise price as may be determined by the Nomination & Remuneration Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period.

Till date no options have been granted under ESOP VII scheme.

Disclosure required under SEBI (ESOS & ESPS) Guidelines, 1999

In order to enable the Company to continue with its ESOP, the Company passed special resolutions through postal ballot in January, 2002 for issue of 700,000 stock options to its employees. At the Annual General Meeting held on September 20, 2004, the Company passed special resolutions to issue 700,000 stock options to its employees. The Company passed special resolutions through postal ballot in August 9, 2007 for issue of 1,000,000 stock options to its employees. On March 20, 2009, the shareholders of the Company approved the further issue of 1,500,000 options to the employees. At the Annual General Meeting of the Company held on October 1, 2010, the shareholders of the Company approved the further issue of 2,000,000 options. At the Annual General Meeting of the Company held on July 17, 2013, the Shareholders of the Company approved the further issue of 2,500,000 options.

a) Options granted: Opening 2,297,354

b) Issued / Granted during the year 1,003,750

c) Pricing formula Market Price as defined by SEBI from time to time or face value or such price as may be decided by the Compensation committee from time to time

d Options vested: 1,099,691

e) Options exercised 6,500

f) Total Number of shares arising as a 6,500 result of exercise of option

g) Options lapsed: 452,154

h) Variations of terms of options NIL

i) Money realized by exercise of 598,000 options

j) Total number of options in force 2,842,450

k) Employee-wise details of options granted to

(1) Senior managerial personnel: 1

(2) Any other employee who receives NIL a grant in any one year of option amounting to 5% or more of option granted during that year

(3) Identified employees who were NIL granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

Diluted EPS pursuant to issue Rs. 10.84 of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20

l) The impact of this difference on profits and on EPS of the Company.

(Rs. in Lakhs) Year Ended Nine months March 31, period ended 2014 March 31, 2013

Profit After Tax (PAT) 2,697.11 3,018.97

Less : Change in Empoyee (36.49) 156.90 compensation cost based on Fair value

PAT as per Fair value method 2,660.61 2,862.07

Proforma Basic EPS (in Rs.) 10.83 10.89

m) Weighted-average exercise price and fair value of Stock Options granted during the year:

Stock options Weighted Weighted Closing granted on average Average fair market price exercise price value at BSE on the (in Rs.) date of grant (in f)

26 April 2013 133.00 61.86 132.35

19 July 2013 140.00 64.82 139.45

24 October 2013 161.00 77.49 158.25

n) Description of the : The Black Scholes option pricing method and significant model was developed for estimating assumptions used during fair value of traded options that the year to estimate the have no vesting restrictions and fair value of the options, are fully transferable. Since Option including the following pricing models require use of weighted average substantive assumptions, changes information: therein can materially affect fair value of options. The option pricing models do not necessarily provide a reliable measure of fair value of options.

The main assumptions used in the Black-Scholes option-pricing model during the year were as follows:



Serial Grant Date April 26, July 19, October no 2013 2013 24, 2013

1 Risk Free Interest 7.71% 7.25% 8.68% Rate

2 Expected Life (years) 6 6 6

3 Expected Volatility 49.09% 48.90% 48.32%

4 Dividend Yield 2.27% 2.15% 1.90%

14. ADDITIONAL INFORMATION RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1968, forming part of the Directors'' Report for the period ended March 31, 2014:

a) Conservation of Energy :

As a software Company, energy costs constitute a small portion of the total cost and there is not much scope for energy conservation.

Form A is not applicable for software industry.

b) Technology Absorption : Not Applicable

c) Foreign Exchange Earnings Total foreign exchange used and Outgo and earned by Mastek Ltd.

Particulars (Rs. In Lakhs) Year Ended March Nine month period 31, 2014 ended March 31, 2013

Exchange Used 22,678.55 17,163.53

Exchange Earned 54,386.98 39,874.86

d) Expenditure on Product Development incurred by Mastek Ltd.

(Rs. in Lakhs) Description Year Ended Nine month period March 31, ended March 31, 2014 2013

Life & Annuity Products 859.50 729.85

Property & Casualty 2,657.70 1,655.87 Products

Total 3,517.20 1,785.72

15. CORPORATE GOVERNANCE

Mastek follows best practices in Corporate Governance by benchmarking them with the best in the world.

16. ACKNOWLEDGEMENTS

The Directors would like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance provided by the SEEPZ Authorities, MIDC, Department of Electronics, ICICI Bank, Standard Chartered Bank Ltd and other government departments and authorities.



By the Order of the Board



Place: Mumbai Sudhakar Ram

Dated: April 23, 2014 Managing Director & Group CEO


Mar 31, 2013

The Board of Directors has pleasure to forward the following Report for the nine month period ended March 31, 2013.

1. FINANCIAL RESULTS - CONSOLIDATED RESULTS OF MASTEK LIMITED AND ITS SUBSIDIARIES

Rs. in Lakhs

Nine month Year ended PARTICULARS period June 30, ended 2012 March 31, 2013

Revenue

Income from IT Services 67,376.60 72,296.43

Other operating revenue 959.81 1,055.12

Other Income 910.68 1,182.04

Total Revenue 69,247.09 74,533.59

Expenses 62,623.47 70,997.28

Depreciation 2,203.13 2,878.37

Interest & Financial Charges 39.65 129.94

Profit Before Tax 4,380.84 528.00

Tax Expense 948.59 477.97

Profit After Tax 3,432.25 50.03

FINANCIAL RESULTS - MASTEK LIMITED

Rs. in Lakhs

Nine month Year PARTICULARS period ended ended June 30, March 31, 2012 2013

Revenue (including Other Income) 43,101.23 46,345.50

Profit/(Loss) before Tax 3,249.62 (601.09)

Tax (expense)/credit (230.65) 43.81

Profit/(Loss) after Tax 3,018.97 (557.28)

Add: Profit brought forward from 26,353.73 24,802.08 Previous Year

Reserves on Amalgamation of Keystone - 2,108.93 Solutions Private Limited with Mastek Limited

Profit available for appropriation 29,372.70 26,353.73

Dividend 739.15 -

Corporate Dividend Tax 125.62 -

Transfer to General Reserve 350.00 -

Balance carried to Balance Sheet 28,157.93 26,353.73

2. RESULTS OF OPERATIONS

A) Mastek Consolidated Operations

Continuing on the traction witnessed last year particularly in the Insurance segment in North America, the current fiscal saw the Company improve its operational performance. This coupled with uptick in the UK Government segment and key wins in the UK retail and financial vertical aided the improved performance. The strong growth momentum along with management focus on driving operational efficiencies helped the Company report healthy profits.

The Group consolidated its leadership position in the insurance space in North America, it has had some key wins last fiscal and the pipeline continues to remain strong. During the nine month period ended March 31, 2013, the Group has added 13 new logos as compared to 21 in FY2012 and ended the year with a twelve month order backlog of Rs. 47,800.0 lakhs as compared to Rs. 48,515.1 lakhs in June 2012.

Financials

The Company has changed its Fiscal from July-June to April- March. Hence the current fiscal financials are for nine months. On a consolidated basis, the Group registered total operating revenue of Rs. 68,336.4 lakhs in the nine month period ended March 31, 2013. The Group registered a net profit of Rs. 3,432.3 lakhs in the nine month period ended March 31, 2013 as compared to Rs. 50.0 lakhs in FY 2012.

Break-up of Operating Revenue by regions

Region Nine month period Year ended ended March 31, June 30, 2012 2013 Rs. in Lakhs % of Rs. in Lakhs % of Revenue Revenue

UK 32,461.1 47.5 35,206.7 47.9

North America 30,846.5 45.1 32,404.5 44.2

Others (India/ 5,028.8 7.4 5,740.4 7.9 Asia Pacific)

Total Operating 68,336.4 100.0 73,351.6 100.0 Revenue

The UK operations contributed Rs. 32,461.1 lakhs in revenue as compared to Rs. 35,206.7 lakhs during the corresponding period last year. The annualized growth of 22.9% was led by increased business in the government vertical followed by retail and financial services. The company''s strong partnership model is positioning the company favourably to tap into opportunities in the Government segment. This segment has recently seen some uptick and Mastek has been a selected vendor for Government procurement through cloud. The Company has also witnessed growing opportunities in the Retail space with one of its existing customer. The pipeline for the UK geography is much stronger than last year and the Company is making necessary investments for the same.

The North America operations, registered an annualized growth of 26.9% primarily due to growth in the insurance segment both in the Life & Annuity (L&A) and Property & Casulty (P&C) space. The Company''s decision of continuing its investments in the insurance segment in North America has resulted in the Company attaining the top 3 vendor status. Going ahead, this segment will continue to drive growth for the Company.

The annualized growth of 16.8% in the India Asia Pacific region was driven by good level of wins from the India Government side. The Company''s strong IP-based solutions for Government and Insurance business verticals continue to drive new client wins and deeper engagements with existing clients.

Break-up of operating Revenue by Verticals

2012-13 %of 2011-12 %of Vertical (9 months) (12 months) Revenue Revenue (Rs. in Lakhs) (Rs. in Lakhs)

Insurance 27,718.6 41.1 28,302.9 39.1

Government 20,006.1 29.7 21,291.1 29.4

Financial Services 10,569.9 15.7 12,745.7 17.6

IT & Other Services 9,082.0 13.5 9,956.8 13.9

Total - IT Services 67,376.6 100.0 72,296.5 100.0 revenue

Other operating 959.8 1,055.1 revenue

Total 68,336.4 73,351.6

The key driver for the 30.6% annualized growth in the insurance segment has been the North America market i.e both P&C and L&A whereas the UK Insurance market continues to remain subdued with limited growth opportunities.

The Government vertical grew by 25.3 % on an annualized basis, led by improved level of business in the UK from existing partners and a robust deal flow from India Government.

The Financial Services witnessed growth both within the US and the UK, clocking an annualized growth of 10.6 %. IT and other services vertical grew by 21.6% on annualized basis especially from the UK.

Profitability

During the nine month period ended March 31, 2013, the Group earned a profit of Rs. 3,432.2 lakhs as compared to Rs. 50.0 lakhs for the year ended June 30, 2012. The strong profitability was driven by the following:

- Growth in business across the three geographies.

- Higher proportion of Insurance revenue from North America with increased license based revenue.

- Improved operating efficiencies and higher utilization levels.

- Cost improvement initiatives across regions and departments.

- Higher foreign exchange realizations as compared to previous year.

While operating revenue grew 24.2%, the employee benefits expense together with consultancy charges paid to sub-contractors grew by 22.9%. Travel costs grew by 7.6%. The strong cost management initiatives led to other operating expenses declining by 2.9%, depreciation and amortization expenses saw a marginal increase of 2.1%. Forex gain during the nine month period ended March 31, 2013 was Rs. 29.7 lakhs as compared to a Forex loss of Rs. 580.0 lakhs during the previous year.

(A more detailed discussion of the Company''s, strategy and performance appears in the Management Discussion & Analysis section of this annual report.)

B) Mastek standalone operations

On a stand-alone basis, Mastek reported total operating revenue of Rs. 40,101.8 lakhs for the nine month period ended March 31, 2013, as compared to Rs. 45,088.4 lakhs for year ended June 30, 2012. The Company made a Net profit of Rs. 3,019.0 lakhs for the nine month period ended March 31, 2013 as compared to Net loss of Rs. 557.3 lakhs in FY 2012.

C) Update on Board of Directors

The Mastek Board currently has 9 members, of which 5 are Independent Directors and the remaining 4 are Promoter Directors.

During the year under review, Mr. Atul Kanagat was appointed as an Additional Director of the Company with effect from January 21, 2013 and is proposed to be appointed as Director liable to retire by rotation in the ensuing Annual General Meeting. He is an Independent Director on the Board.

The Board of Directors formed a Corporate Social Responsibility Committee (CSR) as recommended by the Companies Bill 2012. The said CSR committee consists of 4 Members.

3. BUSINESS OUTLOOK

The Company''s strategy of sustained product development in the insurance segment (both in P&C and L&A) seems to be paying off. It expects growth to be led by improved business opportunities in the insurance vertical in North America.. The opportunities in the Government segment in the UK and India continue to remain attractive and the Company will continue its sales & marketing spends to take advantage of the upcoming opportunities.

4. BUY-BACK OF SHARES OF THE COMPANY

During the year the Company initiated a share buy back scheme intending to buy a maximum of 3,200,000 equity shares of the company at a price not exceeding Rs. 175.00 per share for a total amount not exceeding Rs. 3,600.0 lakhs. The Company under the said scheme bought back 2,388,000 equity shares for an average price of Rs. 150.39 per share at a total value of Rs. 3,591.4 lakhs.

5. LIQUIDITY

The Company continues to maintain a reasonable level of Current Investments and Cash and bank balances which enable it to not only eliminate short and medium-term liquidity risks but also provide the leverage to scale up operations at a short notice. As at March 31, 2013 the amount of Current Investments and Cash and bank balances stood at Rs. 15,904.5 Lakhs which amount to 68 days of expenses and Rs. 64.5 per share.

During the year, Mastek invested surplus funds in Liquid Schemes and Fixed Maturity Plans of leading Mutual Funds and Fixed Deposits with leading Banks and Housing Development Finance Corporation Ltd.

6. AUDITED ACCOUNTS OF SUBSIDIARY COMPANIES

In view of the Circular No.2/2011 dated February 8, 2011 issued by the Government of India, Ministry of Corporate Affairs, New Delhi, the accounts of subsidiary companies are not attached to the audited accounts of the Company. The Board of Directors of the Company at its meeting held on April 26, 2013 has given its consent for not attaching the Balance Sheets of the subsidiaries. We, hereby, undertake that the Annual Accounts of subsidiary companies and related detailed information shall be made available to the shareholders at any point of time. Copies of the annual accounts of subsidiary companies shall also be available for inspection by any shareholder at the registered office of the Company.

7. DIVIDEND

Directors recommend payment of a dividend of Rs. 3/- per equity share for the nine month period ended March 31, 2013 on the paid up Equity Share Capital of the Company.

8. PAYMENT OF CERTAIN BENEFITS / PERQUISITES TO MR. ASHANK DESAI

In the Annual General Meeting held on October 5, 2012, the shareholders of the Company had given consent by approving Special Resolution for payment of certain benefits / perquisites to Mr. Ashank Desai not exceeding Rs. 15 Lakhs per annum. The Company has thereafter applied to the Ministry of Corporate Affairs (MCA) for its approval to the same and the approval from the ministry is awaited.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the Directors 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 on March 31, 2013, and of the profit/(loss) of the Company for the period ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the Company''s assets and prevent and detect fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis.

10. DIRECTORS

As per Article 134 of Articles of Association of the Company, Ms. Priti Rao and Dr. Rajendra Sisodia, Directors of the Company retire by rotation and, being eligible, offer themselves for re-appointment.

11. CHANGE IN FINANICAL YEAR OF THE COMPANY

In order to coincide the Company''s Financial Year with the Tax Year, the Board of Directors of your Company vide their resolution dated January 21, 2013 has approved the change in the Financial Year of the Company from July 01-June 30 to April 01-March 31 every year. Therefore, current financial year of the Company is for nine months i.e. from July 01, 2012 to March 31, 2013.

12. AUDITORS

You are requested to appoint Auditors and fix their remuneration. The retiring auditors, M/s. Price Waterhouse, Chartered Accountants, (Firm Registration No. 012754N) have confirmed their availability within the limits of section 224(1B) of the Companies act, 1956.

13. HUMAN RESOURCES

Mastek deploys its intellectual capability to create and deliver intellectual property (IP)-led solutions that make a business impact for its global clients. For this, the key success enabler and most vital resource is world-class talent. Mastek continuously undertakes measures to attract and retain such high quality talent.

As on March 31, 2013, Mastek Group had a total of 3,214 employees. The Company has resumed recruitment of fresh talent for its different projects.

The Directors wish to place on record their appreciation for the contributions made by employees to the Company during the year under review.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956 the report and accounts, excluding the Statement of Particulars under Section 217(2A)of the Companies Act, 1956, are being sent to all members. Any member interested in obtaining a copy of the Statement of Particulars may write to the Company at its Registered Office.

14. EMPLOYEE STOCK OPTIONS PLAN III

The Company passed special resolutions at its Annual General Meeting held on September 20, 2004 approving the allocation of 700,000 stock options to the eligible employees of the Company and its subsidiaries.

The Company subsequently established a new scheme in 2004 for granting 700,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current period. In April, 2006 the Company issued Bonus Shares in the ratio of 1:1 and the number of unvested and unexercised options and the price of the said options have been adjusted accordingly.

(No. of options)

Particulars Nine month Year ended period ended on June 30, 2012 March 31, 2013

Opening Balance 94,750 279,292

Granted during the year - -

Exercised during the year - -

Cancelled during the year (52,625) (184,542)

Balance unexercised options 42,125 94,750

Plan IV

The Shareholders of the Company through Postal Ballot on August 9, 2007 approved the allocation of 1,000,000 stock options to the eligible employees of the Company and its subsidiaries.

The Company subsequently established a new scheme in 2007 for granting 1,000,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. During the year ended June 30, 2011, the Company has extended the vesting period from two years to seven years. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current period.

(No of Options)

Particulars Nine month Year ended period ended on June 30, 2012 March 31, 2013

Opening Balance 319,834 407,238

Granted during the year - -

Exercised during the year - -

Cancelled during the year (41,919) (87,404)

Balance unexercised options 277,915 319,834

Plan V

The Company introduced a new scheme in 2008 for granting 1,500,000 stock options to the employees, each option representing one equity share of the Company. The exercise price as may be determined by the Compensation Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by

SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. During the financial year ended June 30, 2011, 50,000 options were granted at price less than the market price. Consequently, the amortized compensation cost of Rs. Nil (Previous Year Rs. 35.00) in respect of options granted in earlier periods has been charged to the Statement of Profit and Loss during the current period.

(No. of options)

Particulars Nine month Year ended period ended on June 30, 2012 March 31, 2013

Opening Balance 895,458 1,317,348

Granted during the year - 46,900

Exercised during the year - (75,000)

Cancelled during the year (41,944) (393,790)

Balance unexercised options 853,514 895,458

Plan VI

The Company introduced a new scheme in 2010 for granting 2,000,000 stock options to the employees, each option representing one equity share of the Company. The exercise price as may be determined by the Compensation Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current period.

(No. of options)

Particulars Nine month Year ended period ended on June 30, 2012 March 31, 2013

Opening Balance 1,054,200 569,600

Granted during the year 84,600 494,600

Exercised during the year - -

Cancelled during the year (15,000) (10,000)

Balance unexercised options 1,123,800 1,054,200

Disclosure required under SEBI (ESoS & ESpS) Guidelines, 1999

In order to enable the Company to continue with its ESOP, the Company passed special resolutions through postal ballot in January, 2002 for issue of 700,000 stock options to its employees. At the Annual General Meeting held on September 20, 2004, the Company passed special resolutions to issue 700,000 stock options to its employees. The Company passed special resolutions through postal ballot on August 9, 2007 for issue of 1,000,000 stock options to its employees. On March 20, 2009, the shareholders of the Company approved further issue of 1,500,000 options to the employees. At the Annual General Meeting of the Company held on October 1, 2010, the shareholders of the Company approved further issue of 2,000,000 options.

a) Options granted: Opening 2,334,642

b) Issued during the year 84,600

c) Pricing formula Market Price as defined by SEBI from time to time or face value or such price as may be decided by the Compensation Committee from time to time

d) Options vested: 917,772

e) Options exercised Nil

f) Total Number of shares arising as a result of exercise of options

Nil

g) Options lapsed: 151,488

h) Variations of terms of options NIL

i) Money realized by exercise of options

NIL

j) Total number of options in force 2,297,354

k) Employee-wise details of options granted to:

(1) Senior managerial personnel: 1

(2) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year 3

(3) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

NIL

Diluted EPS pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20

l) The impact of this difference on profits and on EPS of the Company.

(Rs. in Lakhs) Profit after Tax (PAT) 3,018.97

Less : Change in Employee compensation cost based 156.90 on Fair value

PAT as per Fair value method 2,862.07

Proforma Basic EPS (in Rs.) 10.89

m) Weighted-average exercise price and fair value of Stock Options granted during the year:

Stock options Weighted Weighted Closing granted on average Average fair market price exercise price value at BSE on the (in Rs.) date of grant (in Rs.)

July 27, 2012 125.00 63.02 124.15

Oct 19, 2012 138.00 70.51 137.70

Feb 07, 2013 150.00 77.61 152.25

n) Description of the method and significant assumptions used during the year to estimate the fair value of the options, including the following weighted average information:

: The Black Scholes option pricing model was developed for estimating fair value of traded options that have no vesting restrictions and are fully transferable. Since Option pricing models require use of substantive assumptions, changes therein can materially affect fair value of options.

The option pricing models do not necessarily provide a reliable measure of fair value of options.

The main assumptions used in the Black-Scholes option-pricing model during the year were as follows:

Serial Grant Date July 27, Oct 19, Feb 7, no 2012 2012 2013

1 Risk Free Interest 8.10 % 8.14 % 7.89% Rate

2 Expected Life 6 6 6 (years)

3 Expected Volatility 49.72% 50.22% 49.71%

4 Dividend Yield 1.54% 1.54% 1.54%

15. ADDITIONAL INFORMATION RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1968, forming part of the Directors'' Report for the period ended March 31, 2013:

a) Conservation of Energy:

As a software Company, energy costs constitute a small portion of the total cost and there is not much scope for energy conservation. Form A is not applicable for software industry.

b) Technology Absorption : Not Applicable

c) Foreign Exchange Earnings Total foreign exchange used and and outgo: earned by Mastek Ltd.

Particulars (Rs. in Lakhs)

Nine month Year ended period ended June 30, 2012 March 31, 2013

Exchange Used 17,163.53 20,570.46

Exchange Earned 39,874.86 41,110.58

16. CORPORATE GOVERNANCE

Mastek follows best practices in Corporate Governance by benchmarking them with the best in the world.

17. ACKNOWLEDGEMENTS

The Directors would like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance provided by the SEEPZ Authorities, MIDC, Department of Electronics, ICICI Bank, Standard Chartered Bank Ltd and other government departments and authorities. By the Order of the Board

Mumbai Sudhakar Ram

April 26, 2013 Chairman & Managing Director


Jun 30, 2010

The Directors herewith present the 28 Annual Report and Audited Statement of Accounts of Mastek Ltd for the year ended June 30, 2010.

1. FINANCIAL RESULTS - CONSOLIDATED RESULTS OF MASTEK LIMITED AND ITS SUBSIDIARIES

Rs. in Mn.

Year Year

Ended Ended

PARTICULARS

June 30 June 30

2010 2009

Income from IT services 7,138 9,426

Other Income 81 224

Total Income 7,219 9,650

Expenses 6,266 7,835

Depreciation 267 295

Interest & Financial Charges 13 48

Profit Before Tax 673 1,472

Provision for Tax (4) 60

Profit after Tax 677 1,412

FINANCIAL RESULTS- MASTEK LIMITED

Rs. in Mn.

Year Year

Ended Ended

PARTICULARS

June 30 June 30

2010 2009

Income 4,409 5,978

Profit before tax 240 946

Provision for tax (130) (10)

Profit After Tax 370 956

Add : Balance b/f from last year 2,395 1,991

Profit available for appropriation 2,765 2,947

Interim Dividend 54 66

Final Dividend 34 202

Corporate Dividend Tax 14 45

Transfer to General Reserve 169 239

Balance carried to Balance Sheet 2,494 2,395

2. RESULTS OF OPERATIONS

A) Group global operations

The Company s performance for the financial year under review (FY 2010) reflects the impact of slower uptake in demand following the recent global economic crisis, adverse forex conditions, ramp-down of the remainder phase of the BT/ NHS project development revenues, increased hiring, some wage hikes implemented during the year, and induction of multiple senior business leaders across geographies.

On a consolidated basis, the company registered a total income of Rs 7.22 billion in FY2010. This represents a 25% decline compared to Rs 9.65 billion in the preceding year.

Profit after Tax (PAT) declined by 52% in FY2010 to Rs 677 million from Rs 1,412 million in FY2009.

The UK remained the largest contributor to Mastek s business among all its operating geographies. During the year under review, the UK operations contributed Rs 3,739 million in revenues, amounting to 52% of overall consolidated revenues for the year.

The North American operations, which now includes both the US and Canada businesses, also registered a de-growth of 12% to Rs 2,928 million from Rs 3,328 million last year.

The company s P&C division (resulting from the acquired subsidiary STGMastek that is focused on the non-life insurance segment) has delivered a noticeably strong performance during the year. During the year, the recently established (in February 2009) Canadian subsidiary of the Company acquired its initial set of customers and began generating revenues.

Mastek s operations in the Asia-Pacific region including India witnessed some progress during the year that are strategically significant, such as the successful launch of ElixirAsia where the Company also secured a deal with a Thailand- based insurance company and initiatives in the Government vertical that positions the Company well for future opportunities in areas like GST implementation. During FY2010, these operations (Asia-Pacific including India & Middle East and Germany) contributed Rs 470.6 million to overall consolidated revenues.

(A more detailed discussion of the Company s business model, strategy, and performance appears in the Management s Discussion & Analysis section of this annual report.)

B) Mastek standalone operations

On a stand-alone basis, Mastek reported a total income of Rs.4.41 billion for FY2010, as compared to Rs.5.98 billion for FY2009. Profit after Tax stood at Rs. 370 million in FY2010 as compared to Rs. 956 million in the preceding year.

C) Board and management & sales team expansion

During the year under review, Mr. Anil Singhvi was inducted as Director of the Company. In the same period, Mr. Rajesh Mashruwala resigned from the Board of the Company.

The Company also expanded and strengthened its leadership and sales teams globally, with multiple senior-level appointments during the year under review. These appointments are aimed at reinforcing Mastek s business and sales organization and creating the necessary capabilities to extend the Company s presence in existing and new markets.

3. BUSINESS OUTLOOK

The Company s performance during the year under review reflects the combined influence of several factors including subdued uptake in demand for I solutions that depend on discretionary spending and transformational initiatives by clients as well as macroeconomic pressures such as volatility in foreign currency exchange rates. The Company did accomplish some strategically important successes during the year, from gaining a foothold in the North American insurance market for its Elixir platform based solutions to moving its Capita relationship to the next phase. Mastek intends to build upon all the progress made by it so far on the operational and strategic fronts, and will take concrete steps aimed at adding new accounts, growing partnerships, and expanding its order book. An expanded order backlog and enhanced market presence in its key verticals should create a solid platform for the Company to deliver revenue and earnings growth in the subsequent years. The Company is also committed to restoring its margins and will be implementing initiatives towards that end during the next financial year. Mastek continually strives to develop strategic customer accounts and new partnerships where necessary, and this in turn should over time result in better quality of revenues and much deeper client engagement.

4. LIQUIDITY AND CASH EQUIVALENTS

The Company continues to maintain a reasonably high level of cash and cash equivalents, which enable it to not only eliminate short and medium-term liquidity risks but also provide the leverage to scale up operations at a short notice.

During the year, Mastek invested surplus funds in Liquid Schemes and Fixed Maturity Plans of Blue-chip Mutual Funds and Fixed Deposits with leading Banks. As of June 30, 2010, the Cash and Cash Equivalents stood at Rs. 1.98 billion which amounted to 39 days of expenses and Rs. 73.48 per share.

5. AUDITED ACCOUNTS OF SUBSIDIARY COMPANIES

In view of the approval granted by the Government of India, Ministry of Company Affairs, New Delhi, vide its letter dated June 8, 2010, the accounts of subsidiary companies are not attached to the audited accounts of the Company. We, hereby, undertake that the audited annual accounts of subsidiary companies shall be made available to the investors at any point of time. Copies of the audited annual accounts of subsidiary companies shall also be available for inspection by any investor at the registered office of the company.

6. ISSUE OF SHARE CAPITAL

During the year, the Company allotted 44,443 equity shares of Rs. 5 each to its eligible employees who exercised their options under Employee Stock Option Plan.

7. DIVIDEND

At the Board Meeting held on July 21, 2010 , the Board proposed a final dividend of Rs. 1.25 per share. Resultantly, the total effective dividend for the year 2009-10 is 65 % compared to 200% for the year 2008- 09.

8. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the company confirms:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. that the selected accounting policies were applied consistently and the Directors made judgments 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 on June 30, 2010, and of the profit of the company for the year ended on that date;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the company s assets and prevent and detect fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis;

9. DIRECTORS

Mr. Ashank Desai and Mr. Ketan Mehta, Directors of the company, retire by rotation and being eligible, offer themselves for re-appointment.

10. AUDITORS

The retiring Auditors, M/s. Price Waterhouse, Chartered Accountants (Firm Registration No. 007568S), have expressed their unwillingness to be re-appointed for the year 2010-11. You are requested to appoint M/s. Price Waterhouse, Chartered Accountants (Firm Registration No. 012754N) as the Auditors of the Company for the year 2010-11. The Company has received a certificate from M/s. Price Waterhouse, Chartered Accountants (Firm Registration Number 012754N), confirming that their appointment, if made, will be within the limits of Section 224 (1B) of the Companies Act, 1956.

11. HUMAN RESOURCES

Mastek deploys its intellectual capability to create and deliver intellectual property (IP)-led solutions that make a business impact for its global clients. For this, the key success enabler and most vital resource is world-class talent. Mastek continually undertakes measures to attract and retain such high quality talent.

As on 30 June 2010, the Company had a total of 3,243 employees. The Virtual Bench, which had been created in FY2009 in view of the worldwide financial meltdown and the resulting downward revision of growth outlook, came to an end during FY2010, and the Company has resumed recruitment of fresh talent.

The Directors wish to place on record their appreciation for the contributions made by employees to the Company during the year under review.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, the report and accounts, excluding the Statement of Particulars under Section 217(2A), are being sent to all members. Any member interested in obtaining a copy of the Statement of

Particulars may write to the Company at its Registered Office.

12. EMPLOYEE STOCK OPTIONS

Plan II

The Company established a new scheme in 2002 for granting 700,000 stock options to employees and each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employees Stock Purchase Guidelines issued in 1999 by SEBI. There is a minimum period of twelve months for the first vesting from the date of the grant of options. The options are exercisable within two years of their vesting. As per the SEBI guidelines issued in 1999, and as amended from time to time, the excess of the market price of the underlying equity shares as of the date of the grant of the option over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. The options granted during the year have been granted at an exercise price which is equal to the market price of the underlying equity shares. Consequently, there is no compensation cost in the current year. In April, 2006, the Company issued Bonus Shares in the ratio of 1:1 and the number of unvested and unexercised options and the price of the said options have been adjusted accordingly.

In accordance with the Guidelines, the Company has passed the necessary special resolutions in January 2002 to approve the scheme and to extend the plan to the employees of its subsidiaries.

(No. of options)

Year Year

ended ended

June 30 June 30

2010 2009

Opening Balance 91,520 250,579

Granted during the year - -

Adjusted for the issue of bonus shares in ratio of 1:1

Exercised during the year (14,458) (10,629)

Cancelled during the year (69,312) (148,430)

Balance unexercised options 7,750 91,520

Plan III

The Company passed special resolutions at its Annual General Meeting held on September 20, 2004 approving the allocation of 700,000 stock options to the eligible employees of the Company and its subsidiaries.The Company subsequently established a new scheme in 2004 for granting 700,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within two years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortised on a straight line basis over the vesting period. The options granted during the year have been granted at an exercise price which is equal to the market price of the underlying equity shares. Consequently, there is no compensation cost in the current year. In April, 2006 the Company issued Bonus Shares in the ratio of 1:1 and the number of unvested and unexercised options and the price of the said options have been adjusted accordingly.

(No. of options)

Year Year

ended ended

June 30 June 30

2010 2009

Opening Balance 898,624 1,071,038

Granted during the year - -

Adjusted for the issue of bonus shares in ratio of 1:1

Exercised during the year (26,938) (8,664)

Cancelled during the year (324,892) (163,750)

Balance unexercised options 546,794 898,624

Plan IV

The Shareholders of the Company through Postal Ballot on August 9, 2007 approved the allocation of 1,000,000

stock options to the eligible employees of the Company and its subsidiaries.The Company subsequently established a new scheme in 2007 for granting 1,000,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price is as governed by the guidelines issued by SEBI. The scheme is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortised on a straight line basis over the vesting period. The options granted during the year have been granted at an exercise price which is equal to the market price of the underlying equity shares. Consequently, there is no compensation cost in the current year.

(No. of options)

Year Year

ended ended

June 30 June 30

2010 2009

Opening Balance 614,917 248,876

Granted during the year - 413,484

Adjusted for the issue of bonus shares in ratio of 1:1

Exercised during the year (3,047) -

Cancelled during the year (98,156) (47,443)

Balance unexercised options 513,714 614,917

Plan V

The Company introduced a new scheme in 2009 for granting 1,500,000 stock options to the employees referred to above, each option representing one equity share of the Company. The exercise price as may be determined by the Compensation Committee and such price may be the face value of the share from time to time or may be the Market Price or any price as may be decided by the Committee and will be governed by the guidelines issued by SEBI. The scheme

is governed by the Employee Stock Option Scheme and Employee Stock Purchase Guidelines issued in 1999 by SEBI and as amended from time to time. The first vesting of the stock options shall happen only on completion of one year from the date of grant and the options are exercisable within Seven years from the date of vesting. As per the SEBI guidelines, the excess of market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the option is to be recognized and amortised on a straight line basis over the vesting period. The options granted during the year in certain cases were less than the market price of the underlying equity shares. Consequently, Rs 57,00,000 has been provided as compensation cost for the current year.

The Shareholders of the Company through Postal Ballot on March 20, 2009 approved the Scheme, which contained the allocation of 1,500,000 stock options to the eligible employees of the Company and its subsidiaries.

(No. of options)

Year Year

ended ended

June 30 June 30

2010 2009

Opening Balance 61,000 -

Granted during the year 11,116,000 61,000

Adjusted for the issue of bonus shares in ratio of 1:1

Exercised during the year - -

Cancelled during the year (286,000) -

Balance unexercised options 891,000 61,000

Disclosure required under SEBI (ESOS & ESPS) Guidelines, 1999

In order to enable the Company to continue with its ESOP, the Company passed special resolutions through postal ballot in January, 2002 for issue of 7,00,000 stock options to its employees. At the Annual General Meeting held on September 20, 2004, the Company passed special resolutions to issue 7,00,000 stock options to its employees. The Company passed special resolutions through postal ballot in August 9, 2007 for issue of 10,00,000 stock options to its employees. On March 20, 2009, the shareholders of the Company

approved the further issue of 15,00,000 options to the employees.

a) Options granted: Opening: : 1,666,061

b) Issued during the year: 1,116,000

c) Pricing formula: Market Price as defined by SEBI from time to time or face value or such price as may be decided by the Compensation committee from time to time.

d) Options vested: 6,99,942

e) Options exercised: 44,443

f) Total number of shares arising as a result of exercise of options: 44,443

g) Options lapsed: 778,360

h) Variations of terms of options: NIL

i) Money realized by exercise of options: Rs. 10,524,952

j) Total number of options in force: 1,959,258

k) Employee-wise details of options granted to:

(1) Senior managerial personnel: 25 (Twentyfive)

(2) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year: 3 (three)

(3) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant: 1 (One)

l) Diluted EPS pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 is Rs 13.66 per share

m) The impact of this difference on profits and on EPS of the Company

(Rs in lacs)

Profit After Tax (PAT) 3699.84

Less Additional employee

compensation based on fair value 372.91

Adjusted PAT 3326.93

Adjusted EPS 12.34

n) Weighted-average exercise price and fair value of Stock Options granted during the year:

Stock options Weighted Weighted Closing

granted on average Average market

exercise fair value price at

price BSE on

(in Rs) the date

of grant

(in Rs.)

July, 2009 247 127.65 246.55

October, 2009 295 154.27 294.90

January, 2010 399 212.08 398.75

April, 2010 353 185.42 352.80

(o) Description of the The Black Scholes

method and significant option pricing model assumptions used was developed for

during the year to estimating fair value

estimate the fair value of traded options that of the options, have no vesting

including the restrictions and are

following weighted fully transferable.

average information: Since Option pricing

models require use of substantive assumptions, changes therein can materially affect fair value of options. The option pricing models do not necessarily provide a reliable measure of fair value of options.

The main assumptions used in the Black-Scholes option-pricing model during the year were as follows

Sr. Grant July 22, October 8, January 12, April 12,

no Date 2009 2009 2010 2010

1 Risk Free Inte rest

Rate 6.77% 7.08% 7.36% 7.77%

2 Expected

Life (years) 6 6 6 6

3 Expected

Volatility 54.08% 54.24% 55.13% 53.04%

4 Dividend

Yield 1.49% 1.49% 1.49% 1.49%



13. ADDITIONAL INFORMATION RELATING TO

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1968, forming part of the Directors Report for the year ended June 30, 2010:

a) Conservation of Energy

As a software company, energy costs constitute a small portion of the total cost and there is not much scope for energy conservation.

Form A is not applicable for software industry.

b) Technology Absorption Not Applicable

c) Foreign Exchange Earnings and Outgo -

Total foreign exchange used and earned by the company

(Rs. in Mn.)

30.6.2010 30.6.2009

Exchange used 1,733 2,310

Exchange earned 3,831 5,592

14. CORPORATE GOVERNANCE

Mastek follows best practices in Corporate Governance by benchmarking them with the best in the world.

The report on corporate governance is included in the latter part of this Annual Report.

15. ACKNOWLEDGEMENTS

The Directors would like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance provided by the SEEPZ Authorities, MIDC, Department of Electronics, ICICI Bank, Standard Chartered Bank Ltd and other government departments and authorities.

By the Order of the Board

Place: Mumbai Sudhakar Ram

Dated: July 21, 2010 Chairman and Managing Director



 
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