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Directors Report of Mastek Ltd.

Mar 31, 2023

The Board of Directors (“Board”) of your Company is pleased to present the 41st Annual Report of Mastek Limited (“Mastek” or “the Company” or “Your Company”) on the business and operations together with the Audited Financial Statements (Consolidated and Standalone) for the Financial Year ended March 31, 2023.

In compliance with the applicable provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force) (“the Act”) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), this report covers the financial results and other developments during the Financial Year ended March 31, 2023.

1. Financial Results

Key highlights of the Financial Results (Consolidated and Standalone) of your Company for the Financial Year ended March 31, 2023, as compared to the previous Financial Year are summarised below:

(Rs. in Lakhs)

Consolidated

Standalone

Summarised Profit and Loss

Financial Year 2022-23

Financial Year 2021-22

Financial Year 2022-23

Financial Year 2021-22

Revenue from operations

256,339

218,384

31,339

25,670

Other income

3,829

3,608

7,337

7,354

Total Income

260,168

221,992

38,676

33,024

Expenses

210,754

172,133

26,628

22,286

Depreciation and amortisation expenses

6,737

4,287

1,303

1,242

Finance costs

2,472

768

44

54

Exceptional items - (loss) / gain

2,532

-

5,864

145

Profit Before Tax

42,737

44,804

16,565

9,587

Tax expense

11,710

11,462

3,351

1,876

Profit After Tax

31,027

33,342

13,214

7,711

Other Comprehensive Income

6,584

2,573

(139)

554

Total Comprehensive Income

37,611

35,915

13,075

8,265

Attributable to Equity Holders

37,611

35,915

13,075

8,265

Dividend

(5,741)

(4,753)

(5,741)

(4,753)

EPS (in '')

- Basic

97.23

106.52

43.85

27.83

- Diluted

95.53

103.81

43.07

27.13

Note: The above figures are extracted from the Consolidated and Standalone Financial Statements, which have been prepared in compliance with the Indian Accounting Standards (Ind AS), and it complies with all aspects of Ind AS notified under Section 133 of the Act read with [Companies (Indian Accounting Standards) Rules, 2015 (amended)] and other relevant provisions thereof. There are no material departures from the prescribed norms stipulated by the Accounting Standards in preparation for the Annual Accounts. Accounting policies have been consistently applied, except where a newly issued Accounting Standard, if initially adopted or a revision to an existing Accounting Standard, required a change in the Accounting Policy hitherto in use. Management evaluates all recently issued or revised Accounting Standards on an ongoing basis.

details are included in notes to the Accounts of Consolidated Financial Statement, which forms part of this Annual Report.

On a Standalone basis, the Company registered revenue from operations of '' 31,339 lakhs for the year ended March 31, 2023 (as compared to '' 25,670 lakhs in the previous year ended March 31, 2022). The Company also made a Net profit of '' 13,214 lakhs for the year ended March 31, 2023 (as compared to a Net Profit of '' 7,711 lakhs in the previous year ended March 31, 2022). Further details are included in notes to the Accounts of Standalone Financial Statement, which forms part of this Annual Report.


2. An Overview of the Company Affairs and Financial / Business Performance

• Mastek Operations

On a Consolidated basis, the Company and its Subsidiaries (“Mastek Group”) registered revenue from operations of '' 2,56,339 lakhs for the year ended March 31, 2023 (as compared to '' 218,384 lakhs in the previous year ended March 31, 2022), which is an increase of 17.38%. The Mastek Group registered a Net Profit of '' 31,027 lakhs for the year ended March 31, 2023 (as compared to '' 33,342 lakhs in the previous year ended March 31, 2022), thereby registering a decrease of 6.94%. Further

•

Break-up of the Operating Revenue by Geographies

Geographies

Year ended March 31, 2023

Year ended March 31

, 2022

'' in lakhs

% of Revenue

'' in lakhs

% of Revenue

UKI & Europe

158,761

61.9

148,485

68.0

North America

62,576

24.4

38,556

17.7

Middle East

23,350

9.1

19,006

8.7

Rest of the World

11,652

4.6

12,337

5.6

Total

256,339

100.00

218,384

100.0

The Standalone and Consolidated Financial Statements of the Company have been audited by the Statutory Auditors of the Company.

The Company discloses Consolidated and Standalone Financial Results on a quarterly basis, which are subject to limited review, and publishes

Consolidated and Standalone Audited Financial Results on an annual basis.

Further, a detailed analysis of the Company’s performance is included in the Management Discussion and Analysis Section, which forms part of this Annual Report.

The UKI & Europe Geography operations contributed '' 1,58,761 lakhs to total Operating Revenue for the year ended March 31, 2023 (as compared to '' 148,485 lakhs in the previous year ended March 31, 2022), resulting in a growth of 6.9%.

The North America Geography operations contributed '' 62,576 lakhs to total Operating Revenue for the year ended March 31, 2023 (as compared to '' 38,556 lakhs in the previous year ended March 31, 2022), resulting in an increase of 62.3%.

The Middle East operations contributed '' 23,350 lakhs to total Operating Revenue for the year ended March 31, 2023 (as compared to '' 19,006 lakhs in the previous year ended March 31, 2022), resulting in an increase of 22.9%.

Revenue from the Rest of the World’s Geographies i.e. India and Asia Pacific operations contributed '' 11,652 lakhs to the total Operating Revenue for the year ended March 31, 2023 (as compared to '' 12,337 lakhs in the previous year ended March 31, 2022), resulting in a decrease of 5.6%.

• Break-up of the Revenue by Service Lines

Service Lines

Year ended March 31, 2023

Year ended March 31, 2022

'' in lakhs

% of Revenue

'' in lakhs % of Revenue

Digital & Application Engineering

111,071

43.3

99,428 45.5

Oracle Cloud & Enterprise Apps

81,619

31.8

72,000 33.0

Digital Commerce & Experience

46,263

18.1

25,789 11.8

Data, Automation, and AI

17,386

6.8

21,167 9.7

Total

256,339

100.00

218,384 100.00

• Break-up of the Revenue by Customer Segments

Customer Segments

Year ended March 31, 2023

Year ended March 31, 2022

'' in lakhs

% of Revenue

'' in lakhs % of Revenue

Government & Education

107,132

41.8

82,023 37.6

Health & Life sciences

42,482

16.6

51,247 23.5

Manufacturing & Technology

39,124

15.2

28,254 12.9

Retail Consumers

37,398

14.6

32,548 14.9

Financial Services

30,203

11.8

24,312 11.1

Total

256,339

100.00

218,384 100.00

• Consolidated Financial Statements

The Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Indian Accounting Standard (IndAS) - 110 “Consolidated Financial Statements” and IndAS - 28 “Investments in Associates and Joint Ventures” prescribed under Section 133 of the Companies Act, 2013, read with the rules thereunder. The Consolidated Financial Statements are provided in the Annual Report.

Profitability

During the year ended March 31, 2023, Mastek Group earned a profit of '' 31,027 lakhs (as compared to '' 33,342 lakhs for the year ended March 31, 2022). The profits for the Financial Year ended March 31, 2023, witnessed decline on account of the following:

(a) depreciation of GBP impacted overall profitability for Mastek, as UK is a significant market for

the Company;

(b) significant increase in talent cost and increase in cost per hire, led by higher demand for niche and skilled resources in the market; and

(c) continued investment in sales and capability building.

3. Acquisition during the year under review

Acquisitions are a key enabler for driving capability to build industry domain, focus on key strategic areas, strengthen presence in emerging technology areas including Digital, and increase market footprint in newer markets. Your Company focuses on opportunities where it can further develop its domain expertise, specific skill sets, and its global delivery model to maximise service and product enhancements and higher margins.

During the year under review, the Company and its US based subsidiary acquired both the MST group Companies business alongwith its employees. The deal had been structured in two stages:

• MetaSoftTech Solutions LLC, US entity, was acquired by Mastek Inc., US based wholly owned First level Step down subsidiary of the Company.

• Meta Soft Tech Systems Private Limited, Indian entity, was acquired by the Company.

These two entities became the subsidiaries of the Company during the financial year 2022-23.

About MetaSoftTech Solutions LLC, USA (MST USA):

Founded in 2012, MST Solutions is the largest independent Salesforce consulting partner in the American Southwest region. With Summit level status in the Salesforce ecosystem and a 5 out 5 Customer Satisfaction score, they are service experts who take service to a whole new level. Through the framework of a proven effective Roadmap to Results, their team of Salesforce architects, developers, project managers, and administrators add their expertise to clients team to craft agile, innovative solutions that answer client organisation’s operational challenges today and as clients grow.

It is based in Chandler, Arizona, USA, and is an independent Salesforce consulting partner in the American Southwest region. MST USA is a trusted partner to a number of Fortune 1000 and has large enterprise clients. MST USA has built a strong reputation for itself, especially in the Healthcare, Public Sector, and Manufacturing Industry verticals. The entire USA

business and membership were acquired for upfront consideration of USD 76.6 million and Earnout - between USD 0 to USD 35 million, subject to achieving targets.

About Meta Soft Tech Systems Private Limited (MST India):

Formed in March 2013, MST is a privately held Indian subsidiary of US-based parent MetaSoftTech Solutions LLC, USA. The Indian entity was set up as an offshore service provider and is mainly engaged in IT and software support services, to meet overseas client requirements. The entire business and equity shares were bought for all cash consideration of '' 27.2 crores, subject to customary closing adjustments as per the terms of the Share Purchase Agreement. The said transaction was a 100% acquisition of shares.

Objects and effects of the acquisition:

Mastek’s Business Outcomes and Industry First DNA paired with MST USA’s Salesforce-led innovation capabilities will strengthen the value we will deliver to our customers and help them in their journey to Decomplex Digital. This acquisition is expected to significantly increase Company’s market share in existing accounts across industries in the Americas and provide a foundation to scale our Digital Transformation business globally.

Strategic Rationale:

a) Ability to address a large high growth new market for the Company;

• Large Target Addressable Salesforce services market

• Fills up a critical and strategic white space for the Company

• 90% of Fortune 1000 customer use Salesforce

• Strong synergy potential in mutual account base

b) Key Component of Mastek’s Vision 2025

• MST is a summit-level Salesforce partner. The Salesforce market continues to expand and is a strategic priority for Mastek in achieving $1 Bn revenue ambition in a few years.

• Bolsters Mastek tech stack with full suite Salesforce capabilities, critical for customer experience transformation programs.

c) Alignment to US Geo with Global Potential

• MST is focused on US clients and increases Mastek’s footprint in the Americas

• Mastek can leverage its global presence for hyper-growth of the Salesforce business

d) Complementary Capabilities

• MST’s CX capabilities on various Salesforce clouds are complementary to Mastek’s existing Commerce, Oracle Cloud, and Digital Engineering services

• Significant synergy opportunities within existing accounts

• Ability to stitch together larger deals spanning the entire IT landscape

e) Strong cultural fit

• Strong leadership team with experience in growing the business

• Focus on delivering value to customers while enabling growth for employees aligns with Mastek 4.0 culture

• These two entities became the subsidiaries of the Company during the financial year 2022-23.

4. Material Changes and Commitments including Changes in the Nature of Business

There have been no material changes and commitments affecting the financial position of the Company, which have occurred from the end of the Financial Year of the Company to which the Financial Statements relate till the date of this Report.

Except the relinquishment of role of Managing Director by Mr. Ashank Desai w.e.f April 1, 2023 and the resignation of Ms. Priti Rao, Independent Director w.e.f May 1, 2023 there is no other material change.

There has been no change in the nature of business of your Company.

5. Transfer to General Reserves

No part of the profit for the year was transferred to General Reserves during the year under review.

6. Dividend

Pursuant to Regulation 43A of the SEBI Listing Regulations, your Company has a well-defined Dividend Distribution Policy that balances the dual objectives of rewarding Members through dividends whilst also ensuring the availability of sufficient funds for the growth of the Company. The Policy is available on the website of the Company and can be accessed through the web link https://www.mastek.com/wp-content/ uploads/2022/07/Dividend-Distribution-Policv.pdf

Interim Dividend

The Board of Directors at its meeting held on January 17, 2023, declared an Interim Dividend at the rate of 140% i.e., '' 7.00 per equity share (on the face value of '' 5.00 per equity share). The above dividend was paid to the Members on February 15, 2023. The Company had deducted tax at source at the time of payment

of dividend in accordance with the provisions of the Income Tax Act, 1961.

Final Dividend

Your Directors are pleased to recommend a Final Dividend at the rate of 240%, i.e., '' 12.00 per equity share (on the face value of '' 5.00 per equity share) for the Financial Year ended March 31, 2023, which will be paid upon obtaining the Members’ approval at the ensuing Annual General Meeting. The Final Dividend, if approved, will be paid (subject to deduction of tax at source) within 30 (thirty) days from the date of the Annual General Meeting to those Members whose name appears in the Register of Members as on the book closure date mentioned in the Notice convening the 41st Annual General Meeting.

The total dividend for the Financial Year ended March 31, 2023, including the proposed Final Dividend, amounts to '' 19 per equity share (on the face value of '' 5.00 per equity share) or 380% (previous year '' 19.00 per share or 380%).

7. Transfer of Unclaimed Dividend Amount and Underlying Shares to Investor Education and Protection Fund Authority

As required under the provisions of Section 125 and other applicable provisions of the Act, dividends that remain unpaid / unclaimed for a period of 7 (seven) consecutive years, are required to be transferred to the account administered by the Central Government viz. Investor Education and Protection Fund (“IEPF”). Further, according to the said Rules, the shares on which dividend has not been encashed or claimed by the Members for 7 (seven) consecutive years or more shall also be transferred to the Demat account of the IEPF Authority.

During the year under review, pursuant to the provisions of Section 124 (5) of the Act, the Unpaid Final Dividend for the Financial Year 2014-15 amounting to '' 168,543, and the 1st Unpaid Interim Dividend for the Financial Year 2015-16 amounting to '' 267,036 which remained unclaimed for 7 (seven) consecutive years and was lying in the unpaid dividend account, has been transferred by the Company to the designated Bank account of IEPF Authority and the underlying shares on the above-unclaimed amount as dividend aggregating to 156 equity shares and 943 equity shares respectively, have also been transferred to the Demat account of the IEPF Authority.

The Company is in the process of transferring the 2nd Unpaid Interim Dividend for the Financial Year 2015-16 amounting to '' 208,311 to IEPF authority shortly, and also the underlying shares on the above-unclaimed dividend aggregating to 612 equity shares.

The relevant dates of the unpaid / unclaimed dividend amount which will be transferred to the IEPF Authority in the current year and subsequent years are given in

The reaffirmation reflects your Company’s continued strong parentage, credit profile, liquidity position, strong corporate governance practices, financial flexibility, and prudent financial policies.

The Company has not issued any debt instruments and did not have any fixed deposit programme or any scheme or proposal involving the mobilisation of funds in India or abroad during the Financial Year ended March 31, 2023.

10. Employee Stock Option Plans

The Company has 3 (three) ongoing Employee Stock Option Plans (“ESOPs”) at present. The Members approved the ESOP Plan V by way of a Postal Ballot on March 20, 2009, approved the ESOP Plan VI in the Annual General Meeting held on October 1, 2010, and approved the ESOP Plan VII in the Annual General Meeting held

the Corporate Governance Report, which forms part of this Annual Report.

8. Management Discussion and Analysis

In terms of provisions of Regulation 34(2) of the SEBI Listing Regulations, a detailed Management Discussion and Analysis given elsewhere in this report, forms an integral part of this Report and, inter alia, gives an update, including Market and Future Prospects and on the following matters.

• Macro economy review

• Industry review

• Company overview

• Financial review

• Business review

• Business outlook

• Information Technology

• Research and Development

• Risks and Concerns

• Internal Control Systems

9. Credit Rating

The Company’s financial discipline is reflected in the strong credit rating ascribed to it by ICRA Limited, a reputed credit rating agency. During the year under review, the following ratings ascribed by ICRA Limited reflect that the Company has serviced its financial obligations on time.

Instrument

Rating Received

Long - term Fund-based - Cash Credit

[ICRA]AA-(Stable) reaffirmed / assigned

Long - term Non-fund based Facility - SBLC

[ICRA]AA-(Stable) assigned

Short - term Non-fund based -Working Capital

[ICRA]A1 reaffirmed

Long - term / Short-term - fund based / Non-fund based

[ICRA]AA-(Stable) / [ICRA] A1 reaffirmed

on July 17, 2013, for issuance of the Employee Stock Options (“Options”) to the identified employees of the Company. The First 4 (four) Plans I to IV, have been already closed by the Company.

The Nomination and Remuneration Committee of the Company, inter alia, administers and monitors ESOPs, implemented by the Company in accordance with the relevant provisions of the Act and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,

2021, (including any statutory modification(s) and / or re-enactment(s) thereof for the time being in force) (“SEBI SBEB Regulations”). During the year under review, the Company granted 54,860 Options to its identified employees. The Company has not introduced any new Plan during the year under review.

The Certificate from M/s. P. Mehta & Associates, Secretarial Auditors, confirming the compliance of ESOPs with the provisions of the Act and SEBI SBEB Regulations, will be obtained and shall be available for inspection by the Members. The Members desiring inspection may write to [email protected]

During the year under review, there were no material changes in the ESOPs of the Company. The details of the Options granted under the aforesaid ESOPs and the disclosure in compliance with SEBI SBEB Regulations for the year ended March 31, 2023, are annexed as “Annexure 1” to this report.

11. Increase in Issued, Subscribed, and Paid-Up Equity Share Capital

During the year, the Company issued and allotted 186,054 equity shares of the face value of '' 5 each for a total nominal value of '' 930,270 under various Employee Stock Option Plans to the employees who exercised their vested Employee Stock Options. These equity shares ranked pari passu in all respects with the existing equity shares of the Company.

Further, the Board of Directors of the Company, by virtue of a Special Resolution, passed by the Members of the Company through Postal Ballot on January 11, 2023, approved and allotted 320,752 equity shares having the face value of '' 5 each at an issue price of '' 1,856 per share (including premium of '' 1,851 per share), aggregating to '' 59.53 crores on a private placement basis through the preferential allotment on January 17, 2023, towards buyout of 2nd tranche of Compulsorily Convertible Preference Shares (CCPS) from CCPS holders of Mastek Enterprise Solutions Private Limited (formerly known as Trans American Information Systems Private Limited), Subsidiary of the Company. The buyout of CCPS was partially in cash and partially through issue of Equity Shares. The issue price was determined in accordance with the applicable provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.

The movement of Share Capital during the year was as under:

Particulars

No. of shares issued and allotted

Cumulative outstanding No. of shares

Cumulative outstanding Total share capital (in Rs.)

Share Capital at the beginning of the year, i.e. as on April 1, 2022

-

3,00,18,021

15,00,90,105

Allotment of Shares:

1. June 10, 2022 - Under ESOP

25,773

3,00,43,794

15,02,18,970

2. July 19, 2022 - Under ESOP

21,971

3,00,65,765

15,03,28,825

3. September 2, 2022 - Under ESOP

9,046

3,00,74,811

15,03,74,055

4. October 19, 2022 - Under ESOP

3,540

3,00,78,351

15,03,91,755

5. December 5, 2022 - Under ESOP

5,784

3,00,84,135

15,04,20,675

6. January 16, 2023 - Under ESOP

8,404

3,00,92,539

15,04,62,695

7. January 17, 2023 - Under Preferential Issue

3,20,752

3,04,13,291

15,20,66,455

8. February 13, 2023 - Under ESOP

30,807

3,04,44,098

15,22,20,490

9. March 20, 2023 - Under ESOP

80,729

3,05,24,827

15,26,24,135

Share Capital at the end of the year, i.e. as on March 31, 2023

-

3,05,24,827

15,26,24,135

The Company now holds 1,00,000 CCPS of Re. 1/- each of Mastek Enterprise Solutions Private Limited (formerly known as Trans American Information Systems Private Limited), Subsidiary of the Company.

Your Company is listed on BSE Limited and National Stock Exchange of India Limited and the Company has not issued any equity shares with differential rights as to dividend, voting, or otherwise, and shares are actively traded on the aforementioned Exchanges and have not been suspended from trading.

Also, the Share Capital Audit as per the SEBI Listing Regulations is conducted on a quarterly basis by M/s. P. Mehta & Associates, Practising Company Secretaries, and the Report is duly forwarded to the aforementioned Exchanges where the equity shares of the Company are listed.

12. Subsidiaries and Material Subsidiaries

A list of Companies which are Subsidiaries/ Step Down Subsidiaries of your Company is provided as part of the notes to the Financial Statements.

In accordance with Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of all Subsidiaries of the Company, in prescribed Form AOC - 1 is annexed as “Annexure 2” to this Report. The statement also provides details of the performance and financial position of each of the Subsidiaries and their contribution to the overall performance of the Company.

During the Financial Year 2022-23, the Company had no Associate or Joint Venture Company.

Further, pursuant to the provisions of Section 136(1) of the Act, the Financial Statements including, Consolidated Financial Statements along with relevant documents and separate Financial Statements in respect of Subsidiaries, are available on the website of the Company and the same are also available for inspection by the Members.

There have been no material change in the nature of the business of any of the Company’s Subsidiaries.

Material Subsidiaries

Mastek (UK) Limited, Mastek Enterprise Solutions Private Limited (Formerly known as Trans American Information Systems Private Limited), and Mastek Systems Company Limited (Formerly known as Evolutionary Systems Company Limited) are ‘Material Subsidiaries’ as per the criteria given under Regulation 16 of the SEBI Listing Regulations. As a good corporate governance practice and as stipulated under the SEBI Listing Regulations, the Company has already appointed at least one Independent Director on the Board of each of these Subsidiaries.

The Company is in the process of appointing an Independent Director on the Board of Mastek Systems Company Limited, as the nominated Independent Director has submitted the resignation.

The Company monitors the performance of its Subsidiaries, inter alia, by the following means:

• The Financial Statements and in particular, investments made by the Unlisted Subsidiary Companies are reviewed by the Audit Committee of the Company.

• The Minutes of the Board Meetings of the Subsidiary Companies are placed before the Board of the Company.

• The details of any significant transactions and arrangements entered into by the Unlisted Subsidiary Companies are placed before the Board of the Company.

• The identified Senior Managerial Personnel of the Company also in some cases are appointed as the Directors of Subsidiary Companies, and they also apprise on a quarterly basis of the Company’s Board / Committees.

As required under Regulation 16 of the SEBI Listing Regulations, the Company has formulated a “Policy for determining Material Subsidiaries” and posted the same on the website of the Company, and can be accessed through the web link at https://www.mastek.com/ wp-content/uploads/2022/07/Policy-for-determining-Material-Subsidiaries. pdf.

13. Sale of Pune Office

During the year under review, the Company sold its small office situated in Pune, as it was not in use by the Company for long.

14. Particulars of Related Party Transactions

During the year under review, the Company has not entered into any material transactions with Related Parties (except with its Subsidiaries, which are exempt for the purpose of Section 188(1) of the Act). As defined under Section 2(76) of the Act, read with Companies (Specification and Definitions Details) Rules, 2014, all of the Related Party Transactions entered into were in the ordinary course of business and on an arm’s length basis and in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. There are no materially significant Related Party Transactions made by the Company with its Promoters, Directors or Key Managerial Personnel, etc., which may have potential conflict with the interest of the Company at large.

All transactions with Related Parties are placed before the Audit Committee for its approval. Omnibus approvals are given by the Audit Committee on yearly basis for transactions, which are anticipated and repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value, and terms and conditions of the transactions.

A significant quantum of Related Party Transactions undertaken by the Company is with its Subsidiaries.

The said transactions were unanimously approved by the Audit Committee as well as by the Board. There are no materially significant Related Party Transactions that may have potential conflict with the interest of the Company at large.

The SEBI vide amendments to the SEBI Listing Regulations has introduced changes in the Related Party Transactions framework, inter alia, by enhancing the purview of the definition of the Related Party, and the overall scope of transactions with Related Parties effective April 1, 2022. Consequently, the Board of Directors on recommendations of the Audit Committee has approved the revised Policy on “Related Party Transactions” of the Company to align it with the amendments notified by the SEBI Listing Regulations.

The details of the Related Party Transactions as per Indian Accounting Standards (Ind AS) - 24 are set out in notes to the Financial Statements of the Company. The Company in terms of Regulation 23 of the SEBI Listing Regulations submits on the same date of declaration of its Standalone and Consolidated Financial Results for the half-year, disclosures of Related Party Transactions on a consolidated basis, in the format specified in the relevant Accounting Standards to the Stock Exchanges.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as “Annexure 3” to this Report.

15. Particulars of Loans, Guarantees, and Investments

The particulars of Loans, Guarantees given, and Investments made by the Company during the year under review and as covered under the provisions of Section 186 of the Act have been disclosed in the notes to the Financial Statements forming part of the Annual Report. In compliance with the provisions of the Act, there were no Loans given by the Company during the year. However, the Company has made investments in subsidiaries and provided a Guarantee /Stand by Letter of Credit and also security / charge / mortgage over its properties as a security for loan facilities availed by its Subsidiaries.

16. Board of Directors and Key Managerial Personnel

There have been changes in the composition of the Board of Directors during the year under review. The details of the Board of Directors and the number of meetings held and attended by the Directors have been given in detail in the Corporate Governance Report, which forms part of this Annual Report.

a. Board’s Composition

The Company has a diverse Board of Directors who believe in good Corporate Governance Practices. The composition of the Board of Directors is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an optimum combination of Executive, Non-Executive, and Independent Directors during the year under review.

As at March 31, 2023 the Board of Directors of the Company consists of 5 (five) Members, out of which there are 3 (three) Independent Directors, including 1 (one) Woman Director. There is 1 (one) NonExecutive Director and 1 (one) Managing Director who are also the Promoters of the Company.

There was change of role from March 21, 2023 of Mr. Ashank Desai, from Vice Chairman & Managing Director to Chairman & Managing Director till March 31, 2023, and from April 1, 2023 he holds the position of Non-Executive Chairman of the Company and has relinquished the role of Managing Director of the Company on March 31, 2023.

The Company is in the process of appointment of new Directors to have a Board composition of minimum 6 (six) Members.

Appointment

Mr. Suresh Vaswani (DIN: 02176528) was appointed as an Additional Director (Non-Executive) with effect from December 11, 2022. The Members of the Company, by way of a special resolution passed through postal ballot on January 11, 2023, approved the appointment of Mr. Suresh Vaswani as a NonExecutive Independent Director, not liable to retire by rotation.

Resignations

During the year under review, Mr. Atul Kanagat (DIN: 06452489), Independent Director of the Company resigned on January 17, 2023, from the Board of Directors and Board Committees of the Company due to personal and other professional commitments.

The Board recalled his contribution and expressed their sincere gratitude for the invaluable contributions of Mr. Atul Kanagat towards the Company during his tenure of more than a decade. His association has helped in reaping benefits and business opportunities to a great extent.

Mr. S. Sandilya (DIN: 00037542), Non - Executive Chairman & Independent Director of the Company also resigned on March 3, 2023, from the Board of Directors and Board Committees of the Company stating that he is no longer aligned with the future direction of the Company.

The Board recalled the selfless and valuable contribution made to the Company by Mr. S. Sandilya as Non-Executive Chairman & Independent Director. His commitment to Mastek’s business and upholding the corporate governance principles were the highlight during his more than 11- yearlong association with the Company.

After the end of the Financial Year - on April 19, 2023, Ms. Priti Rao (DIN: 03352049) Independent Director of the Company submitted her resignation effective May 1, 2023, from the Board of Directors and Board Committees of the Company stating that her term is nearing its end and having assessed her position in light of the Company’s plans for its next growth phase, she has decided to resign.

The Board applauded and wish to place on record that Ms. Priti Rao brought in immense value through her operational expertise and contributed greatly to Mastek during her 12-year stint as Director. Her passion for Social Responsibility and Corporate Governance and her drive to engage organisation in taking the right decisions were the highlights of her association with Mastek.

b. Key Managerial Personnel

Pursuant to the provisions of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 (as amended from time to time), the following persons are acting as the Key Managerial Personnel (KMP) of the Company:

1. Mr. Ashank Desai - Chairman & Managing Director (upto March 31, 2023)

2. Mr. Arun Agarwal - Global Chief Financial Officer

3. Mr. Dinesh Kalani - Vice President - Group Company Secretary

Pursuant to Rule 8(5)(iii) of the Companies (Accounts) Rules, 2014, the following change occurred in the composition of KMP during the year under review:

Mr. Ashank Desai relinquished the role of Managing Director of the Company w.e.f. March 31, 2023 from close of business hours, except for this, there was no other change in the composition of KMP.

The Company is in the process of appointing MD / CEO as KMP of the Company.

c. Independent Directors and their Declarations

The definition of ‘Independence’ of Directors is derived from Regulation 16 of the SEBI Listing Regulations and Section 149(6) of the Act. The Company has received necessary declarations under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, from the Independent Directors stating that they meet the prescribed criteria for independence. All Independent Directors have affirmed compliance with the Code of Conduct for Independent Directors as prescribed in Schedule IV of the Act. A list of key skills, expertise, and core competencies of the Board of Directors is placed under the Corporate Governance Report, which forms part of this Annual Report.

Based on the confirmations / declarations received from the Independent Directors, your Board of Directors confirms that they are independent of management, are persons of integrity, possess relevant expertise and vast experience, and bring an independent judgment on the Board’s discussions (including the proficiency) of the Independent Directors of the Company. Accordingly, the following Non-Executive Directors are Independent of the Management:

1. Ms. Priti Rao,

2. Mr. Rajeev Kumar Grover, and

3. Mr. Suresh Vaswani

None of the Directors of the Company is disqualified from being appointed as Director as specified in Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. As required under Rule 6 of the Companies (Appointment

and Qualification of Directors) Rules, 2014, all the Independent Directors have completed the registration with the Independent Directors Databank and also completed the online proficiency test conducted by the Indian Institute of Corporate Affairs, wherever required.

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

d. Director liable to retire by Rotation

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and pursuant to the Articles of Association of the Company, Mr. Ashank Desai (DIN: 00017767) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. In the opinion of the Board, Mr. Desai possesses the requisite qualifications and experience, and therefore, your Directors, based on the annual performance evaluation, and recommend the re-appointment of Mr. Ashank Desai. The necessary resolution for the re-appointment of Mr. Ashank Desai is being placed for the approval of the Members at the ensuing Annual General Meeting.

A brief profile of Mr. Ashank Desai, along with other related information, forms part of the Notice convening the ensuing Annual General Meeting.

e. Performance Evaluation of the Board

In compliance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board of Directors has carried out an Annual Evaluation of the performance of the Board, the Board Committees, Individual Directors, Chairpersons, and the Managing Director for the year under review.

Board and Committees’ functioning was reviewed and evaluated using a peer review process and based on responses received from Directors, Committee Members, and the Managing Director through a structured questionnaire, covering various aspects of the composition and functioning of the Board and its Committees.

The Board expressed its satisfaction with the evaluation results, which reflects the high degree of engagement of the Board and its Committees with the Company and its Management. Based on the outcome of the evaluation and assessment-cum- feedback of the Directors, the Board, and the Management have also agreed on some action points, which will be implemented over an agreed time frame.

f. Familiarisation Programme

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The Company has conducted a Familiarisation Programme for the Directors / Independent Directors of the Company covering the matters as specified in Regulation 25(7) of the SEBI Listing Regulations. The details of the training and Familiarisation Programme conducted by the Company are hosted on the Company’s website and can be accessed through the web link https://www.mastek.com/wp-content/ uploads/2023/05/Induction-and-Familiarisation-Programme-for-Independent-Directors-2023.pdf

g. Code of Conduct and Directors’ Appointment and Remuneration

The Company has formulated a “Code of Conduct for Directors”. The confirmation of compliance with the same is obtained from all the Board Members on an annual basis. All Board Members have given their confirmation of compliance for the year under review. A declaration duly signed by Chairman is given under the Corporate Governance Report, which forms part of this Annual Report. The “Code of Conduct for Directors” is also posted on the website of the Company and can be accessed through the weblink https://www.mastek.com/ wp-content/uploads/2022/08/Code-of-Conduct-for-Directors.pdf

The Nomination and Remuneration Committee of the Company formulates the criteria for determining the qualifications, positive attributes, and independence of Directors in terms of its charter. In evaluating the suitability of individual Board members, the Committee takes into account factors such as educational and professional background, general understanding of the Company’s business dynamics, standing in the profession, personal and professional ethics, integrity and values, willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively. The Committee also assesses the independence of Directors at the time of their appointment / re-appointment as per the criteria prescribed under the provisions of the Act and the Rules made thereunder and the SEBI Listing Regulations.

h. Meetings of the Board of Directors

The Board / Committee Meetings are pre-scheduled, and a tentative calendar of the meetings is circulated to the Directors well in advance to help them plan their schedules and ensure meaningful participation. Should the need arise in the case of special and urgent business, the Board’s approval is obtained by passing resolutions through circulation, as permitted by law, which is confirmed in the subsequent Board Meeting. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on the Board Meetings.

The Board of Directors met 10 (ten) times during the Financial Year ended March 31, 2023. The details of the Board Meetings and the attendance of the Directors thereat have been provided in the Corporate Governance Report, which forms part of this Annual Report. The maximum interval between any 2 (two) meetings did not exceed 120 (one hundred and twenty) days as prescribed under the Act.

During the year under review, the Board accepted all recommendations made by its various Committees.

As per Schedule IV of the Act, Secretarial Standards-1 on Board Meetings and SEBI Listing Regulations, during the year under review, 3 (three) Meetings of the Independent Directors were held.

i. Committees of the Board

In terms of the requirements of the Act and the SEBI Listing Regulations, the Board of Directors has constituted the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders’ Relationship Committee

4. Corporate Social Responsibility Committee, and

5. Risk Management & Governance Committee

The detailed information of the Committees, along with their composition, charter, the number of meetings held, and the attendance at the Meetings held during the year under review, have been provided in the Corporate Governance Report, which forms part of this Annual Report.

j. Company’s Policy on Nomination and Remuneration

The Nomination and Remuneration Committee (‘NRC’) has formulated a Nomination and Remuneration Policy laying out the role of NRC, Policy on Director’s Appointment and Remuneration, including the recommendation of remuneration of the Key Managerial Personnel and Senior Managerial Personnel and the criteria for determining qualifications, positive attributes, and independence of a Director. The updated policy is hosted on the website of the Company and can be accessed through the weblink https://www.mastek. com/wp-content/uploads/2022/07/Nomination-Remuneration-Policy-For-Board-of-Directors-Key-Managerial-Personnel.pdf

Some of the salient features of the policy are as follows:

1. To regulate the appointment and remuneration of Directors, Key Managerial Personnel, and Senior Managerial Personnel (Grade 17 & above) and succession planning;

2. To formulate the criteria for Board Membership, including the appropriate mix of Executive and Non-Executive Directors;

3. To identify persons who are qualified to become Directors as per the criteria / skill matrix as formulated by the Board;

4. To ensure the proper composition of the Board of Directors and Board diversity;

5. To ensure that the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate Key Managerial Personnel and Senior Managerial Personnel and their remuneration involves a balance between fixed and variable (incentive)

pay reflecting short-term and long-term performance objectives appropriate to Company’s working and its goals.

Additionally, the Board has, on the recommendation of the NRC, reviewed the list of core skills / expertise / competencies required from the Directors, in the context of the Company’s business and sector, for it to function effectively.

Please refer to the Notes to Accounts and Corporate Governance Section for the details on the Remuneration of Directors and Key Managerial Personnel.

k. Particulars of Employees and Related Disclosures

The ratio of remuneration of each Director to the median remuneration of Employees as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2016 is annexed as “Annexure 4” to this report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committees of the Company. The Managing Director of the Company has not received any remuneration or commission from any of the Company’s Subsidiaries.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a Statement showing the names and other particulars of the Employees forms part of this report. Having regard to the provisions of the proviso to Section 136(1) of

the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company and others entitled thereto. Details of Employees’ remuneration as required under aforesaid provisions are available with the Company and shall be sent to Members electronically who request the same by sending an e-mail to the Company at [email protected] from their registered e-mail address.

17. Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Act, and rules made thereunder, M/s. Walker Chandiok & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 001076N / N500013) were re-appointed as the Statutory Auditors of the Company to hold office for a second term of 5 (five) consecutive years from the conclusion of the 40th Annual General Meeting, have given their consent for re-appointment as Statutory Auditors for the second term of 5 (five) consecutive years from the Financial Year 2022-23 onwards until the conclusion of the 45th Annual General Meeting, to be held in the Year 2027.

M/s. Walker Chandiok & Co. LLP have confirmed their eligibility and given their consent under Sections 139 and 141 of the Act and the Companies (Audit and Auditors) Rules, 2014 for their continuance as the Statutory Auditors of the Company for the Financial Year 2023-2024. In terms of the SEBI Listing Regulations, the Auditors have also confirmed that they subject themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Report of Statutory Auditors

M/s. Walker Chandiok & Co. LLP, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the Financial Year 2022-23, which forms part of this Annual Report. The reports are selfexplanatory and there were no observations (including any qualification, reservation, adverse remark, or disclaimer) of the Auditors in the Audit Reports issued by them that calls for any explanation from the Board of Directors, and they also did not report any incident of fraud to the Audit Committee of the Company during the year under review.

18. Secretarial Auditors and their Report

Pursuant to Section 204 of the Act and Rules made thereunder, P. Mehta & Associates, Practising Company Secretaries represented by Mr. Prashant Mehta were appointed as Secretarial Auditors of the Company for the Financial Year 2022-23 to conduct the Secretarial Audit and issue the Secretarial Audit Report in Form MR-3. The Secretarial Audit Report issued by Secretarial Auditors for the Financial Year ended March 31, 2023, is annexed as “Annexure 5” to this report.

There were no qualifications or observations, adverse remarks or disclaimer of the Secretarial Auditors in the report issued by them for the Financial Year ended March 31, 2023, and hence, no explanation was required from the Board of Directors. The said report is selfexplanatory and does not call for further comments.

P. Mehta & Associates, Practising Company Secretaries, have been re-appointed to conduct the Secretarial Audit of the Company for the Financial Year 2023-24. They have confirmed that they are eligible for the said re-appointment.

The Company is in compliance with Regulation 24A of the Listing Regulations. The Company’s material Indian subsidiary has undergone Secretarial Audit. Copy of Secretarial Audit Report of Mastek Enterprise Solutions Private Limited (Formerly known as Trans American Information Systems Private Limited), Indian Material Subsidiary forms part of this report and annexed as “Annexure 5 A”. The Secretarial Audit Report of the material subsidiary does not contain any qualification, reservation, adverse remark or disclaimer.

19. Risk Management

Risk Management is an integral and important component of Corporate Governance. The Company has developed and implemented a comprehensive Risk Management Framework, including Cyber security and ESG for the identification, assessment and monitoring of key risks that could negatively impact the Company’s goals and objectives. This framework is periodically reviewed and enhanced under the oversight of the Risk Management & Governance Committee of the Board as well as by the Board of Directors of the Company. The Audit Committee of the Board has additional oversight in the area of financial risks and controls.

Mastek is committed to continually strengthen its Risk Management capabilities in order to protect the interests of stakeholders and enhance shareholder value. The detailed information pertaining to Risk Management is given elsewhere in the Report, which forms part of this Annual Report.

20. Internal Control Systems

Adequacy of Internal Financial Controls

The Company believes that internal control is a necessary prerequisite of governance and that freedom should be exercised within a framework of checks and balances. The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management ensures an effective internal control environment commensurate with the size and complexity of the business, which assures compliance with internal policies, applicable laws, regulations and protection of resources and assets.

Mastek Group has a presence across multiple geographies, and a large number of employees, suppliers and other partners collaborate to provide solutions to customer needs. Robust internal controls and scalable processes are imperative to managing the global scale of operations. The Management has laid down internal financial controls to be followed by the Company.

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

Internal Audit

An independent and empowered Internal Audit Firm at the corporate level carries out risk focused audits across all businesses (both in India and overseas) to ensure that business process controls are adequate and are functioning effectively. These audits include reviewing finance, operations, safeguarding of assets, and compliance-related controls. Areas requiring specialised knowledge are reviewed in partnership with external subject matter experts.

The Internal Audit functioning is governed by the scope of audit duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of the audit. As the business expanded with new acquisitions, the scope has been widened to include the internal control framework of the new entities. The corporate-level process controls, including the ERP framework and operating processes, are constantly monitored for effectiveness during such Audits.

The Company’s senior management closely monitors the internal control environment and ensures that the recommendations of the Internal Auditors are effectively implemented. The Audit Committee periodically reviews key findings and provides strategic guidance. Internal Auditors report directly to the Audit Committee.

21. Human Resources

A key area of focus for the Company is to create a performance-driven workforce while ensuring the health and well-being of employees and their families. Many policies and benefits were implemented to maximise employee engagement and welfare. Mastek also continues to endeavor to create a work environment that is collaborative, encourages learning, and is growth-oriented to enable employees to perform at their full potential. Mastek believes in an open and transparent work culture that places adequate emphasis on Mastekeers work experience, feedback, and suggestions. Mastek organises regular engagement activities including interactions with all leaders including Executive leaders in the organisation through various forums. In addition, forums such as regular org-wide and function

level connects, and Quarterly Meets, and meetings provide opportunities for Mastekeers interaction with the management.

As of March 31, 2023, Mastek Group had a total headcount of 5,622. Mastek Group continues to focus on attracting new talent and helping them to acquire new skills, explore new roles, and realise their potential by providing training and retaining top talent.

22. Management of Equality, Risks of Fraud,

Corruption, and Unethical Business Practices

• Equal opportunity employer

The Company has always provided a congenial atmosphere for work, free from discrimination and harassment (including but not limited to sexual harassment). It has also provided equal opportunities for employment to all irrespective of their personal background, ethnicity, religion, marital status, sexual orientation, or gender.

• Code for Prevention of Insider Trading Practices

The Company has adopted the “Code of Internal Procedures and Conduct for regulating, monitoring and reporting of trading by Insiders” in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 to regulate, monitor and report trading by its Designated Person(s) / and other connected person(s). Further, for effective implementation of the Code, the Company has put in place the penalty framework and the internal guidelines on violation of the said Code.

The Company’s “Code of practices and procedures for fair disclosure of unpublished price-sensitive information” is available on the Company’s website and can be accessed through the web link https:// www.mastek.com/wp-content/uploads/2021/10/ code-of-practices-and-procedures-for-fairdisclosure-of-upsi.pdf

• Establishment of Vigil Mechanism (WhistleBlower Policy)

The Vigil Mechanism as envisaged under the Act, the Rules prescribed thereunder, and the SEBI Listing Regulations are implemented through the Company’s Whistle-Blower Policy which establishes a formal vigil mechanism for the Directors, Mastekeers, and Stakeholders and provides a mechanism for reporting concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct and Ethics. It also provides adequate safeguards against the victimisation of the complainant who avails the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy / Vigil Mechanism is placed on the website

of the Company and can be accessed through the weblink https://www.mastek.com/wp-content/ uploads/2022/07/G roup-Whistle- Blower- Policy. pdf

• Anti-Bribery and Corruption Policy

In furtherance of the Company’s Philosophy of conducting business in an honest, transparent, and ethical manner, the Board has laid down the ‘Anti-Bribery and Corruption Policy’ as part of the Company’s Code of Business Conduct and Ethics. Our Company has zero tolerance for bribery and corruption and is committed to acting professionally and fairly in all its business dealings. Awareness of the policy is ensured through mandatory online training and understanding is confirmed through a test that has a minimum threshold for passing and generating a certificate of successful completion.

23. Disclosures as per the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, and Redressal) Act, 2013

The Company has zero-tolerance for sexual harassment in the workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company has complied with provisions relating to the constitution of the Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

All women employees, whether permanent, temporary, or contractual, are covered under the above policy. The said policy has been uploaded on the internal portal of the Company for information of all employees. Periodic sessions were also conducted to apprise employees and build awareness of the subject matter. Our key focus is to create a safe, respectful, and inclusive workplace that fosters professional growth for each employee.

Your Company has constituted an Internal Committee (IC) to consider and resolve all sexual harassment complaints if any, reported by women. The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted, and decisions are made by the IC at the respective locations, and a senior woman employee is a presiding officer over every case. More than half of the total members of the IC are women. The role of the IC is not restricted to the mere redressal of complaints but also encompasses the prevention and prohibition of sexual harassment. In the last few years, the IC has worked extensively on creating awareness of the relevance of sexual harassment issues in the new normal by using new and innovative measures to help

employees understand the forms of sexual harassment while working remotely.

During the year under review, no complaint with allegations of sexual harassment was filed, and there was no complaint or pending investigations at the end of the year.

24. Corporate Social Responsibility (CSR)

Mastek has been an early adopter of CSR initiatives. Mastek Foundation is the CSR wing of the Company. Founded in 2002, the mission of Mastek Foundation is Informed Giving, Responsible Receiving. The institution seeks to inspire Company employees by creating awareness among them to give back to the community through mediums such as volunteering and giving opportunities. The Foundation also supports Non - Governmental Organisations (NGOs) to scale and build their capabilities through the core skill of Information Technology. Hence, the Mastek Foundation has 3 (three) clearly defined pillars: GIVE, ENGAGE, and BUILD.

The disclosures required to be given under Section 135 of the Act, read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, are annexed as “Annexure 6” to this report.

The CSR Policy of the Company is posted on the website of the Company and can be accessed through the weblink https://www.mastek.com/wp-content/ uploads/2022/07/Corporate-Social-Responsibility-Policy-2022.pdf

25. Business Responsibility and Sustainability Report (BRSR)

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report for the Financial Year ended March 31, 2023 forms part of the Annual Report. The Company continues to execute strong ESG proposition by working with all relevant stakeholders as well as in its own operations. The detailed Report given elsewhere in this report, forms part of this report.

26. Corporate Governance Practices

The Company has a rich legacy of ethical governance practices and follows sound Corporate Governance practices with a view to bringing transparency to its operations and maximising shareholder value. The Company continues to maintain high standards of Corporate Governance, which has been fundamental to and is an integral principle of the business of your Company since its inception. Your Directors reaffirm their continued commitment to good corporate governance practices. A Report on Corporate Governance along with a Certificate from the Secretarial Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under

Schedule V of the SEBI Listing Regulations forms part of this Annual Report.

27. Annual Return

As required under the provisions of Sections 134(3)(a) and 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7 (of Financial Year 2022-23) has been made available on the website of the Company and can be accessed through the weblink: https://www.mastek.com/investor-information/.

28. Compliance with Secretarial Standards

During the year under review, the Company has complied with the applicable Secretarial Standards on Meetings of the Board of Directors and on General Meetings issued by the Institute of Company Secretaries of India in terms of Section 118(10) of the Act.

29. Directors & Officers Insurance Policy

The Company has sufficiently insured itself under various Insurance policies to mitigate risks arising from third- party or customer claims, property, casualty, etc. The Company also has in place an insurance policy for its “Directors & Officers” with a quantum and coverage as approved by the Board. The policy complies with the requirements of Regulation 25(10) of the SEBI Listing Regulations.

30. Details of Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo

(A) Conservation of energy

Mastek delivers value and upholds the trust of not only its customers but also of its stakeholders including its employees, its suppliers and partners, the society it has impact on and the shareholders who invest in the company. The ESG roadmap is aimed to lay out the actions that Mastek will take and execute to achieve its sustainability objectives going beyond the minimum disclosure requirements and regulatory compliance.

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

Mastek being an IT/ITES company we mainly focus on reducing energy consumption across all offices. To achieve the same we have prepared action plan 6 years back and same has been implemented in phases.

Action Plan:

1. Survey of electrical infrastructure for breakdown of energy use across the units.

2. Identification of challenges for seamless implementation of the plan. Implementation of Smarter solutions,

3. Processes and Optimal use & Upgrade of the systems

4. Monitor and measure the energy consumption.

To achieve the set target of energy savings, we planned and executed below actions.

• Switching to HT express electricity feeder, wherever feasible to cut down power shutdowns.

• Shutting Down and Switching off the Lights and AC’s after working hours.

• Maintenance and Servicing of HT/LT electrical supply systems on periodic basis to minimise breakdowns and thereby reducing DG operations and diesel consumption.

• Upgradation of obsolete HT/LT systems with new energy efficient systems.

• Upgradation of old HVAC with energy efficient HVAC system. Optimization and Upgrade of UPS system.

• Replacement of CFL lights with LED lights across all offices.

• Upgradation of conventional datacenter with energy efficient smart rack system.

• Installation of solar water heaters for cafeteria.

(ii) the steps taken by the Company for utilising alternate sources of energy:

• As a policy our new offices across globe are placed in LEED or Energy certified buildings.

• Refurbishment of existing offices in line with LEED standards.

We have started doing carbon offsetting to compensate GHG emission done by our offices in UK.

• Same will be implemented across all offices in phase manner.

• We are open to adopt renewable power like solar /wind wherever feasible for all our offices.

(iii) the capital investment on energy conservation equipments:

• In line with our energy optimisation plan, we have implemented various initiatives which are mentioned above in point (i). Till Financial Year 2023, we have invested approx. INR 4 Crores for energy conservation initiatives across Mastek’s offices.

(B) Technology absorption

We have always been focused for adopting technology to facilitate business growth. In FY23, we continued to invest in digital technologies, which have helped us improve operational efficiencies and customer experiences.

Efforts made towards technology absorption are:-

• For procurement and billing we have implemented procure to pay platform.

• For travel booking and billing we have implemented Travel and Expense management platform.

(C) Foreign exchange earnings and outgo

Total Foreign Exchange used and earned by the Company are as follows:

('' in lakhs)

Year ended

Year ended

March 31, 2023

March 31, 2022

Foreign Exchange Outgo

155

357

Foreign Exchange Earned

28,781

28,317

31. Environmental, Social and Governance (ESG)

While laying out a strategic approach to achieve the ESG goals in all areas and levels in the Company, this year along with prioritising Goal 4 (Quality Education), Goal 5 (Gender Equality), Goal 6 (Clean Water and Sanitation), Goal 8 (Decent Work and Economic Growth) and Goal 13 (Climate Action) of the United Nation’s Sustainable Development Goals, we have also focused on aligning to Goal 1 (promotes livelihood and health among women impacted by poverty), Goal 2 (Zero hunger), Goal 7 (affordable, reliable, sustainable and modern energy) and Goal 12 (sustainable consumption and production).

a. Environment

Climate change needs global attention and action and Mastek recognises its role to be part of the solution. We aim to deal with climate action within our operations and engage with stakeholders for the global program.

Our steady focus on responsiveness to the needs of the environment ecosystem will continue to be in three main areas:

• Decreasing carbon emissions through energy efficiency and conservation while moving to renewable energy,

• Minimising waste going to landfills.

• Conserving freshwater.

Mastek (UK) Limited (“Mastek UK”), a Subsidiary of the Company is committed to achieving carbon neutrality by Financial Year 2030 followed by Net-Zero Emissions by Financial Year 2040.

Energy Efficiency:

We are taking initiatives mentioned below that

reduce our electricity energy consumption.

• Energy efficient retrofits/utilities system upgradation.

• New offices in LEED/Energy certified buildings.

• Switching to renewable energy supply source, wherever feasible.

Responsible Sourcing:

• We are switching to ecofriendly/less polluting alternatives such as refrigerants with lower ozone depletion potential.

• Priority is given for procuring products with high energy /green rating.

Carbon Offsets:

• We have successfully completed carbon offsetting of Mastek UK emissions reported for FY 2019-20. We have started our carbon offsetting journey by contributing for solar, wind projects and energy efficient cook stoves in various certified carbon offset projects.

• We have completed our carbon emissions reporting of Mastek UK for FY 2021-22. We also plan to offset these emissions by contributing in carbon offset projects.

• Please find below the link w.r.t. Mastek UK carbon assessment:

https://www.mastek.com/statutory-

compliance/

• We are monitoring our electricity consumption of our global offices.

Health & Safety:

Post pandemic work from office culture is slowly picking up. We are pursuing best housekeeping practices in all our offices to maintain overall hygiene and safety standards.

Our Mahape, Seepz SDF 4 and Acropolis Ahmedabad offices are accredited by DNV for ISO 14001:2015 (EMS) & ISO 45001:2018 (OHSAS).

In view of creating awareness and improving competencies we have regular online sessions by subject experts for employees on the Environment, Health and Safety topics.

b. Social

Mastek has strong and established CSR framework.

It drives the CSR through Mastek Foundation (www.

mastekfoundation.in), the CSR arm of Mastek was

founded in 2002.

Its mission is - ‘Informed Giving, Responsible Receiving’.

Mastek has been an early adopter of CSR initiatives. The institution seeks to inspire Company employees by creating awareness among them to give back to the community in ways which would meet the needs and challenges faced by the community members. One such medium could be through volunteering and giving opportunities. Mastek Foundation, together with Mastek has a payroll giving programme which encourages employees to come forward and contribute to society as informed givers. Every quarter-end, since 2017, your Company holds a ‘Gratitude is Attitude’ event, bringing together all its employees and the charities to present themselves for donations from the employees. Mastek is committed to touch a million lives through its CSR programme by FY 2028. The Foundation also supports Non-Governmental Organisations (NGOs) to scale and build their capabilities through Information Technology skills. Hence, the Foundation has 3 clearly defined pillars: GIVE, ENGAGE and BUILD. In the Financial Year 2022-23, Mastek collaborated with about 28 NGOs which benefited about 43,464 people in need.

The disclosures required to be given under Section 135 of the Act, read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is annexed as “Annexure 6” to this report.

The CSR Projects and the CSR Policy of the Company is available on the Company’s website and can be accessed through the weblink https:// www.mastek.com/wp-content/uploads/2022/07/ Corporate-Social-Responsibility-Policy-2022.pdf.

c. Governance

Mastek has a rich legacy of ethical governance practices and follows sound corporate governance practices with a view to bringing transparency to its operations and maximising shareholder value. The Company continues to maintain high standards of corporate governance, which has been fundamental to and is an integral principle of the business of your Company since its inception. Mastek’s Directors reaffirm their continued commitment to good corporate governance practices. A report on corporate governance along with a certificate from the Secretarial Auditors of the Company regarding compliance with the conditions of corporate governance as stipulated under Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

32. Other Disclosures

No disclosure or reporting was made with respect to the

following items, as there were no transactions during

the year under review:

• The Company does not have any scheme or provision of money for the purchase of its own shares by trustees for employee benefit.

• The Company is not required to maintain cost records as per Section 148 of the Act.

• There was no buyback of shares during the year under review.

• The Company has not accepted any deposits from the public under the provisions of the Act and the rules framed thereunder.

• The Company has not failed to implement any corporate action during the year under review.

• The Company’s securities were not suspended during the year under review.

• The Company has not issued equity shares with differential rights as to dividend, voting, or otherwise.

• There was no revision of financial statements and the Board’s Report of the Company during the year under review requiring shareholders approval.

• No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of the application made or

any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year is not applicable.

• There are no significant and material orders passed by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations and legal compliances. However, Members’ attention is drawn to the statement on contingent liabilities, commitment in the notes forming part of the financial statement as.

• The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions.

33. Amendment to the Articles of Association

The Board of Directors of the Company, at their meeting held on March 21, 2023, approved the amendments to the Articles of Association approving the appointment of two Promoter Directors and also agreed to incorporate the relevant amended provisions of the Shareholders’ Agreement, which was modified and executed between the Company, its Promoters, and New Shareholders. Accordingly, the Company has proposed the amendments to the Articles of Association of the Company as a consequence of the amendment of the Shareholders’ Agreement and also added an article stating the appointment of Two Promoter Directors in

terms of the Articles of Association of the Company, through a said Postal Ballot. The results of the Postal Ballot will be declared on or before May 3, 2023.

34. Directors’ Responsibility Statement

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, audits, and reviews are performed by the Internal, Statutory, and Secretarial Auditors, and the reviews are undertaken by the Management and the Audit Committee, the Board is of the opinion that the Company’s Internal Financial Controls have been adequate and effective during the year under review.

In terms of Section 134(3)(c) of the Act, your Directors would like to make the following statements to the Members, to the best of their knowledge and belief and according to the information and representations obtained by the Management:

(a) that in the preparation of the Annual Financial Statements for the year ended March 31, 2023, 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 the Notes to the Financial Statements have been selected and applied consistently, and judgements 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 March 31, 2023, and of the profits 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 Act 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 such internal financial controls are adequate and were operating effectively; and

(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.

35. Industry Recognition:

During the year under review, your Company, Subsidiaries and its officials received various awards and felicitations conferred by reputable Organisations. The detailed updates on the same is included elsewhere in this Annual Report.

36. Acknowledgements

Your Directors thank all the customers, associates, vendors, investors, and bankers across the globe, for their continued support during the year under review. Your Directors place on record their sincere appreciation for the enthusiasm and the commitment for the growth and also the contribution made by the employees at all levels. The Company’s consistent growth was made possible by their hard work, solidarity, co-operation, and support.

Your Directors are grateful to the Investors for their continued support, trust, patronage and confidence in the Company over last more than 4 (four) decades. Your directors would like to make a special mention of the support extended by the various Departments of the Central and State Governments, particularly the Software Technology Parks of India, Development Commissioners - SEZ, the Department of Communication and Information Technology, the Direct and Indirect Tax Authorities, the Ministry of Commerce, the Reserve Bank of India, Ministry of Corporate Affairs / Registrar of Companies, Securities and Exchange Board of India, the Stock Exchanges and others and look forward to their continued support in all future endeavors.

With continuous learning, the skill upgradation and technology development, Company will continue to provide world class professionalism and services.

Your Directors look forward to the long-term future with confidence.

For and on behalf of the Board of Directors

Ashank Desai

Chairman (DIN: 00017767)

Date: April 19, 2023 Place: Mumbai


Mar 31, 2022

The Board of Directors (“Board”) of your Company is pleased to present the 40th Annual Report of Mastek Limited (“Mastek” or “the Company” or “Your Company”) on the business and operations together with the Audited Financial Statements (Consolidated and Standalone) for the Financial Year ended March 31, 2022.

In compliance with the applicable provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force) (“the Act”) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), this report covers the financial results and other developments during the Financial Year ended March 31, 2022.

1. Financial Results

Key highlights of the Financial Results (Consolidated and Standalone) of your Company for the Financial Year ended March 31, 2022, as compared to the previous Financial Year are summarised below:

('' in lakhs)

Consolidated

Standalone

Summarised Profit and Loss

Financial Year 2021-22

Financial Year 2020-21

Financial Year 2021-22

Financial Year 2020-21

Revenue from operations

218,384

172,186

25,670

18,714

Other income

3,608

2,791

7,354

3,487

Total Income

221,992

174,977

33,024

22,201

Expenses

172,133

135,739

22,286

16,968

Depreciation and amortisation expenses

4,287

4,495

1,242

1,079

Finance costs

768

810

54

58

Exceptional items - (loss) / gain

-

-

145

(459)

Profit Before Tax

44,804

33,933

9,587

3,637

Tax expense

11,462

8,758

1,876

1,750

Profit After Tax

33,342

25,175

7,711

1,887

Other Comprehensive Income

2,573

13,709

554

(313)

Total Comprehensive Income

35,915

38,884

8,265

1,574

Attributable to Equity Holders

35,915

38,884

8,265

1,574

Dividend

(4,753)

(1,362)

(4,753)

(1,362)

EPS (in '')

- Basic

106.52

84.92

27.83

7.65

- Diluted

103.81

81.88

27.13

7.38

Note: The above figures are extracted from the Consolidated and Standalone Financial Statements, which have been prepared in compliance with the Indian Accounting Standards (Ind AS), and it complies with all aspects of Ind AS notified under Section 133 of the Act read with [Companies (Indian Accounting Standards) Rules, 2015 (amended)] and other relevant provisions thereof. There are no material departures from the prescribed norms stipulated by the Accounting Standards in preparation for the Annual Accounts. Accounting policies have been consistently applied, except where a newly issued Accounting Standard, if initially adopted or a revision to an existing Accounting Standard, required a change in the Accounting Policy hitherto in use. Management evaluates all recently issued or revised Accounting Standards on an ongoing basis.

• Break-up of the Operating Revenue by Geographies

Year ended March 31, 2022

Year ended March 31

, 2021

Geographies

'' in lakhs

% of Revenue

'' in lakhs

% of Revenue

UK & Europe

148,485

68.0

116,089

67.4

North America

38,556

17.7

28,755

16.7

Middle East

19,006

8.7

18,948

11.0

Rest of the World

12,337

5.6

8,394

4.9

Total

218,384

100.0

172,186

100.0

• Break-up of the Revenue by Service Lines

Year ended March 31, 2022

Year ended March 31

, 2021

Service Lines

'' in lakhs

% of Revenue

'' in lakhs

% of Revenue

Digital & Application Engineering

99,428

45.5

82,269

47.8

Oracle Cloud & Enterprise Apps

72,000

33.0

52,272

30.4

Digital Commerce & Experience

25,789

11.8

23,612

13.7

Data, Automation, and AI

21,167

9.7

14,033

8.1

Total

218,384

100

172,186

100

• Break-up of the Revenue by Customer Segments

Year ended March 31, 2022

Year ended March 31

, 2021

Customer Segments

'' in lakhs

% of Revenue

'' in lakhs

% of Revenue

Government & Education

82,023

37.6

62,199

36.1

Health & Life science

51,247

23.5

39,407

22.9

Retail & Consumers

32,548

14.9

28,666

16.6

Manufacturing & Technology

28,254

12.9

17,513

10.2

Financial Services

24,312

11.1

24,401

14.2

Total

218,384

100

172,186

100


2. An Overview of the Company’s overall Financial Performance • Mastek Operations

On a Consolidated basis, the Company and its Subsidiaries (“Mastek Group”) registered revenue from operations of ''218,384 lakhs for the year ended March 31, 2022 (as compared to ''172,186 lakhs in the previous year ended March 31, 2021), which is an increase of 26.8%. The Mastek Group registered a Net Profit of ''33,342 lakhs for the year ended March 31, 2022 (as compared to ''25,175 lakhs in the previous year ended March 31, 2021), thereby registering an increase of 32.4%. Further details are included in notes to the Accounts of Consolidated Financial Statement, which forms part of this Annual Report.

On a Standalone basis, the Company registered revenue from operations of ''25,670 lakhs for the year ended March 31, 2022 (as compared to ''18,714 lakhs in the previous year ended March 31, 2021).

The Company also made a Net profit of ''7,711 lakhs for the year ended March 31, 2022 (as compared to a Net Profit of ''1,887 lakhs in the previous year ended March 31, 2021). Further details are included in notes to the Accounts of Standalone Financial Statement, which forms part of this Annual Report.

The Financial Statements of the Company have been prepared based on the Audited Financial Statements of the Company and Audited Financial Statements of its Subsidiaries, which have been reviewed by the Statutory Auditors of the Company.

The Company discloses Consolidated and Standalone Financial Results on a quarterly basis, which are subject to limited review, and publishes Consolidated and Standalone Audited Financial Results on an annual basis.

The UK & Europe Geography operations contributed ''148,485 lakhs to total Operating Revenue for the year ended March 31, 2022 (as compared to ''116,089 lakhs in the previous year ended March 31, 2021), resulting in a growth of 27.9%.

The North America Geography operations contributed ''38,556 lakhs to total Operating Revenue for the year ended March 31, 2022 (as compared to ''28,755 lakhs in the previous year ended March 31, 2021), resulting in an increase of 34.1%.

Profitability

During the year ended March 31, 2022, Mastek Group earned a profit of ''33,342 lakhs (as compared to ''25,175 lakhs for the year ended March 31, 2021). The profits for the Financial Year ended March 31, 2022 witnessed growth on account of the following:

Further, a detailed analysis of the Company’s performance is included in the Management Discussion and Analysis Section, which forms part of this Annual Report.

The Middle East operations contributed ''19,006 lakhs to total Operating Revenue for the year ended March 31, 2022 (as compared to ''18,948 lakhs in the previous year ended March 31, 2021), resulting in an increase of 0.3%.

Revenue from the Rest of the World’s Geographies i.e. India and Asia Pacific operations contributed ''12,337 lakhs to total Operating Revenue for the year ended March 31, 2022 (as compared to ''8,394 lakhs in the previous year ended March 31, 2021), resulting in a growth of 47.0%.

(a) Productivity and other operational improvements;

(b) Profitable growth across geographies and accounts, and;

(c) Better management of variable cost structure and profitability levers.

3. Material Changes & Commitments and Changes in Nature of Business

There have been no material changes and commitments affecting the financial position of the Company, which have occurred from the end of the Financial Year of the Company to which the Financial Statements relate till the date of this Report.

There has been no change in the nature of business of your Company.

4. Transfer to General Reserves

No part of the profit for the year was transferred to General Reserves during the year under review.

5. Dividend

Pursuant to Regulation 43A of the SEBI Listing Regulations, your Company has a well-defined Dividend Distribution Policy that balances the dual objectives of rewarding Members through dividends whilst also ensuring availability of sufficient funds for growth of the Company. The Policy is available on the website of the Company and can be accessed through the web link https://www.mastek.com/wp-content/uploads/2022/07/ Dividend-Distribution-Policv.pdf.

Interim Dividend

The Board of Directors at its meeting held on January 19, 2022, declared an Interim Dividend at the rate of 140% i.e., ''7.00 per equity share (on the face value of ''5.00 per equity share). The above dividend was paid to the Members on February 15, 2022. The Company had deducted tax at source at the time of payment of dividend in accordance with the provisions of the Income Tax Act, 1961.

Final Dividend

Your Directors are pleased to recommend a Final Dividend at the rate of 240%, i.e., ''12.00 per equity share (on the face value of ''5.00 per equity share) for the Financial Year ended March 31, 2022, which will be paid upon obtaining the Members’ approval at the ensuing Annual General Meeting. The Final Dividend, if approved, will be paid (subject to deduction of tax at source) within 30 (thirty) days from the date of the Annual General Meeting to those Members whose names appear in the Register of Members as on the cut-off date mentioned in the Notice convening the 40th Annual General Meeting.

The total dividend for the Financial Year ended March 31, 2022, including the proposed Final Dividend, amounts to ''19.00 per equity share (on the face value of ''5.00 per equity share) or 380% (previous year ''14.50 per share or 290%).

6. Transfer of Unclaimed Dividend Amount and Underlying Shares to Investor Education and Protection Fund Authority

As required under the provisions of Section 125 and other applicable provisions of the Act, dividends that

remain unpaid / unclaimed for a period of 7 (seven) consecutive years, are required to be transferred to the account administered by the Central Government viz. Investor Education and Protection Fund (“IEPF”). Further, according to the said Rules, the shares on which dividend has not been encashed or claimed by the Members for 7 (seven) consecutive years or more shall also be transferred to the Demat account of the IEPF Authority.

During the year under review, pursuant to the provisions of Section 124 (5) of the Act, the Final Dividend for the Financial Year 2013-14 amounting to ''431,830 and Interim Dividend for the Financial Year 2014-15 amounting to ''255,341 which remained unclaimed for 7 (seven) consecutive years and was lying in the unpaid dividend account, has been transferred by the Company to the IEPF Authority and the underlying shares on the above-unclaimed amount of dividend aggregating to 2,719 equity shares and 947 equity shares respectively, have also been transferred to the Demat account of the IEPF Authority.

The relevant dates of the unpaid / unclaimed dividend amount which will be transferred to the IEPF Authority in the current year and subsequent years are given in the Corporate Governance Report, which forms part of this Annual Report.

7. Management Discussion and Analysis

In terms of provisions of Regulation 34(2) of the SEBI Listing Regulations, a detailed Management Discussion and Analysis Section forms an integral part of this Report and, inter alia, gives an update on the following matters

• Economy review

• Industry review

• Company overview

• Financial review

• Operational review

• Business outlook

• Information Technology

• Research and Development

• Risks and Concerns

• Internal Control Systems

8. Credit Rating

The Company’s financial discipline is reflected in the strong credit rating ascribed to it by ICRA Limited, a reputed credit rating agency. During the year under review, the following ratings ascribed by ICRA Limited reflect that the Company has serviced its financial obligations on time.

Instrument

Rating Received

Long-term Fund-based

[ICRA]AA-(Stable) reaffirmed / assigned

Short-term Non-fund based

[ICRA]A1 reaffirmed / assigned

Long-term / Short-term Fund

[ICRA]AA-(Stable) / [ICRA]A1

based / Non-fund based

reaffirmed

The reaffirmation reflects your Company’s continued strong parentage, credit profile, liquidity position, strong corporate governance practices, financial flexibility, and prudent financial policies.

The Company has not issued any debt instruments and did not have any fixed deposit programme or any scheme or proposal involving the mobilisation of funds in India or abroad during the Financial Year ended March 31, 2022.

9. EMPLOYEE STOCK OPTION PLANS

The Company has 3 (three) ongoing Employee Stock Option Plans (ESOPs) at present. The Members approved the ESOP V by way of Postal Ballot on March 20, 2009, approved the ESOP VI in the Annual General Meeting held on October 1, 2010, and approved the ESOP VII in the Annual General Meeting held on July 17, 2013 for issuance of the Employee Stock Options (“Options”) to the identified employees of the Company. The First 4 (four) plans I to IV, have been closed by the Company.

The Nomination and Remuneration Committee of the Company, inter alia, administers and monitors ESOPs, implemented by the Company in accordance with the relevant provisions of the Act and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,

2021, (including any statutory modification(s) and / or re-enactment(s) thereof for the time being in force) (“SEBI SBEB Regulations”). During the year under review, the Company had granted 14,530 Options to its identified employees. The Company has not introduced any new plan during the year under review.

The Certificate from the Secretarial Auditor, confirming the compliance of ESOPs with the provisions of the Act and SEBI SBEB Regulations, will be obtained and shall be available for inspection by the Members. The Members desiring inspection may write at investor_grievances@ mastek.com

During the year under review, there were no material changes in the ESOPs of the Company. The details of the Options granted under the aforesaid ESOPs and the disclosure in compliance with SEBI SBEB Regulations for the year ended March 31, 2022 is annexed as “Annexure 1” to this report and has also been uploaded on the website of the Company.

10. Increase in Issued, Subscribed, and Paid-Up Equity Share Capital

During the year, the Company had issued and allotted 295,083 equity shares of the face value of ''5 each for a total nominal value of ''1,475,415 under various Employee Stock Option Plans to the employees who exercised their vested Employee Stock Options. These equity shares ranked pari passuin all respects with the existing equity shares of the Company.

The Company on receipt of order in the Company Application No. CA (CAA) No. 18/AHM/2021 dated April 12, 2021 from the National Company Law Tribunal, Ahmedabad Bench at Ahmedabad (“NCLT / Tribunal”) held the Meetings of the Equity Shareholders and Unsecured Creditors of the Company on May 28,

2021 and the Scheme of Arrangement was approved. Afterwards, the NCLT Ahmedabad Bench vide its order dated September 14, 2021, approved and sanctioned the Scheme of Arrangement amongst Evolutionary Systems Private Limited, Trans American Information Systems Private Limited and Mastek Limited and their respective Shareholders and Creditors pursuant to Sections 230 to 232 of the Act, read with Companies (Compromise, Arrangements, and Amalgamations) Rules, 2016. The Company accordingly had issued and allotted 4,235,294 equity shares having the face value of '' 5 each at an issue price of ''650 per share (including premium of ''645 per share) to the Shareholders of Evolutionary Systems Private Limited in terms of the approved Scheme of Arrangement.

Further, the Board of Directors of the Company, by virtue of a Special Resolution passed by the Members of the Company through Postal Ballot on January 17, 2022, approved and allotted 254,755 equity shares having the face value of ''5 each at an issue price of ''3,194 per share (including premium of ''3,189 per share), aggregating to ''81.37 crores on a private placement basis through the preferential allotment on February 10, 2022 towards buyout of 1st tranche of Compulsorily Convertible Preference Shares (CCPS) from CCPS holders of Trans American Information Systems Private Limited, Subsidiary of the Company. The issue price was determined in accordance with the applicable provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.

The movement of Share Capital during the year was as under:

Particulars

No. of shares issued and allotted

Cumulative outstanding No. of shares

Cumulative outstanding Total share capital (in '')

Share Capital at the beginning of the year, i.e. as on April 1, 2021

-

25,232,889

126,164,445

Allotment of Shares:

1. April 1, 2021 - Under ESOP

2,288

25,235,177

126,175,885

2. April 26, 2021 - Under ESOP

26,920

25,262,097

126,310,485

3. May 30, 2021 - Under ESOP

10,578

25,272,675

126,363,375

4. July 15, 2021 - Under ESOP

117,190

25,389,865

126,949,325

5. July 23, 2021 - Under ESOP

7,150

25,397,015

126,985,075

6. September 13, 2021 - Under ESOP

13,290

25,410,305

127,051,525

7. September 17, 2021 - Under Scheme of Arrangement

4,235,294

29,645,599

148,227,995

8. October 18, 2021 - Under ESOP

6,138

29,651,737

148,258,685

Particulars

No. of shares issued and allotted

Cumulative outstanding No. of shares

Cumulative outstanding Total share capital (in '')

9. November 3, 2021 - Under ESOP

38,500

29,690,237

148,451,185

10. December 9, 2021 Under ESOP

33,617

29,723,854

148,619,270

11. February 8, 2022- Under ESOP

20,118

29,743,972

148,719,860

12. February 10, 2022 - Under Preferential Issue

254,755

29,998,727

149,993,635

13. February 27, 2022 - Under ESOP

4,225

30,002,952

150,014,760

14. March 18, 2022 - Under ESOP

15,069

30,018,021

150,090,105

Share Capital at the end of the year, i.e. as on March 31, 2022

-

30,018,021

150,090,105

and conditions of the transactions. A significant quantum of Related Party Transactions undertaken by the Company is with its Subsidiaries. The said transactions were unanimously approved by the Audit Committee as well as by the Board. There are no materially significant Related Party Transactions that may have potential conflict with the interest of the Company at large.

The SEBI vide amendments to the SEBI Listing Regulations has introduced changes in the Related Party Transactions framework, inter alia, by enhancing the purview of the definition of the Related Party, and overall scope of transactions with Related Parties effective April 1, 2022. Consequently, the Board of Directors on recommendations of the Audit Committee has approved the revised Policy on “Related Party Transactions” of the Company to align it with the amendments notified by the SEBI Listing Regulations.

The details of the Related Party Transactions as per Indian Accounting Standards (Ind AS) - 24 are set out in notes to the Standalone Financial Statements of the Company. The Company in terms of Regulation 23 of the SEBI Listing Regulations submits within the stipulated time from the date of publication of its Standalone and Consolidated Financial Results for the half-year, disclosures of Related Party Transactions on a consolidated basis, in the format specified in the relevant Accounting Standards to the Stock Exchanges.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as “Annexure 3” to this Report.

14. Particulars of Loans, Guarantees and Investments

The particulars of Loans, Guarantees given, and Investments made by the Company during the year under review and as covered under the provisions of Section 186 of the Act have been disclosed in the notes to the Standalone Financial Statements forming part of the Annual Report. In compliance with the provisions of the Act, there were no Loans given by the Company during the year. However, the Company has provided a Guarantee and also security / charge / mortgage over its properties as a security for loan facilities availed by its Subsidiaries.

The Company is in the process of initiating strategic steps to fuel its digital transformation growth in cloud migration services and is expediting its plan to scale up its capacity, and coverage to diversify its geographic concentration and seek leverage on customer velocity. Further, the Company is consolidating and synergising the internal assets to build futuristic solutions in its products to embrace future trends all of which need sizeable investment and capital requirements. The Board has considered to raise funds by way of exercise of borrowing powers for which increase in the overall borrowing limits is being proposed for ease and financial support in business operations and expansions and to facilitate funding to its Subsidiaries and Joint Ventures.

Your Company is listed on the Stock Exchanges with the BSE Limited and National Stock Exchange of India Limited and the Company has not issued any equity shares with differential rights as to dividend, voting, or otherwise, and shares are actively traded on the aforementioned Exchanges and have not been suspended from trading. Also, the Share Capital Audit Report as per the SEBI Listing Regulations is conducted on a quarterly basis by P. Mehta & Associates, Practising Company Secretaries, and is duly forwarded to the aforementioned Exchanges where the equity shares of the Company are listed.

11. Subsidiaries

A list of bodies corporate which are Subsidiaries of your Company is provided as part of the notes to the Consolidated Financial Statements. During the year under review, a new entity was incorporated in Canada, USA.

In accordance with Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of all Subsidiaries of the Company, if any, in prescribed Form AOC - 1 is annexed as “Annexure 2” to this Report. The statement also provides details of the performance and financial position of each of the Subsidiaries.

During the Financial Year 2021-22, the Company had no Associate or Joint Venture Company.

Further, pursuant to the provisions of Section 136(1) of the Act, the Financial Statements including, Consolidated Financial Statements along with relevant documents and separate Financial Statements in respect of Subsidiaries, are available on the website of the Company and the same are also available for inspection by the Members.

There have been no material changes in the nature of the business of any of the Company’s Subsidiaries.

12. Material Subsidiaries

Mastek (UK) Limited, Mastek Enterprise Solutions Private Limited (Formerly known as Trans American Information Systems Private Limited), and Evolutionary Systems Company Limited are ‘Material Subsidiaries’ as per the criteria given under Regulation 16 of the SEBI Listing Regulations. As a good corporate governance practice and as stipulated under the SEBI Listing Regulations, the Company has already appointed at least one Independent Director on the Board of each of these Subsidiaries.

The Company monitors the performance of its Subsidiaries, inter alia, by the following means:

• The Financial Statements and in particular, investments made by the Unlisted Subsidiary Companies are reviewed by the Audit Committee of the Company.

• The Minutes of the Board Meetings of the Subsidiary Companies are placed before the Board of

the Company.

• The details of any significant transactions and arrangements entered into by the Unlisted Subsidiary Companies are placed before the Board of the Company.

• The identified Senior Managerial Personnel are appointed as the Directors of Subsidiary Companies, and they also apprise on a quarterly basis to the Company’s Board / Committees.

As required under Regulation 16 of the SEBI Listing Regulations, the Company has formulated a “Policy for determining Material Subsidiaries” and posted the same on the website of the Company and can be accessed through the weblink at https://www.mastek.com/ wp-content/uploads/2022/07/Policy-for-determining-Material-Subsidiaries.pdf.

13. Related Party Transactions

During the year under review, the Company has not entered into any material transactions with Related Parties (except with its Subsidiaries, which are exempt for the purpose of Section 188(1) of the Act). As defined under Section 2(76) of the Act, read with Companies (Specification and Definitions Details) Rules, 2014, all of the Related Party Transactions entered into were in ordinary course of business and on an arm’s length basis and in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. There are no materially significant Related Party Transactions made by the Company with its Promoters, Directors or Key Managerial Personnel, etc., which may have potential conflict with the interest of the Company at large.

All transactions with Related Parties are placed before the Audit Committee for its approval. Omnibus approvals are given by the Audit Committee on yearly basis for the transactions, which are anticipated and are repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value, and terms

Further, the Company will be required to offer financial facilities by way of Corporate Guarantees / Stand by Letter of Credit and will also be availing loan facility for its increased business operations and will be required to provide security by way of charge, mortgage or encumbrance on its own assets.

Considering the overall ongoing business requirements and potential Mergers & Acquisition activity, the Company proposes to increase charge / mortgage limit under Section 180 (1)(a), and also borrowing limit under Section 180 (1)(c) as mentioned in the Notice of the ensuing Annual General Meeting for seeking approval of the Members.

15. Board of Directors and Key Managerial Personnel

There have been no changes in the composition of the Board of Directors during the year under review. The details of the Board of Directors and the number of meetings held and attended by the Directors have been given in detail in the Corporate Governance Report, which forms part of this Annual Report.

a. Board’s Composition

The Company has a diverse Board of Directors who believe in good Corporate Governance Practices. The composition of the Board of Directors is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an optimum combination of Executive, Non-Executive, and Independent Directors.

As of the date of this Annual Report, the Board of Directors of the Company consists of 6 (six) Members, out of which there are 4 (four) Independent Directors, including 1 (one) Woman Director. There is 1 (one) Non-Executive Director and 1 (one) Executive Director who are also Promoters of the Company. The Company has a Non-Executive Independent Director as its Chairman.

b. Key Managerial Personnel

Pursuant to the provisions of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time to time), the following persons are acting as the Key Managerial Personnel (KMP) of the Company:

1. Mr. Ashank Desai - Vice-Chairman &

Managing Director

2. Mr. Arun Agarwal - Global Chief Financial Officer

3. Mr. Dinesh Kalani - Vice President -Company Secretary

Pursuant to Rule 8(5)(iii) of the Companies (Accounts) Rules, 2014, the following change

occurred in the composition of KMP during the year under review:

Mr. Arun Agarwal was appointed as Global Chief Financial Officer of the Company w.e.f. May 31,

2021. Except for this, there was no other change in the composition of KMP.

c. Independent Directors and their Declarations

During the year under review, the Members at the 39th Annual General Meeting held on September 28, 2021, approved the payment of Remuneration to Mr. S. Sandilya (DIN: 00037542), Chairman (Non-Executive) & Independent Director of the Company for the Financial Year 2020-21, which exceeded 50% of the total annual remuneration payable to all the Non-Executive Directors of the Company.

Definition of ‘Independence’ of Directors is derived from Regulation 16 of the SEBI Listing Regulations and Section 149(6) of the Act. The Company has received necessary declarations under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, from the Independent Directors stating that they meet the prescribed criteria for independence. All Independent Directors have affirmed compliance to the Code of Conduct for Independent Directors as prescribed in Schedule IV to the Act. A list of key skills, expertise and core competencies of the Board of Directors is placed under the Corporate Governance Report, which forms part of this Annual Report.

Based on the confirmations / declarations received from the Independent Directors, your Board of Directors confirms that they are independent of management, are persons of integrity, possess relevant expertise and vast experience, and bring an independent judgement on the Board’s discussions (including the proficiency) of the Independent Directors of the Company. Accordingly, the following Non-Executive Directors are Independent of the Management:

1. Mr. S. Sandilya,

2. Ms. Priti Rao,

3. Mr. Atul Kanagat, and

4. Mr. Rajeev Kumar Grover

None of the Director of the Company is disqualified from being appointed as Director as specified in Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. As required under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have completed the registration with the Independent Directors Databank and also completed the online proficiency test conducted by the Indian Institute of Corporate Affairs, wherever required.

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

d. Director liable to retire by Rotation

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and pursuant to the Articles of Association of the Company, Mr. Ketan Mehta (DIN: 00129188) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. In the opinion of your Directors,

Mr. Mehta possesses requisite qualifications and experience, and therefore, your Directors, based on the annual performance evaluation, recommend the re-appointment of Mr. Ketan Mehta. Necessary resolution for the re-appointment of Mr. Ketan Mehta is being placed for the approval of the Members at the ensuing Annual General Meeting.

A brief profile of Mr. Ketan Mehta, along with other related information, forms part of the Notice convening the ensuing Annual General Meeting.

e. Performance Evaluation of the Board

The Company believes that the process of Performance Evaluation at the Board level is pivotal to its Board engagement and effectiveness. In compliance with the relevant provisions of the Act, read with the Rules made thereunder, and the SEBI Listing Regulations, the Performance Evaluation of the Board as a whole, its specified Statutory Committees, the Chairman of the Board, and the individual Directors were carried out for the year under review.

This exercise was carried out through a structured questionnaire prepared separately for the Board, Committees, Chairman and individual Directors.

The Chairman’s Performance Evaluation was carried out by Independent Directors at a separate meeting. The parameters assessed included various aspects of the Board’s functioning such as effectiveness, meetings, quantum and timeliness of the information flow between Board Members and Management, Board Member participation, quality and transparency of Board discussions, time devoted by the Board to strategy, performance and risk issues, Board composition and understanding of roles and responsibilities, succession and evaluation, and possession of required experience and expertise by Board Members.

The performance of the Committees was evaluated on the basis of their effectiveness in carrying out their respective mandates.

Peer assessment of Directors, based on parameters such as participation and contribution to Board deliberations, ability to guide the Company in key matters, knowledge and understanding of relevant areas, team attitude and initiative was reviewed by the Board for individual feedback.

During the year, Company actioned the feedback from the Board evaluation process conducted in Financial Year 2021-22. The agenda was reorganised to allow for more time for discussion on strategy and business matters, streamlining of content and briefing on compliance submissions, sharper business presentations with executive summaries and focus on strategy reviews.

Dedicated time was reserved for Board feedback on the agenda and important matters. Board interaction between meetings was stepped up through Board calls on various topics. Specific items were added in the Board planning for reviews, such as succession plans and review of long-term investments / initiatives, which were covered during the year. Scheduling of meetings was improved to allow sufficient discussion time for quarterly performance reviews during regular quarterly cycles.

f. Familiarisation Programme

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The Company has conducted a Familiarisation Programme for the Directors / Independent Directors of the Company covering the matters as specified in Regulation 25(7) of the SEBI Listing Regulations. The details of the training and Familiarisation Programme conducted by the Company are hosted on the Company’s website and can be accessed through the web link https:// www.mastek.com/wp-content/uploads/2022/08/ Induction-and-Familiarisation-Programme-for-Independent-Directors-2022.pdf. The details of the induction and Familiarisation Programme for the Directors are given in the Corporate Governance Report, which forms part of this Annual Report.

g. Code of Conduct and Directors’ Appointment and Remuneration

The Nomination and Remuneration Committee of the Company formulates the criteria for determining the qualifications, positive attributes, and independence of Directors in terms of its charter. In evaluating the suitability of individual Board members, the Committee takes into account factors such as educational and professional background, general understanding of the Company’s business dynamics, standing in the profession, personal and professional ethics, integrity and values, willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively. The Committee also assesses the independence of Directors at the time of their appointment / re-appointment as per the criteria prescribed under the provisions of the Act and the Rules made thereunder and the SEBI Listing Regulations.

The Company has formulated the “Code of Conduct for Directors”. The confirmation of compliance with

the same is obtained from all the Board Members on an annual basis. All Board Members have given their confirmation of compliance for the year under review. A declaration duly signed by Vice-Chairman & Managing Director is given under the Corporate Governance Report, which forms part of this Annual Report. The “Code of Conduct for Directors”is also posted on the website of the Company and can be accessed through the weblink https://www. mastek.com/wp-content/uploads/2022/08/Code-of-Conduct-for- Directors.pdf.

h. Meetings of the Board of Directors

The Board / Committee Meetings are pre-scheduled, and a tentative calendar of the meetings is circulated to the Directors well in advance to help them plan their schedules and ensure meaningful participation. Should the need arise in the case of special and urgent business, the Board’s approval is obtained by passing resolutions through circulation, as permitted by law, which is confirmed in the subsequent Board Meeting. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India during the Board Meetings.

The Board of Directors met 10 (ten) times during the Financial Year ended March 31, 2022. The details of the Board Meetings and the attendance of the Directors thereat have been provided in the Corporate Governance Report, which forms part of this Annual Report. The maximum interval between any 2 (two) meetings did not exceed 120 (one hundred and twenty) days as prescribed under the Act.

During the year under review, the Board accepted all recommendations by its various Committees.

As per Schedule IV of the Act, Secretarial Standards-1 on Board Meetings and SEBI Listing Regulations, during the year under review, 1 (one) Meeting of the Independent Directors was held on January 19, 2022.

i. Committees of the Board

In terms of the requirements of the Act and the SEBI Listing Regulations, the Board of Directors has constituted the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders’ Relationship Committee

4. Corporate Social Responsibility Committee, and

5. Risk Management & Governance Committee

The detailed information of the Committees, along with their composition, charter, the number of meetings held, and the attendance at the Meetings held during the year under review, have been provided in the Corporate Governance Report, which forms part of this Annual Report.

j. Company’s Policy on Nomination and Remuneration

The Nomination and Remuneration Committee (‘NRC’) has formulated a Nomination and Remuneration Policy laying out the role of NRC, Policy on Director’s Appointment and Remuneration, including the recommendation of remuneration of the Key Managerial Personnel and Senior Managerial Personnel and the criteria for determining qualifications, positive attributes and independence of a Director. The latest policy is hosted on the website of the Company and can be accessed through the weblink https://www.mastek. com/wp-content/uploads/2022/07/Nomination-Remuneration-Policy-For-Board-of-Directors-Key-Managerial-Personnel.pdf.

Some of the salient features of the policy are as follows:

1. To regulate the appointment and remuneration of Directors, Key Managerial Personnel

and the Senior Managerial Personnel and succession planning;

2. To formulate the criteria for Board Membership, including the appropriate mix of Executive and Non-Executive Directors;

3. To identify persons who are qualified to become Directors as per the criteria / skill matrix as formulated by the Board;

4. To ensure proper composition of Board of Directors and Board diversity;

5. To ensure that level and composition of remuneration are reasonable and sufficient to attract, retain and motivate Key Managerial Personnel and Senior Managerial Personnel and their remuneration involves a balance between fixed and variable (incentive) pay reflecting short- and long-term performance objectives appropriate to Company’s working and its goals.

Additionally, the Board has, on the recommendation of the NRC, reviewed the list of core skills / expertise / competencies required from the Directors in the context of the Company’s business and sector for it to function effectively.

Please refer to the Notes to Accounts and Corporate Governance Section for the details on the Remuneration of Directors and Key Managerial Personnel.

k. Particulars of Employees and Related Disclosures

The ratio of remuneration of each Director to the median remuneration of Employees as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2016 is annexed as “Annexure 4” to this report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, perquisites, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committees of the Company. The Managing Director of the Company has not received any remuneration or commission from any of the Company’s Subsidiaries.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a Statement showing the names and other particulars of the Employees drawing remuneration in excess of the limits set out in the said rules is part of this report. Having regard to the provisions of the proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company and others entitled thereto. Details of Employees remuneration as required under aforesaid provisions are available with the Company and shall be sent to Members electronically who request the same by sending an e-mail to Company at investor_grievances@mastek. com from their registered e-mail address.

16. Statutory Auditors and their Report

The Company’s Auditors, M/s. Walker Chandiok & Co.

LLP, Chartered Accountants (ICAI Firm Registration Number 001076N/N500013), who have been appointed as the Statutory Auditors of the Company for the period up to the conclusion of the 40th Annual General Meeting, have given their consent for re-appointment as the Statutory Auditors for the second term of 5 (five) consecutive years from the Financial Year 2022-23 onwards until the conclusion of the 45th Annual General Meeting, to be held in the Year 2027.

The Company has received a confirmation from the Auditors to the effect that if they are reappointed, it will be in accordance with the limits specified under the Act, and that they satisfies the criteria specified in Section 141 of the Act, read with Rule 4 of Companies (Audit and Auditors) Rules 2014. In terms of the SEBI Listing Regulations, the Auditors have also confirmed that they subject themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

The Board is of the opinion that continuation of M/s. Walker Chandiok & Co. LLP, as Statutory Auditors will be in the best interests of the Company and therefore, the Members are requested to consider their re-appointment as Statutory Auditors of the Company, for a second term of 5 (five) consecutive years, from the conclusion of the ensuing 40th Annual General Meeting, till the conclusion of 45th Annual General Meeting to be held in the Year 2027.

Report of Statutory Auditors

M/s. Walker Chandiok & Co. LLP, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the Financial Year 2021-22, which forms part of this Annual Report. There were no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in the Audit Reports issued by them that call for any explanation from the Board of Directors, and they also did not report any incident of fraud to the Audit Committee of the Company during the year under review.

17. Secretarial Auditors and their Report

Pursuant to Section 204 of the Act and Rules made thereunder, P. Mehta & Associates, Practising Company Secretaries represented by Mr. Prashant Mehta were appointed as Secretarial Auditors of the Company for the Financial Year 2021-22 to conduct the Secretarial Audit and issue the Secretarial Audit Report in Form MR-3. The Secretarial Audit Report issued by Secretarial Auditors for the Financial Year ended March 31, 2022 is annexed as “Annexure 5” to this report.

There were no qualifications or observations, adverse remarks or disclaimer of the Secretarial Auditors in the report issued by them for the Financial Year ended March 31, 2022, and hence, no explanation was required from the Board of Directors. The said report is selfexplanatory and does not call for further comments.

P. Mehta & Associates, Practising Company Secretaries, have been re-appointed to conduct the Secretarial Audit of the Company for the Financial Year 2022-23. They have confirmed that they are eligible for the said re-appointment.

18. Risk Management

Risk Management is an integral and important component of Corporate Governance. The Company has developed and implemented a comprehensive Risk Management Framework, including Cyber security and ESG for the identification, assessment and monitoring of key risks that could negatively impact the Company’s goals and objectives. This framework is periodically reviewed and enhanced under the oversight of the Risk Management & Governance Committee of the Board as well as by the Board of Directors of the Company. The Audit Committee of the Board has additional oversight in the area of financial risks and controls.

Mastek is committed to continually strengthen its Risk Management capabilities in order to protect the interests of stakeholders and enhance shareholder value. The detailed information pertaining to Risk Management is given elsewhere in the Report, which forms part of this Annual Report.

19. Internal Control Systems Internal Financial Controls

The Company believes that internal control is a necessary prerequisite of governance and that freedom should be exercised within a framework of checks and balances. The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management ensures an effective internal control environment commensurate with the size and complexity of the business, which assures compliance with internal policies, applicable laws, regulations and protection of resources and assets.

Mastek Group has a presence across multiple geographies, and a large number of employees, suppliers and other partners collaborate to provide solutions to customer needs. Robust internal controls and scalable processes are imperative to managing the global scale of operations. The Management has laid down internal financial controls to be followed by the Company.

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

In response to the COVID-19 pandemic, the Company continues to benefit from the remote working model it evolved and adopted as a part of business continuity plans. This has facilitated employees to work remotely / work from home wherever customer-location deliveries are not contractually required or waived by customers during these tough times. The design of processes allows for such remote execution with accessibility to secure data and ensures there are no events that have materially affected or are reasonably likely to materially affect the internal controls over financial reporting during the period.

Internal Audit

An independent and empowered Internal Audit Firm at the corporate level carries out risk focused audits across all businesses (both in India and overseas) to ensure that business process controls are adequate and are functioning effectively. These audits include reviewing finance, operations, safeguarding of assets, and compliance-related controls. Areas requiring specialised knowledge are reviewed in partnership with external subject matter experts.

The Internal Audit functioning is governed by the scope of audit duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of the audit. As the business expanded with new acquisitions, the scope has been widened to include the internal control framework of the new entities. The corporate-level process controls, including the ERP framework and operating processes, are constantly monitored for effectiveness during such Audits.

The Company’s senior management closely monitors the internal control environment and ensures that the recommendations of the Internal Auditors are effectively implemented. The Audit Committee periodically reviews key findings and provides strategic guidance. Internal Auditors report directly to the Audit Committee.

20. Human Resources

A key area of focus for our Company is to create a performance-driven workforce while ensuring the health and well-being of employees and their families. Many policies and benefits were implemented to maximise employee engagement and welfare. Mastek also continues to endeavour to create a work environment that is collaborative, encourages learning and is growth-oriented to enable employees to perform at their full potential. We believe in an open and transparent work culture that places adequate emphasis on Mastekeers work experience, feedback and suggestions. We have regular engagement activities including interactions with all leaders including Executive leaders in the organisation through various forums. In addition, forums such as weekly and monthly meetings, monthly All Hands Meeting and Quarterly Meets, and departmental meetings provide opportunities for Mastekeers interaction with the management.

As of March 31, 2022, Mastek Group had a total headcount of 4,977. Mastek Group continues to focus on attracting new talent and helping them to acquire new skills, explore new roles and realise their potential by providing training and retaining high-quality talent.

21. Management of Equality, Risks of Fraud, Corruption, and Unethical Business Practices

• Equal opportunity employer

The Company has always provided a congenial atmosphere for work, free from discrimination and harassment (including but not limited to sexual harassment). It has also provided equal opportunities for employment to all irrespective of their personal background, ethnicity, religion, marital status, sexual orientation, or gender.

• Prevention of Insider Trading

The Company has adopted the “Code of Internal Procedures and Conduct for regulating, monitoring and reporting of trading by Insiders” in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 to regulate, monitor and report trading by its Designated Person(s) / and other connected person(s). Further, for effective implementation of the Code, the Company has put in place the penalty framework and the internal guidelines on violation of the said Code.

The Company’s “Code of practices and procedures for fair disclosure of unpublished price-sensitive information” is available on the Company’s website

and can be accessed through the weblink https:// www.mastek.com/wp-content/uploads/2021/10/code-of-practices-and-procedures-for-fairdisclosure-of-upsi. pdf.

• Vigil Mechanism (Whistle-Blower Policy)

The Vigil Mechanism as envisaged under the Act, the Rules prescribed thereunder, and the SEBI Listing Regulations are implemented through the Company’s Whistle-Blower Policy which establishes a formal vigil mechanism for the Directors, Mastekeers and Stakeholders and provides a mechanism for reporting concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct and Ethics. It also provides adequate safeguards against the victimisation of the complainant who avails the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy / Vigil Mechanism is placed on the website of the Company and can be accessed through the weblink https://www.mastek.com/ wp-content/uploads/2022/07/Group-Whistle-Blower-Policy.pdf.

• Anti-Bribery and Corruption Policy

In furtherance of the Company’s Philosophy of conducting business in an honest, transparent and ethical manner, the Board has laid down ‘Anti-Bribery and Corruption Policy’ as part of the Company’s Code of Business Conduct and Ethics. Our Company has zero tolerance for bribery and corruption and is committed to acting professionally and fairly in all its business dealings. Awareness to the policy is ensured through mandatory online training and understanding is confirmed through a test that has a minimum threshold for passing and generating a certificate of successful completion.

22. Disclosures as per the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, and Redressal) Act, 2013

The Company has zero-tolerance for sexual harassment in the workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company has complied with provisions relating to the constitution of the Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

All women employees, whether permanent, temporary, or contractual, are covered under the above policy. The said policy has been uploaded on the internal portal of the Company for information of all employees. Periodic sessions were also conducted to apprise employees and build awareness of the subject matter. Our key focus is

to create a safe, respectful, and inclusive workplace that fosters professional growth for each employee.

Your Company has constituted an Internal Committee (IC) to consider and resolve all sexual harassment complaints reported by women. The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Investigations are conducted, and decisions made by the IC at the respective locations, and a senior woman employee is the presiding officer over every case. More than half of the total members of the IC are women. The role of the IC is not restricted to mere redressal of complaints but also encompasses the prevention and prohibition of sexual harassment. In the last few years, the IC has worked extensively on creating awareness of the relevance of sexual harassment issues in the new normal by using new and innovative measures to help employees understand the forms of sexual harassment while working remotely.

During the year under review, no complaint with allegations of sexual harassment was filed, and there was no complaint or pending investigations at the end of the year.

23. Corporate Social Responsibility (CSR)

Mastek has been an early adopter of CSR initiatives. Mastek Foundation is the CSR wing of the Company. Founded in 2002, the mission of Mastek Foundation is Informed Giving, Responsible Receiving. The institution seeks to inspire Company employees by creating awareness among them to give back to the community with mediums such as volunteering and giving opportunities. The Foundation also supports Non - Governmental Organisations (NGOs) to scale and build their capabilities through core skill of Information Technology. Hence, the Mastek Foundation has 3 (three) clearly defined pillars: GIVE, ENGAGE and BUILD.

The disclosures required to be given under Section 135 of the Act, read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is annexed as “Annexure 6” to this report.

The CSR Policy of the Company is posted on the website of the Company and can be accessed through the weblink https://www.mastek.com/wp-content/ uploads /2022/07/Corpo rate-Social- Res po nsi bili ty-Policy-2022.pdf.

24. Business Responsibility and Sustainability Report (BRSR)

The SEBI Listing Regulations mandate the inclusion of the BRSR as part of the Annual Report for the top 1,000 listed entities based on market capitalisation from Financial Year 2022-23 onwards. However, your Company has voluntarily decided to include it from this year. Pursuant to Regulation 34 of the SEBI Listing Regulations, ‘Business Responsibility and Sustainability Report’ forms part of this Annual Report, which describes the initiatives taken by the Company from an environmental, social and governance perspective.

25. Corporate Governance Practices

The Company has a rich legacy of ethical governance practices and follows sound Corporate Governance practices with a view to bringing transparency to its operations and maximising shareholder value. The Company continues to maintain high standards of Corporate Governance, which has been fundamental to and is an integral principle of the business of your Company since its inception. Your Directors reaffirm their continued commitment to good corporate governance practices. A Report on Corporate Governance along with a Certificate from the Secretarial Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI Listing Regulations forms part of this Annual Report.

26. Annual Return

As required under the provisions of Sections 134(3) (a) and 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the draft Annual Return in Form No. MGT-7 (of Financial Year 2021-22) has been made available on the website of the Company: https://www.mastek.com.

27. Compliance with Secretarial Standards

During the year under review, the Company has complied with the applicable Secretarial Standards on Meetings of the Board of Directors and on General Meetings issued by the Institute of Company Secretaries of India in terms of Section 118(10) of the Act.

28. Insurance

The Company has sufficiently insured itself under various Insurance policies to mitigate risks arising from third-party or customer claims, property, casualty, etc. The Company also has in place an insurance policy for its “Directors & Officers” with a quantum and coverage as approved by the Board. The policy complies with the requirements of Regulation 25(10) of the SEBI Listing Regulations.

29. Details of Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo

Conservation of Energy and Technology Absorption:

Mastek understands the importance of being an environmentally sustainable business entity and that businesses can thrive in the long run by ensuring environmentally friendly practices.

As a responsible organisation, Company makes a constant effort to reduce carbon emissions from own operations. Its sustainability strategy focuses on environmental responsibility, climate protection, and an optimal use of energy resources. The environment has a direct impact on the health and well-being of every Stakeholder in value chain. It is therefore important that Company

30. ESG (Environment, Social, Governance)

The Company’s ESG priorities and goals are aligned to the United Nation’s Sustainable Development Goals under Goal 4 (Quality Education), Goal 5 (Gender Equality), Goal 6 (Clean Water and Sanitation), Goal 8 (Decent Work and Economic Growth) and Goal 13 (Climate Action).

Mastek has laid out a strategic approach to achieve the ESG goals in all areas and levels in the Company.

a. Environment

Mastek (UK) Limited (“Mastek UK”), a Subsidiary of the Company is committed to achieving carbon neutrality by FY25 followed by Net-Zero Emissions by FY40. Mastek UK has completed a carbon assessment and benchmarked its emissions for the period prior to Covid, i.e. as of FY 2019-20, to understand actual emissions as the period under the Covid pandemic may not be a true reflection of emissions owing to reduced industry activity.

In India, Company offices in Mahape (Navi Mumbai), SEEPZ (Mumbai) and Acropolis (Ahmedabad) are accredited with ISO 14001 - Environment Management System and ISO 45001 - Occupational Health and Safety Management System. As part of E-waste management activity, Mastek has disposed up to 15 years old scrap lying in Mahape and SEEPZ offices. The Company’s e-waste disposal of 4.75 Metric Ton is carried out through a Government approved vendor on a regular basis. In the last 5 (five) years Company has reduced CO2 emissions from Mahape facility from 1,338 MT to 275 MT, a reduction of 79%. The graphs below show the YoY KWH consumption and equivalent CO2e emission in MT for Mahape office.

strives to mitigate the impact, and where possible,

influence positive environmental practices.

Focus is continued during the year to minimise the

Electrical consumption.

• Optimisation of Electrical energy units by system upgradation and effective controls.

• During the year we have completed upgradation of electrical substation for our Mahape, Navi Mumbai facility.

• As per strategy we are selecting our new offices in LEED/ Energy certified buildings. Our new offices in Chicago, Romania and Amsterdam are operating in LEED/Energy certified buildings.

Assessments and Certifications

• Our office at Mahape (Navi Mumbai) is accredited by DNV for ISO 14001:2015 and OHSAS ISO 45001:2018.

In addition to Mahape, this year we have successfully completed ISO 14001: 2015 and OHSAS certification for our SEEPZ SDF 4 and Acropolis, Ahmedabad office and;

• Completed carbon footprint assessment and reduction plan for Mastek UK with FY 2019-20 as benchmark year.

Company is committed towards fulfilment of

sustainability initiatives and ensuring actions for the

benefit of People, Planet and Profit. These initiatives are

mainly -

• Reduction of energy consumption through implementation of energy efficient systems.

• Optimum utilistaion of natural resources like Water and Diesel.

• Consumption reduction for Paper, Food waste and Plastic.

• Adopting ecofriendly refrigerants for air-conditioning systems.

• Ensuring people centric approach in providing functional services especially in the COVID-19 pandemic situations.

• Adopting automisation for operations like Procurement, Billing and Travel wherever possible to improve overall functional efficiency.

Foreign exchange earnings and outgo:

Total Foreign Exchange used and earned by the Company

are as follows:

('' in lakhs)

Particulars

Year ended March 31, 2022

Year ended March 31, 2021

Foreign Exchange Used

357

515

Foreign Exchange Earned

28,317

15,877

The electricity consumption savings stood at 74,712 KWH units across globe for FY 2021-22. Water consumption for Company’s India offices is reduced by 8.45% YoY. General and Food waste is disposed through Municipal agencies. The total Green House Gas (GHG) emission stood at 536 MT due to air travel in the year 2021-22 for Mastek globally. Mastek has also partnered with ‘One Tree Planted’, a not-for-profit NGO and the official partners of the United Nations Decade on Ecosystem Restoration (2021-2030); to boost the Environmental agenda as part of your Company’s ESG goals. Your Company had planted a tree in the name of each investor who participated in the Investor Day held by the Company on April 21, 2022. Your Company will continue to contribute to the restoration of trees across the globe through this partnership and various other manners in FY 2023 and beyond.

b. Social

Your Company has strong and established CSR framework. It drives the CSR through Mastek Foundation (www.mastekfoundation.in), the CSR arm of Mastek found in 2002.

Its mission is - ‘Informed Giving, Responsible Receiving’.

Mastek has been an early adopter of CSR initiatives. The institution seeks to inspire Company employees by creating awareness among them to give back to the community in ways which would meet the needs and challenges faced by the community members. One such medium could be through volunteering and giving opportunities. Mastek Foundation, together with Mastek has a payroll giving programme which encourages employees to come forward and contribute to society as informed givers. Every quarter-end, since 2017, your Company holds a ‘Gratitude is Attitude’ event, bringing together all its employees and the charities to present themselves for donations from the employees. Mastek is committed to touch a million lives through its CSR programme by FY 2028. The Foundation also supports Non-Governmental Organisations (NGOs) to scale and build their capabilities through Information Technology skills. Hence, the Foundation has 3 clearly defined pillars: GIVE, ENGAGE and BUILD.

The disclosures required to be given under Section 135 of the Act, read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules,

2014, as amended, is annexed as “Annexure 6” to this report.

The CSR Projects and the CSR Policy of the Company is available on the Company’s website and can be accessed through the weblink https:// www.mastek.com/wp-content/uploads/2022/07/ Corporate-Social-Responsibilitv-Policv-2022.pdf.

c. Governance

The Company has a rich legacy of ethical governance practices and follows sound corporate governance practices with a view to bringing transparency to its operations and maximising shareholder value. The Company continues to maintain high standards of corporate governance, which has been fundamental to and is an integral principle of the business of your Company since its inception. Your Directors reaffirm their continued commitment to good corporate governance practices. A report on corporate governance along with a certificate from the Secretarial Auditors of the Company regarding compliance with the conditions of corporate governance as stipulated under Schedule V of the SEBI Listing Regulations forms part of the Annual Report.

31. Other Disclosures

No disclosure or reporting was made with respect to the

following items, as there were no transactions during the

year under review:

• The Company does not have any scheme or provision of money for the purchase of its own shares by trustees for employee benefit.

• The Company is not required to maintain cost records as per Section 148 of the Act.

• There was no buyback of shares during the year under review.

• The Company has not accepted any deposits from the public under the provisions of the Act and the rules framed thereunder.

• The Company has not failed to implement any corporate action during the year under review.

• The Company’s securities were not suspended during the year under review.

• The Company has not issued equity shares with differential rights as to dividend, voting, or otherwise.

• There was no revision of financial statements and the Board’s Report of the Company during the year under review.

• No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of the application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year is not applicable.

• No significant and material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company’s operations and legal compliances.

32. Significant Developments

Scheme of Arrangement between Mastek Limited, Trans American Information Systems Private Limited, Evolutionary Systems Private Limited, and their respective Shareholders and Creditors.

National Company Law Tribunal, Ahmedabad Bench, vide its order dated September 14, 2021, approved and sanctioned the Scheme of Arrangement amongst Evolutionary Systems Private Limited, Trans American Information Systems Private Limited, and Mastek Limited and their respective Shareholders and Creditors pursuant to Sections 230 to 232 of the Act read with Companies (Compromise, Arrangements, and Amalgamations)

Rules, 2016. The Company accordingly has issued and allotted 4,235,294 equity shares at ''650 (including premium of ''645 per share) each to the shareholders of Evolutionary Systems Private Limited in terms of the approved Scheme.

Further, the Board of Directors of the Company, by virtue of a special resolution passed by the Members of the Company through postal ballot on January 17, 2022, approved and allotted 254,755 equity shares of the face value of ''5 each at an issue price of ''3,194 per share (including premium of ''3,189 per share), aggregating to ''81.37 crores on a private placement basis through the preferential allotment on February 10, 2022. The offer / issue price was determined in accordance with the applicable provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.

33. Adoption of Amended and Restated Articles of Association

The Board of Directors of the Company, at their meeting held on September 28, 2021, approved the amended and restated set of Articles of Association incorporating the relevant provisions of the Shareholders Agreement, executed between the Company, its Promoters, and New Shareholders. The amended and restated Articles of Association substitute the existing Articles of Association of the Company, as amended in terms of the special resolution passed by the Members of the Company through postal ballot on January 17, 2022.

34. Directors’ Responsibility Statement

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, audits, and reviews are performed by the Internal, Statutory, and Secretarial Auditors, and the reviews are undertaken by the Management and the Audit Committee, the Board is of the opinion that the Company’s Internal Financial Controls have been adequate and effective during the year under review.

In terms of Section 134(3)(c) of the Act, your Directors would like to make the following statements to the Members, to the best of their knowledge and belief and according to the information and representations obtained by the Management:

(a) that in the preparation of the Annual Financial Statements for the year ended March 31, 2022, 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 the Notes to the Financial Statements have been selected and applied consistently, and judgements 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 March 31, 2022, and of the profits 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 Act 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 such internal financial controls are adequate and were operating effectively; and

(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.

35. Appreciation and Acknowledgement

Your Directors express their heartfelt gratitude to all the

Stakeholders of the business, who have wholeheartedly

supported the Company in its prolific journey of

4 (four) decades.

Your Directors are grateful to the Investors for their continued patronage and confidence in the Company over the past several years. Your Directors also thank the Central and State Governments, Statutory and Regulatory Authorities, and Stock Exchanges for their continued guidance, assistance, cooperation, and support received from them and look forward to their continued support in the future.

Your Directors thank all its esteemed clients, associates, vendors, banks, financial institutions, and contractors within the country and overseas for their continued support, faith and trust reposed in the professional integrity of the Company. With continuous learning, skill up-gradation, and technology development, the Company will continue to provide world-class professionalism and services.

Your Directors also wish to place on record their deep sense of acknowledgment for the devoted and efficient services rendered by each and every employee of the Mastek Family, without whose whole-hearted efforts, the overall satisfactory performance would not have been possible.

Your Directors look forward to the long-term future with confidence.

For and on behalf of the Board of Directors

Ashank Desai S. Sandilya

Vice-Chairman & Managing Chairman (Non-Executive) Director & Independent Director

(DIN: 00017767) (DIN: 00037542)

Date: July 20, 2022 Place: Mumbai


Mar 31, 2019

Dear Members,

The Directors have great pleasure in presenting the 37th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended 31 March, 2019. The Consolidated Performance of the Company and its Subsidiaries has been referred to wherever required.

1. Highlights of Consolidated and Standalone Financial Results

(Rs. in lakhs)

Consolidated

Standalone

2018-19

2017-18

2018-19

2017-18

Revenue from operations

1,03,321

81,721

18,944

16,232

Other Income

2,478

2,099

3,459

2,323

Total Income

1,05,799

83,820

22,403

18,555

Expenses

90,167

71,755

17,252

14,683

Depreciation and amortization expenses

1,735

1,876

1,208

1,119

Finance costs

613

586

27

19

Exceptional items

55

-

-

-

Profit before tax

13,339

9,603

3,916

2,734

Tax expense

3,192

2,607

865

1,160

Profit after tax

10,147

6,996

3,051

1,574

Other comprehensive income

8,755

(248)

872

(1,315)

Total Comprehensive income

18,902

6,748

3,923

259

Equity Holders

18,902

6,748

3,923

259

Dividend

(1,788)

(1,056)

(1,788)

(1,056)

Dividend Distribution Tax

-

(12)

-

(12)

EPS

- Basic

42.61

29.74

12.81

6.69

- Diluted

40.32

28.14

12.12

6.33

2. Overview of Company’s Financial

Performance

a. Mastek Operations

On a Consolidated basis, the Group registered revenue from operations of Rs. 1,03,321 lakhs for the year ended 31 March, 2019 as compared to Rs. 81,721 lakhs in the previous year ended 31 March, 2018, which is an increase of 26.4%. The Group registered a Net Profit of ^ 10,147 lakhs for the year ended 31 March, 2019 as compared to Rs. 6,996 lakhs in the previous year ended 31 March, 2018, thereby registering an increase of 45%.

On a Standalone basis, Mastek registered revenue from operations of Rs. 18,944 lakhs for the year ended 31 March, 2019, as compared to Rs. 16,232 lakhs in the previous year ended 31 March, 2018. The Company made a Net prof it of Rs. 3,051 lakhs for the year ended 31 March, 2019 as compared to Net Profit ofRs. 1,574 lakhs in the previous year ended 31 March, 2018. Further details are included in notes to the Accounts of Standalone Financial Statement.

The Consolidated and Standalone Financial Statements of the Company for the year ended 31 March, 2019 have been prepared in accordance with applicable Accounting Standards and the relevant provisions of the Companies Act, 2013. The said Financial Statements have been prepared based on the Audited Financial Statements of the Company and Audited / Un-audited Financial Statements of its Subsidiaries, which have been reviewed by the Statutory Auditors. The Company discloses Consolidated and Standalone financial results on a quarterly basis, which are subjected to limited review, and publishes Consolidated and Standalone audited financial results on an annual basis.

No material changes or commitments have occurred between the end of the financial year and the date of this Report, which affect the Financial Statements of the Company in respect of the financial year under review.

In accordance with the provisions contained in Section 136 of the Companies Act, 2013, the Annual Report of the Company, containing therein its Consolidated and Standalone Financial Statements are available on the website of the Company at web link http://www.mastek.com/financial-information. Further, the Financial Statements of each of the subsidiary companies are uploaded on the Company’s website and shall be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the Subsidiaries Financial Statements may write to the Company Secretary at the Registered Office of the Company.

Further, a detailed analysis of Company’s performance is included in the Management Discussion and Analysis, which forms part of this Annual report.

b. Break-Up of the Operating Revenue by Regions

Region

Year ended 31 March, 2019

Year ended 31 March, 2018

Rs. in lakhs % of Revenue

Rs. in lakhs % of Revenue

UK

76,361

73.9%

56,315

68.9%

North America

25,275

24.5%

23,715

29.0%

Others

1,685

1.6%

1,691

2.1%

Total

1,03,321

100.0%

81,721

100.0%

The U.K. operations contributed Rs. 76,361 lakhs in total operating revenue for the financial year ended 2018-19 as compared to Rs. 56,315 lakhs for the financial year ended 2017-18, resulting in a growth of 35.6%. This growth was driven by increased business in the Government vertical followed by Retail and Finance vertical. UK business grew by 29.3% on constant currency basis.

The North America operations contributed Rs. 25,275 lakhs in revenue for the financial year ended 2018-19 as compared to Rs. 23,715 lakhs for the financial year ended 2017 - 18 witnessing a growth of 6.6%.

Indian operations contributed Rs. 1,685 lakhs for the financial year ended 2018-19 as compared to Rs. 1,691 lakhs for the financial year ended 2017-18, resulting in a marginal decrease of (0.4%).

c. Break-Up of Revenue by Service Lines

Year ended

Year ended

Service Line

31 March, 2019

31 March, 2018

Rs. in lakhs % of Revenue

Rs. in lakhs % of Revenue

Application Development

48,917

47.3%

38,891

47.6%

Digital Commerce

23,914

23.1%

21,211

26.0%

Application Support & Maintenance

14,394

13.9%

8,008

9.8%

Bl & Analytics

8,899

8.6%

6,484

7.9%

Agile Consulting

3,109

3.0%

4,771

5.8%

Assurance & Testing

4,088

4.0%

2,356

2.9%

Total

1,03,321

100.0%

81,721

100.0%

Profitability

During the Year ended 31 March, 2019, the Group earned a profit of Rs. 10,147 lakhs as compared to Rs. 6,996 lakhs for the year ended 31 March, 2018. The profits for the financial year 2018 - 19 achieved growth of 45%, driven by focused profitable growth in revenue, operational improvement and better utilization of existing investment in Sales, General & Administrative expenses (SG&A) and capacity to service growth.

3. Dividend

The Company has a robust track record of rewarding its members with a generous dividend payout (both Interim and Final). Based on Company’s Financial performance, the Board of Directors, at its meeting held on 16 April, 2019 has recommended payment of a Final Dividend @ of Rs. 5/- per Equity Share (face value of Rs. 5/- each) i.e. @100%, subject to approval of the members at the ensuing 37th Annual General Meeting to be held on 23 July, 2019.

Further, the Board of Directors at its meeting held on 25 October, 2018 had also approved the payment of Interim Dividend of Rs. 3.50/- per share i.e. @ 70%, which was paid on 15 November, 2018.

Therefore, the total dividend for the financial year ended 31 March, 2019 stands at Rs. 8.50/- per share, (Previous Year Rs. 6/- per share) involving a total outflow approximately of Rs. 2,035 lakhs (Previous YearRs. 1,422 lakhs).

The Final Dividend, if approved, at the ensuing 37th Annual General Meeting, will be paid to those members whose names appears on the Register of Members of the Company as of the end of the day on Saturday, 13 July, 2019.

4. Transfer of Unclaimed Dividend Amounts and Concerned Shares to Investor Education and Protection Fund (IEPF) Authority

There were neither Unclaimed Dividend Amount nor Concerned Shares which were due and required to be transferred to IEPF Authority during the year under review.

5. Transfer to Reserves

There was no amount from profit, which was transferred to General Reserves during the year under review.

6. Management Discussion and Analysis

Management Discussion and Analysis as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the SEBI Listing Regulations) is presented in a separate section forming part of this Annual Report. It provides details about the overall industry structure, global and domestic economic scenarios, developments in business operations/ performance of the Company’s various businesses, internal controls and their adequacy, risk management systems, human resources and other material developments during the financial year 2018-19.

7. Credit Rating

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. During the year under review, ICRA Limited, a reputed Credit Rating Agency, had reaffirmed the ratings assigned for the Bank facilities as [ICRA] A (Positive) rating for fund-based limits and [ICRA] A1 for non-fund based limits for the Working Capital Facilities granted to the Company by its Bankers.

8. Subsidiary Companies

Your Company continues to be the Holding Company of Trans American Information Systems Private Limited and Mastek (UK) Limited (MUK). MUK in turn has IndigoBlue Consulting Limited and Mastek Inc. (formerly known as Digility Inc.) as its wholly owned subsidiaries.

IndigoBlue Consulting Limited, the step down subsidiary of the Company has entered into Business Transfer Agreement w.e.f. 30 June, 2018 with its parent Company to merge itself (transfer of its business, assets and liabilities). This will enable greater synergies between them and will also achieve higher operational efficiencies.

Mastek Inc., the step down subsidiary of your Company has TAISTech LLC (100% membership interest) and Trans American Information Systems Inc. as its wholly owned subsidiaries and consequently, they are step down wholly owned overseas subsidiaries of the Company.

Your Company has 2 direct wholly owned subsidiaries and 4 step down subsidiaries as at 31 March, 2019 and pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the Financial Statements of all the subsidiaries and their contribution to overall performance of the Company are provided in Form AOC-1 which is annexed as Annexure 1 to the report.

There has been no material change in the nature of the business of the subsidiaries.

The Company does not have any Joint Venture or Associate Company or any joint operations during the year under review.

9. Material Subsidiary

Mastek (UK) Limited, a UK based entity is the only material subsidiary of the Company.

The Board of Directors of the Company has revised the Policy for determining material subsidiaries in accordance with the amendments to the SEBI Listing Regulations with effect from 1 April, 2019. The policy can be accessed on the website of the Company at web link https://www.mastek.com/ corporate-governance.

10. Update on Board of Directors / Key Managerial Personnel

a. Directorship Changes:

There has been no change in the Board of Directors of the Company during the year under review.

All the directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013.

b. Independent Directors Re-appointment:

Mr. S. Sandilya (DIN 00037542), Ms. Priti Rao (DIN 03352049) and Mr. Atul Kanagat (DIN 06452489), were appointed as Independent Directors of the Company pursuant to Section 149 of the Com pan ies Act, 2013 for the first term of 4 years i.e. from 1 April, 2015 to 31 March, 2019. Considering their knowledge, expertise and experience in their respective fields and the substantial contribution made by these Directors during their tenure as Independent Directors since their appointment, the Nomination and Remuneration Committee and the Board recommends the re-appointment of all the 3 Directors as Independent Directors on the Board of the Company, to hold office for the second term of 5 consecutive years i.e. from 1 April, 2019 to 31 March, 2024 and not liable to retire by rotation, subject to approval by the members at the ensuing 37th Annual General Meeting. The proposal for their re-appointment is based on individual performance evaluation by the Board.

Pursuant to the provision of Regulation 17(1 A) of the SEBI Listing (Amendment) Regulations, 2018 notified by the SEBI on 7 June, 2018, and which is effective from 1 April, 2019, which prescribes that no listed entity shall appoint a person or continue the directorship of any person as the Non-Executive Director who has attained the age of 75 years unless a special resolution is passed to that effect in which case the Explanatory Statement annexed to the Notice for such motion shall indicate the justification for appointing such person. In view of the amendment, the Board of Directors is of the opinion that considering Mr. Sandilya’s integrity, relevant expertise, vast experience, in depth industry knowledge, continuous valuable guidance to the management and his strong Board performance, his continuous association as Non-Executive Independent Director will be beneficial and to the best interest of the Company. Accordingly, the Board recommends his re-appointment for the approval of the members even after him attaining the age of 75 years on 11 April, 2023 during his on-going second term till the expiry of his term i.e. on 31, March, 2024.

Further, the Company after due assessment took on record the necessary declarations received from each of the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the SEBI Listing Regulations, and also in the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in Section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as Independent Directors of the Company.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, perquisites and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committees of the Company.

Accordingly, approval of the members by special resolutions for re-appointing the aforesaid directors as Independent Directors for a further term of 5 consecutive years i.e. from 1 April, 2019 to 31 March, 2024 has been sought in the enclosed Notice convening the Annual General Meeting of the Company. (Please refer to Item Nos. 4, 5 and 6 of the Notice). The Board recommends all the three re-appointments of Individual Directors to the members.

c. Director liable to retire by rotation:

In accordance with the provisions of Section 152 and other applicable provisions, if any of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sudhakar Ram (DIN: 00101473) is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible has offered himself for re-appointment. The Board recommends his re-appointment to the members at the ensuing 37th Annual General Meeting.

d. Board Effectiveness:

1. Manner of Evaluation of the Board’s Performance

In compliance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board of Directors has carried out an Annual Evaluation of its own performance. Board Committees, Individual Directors, Chairpersons and the Managing Director for the year under review.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors including the Non-Executive Chairman and the Managing Director, their personal performance carried out using a peer review process, facilitated by an outside subject matter expert with confidential processing of inputs, interpretation of findings followed by one-on-one meeting with the individual Directors, and concluding with an aggregate presentation to the entire Board.

Board and Committees functioning was reviewed and evaluated on the basis of responses received from Directors. Committee Members and the Managing Director to structured questionnaires, covering various aspects of the composition and functioning of the Board and its Committees.

In a separate meeting of the Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman were also evaluated, taking into account the views of Executive Director and Non- Executive Directors. The Directors were asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its Committees and its areas of improvement for a higher degree of engagement with the Management.

The Board expressed its satisfaction with the evaluation results, which reflects the high degree of engagement of the Board and its Committees with the Company and its Management. Based on the outcome of the evaluation and assessment cum feedback of the Directors, the Board and the Management have also agreed on some action points, which will be implemented over an agreed period.

2. Induction and Familiarisation Programme for Directors

The Familiarisation Programme for Independent Directors, which also extends to other Non-Executive Directors aims to familiarise them with the Company, nature of the IT industry, business model, processes & policies, compliances etc., and seeks to update them on the roles, responsibilities, rights and duties under the Companies Act, 2013 and the SEBI Listing Regulations and other applicable statutes. The details of the induction and familiarisation programme for the Directors are given in the Corporate Governance Report, which forms part of the Annual Report.

3. Code of Conduct

The Company has formulated a “Code of Business Conduct and Ethics” for the Board of Directors and Senior Managerial Personnel. The confirmation of compliance of the same is obtained from all concerned on an annual basis. All Board Members and Senior Managerial Personnel have given their confirmation of compliance for the year under review. A declaration duly signed by Vice Chairman & Managing Director is given under Corporate Governance Report appearing elsewhere as a separate section in this Annual Report. The Code of Business Conduct and Ethics for Board of Directors and Senior Managerial Personnel is also posted on the website of the Company at web link https://www.mastek.com/corporate-qovernance

e. Board Independence:

The definition of ‘Independence’ of Directors is derived from Regulation 16(1 )(b) of the SEBI Listing Regulations and Section 149(6) of the Companies Act, 2013. Based on the confirmation /disclosures received from the Directors and on evaluation of the relationships disclosed by the Directors during the Board evaluation process, the following Non-Executive Directors are Independent of the Management:

1) Mr. S. Sandilya

2) Ms. Priti Rao

3) Mr. Atul Kanagat, and

4) Mr. Keith Bogg

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

f. Key Managerial Personnel:

Pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time to time), the following are the Key Managerial Personnel of the Company:

1) Mr. Sudhakar Ram - Vice Chairman & Managing Director;

2) Mr. Abhishek Singh - Group Chief Financial Officer; and

3) Mr. Dinesh Kalani - Company Secretary

There is no change in the composition of Key Managerial Personnel during the year under review.

g. Committees of the Board:

The Board has 5 Committees:

1) Audit Committee

2) Nomination and Remuneration Committee

3) Stakeholders’ Relationship Committee

4) Corporate Social Responsibility Committee, and

5) Governance Committee

Details of all the Committees along with their amended charters, composition and meetings held during the year are given under Corporate Governance Report appearing elsewhere as a separate section in this Annual Report.

11. Nomination and Remuneration Policy

The Company has a policy on Nomination and Remuneration of Directors and Senior Managerial Personnel approved by the Nomination and Remuneration Committee and the Board. The policy is available at the website of the Company at web link https://www.mastek.com/corporate-qovernance.

The policy inter-alia covers:

1. Directors’ appointment and remuneration; and

2. Key Managerial Personnel and other senior employees appointment and remuneration.

Please refer the Notes to Accounts and Corporate Governance Section for the details on Remuneration of Directors and Key Managerial Personnel.

12. Employee Stock Option Plans

The Company has 3 ongoing Employee Stock Option Plans (ESOPs) at present. During the year under review, the Company had granted 386,000 Employee Stock options to its selected employees. The Board of Directors confirms that there is neither any new plan introduced nor there were any material changes made in the existing ESOP Plans and all the existing ESOP Plans comply with the SEBI Guidelines. Details of shares issued under ESOPs, as also the disclosure in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014, read with SEBI circular dated 16 June, 2015 are uploaded on the website of the Company at web link https://www.mastek.com/ corporate-governance.

The Annual Certificate from M/s. Walker Chandiok & Co. LLP, Chartered Accountants, Statutory Auditors stating that the ESOP Plans have been implemented in accordance with the SEBI Regulations and the resolutions have been passed by the members in their general meeting, will be obtained and placed at the ensuing 37th Annual General Meeting for inspection of members.

13. Audit Committee

The Company has an Audit Committee that currently comprises of 4 Independent Directors and 1 Non-Executive Director. The Chairman of the Audit Committee is Independent Director. The Independent Directors are accomplished professionals from the Corporate fields. The Managing Director and Group Chief Financial Officer attend the meetings as permanent invitees. The Company Secretary acts as the Secretary to the Committee.

During the financial year 2018-19 the Committee met 5 times. The details of the Audit Committee meetings and the attendance of the members there at, are provided in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual Report.

During the year under review, the Board accepted all the recommendations of the Audit Committee.

14. Related Party Transactions

The Company revised its Policies on determining materiality of related party transactions and also on dealing with Related Party Transactions in accordance with the amendments to the applicable provisions of the SEBI Listing Regulations. The same has been posted on the website of the Company at web link https://www.mastek.com/corporate-aovernance

During the year under review, the Company has not entered into transactions with related parties (except with its wholly owned subsidiaries which are exempt for the purpose of Section 188(1) of the Companies Act, 2013). As defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification and Definitions Details) Rules, 2014, all of the Related Party Transactions entered into were at an arm’s length basis and in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI Listing Regulations. There are no materially 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.

Omnibus approvals are given by the Audit Committee for the transactions, which are foreseen and are repetitive in nature on yearly basis. A statement of all Related Party Transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms & conditions of the transactions. The said transactions were unanimously approved by the Audit Committee as well as by the Board.

During the year under review, the Company had not entered into any contract / arrangement / transaction with any related parties, which could be considered material in accordance with the policy of the Company on determining materiality of related party transactions. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 along with the justification for entering into such contract or arrangement in Form AOC-2 is not required to be given. However, the Directors draw attention of the members to the Note no. 24 of the Standalone Financial Statement, which sets out, related party transaction disclosures.

15. Human Resource and Relations

Human Resources are vital and most valuableassets for the Company. Mastek Group 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 excellent talent.

As on 31 March, 2019, Mastek Group had a total head count of 2069. The Directors wish to place on record their appreciation and acknowledgment of the efforts and dedication and contributions made by employees at all levels during the year under review. Mastek Group continues to focus on attracting new talent & help them to acquire new skills, explore new roles and realise their potential byway of providing training Programmes and retain such high quality talent.

The detailed information pertaining to Human Resources initiatives taken by the Company is given under the Management Discussion and Analysis, which forms Part of this Annual Report.

16. Particular of Employees

The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 2 to the report.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rules 5(2) and 5(3) of the aforesaid Rules forms part of this report. However, in terms of first provision of Section 136(1) of the Companies Act, 2013, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection to the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

17. Equal Opportunity Employer

The Company has always provided a congenial atmosphere for work that is free from discrimination and harassment, including sexual harassment but not limited to. It has provided equal opportunities of employment to all irrespective of their caste, religion, colour, marital status and gender.

18. Management of Risks of Fraud, Corruption and Unethical Business Practices

a. Whistle Blower Policy / Vigil Mechanism

In compliance with the requirements of the Companies Act, 2013 and the SEBI Listing Regulations, the Company has established a Whistle Blower Policy/Vigil Mechanism Policy and the same is placed on the web site of the Company at web link https://www.mastek.com/ corporate-qovernance

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, leakage of unpublished price sensitive information, actual or suspected fraud or violation of the Company’s Code of Conduct. The mechanism provides for adequate safeguards against victimisation of Director(s) and / or Employee(s) who avail the mechanism.

b. Anti - Corruption and Bribery Policy

In furtherance of the Company’s Philosophy of conducting business in an honest, transparent and ethical manner, the Board has laid down ‘Anti-Corruption and Bribery Policy’ as part of the Company’s Code of Business Conduct and Ethics. As a Company, Mastek has zero-tolerance to bribery and corruption and is committed to act professionally and fairly in all its business dealings. To spread awareness about the Company’s commitment to conduct business professionally, fairly and free from bribery and corruption and as part of continuous education to the employees an ‘Anti- Bribery’, mandatory online training & testing through a web-based application tool was conducted for relevant employees. The above policy and its implementation are closely monitored.

The concerned employees of the Company are made aware of the said policy at the time of joining the Company and are also provided online training, wherever necessary.

19. Policy on Prevention of Sexual Harassment of Women at Workplace

The Company has zero tolerance towards any action on the part of any employee which may fall under the ambit of ‘Sexual Harassment’ at workplace, and is fully committed to provide a safe and conducive work environment to all its employees and associates to uphold and maintain the dignity of every women employee working in the Company. The Company’s Policy provides for protection against sexual harassment of women employees at workplace and for prevention and redressal of such complaints.

The Company has a qualified Internal Complaints Committee, who along with the external member reviews the policy and framework on a regular basis. Additionally, the Company ensures that every new employee undergoes an awareness programme which will sensitise them to uphold the dignity of their colleagues at workplace, particularly with respect to prevention of sexual harassment.

During the year under review, the Company has not received any complaint.

No cases of child labour, forced labour and involuntary labour were reported during the year.

20. Corporate Social Responsibility

Mastek Foundation is the CSR wing of the Company. Founded in 2002, the mission of Mastek Foundation evolves as Informed Giving, Responsible Receiving. The institution seeks to inspire Company employees by creating awareness among them to give back to the community in ways which would meet the needs and challenges faced by the community members. One such medium could be through volunteering and giving opportunities. The Foundation also supports Non - Governmental Organisation (NGOs) to scale and build their capabilities through our core skill of IT. Hence, the Foundation has 3 clearly defined pillars:

ENGAGE, GIVE AND BUILD.

In compliance with the provisions of Section 135 of the Companies Act, 2013 the Board of the Company has formed a Corporate Social Responsibility (CSR) Committee. The Committee met once during the year under review and a detailed report about CSR activities undertaken during the year is annexed as Annexure 3 to the report. The CSR Policy has been uploaded on the website of the Company at web link www.mastek.com/corporate-aovernance. The CSR projects or programmes undertaken are within the broad framework of Schedule VII of Companies Act, 2013. The highlights of the policy are asfollows:-

Mastek CSR programmes falls under the following categories:

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

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

c. 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.

d. Protection and up gradation of environmental conditions: These include ensuring environ mental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining the quality of soil, air and water.

e. Any other projects with the approval of the Board.

Corpus:

The corpus for the CSR consists of:

- 2% of the Average Net Profit of the preceding 3 years

- Any income / surplus arising out of the above activities

- Payroll contribution from the employees

- Proceeds from Fund-raising events

Mastek may pool its resources and CSR spending with other Groups or Associate Companies on collaborative efforts that qualify as CSR spending.

Roles and Responsibilities:

- Decide CSR projects, programmes, or activities to be taken up by the Company

- The CSR activities proposed to be taken up by the Company each year are placed before the Board for approval

- Oversee the progress of the initiatives rolled out under this policy

- Define and monitor the budgets for carrying out the initiatives

- Submit a report to the Board of Directors on all CSR activities / projects spent during the financial year

- Monitor and review the implementation of the CSR policy

CSR Committee Composition:

The Chairperson of the Committee is Ms. Priti Rao, Non - Executive Independent director. The other members are Mr. Ashank Desai, Non - Executive Director and Mr. Sudhakar Ram, Vice - Chairman & Managing Director. The Company Secretary acts as the Secretary to the Committee.

Based on the Average Net Profits of the Company for 3 immediately preceding financial years, the amount to be spent on CSR activities during the financial year 2018-19 was budgeted at Rs. 54 lakhs. However, a total sum of Rs. 100.05 lakhs was spent on projects approved under Section 135 of the Companies Act, 2013 on CSR activities during the year, which is almost 85% higher than the budgeted amount.

21. Auditors

a. Statutory Auditors

As per the requirements of the Companies Act, 2013, the Audit Committee and the Board of Directors at their meeting held on 20 April, 2017 and the members of the Company at the 35th Annual General Meeting (AGM) appointed M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N / N500013), as the Statutory Auditors of the Company for a period of 5 Consecutive years, commencing from the conclusion of 35th AGM untill the conclusion of the 40th AGM, subject to ratification by members every year.

Pursuant to the provisions of Section 139 and the Companies (Amendment) Act, 2018 effective from 7 May, 2018, the requirement of seeking ratification from the members for the continuation of re-appointment of the Statutory Auditors has been withdrawn from the Statute, hence re-appointment of M/s. Walker Chandiok & Co. LLP, Statutory Auditors of the Company does not require ratification and will continue to be Statutory Auditors of the Company. Hence, the resolution seeking ratification of the members for their appointment is not being placed at the ensuing AGM.

M/s. Walker Chandiok & Co. LLP has confirmed their eligibility and consent under Sections 139 and 141 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 for their continuance as the Auditors of the Company for the financial year 2019-2020. In terms of the SEBI Listing Regulations, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.

Further, the report of the Statutory Auditors along with the notes is enclosed with the Financial Statements. The Auditors have issued an unmodified opinion on the Financial Statements for the financial year ended 31 March, 2019.

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

b. Secretarial Auditors

In terms of Section 204 of the Companies Act, 2013 and Rules made thereunder, the Board has appointed Mr. Prashant S. Mehta, Proprietor of P. Mehta & Associates, Practicing Company Secretaries, as Secretarial Auditorof the Company for the financial year 2018-19 to conduct the Secretarial Audit and issue the Secretarial Audit Report in Form MR-3 pursuant to the provisions of Section 204 of the Companies Act, 2013 and read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The report of the Secretarial Auditors for the financial year 2018-19 is annexed as Annexure4 to this report. The report is self-explanatory and does not contain any qualification, reservation and adverse remarks.

Pursuant to the circular issued by the SEBI dated 8 February, 2019, Secretarial Auditor will issue the “Annual Secretarial Compliance Report” and the same will be submitted to the stock exchanges in time.

22. Enterprise Risk Management (ERM)

In terms of the requirements of the Companies Act, 2013, the Company has developed and implemented the Risk Management Framework which captures and classifies the risks faced by the Company. This is periodically reviewed by the Governance Committee of the Board as well as by the Board of Directors of the Company.

The objectives of ERM includes:

- Identifying and assessing a broad array of risks that could negatively impact the achievement of Organizational goals and objectives

- Ensuring appropriate ownership and accountability of risks

- Developing and implementing appropriate risk mitigation and monitoring plans by risk owners

Risk identified are defined in the “Risk Register” and categorized as High, Medium or Low risks. The risk owners quantify the impact of identified risks and outline the steps taken to mitigate it. The risks identified are reviewed periodically to assess its impact on the business. As a result, a risk can go up or down in its impact. Once mitigated, it can go out of the Risk Register as well. This is a robust process governed by the Board in conjunction with the risk owners. Based on the probability & impact of the risk, the requisite controls and mitigation action plans have been designed and implemented.

Risk of non-compliance can result in reputational damage, penalty and business risk. To ensure optimal compliances, periodic checks and tests of compliance and controls are performed by the Company. The report of such checks are presented to the Board periodically. This spreads awareness about various risk management activities / achievement, new topics / practices / updates on ERM and to create enthusiasm in them to proactively control risks in their work processes & areas. Mastek is committed to further strengthen its risk management capabilities in order to protect interests of stakeholders and enhance shareholder value.

The detailed information pertaining to ERM is given under the management Discussion and Analysis which forms part of this Annual Report.

23. Internal Control Systems

- Internal Audit and its Adequacy

The scope and authority of the Internal Audit function is defined by the Audit Committee. With a view to maintain independence and objectivity in its working, the Internal Audit function reports directly to the Audit Committee. At the beginning of each financial year, a risk based Annual Audit Plan is rolled out after the same is approved by the Audit Committee. The Audit Plan is aimed at evaluation of the efficacy and adequacy of internal control system and compliance thereof, robustness of internal processes, policies and accounting procedures, compliance with laws and regulations. Based on the reports of internal audit function, process owners undertake corrective action in their respective areas. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

- Internal Financial Controls over Financial Reporting (IFCoFR)

The internal financial controls within the Company are commensurate with the size, scale and complexity of its operations. The controls were tested during the year and no reportable material weaknesses either in their design or operations were observed. The Company has robust policies and procedures which, inter alia, ensures integrity in conducting its business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors.

24. Directors’ Responsibility Statement

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, audit and reviews performed by the Internal, Statutory and Secretarial Auditors and the reviews undertaken by the Management and the Audit Committee, the Board is of the opinion that the Company’s Internal Financial Controls have been adequate and effective during the year under review.

Pursuant to Section 134 of the Companies Act, 2013, and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm the following statements:

(a) that in the preparation of the Annual Financial Statements for the year ended 31 March, 2019, 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 judgments 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 31 March, 2019 and of the profits 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 such internal financial controls are adequate and were operating effectively; and

(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.

25. Details of Conservation of Energy and Technology Absorption & Foreign Exchange Earnings and Outgo

a. Conservation of Energy and Technology Absorption

The Company is entirely a Services Company and thus essentially, a non-energy intensive organisation. Additionally, the Company’s facilities are set up at locations chosen for adequate availability and supply of energy. The Company has optimisation of IT power usage as well as higher operational efficiency.

Further, the Company was able to reduce the power consumption over the previous year, through monitoring energy use and installing LED lights. To further save energy and improve efficiency, the Company implemented smarter solutions with automated controls to maintain optimal temperature at optimal power consumption. LED lights fitment in our offices as well as replacement of old power guzzler with new smarter solutions have helped to reduce energy costs as well.

The Company continues to adopt and use the latest technologies to improve the productivity and quality of its services. The Company’s operations do not require significant import of technology.

b. Foreign Exchange Earnings and Outgo

Total Foreign Exchange used and earned by the Company is as follows:

(Rs. lakhs)

Particulars

Year Ended 31 March, 2019

Year Ended 31 March, 2018

Foreign Exchange

413

490

Used

Foreign Exchange

19,526

16,026

Earned

26. Corporate Governance

The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by the SEBI Listing Regulations.

The Company has complied fully with Corporate Governance requirements under the SEBI Listing Regulations. A separate section on Corporate Governance practices followed by the Company together with a Certificate appearing elsewhere in this report and forms an integral part of this report.

27. Code of Conduct for Prevention of Insider Trading

The Board of Directors has revised the Code of Internal Procedures and Conduct for regulating, monitoring and reporting of trading by Insiders in accordance with SEBI (Prohibition of Insider Trading) Regulations, (Amendment) 2018. The code is available on website of the Company at web link https://www.mastek.com/corporate-governance

28. Disclosures under the Companies Act, 2013 and the SEBI Listing Regulations

a. Extract of Annual Return:

As required under the provisions of Sections 134(3)(a) and 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, (including any statutory modification(s) or re-enactment thereof, for the time being in force), the extract of Annual Return in Form No. MGT-9 is annexed herewith as Annexure 5 to this report.

b. Number of Board Meetings:

The Board of Directors met 5 times during the financial year 2018-19. The details of the Board Meetings and the attendance of the Directors there at, are provided in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual Report.

c. Increase in Issued, Subscribed and Paid-up Equity Share Capital:

During the year, the Company has issued and allotted 2,80,747 number of Equity Shares of face value of Rs. 5/- each for a total nominal value of Rs. 14,03,735 under various ESOP Plans to the selected employees of the Company, who exercised their vested Employee Stock Options. These Equity Shares rank pari passu in all respects with the existing Equity Shares of the Company.

The movement of share capital during the year was as under:

Particulars

No. of shares allotted

Cumulative outstanding No. of shares

Cumulative outstanding capital (Rs.)

Capital at the beginning of the year, i.e. as on 1 April, 2018

-

2,36,92,056

11,84,60,280

Allotment of shares to employees pursuant to exercise of options granted under ESOP Plans on -

1. 17 April, 2018

2. 04 July, 2018

3. 24 October, 2018

4. 16 January, 2019

5. 27 March, 2019

35,894

57,863

97,250

59,498

30,242

2,37,27,950

2,37,85,813

2,38,83,063

2,39,42,561

2,39,72,803

11,86,39,750

11,89,29,065

11,94,15,315

11,97,12,805

11,98,64,015

Capital at the end of the Year, i.e. as on 31 March, 2019

-

2,39,72,803

11,98,64,015


d. Changes in the Nature of Business:

There has been no change in the nature of business of the Company during the financial year ended 31 March, 2019.

e. Listing with Stock Exchanges:

Your Company is listed with the BSE Limited and the National Stock Exchange of India Limited.

f. Compliance with Secretarial Standards on Board and General Meetings:

During the year under review, the Company has complied with Secretarial Standards on meetings of the Board of Directors and on General Meetings issued by the Institute of Company Secretaries of India in terms of Section 118(10) of the Companies Act, 2013.

g. Insurance:

The Company has sufficiently insured itself under various Insurance policies to mitigate risks arising from third party or customer claims, property, casualty, etc.

h. Equity Shares with Differential Rights:

Your Company has not issued any Equity Shares with differential rights as to dividend, voting or otherwise.

i. Particulars of Loans, Guarantees or Investment:

In compliance with the provisions of the Companies Act, 2013, there were no loans given or investments made by the Company during the year.

Further, the Company had provided a Corporate Guarantee for an amount of GBP 17 million and also security / charge / mortgage over one of its Property as a Security for a term loan facility availed by one of its wholly owned subsidiary for an aggregate principal amount not exceeding GBP 15 million from the Bank. The Company had released its earlier Corporate Guarantee of US$ 12 million during the year based on prepayment of the loan by the Subsidiary.

j. Other Disclosures:

No disclosure or reporting is made with respect to the following items, as there were no transactions during the year under review:

- There were no revision in the Financial Statements.

- No material fraud has been reported by the Auditors to the Audit Committee or the Board.

- The Managing Director of the Company has not received any remuneration or commission from any of its subsidiaries.

- The Company does not have any scheme or provision of money for the purchase of its own shares by trustees for employees benefit.

- The Company is not required to maintain cost records as per Section 148 of the Companies Act, 2013.

- There were no buy back of shares during the year under review

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

- 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 the Company’s operations and legal compliances.

29. Industry Recognition

During the year under review, your Company, its Subsidiaries and Executives received many awards and felicitations conferred by reputable organisations. Some of them are:

a. Gartner listed your Company in its prestigious “Leading IT Service Provider Offering RPA Services” section

b. Mastek Learning & Development team won the award for “Best Learning Strategy of the Year” this award was presented at the 3rd Edition of the “Future of L&D Summit & Awards 2019”

c. Outstanding Contribution - IT at CNBC-AWAAZ CEO Awards

d. Your Company was shortlisted in not 1 but 3 categories of the UK IT Industry Awards including:

1. Vendor of the Year

2. Digital Project of the Year and

3. IT Service and Support Professional of the Year

e. Your Company was selected as a finalist in 2 categories of this year’s European Software Testing Awards. The categories were:

1. Best Agile Project: Student Loans Company (SLC) in partnership with Mastek

2. Best Test Automation Project - Functional: Specsavers in partnership with Mastek

f. Insights Success magazine which has overn 70,000 qualified subscribers across the globe ran a cover story recognising Mr. John Owen’s exemplary leadership skills, his work as the Group CEO - leading by example and effectively driving transformation to deliver outstanding results and bringing about positive change and awarded him ‘The 10 Best Performing IT Leaders to Watch in 2019’.

g. Mr. John Owen, Group Chief Executive Officer won the Finance Monthly CEO Award 2018 for his outstanding contribution in driving Mastek’s growth agenda over the past 12 months.

h. The CF0100 2019 Roll of Honor was presented to Mr. Abhishek Singh, Group Chief Financial Officer, in recognition of his contributions to Financial Planning & Cost Management. He is Recipient of this honor for 3rd year in a row.

30. Enhancing Shareholders Value

The Company accords top priority for creating and enhancing shareholders value. All the Company’s operations are guided and aligned towards maximising shareholders value.

31. Appreciation and Acknowledgement

Your Directors are grateful to the Investors for their continued patronage and confidence in the Company over the past several years. Your Directors also thank the Central and State Governments, other Statutory and Regulatory Authorities for their continued guidance, assistance, co-operation and support received.

Your Directors thank all our esteemed clients, associates, vendors and contractors within the country and overseas for their continued support, faith and trust reposed in the professional integrity of Mastek. With continuous learning, skill up-gradation and technology development Company will continue to provide world class professionalism and services to its clients, associates, vendors and contractors.

Your Directors also wish to convey their sincere appreciation to all employees at all levels for their dedicated efforts and consistent contributions and co-operation extended and is confident that they will continue to contribute their best towards achieving still better performance in future to become a significant leading player under Information Technology Industry.

For and on behalf of the Board of Directors

Sudhakar Ram S. Sandilya

Vice Chairman and Non- Executive Chairman and

Managing Director Independent Director

(DIN: 00101473) (DIN: 00037542)

Date: 16 April, 2019

Place: Mumbai


Mar 31, 2018

Directors'' Report

Dear Shareholders,

The Directors have great pleasure in presenting the 36th Directors'' Report for the financial year ended March 31, 2018:

1. HIGHLIGHTS OF CONSOLIDATED AND STANDALONE FINANCIAL RESULTS

Rs, in Lakhs

Particulars

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Revenue from operations

81,721

56,016

16,232

16,948

Other Income

2,099

1,260

2,323

1,282

Total Income

83,820

57,276

18,555

18,230

Expenses

71,755

51,160

14,683

14,259

Depreciation and amortisation expenses

1,876

1,493

1,119

1,204

Finance costs

586

377

19

24

Exceptional items

-

340

-

340

Profit before tax

9,603

3,906

2,734

2,403

Tax expense

2,607

665

1,160

91

Profit after tax

6,996

3,241

1,574

2,312

Other comprehensive income

(248)

(4,157)

(1,315)

790

Total Comprehensive income

6,748

(916)

259

3,102

Equity Holders

6,748

(916)

259

3,102

Dividend

(1,056)

(233)

(1,056)

(233)

Dividend Distribution Tax

(12)

-

(12)

-

EPS

-Basic

29.74

13.96

6.69

9.96

-Diluted

28.14

13.38

6.33

9.55

2. OVERVIEW OF THE FINANCIAL PERFORMANCE

A. MASTEK OPERATIONS

On a Consolidated basis, the Group registered revenue from operations of Rs, 81,721 lakhs for the year ended March 31, 2018 as compared to Rs, 56,016 lakhs in the year ended March 31, 2017, which is an increase of 45.9%. The Group registered a net profit of Rs, 6,996 lakhs in the year ended March 31, 2018 as compared to Rs, 3,241 lakhs in the year ended March 31, 2017, thereby registering an increase of 115.9%.

On a Standalone basis, Mastek registered revenue from operations of Rs, 16,232 lakhs for the year ended March 31, 2018, as compared to Rs, 16,948 lakhs for the year ended March 31, 2017. The Company made a Net profit of Rs, 1,574 lakhs for the year ended March 31, 2018 as compared to Net Profit of Rs, 2,312 lakhs for the year ended March 31, 2017. Further details are included in notes to the Accounts of Standalone Financial Statement.

The Consolidated and Standalone Financial Statements of the Company for the year ended March 31, 2018 are prepared in compliance with the applicable provisions of the Companies Act, 2013 and Indian Accounting Standards (IND-AS). The said financial statements have been prepared on the basis of the audited financial statements of the Company and un-audited financial statements of its subsidiaries which have been reviewed by the Statutory Auditors.

No material changes or commitments have occurred between the end of the Financial Year and the date of this Report which affect the financial statements of the Company in respect of the Financial Year under review.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Standalone and Consolidated Financial Statements along with the

Directors'' Report and Auditors'' Report thereon form part of this Annual Report. The Financial Statement of the Company and its subsidiaries are also available on the website of the Company and can be accessed at the weblink: http://www.mastek.com/financial-information.

B. BREAKUP OF THE OPERATING REVENUE BY REGIONS

Region

Year ended March 31, 2018

Year ended March 31, 2017

Rs, in Lakhs

% of Revenue

Rs, in Lakhs

% of Revenue

UK

56,315

68.9%

46,040

82.2%

North America

23,715

29.0%

7,078

12.6%

Others (India/Asia Pacific)

1,691

2.1%

2,898

5.2%

Total

81,721

100.0%

56,016

100.0%

The U.K. operations contributed Rs, 56,315 lakhs in total operating revenue for the year 2017-18 as compared to Rs, 46,040 lakhs for the year ended 2016-17, resulting in a growth of 22.3%. This growth was driven by increased business in the Government vertical followed by Retail and Finance vertical. UK business grew by 27.6% on constant currency basis.

The North America operations contributed Rs, 23,715 lakhs in revenue for the year 2017-18 witnessing a growth of 235%, driven by full year revenue contribution and growth from TAISTech acquisition.

Revenue of other region i.e. India and Asia Pacific region is Rs, 1,691 lakhs for the year 2017-18 as compared to Rs, 2,898 lakhs for the year 2016-17, resulting in a decrease of (41.6%). The degrowth is due to selective bidding in this segment during the year as part of Group strategy.

C. BREAK UP OF REVENUE BY SERVICE LINES

Service Lines

2017-18

2016-17

Rs, in Lakhs

% of Revenue

Rs, in Lakhs

% of Revenue

Application Development

38,891

47.6%

32,480

58.0%

Digital Commerce

21,211

26.0%

5,614

10.0%

Application Support & Maintenance

8,008

9.8%

8,495

15.1%

BI & Analytics

6,484

7.9%

2,007

3.6%

Agile Consulting

4,771

5.8%

5,473

9.8%

Assurance & Testing

2,356

2.9%

1,947

3.5%

Total

81,721

100.0%

56,016

100.0%

PROFITABILITY

During the Year ended March 31, 2018, the Group earned a profit of Rs, 6,996 lakhs as compared to Rs, 3,241 lakhs for the year ended March 31 2017. The profits for the financial year ended 2017-18 achieved growth of 115.9%, driven by focused profitable growth in revenue, acquisition in US, operational improvement and better utilisation of existing investment in SG&A and capacity to service growth.

3. HOLDING AND SUBSIDIARIES

Your Company continues to be the Holding Company of Trans American Information Systems Private Limited and Mastek (UK) Limited, which in turn has IndigoBlue Consulting Ltd, UK and Digility Inc. USA as its wholly owned subsidiaries.

Digility Inc. USA, the step down subsidiary of your Company has TAISTech LLC, USA and Trans American Information Systems Inc. USA as its wholly owned subsidiaries and consequently, they are also step down wholly owned overseas subsidiaries of the Company.

Your Company has two direct wholly owned subsidiaries, and four step down subsidiaries as at March 31, 2018 and the statement containing salient features of the financial statements of all the subsidiaries along with the highlights of the performance of the subsidiaries and their contribution to overall performance of the Company are provided in Form AOC-1 is annexed as Annexure 1.

4. BUSINESS

Your Company is a Global IT service provider focused on Enterprise Digital Transformation in agile manner. It combines the business knowledge and industry expertise of its domain specialists and the technical knowledge and implementation skills of its Delivery team leveraging its Tools, Platforms, Partnerships and Solutions in its Development Centers located across India, UK and US.

Your Company offers comprehensive services covering full range of the software development process starting with agile consulting, application development, testing, to ongoing support and maintenance. With over three decades of experience and excellent track record of delivery, manifesting in our 96% delivery success ratio, has empowered us with the capability to drive the growth of our diverse clients.

In the UK, rate of growth is likely to be subdued owing to uncertainty over the outcome of Brexit negotiations. However, it provides significant opportunity to Mastek as atleast 27 core systems across central government will need to be reconfigured. This includes immigration, borders and customs controls amongst other departments. Mastek holds successful long term client relationship with proven track record with Home office and Health which are expected to have bigger share of IT spend.

In the US, your Company is supporting its customers in Digital Commerce space to modernise and compete in evolving Retail sector which is undergoing disruption and significant transformation in acquiring and retaining customers.

Businesses across globe recognise the imperative to leverage new and emerging technologies to drive efficiencies. As per Forbes, more than 84% of digital transformation projects fail to meet expectations. Your Company, with proven capabilities in delivering large and complex enterprise-wide transformation projects, is well placed to successfully partner businesses from end-to-end in their transformational journeys.

For further details, please refer Management Discussion Analysis Report.

5. OUTLOOK

Your Company closed the financial year with a satisfactory performance, achieving growth across all the parameters as well as making Mastek a future-ready organisation. The Company is well poised to achieve its objectives defined under "Vision 2020" i.e. to be a global leader in digital transformation services. Mastek is eyeing for an all-round growth in agile and digital transformation space and geared up to unlock its potential.

For further details, please refer Management Discussion Analysis Report.

6. DIVIDEND & RESERVES

The Board of Directors at its meeting held on October 26,

2017 approved payment of Interim Dividend of Rs, 2/- per share (Face value of Rs, 5/- each) i.e. @ 40% which was paid on November 15, 2017.

Further, the Board of Directors at its Meeting held on April 18, 2018 were pleased to recommend the payment of a final dividend @ of Rs, 4/- per equity share (face value of Rs, 5/- each) i.e. @80%, subject to the approval of the Shareholders at the ensuing 36th Annual General Meeting.

Therefore, the total dividend for the financial year ended March 31, 2018 stands at Rs, 6/- per share, involving an total outflow approximately of Rs, 1,422 lakhs compared to Rs, 3.50/- per share paid during the previous year

The final dividend, if approved, at the ensuing 36th Annual General Meeting (AGM), will be paid to those shareholders whose names appears on the Register of Members of the Company as of the end of the day on July 12, 2018, being the record date.

During the year, under review, no amount from profit was transferred to General Reserves.

7. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENT UNDER SECTION 186 OF THE COMPANIES ACT, 2013

In compliance with the provisions of the Companies Act, 2013, there were no loans or investment made by the Company. Further the details of guarantee provided and outstanding are given in the respective Notes to the Financial Statements.

Company had provided a Corporate guarantee in December,

2016 for an amount of USD 12 mn. and also security/ charge/ mortgage over its Property as a Security for a term loan facility availed of an aggregate principal amount not exceeding USD 10 million from Bank valid for a period of

5 (five) years for acquisition of 100% share-holding in two US based software services companies by Digility Inc. a first level step-down subsidiary of the Company.

8. OTHER 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, extract of Annual Return is annexed as Annexure 2.

ii) Number of Board Meetings:

The Board of Directors met 5 (Five) times during the financial year 2017-18. The details of the board meetings and the attendance of the Directors there at, 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 3,14,523 Equity Shares of face value of Rs, 5/- each for a total nominal value of Rs, 15,72,615 under various ESOP Plans to the eligible employees of the Company, who exercised their vested Employee Stock Options. These Equity Shares rank pari passu in all respects with the existing Equity Shares of the Company

As on March 31, 2018, the issued, subscribed and paid up share capital of your Company stood at Rs, 11,84,60,280/- comprising 2,36,92,056 Equity shares of Rs,5/- each. (Previous Year Rs, 11,68,87,665 comprising 2,33,77,533 Equity shares of Rs, 5/- each.)

iv) Composition of Audit Committee:

Mastek has an Audit Committee that currently comprises of four Independent Directors and one Non-Executive Director. The Chairman of the Audit Committee is an Independent Director. The Independent Directors are accomplished professionals from the corporate fields. The Group Chief Financial Officer attends the meetings on invitation. The Company Secretary act as the Secretary to the Committee.

During the year ended March 31, 2018 the Committee met 4 (Four) times. The details of the Audit Committee Meetings and the attendance of the Members there at, are provided in the Corporate Governance Report, appearing elsewhere as a separate section in this Annual Report.

During the year all the recommendations of the Audit Committee were accepted by the Board.

v) Related Party Transactions:

In line with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulation"), the Company has formulated a Policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. The same has been posted on the website of the Company at https://www.mastek.com/ corporate-governance

All the Related Party Transactions are entered into at an arm''s length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations. There are no materially 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.

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

In accordance with Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by the Company with related parties referred to in Section 188(1) of the Companies Act, 2013 in FORM AOC-2 is annexed as Annexure 3.

vi) Changes in the Nature of Business:

There has been no change in the nature of business of the Company during the financial year ended March 31, 2018.

vii) Listing with Stock Exchanges:

Your Company is listed with the BSE Limited and National Stock Exchange of India Limited.

viii) Compliance with Secretarial Standards on Board and Annual General Meeting:

The Company has complied with the Secretarial Standards 1 and 2 issued by the Institute of Company Secretaries of India on Meetings of Board of Directors and General Meetings.

ix) Insurance:

The Company has sufficiently insured itself under various Insurance policies to mitigate risks arising from third party or customer claims, property, casualty, etc.

x) Equity shares with differential rights:

Your Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

9. CREDIT RATING

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. During the year under review, ICRA Limited, a reputed Rating Agency, had reaffirmed the ratings assigned for the bank facilities as [ICRA]A (Stable) rating for fund based limits and [ICRA]A1 for non-fund based limits for the Working Capital facilities granted to the Company by its Bankers.

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 SEBI Listing Regulations, the Company has established a Whistle Blower Policy / Vigil Mechanism Policy and the same is placed on the web site of the Company, viz https://www.mastek.com/corporate-governance

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism.

The Company has also adopted Anti Bribery Policy and all concerned staff / employees are trained to avoid falling foul of the laws in the respective geographies where Company operates.

The employees of the Company are made aware of the said policy at the time of joining the Company and are also provided online training.

11. INDUSTRY RECOGNITION

Mastek Group received following awards / accolades, during the year:

- Mastek was a Finalist at the European Testing Awards 2017 within the ''Best Test Automation Category - Functional'';

- 3rd prize in all India level NASSCOM Hackathon -"Build for India & Women in Technology";

- UK IT Industry Awards - 2017.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, audit and reviews performed by the internal auditors, statutory auditors and secretarial auditors and the reviews undertaken by the management and the Audit Committee, the Board is of the opinion that the Company''s internal financial controls have been adequate and effective during the year under review.

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements:

(a) that in the preparation of the annual financial statements for the year ended March 31, 2018, 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 judgments 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 March 31, 2018 and of the profits 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 such internal financial controls are adequate and were operating effectively; and

(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 AND FRAUD, IF ANY

As per the requirements of the Companies Act, 2013, the Audit Committee and the Board of Directors at their meeting held on April 20, 2017 appointed M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), as the Statutory Auditors of the Company and the shareholders of the Company at the 35th Annual General Meeting (AGM) appointed M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), as Statutory Auditors of the Company, for a period of 5 years, commencing from the conclusion of 35th AGM till the conclusion of the 40th AGM, subject to ratification by members every year

Ratification of the appointment of the Statutory Auditors, as recommended by the Board, is being sought from the Shareholders at the ensuing 36th Annual General Meeting of the Company.

Further, the report of the Statutory Auditors along with the notes is enclosed with the financial statements. The observations made in the Auditors'' Report which contains unmodified opinion are self-explanatory and does not contain any qualification/modified opinion. Therefore, it does not call for any further comments. Also the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

14. SECRETARIAL AUDIT

I n terms of Section 204 of the Companies Act, 2013 and Rules made there under, the Board of Directors at their Meeting held on April 20, 2017 appointed Mr. Soumitra Mujumdar, Practicing Company Secretary, as Secretarial Auditor of the Company for the financial year 2017-18. However, Mr. Soumitra Mujumdar had resigned w.e.f. November 30, 2017 as Secretarial Auditor voluntarily and to fill the casual vacancy in his place, Mr. Prashant S. Mehta, Practising Company Secretary was appointed by the Board of Directors at their Meeting held on January 18, 2018 as the Secretarial Auditor for the Financial Year 2017-18 to conduct Secretarial Audit and issue the Secretarial Audit Report pursuant to the provisions of Section 204 of the Companies Act, 2013.

The report of the Secretarial Auditors is annexed 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 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, 2018 Mastek Group had a total Head count of 2,058. Your Directors wish to place on record their appreciation for the contributions made by employees to the Company during the year under review at all levels.

The disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 5 and forms part of this report.

16. EMPLOYEE STOCK OPTION PLANS

During the year under review, the Company had allotted

3,14,523 equity shares under Employee Stock Option Plans to its eligible employee. The Board of Directors confirms that there is neither new plan introduced nor their are any material change in the existing ESOP Plans and all the existing ESOP Plans are in compliance with the SEBI Guidelines. The required disclosures in this regard are annexed as Annexure 6 and forms part of this report.

17. ENTERPRISE RISK MANAGEMENT (ERM)

I n terms of the requirement of the Companies Act, 2013, the Company has developed and implemented the Risk Management Policy and the Board and the Governance Committee of the Board reviews the risks and remedial measures taken on a periodical basis.

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

The Company''s Risk Management Policy with a robust supporting risk management structure & frame work facilitates identification and assessment of new risks and review of already identified risks. The process is based on identified risks and the risk events or factors which require regular assessment and quick response. Based on the probability & impact of the risk, the requisite controls and mitigation action plans have been designed and implemented for risk treatment.

The objective of Risk Management in the Company is to act as an enabler in maintaining its knowledge edge, sustaining and expanding the business, being competitive and ensuring execution of projects within budgeted cost, time and quality, resulting in improved turnover and profitability

Risk compliance verifications are reviewed regularly to test the compliance of controls & mitigation action plans and the summary is reported to the Board. This spreads awareness about various risk management activities/achievement, new topics/ practices/ updates on ERM and to create enthusiasm in them to proactively control risks in their work processes & areas. Mastek is committed to further strengthen its risk management capabilities in order to protect interests and enhance shareholder value.

18. UPDATES ON BOARD OF DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)

A brief profile of all the Directors has been given in the Corporate Governance Section which forms part of the Annual Report.

A. Manner of Evaluation of the Board''s Performance

In compliance with Companies Act, 2013 and SEBI Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, Board Committees, Individual Directors, Chairpersons and the Managing Director for the year under review.

In respect of individual Directors including the Non Executive Chairman and the Managing Director, their personal performance was carried out using a peer review process, facilitated by an outside subject matter expert with confidential processing of inputs, interpretation of findings followed by one-on-one meeting of the individual Directors, and concluding with an aggregate presentation to the entire Board.

Board and Committees functioning was reviewed and evaluated on the basis of responses from Directors, Committee Members and the Managing Director to structured questionnaires, covering various aspects of the composition and functioning of the Board and its Committees.

In a separate meeting of the Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman were also evaluated, taking into account the views of Executive Director and Non Executive Directors. The Directors were asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its Committees and its areas of improvement for a higher degree of engagement with the Management.

The Board expressed its satisfaction with the Evaluation results, which reflects the high degree of engagement of the Board and its Committees with the Company and its Management. Based on the outcome of the evaluation and assessment cum feedback of the Directors, the Board and the Management have also agreed on some action points which will be implemented over an agreed time-frame.

B. Induction and familiarization programme for Directors

The details of the induction and familiarization program for the Directors are given in the Corporate Governance Report which forms part of the Annual Report.

C. Independent Directors

Mr. S. Sandilya, Ms. Priti Rao, Mr. Atul Kanagat and Mr. Keith Bogg have been the Independent Directors on the Board of the Company as at March 31, 2018.

The Shareholders at the Extra Ordinary General Meeting held on March 05, 2015 had approved the appointment of Mr. S. Sandilya, Ms. Priti Rao and Mr. Atul Kanagat as Independent Directors of the Company for a term of four (4) years from April 01, 2015 to March 31, 2019 and Mr. Keith Bogg was appointed as an Independent Director for a period of

5 years with effect from January 17, 2017, and was confirmed by the shareholder at the 35th AGM of the Company held on June 22, 2017 as Non-Executive Independent Directors.

The Company has received and after due assessment took on record the necessary declarations from each of the Independent Directors under section 149(7) of the Companies Act, 2013, that they meets the criteria of Independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI Listing Regulations, and also in the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Companies Act, 2013 and the Rules made there under about their status as Independent Directors of the Company.

D. Director and Key Managerial Personnel (KMP):

There has been no change in the Board of Directors and Key Managerial Personnel of your Company since the last Annual General Meeting held on June 22, 2017. Pursuant to the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company:

- Mr. Sudhakar Ram - Vice Chairman & Managing Director;

- Mr. Abhishek Singh - Group Chief Financial Officer; and

- Mr. Dinesh Kalani - Company Secretary.

During the year under review, Mr. Abhishek Singh was re-designated from Chief Financial Officer to Group Chief Financial officer w.e.f July 19, 2017

E. Retirement by Rotation:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ashank Desai retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. Necessary resolution for approval of re-appointment of Mr. Ashank Desai as a Director of the Company is included in the Notice of the ensuing Annual General Meeting. The Board recommends the resolution for your approval.

F. Code of Conduct:

Mastek has formulated a Code of Business Conduct and Ethics for Board of Directors and

Senior Managerial Personnel. The confirmation of compliance of the same is obtained from all concerned on an annual basis. All Board Members and Senior Managerial Personnel have given their confirmation of compliance for the year under review. A declaration duly signed by Vice Chairman

& Managing Director is given under Corporate Governance Report appearing elsewhere as a separate section in this Annual Report. The Code of Business Conduct and Ethics for Board of Directors and Senior Managerial Personnel is also posted on the website of the Company at https://www.mastek.com/corporate-governance

19. COMPANY''S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND SENIOR MANAGERIAL PERSONNEL

The Company has a policy on Remuneration of Directors and Senior Managerial Personnel. The policy has been approved by the Nomination & Remuneration Committee and the Board. The policy is available at the website of the Company at https://www.mastek.com/corporate-governance

The policy inter-alia covers:

1. Directors'' appointment and remuneration; and

2. Remuneration of Key Managerial Personnel and other senior employees.

Please refer the Notes to Accounts and Corporate Governance Section for the details on Remuneration of Directors and Key Managerial Personnel.

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 the Company''s operations.

21. INTERNAL FINANCIALS CONTROLS OVER FINANCIAL STATEMENT

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.

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

22. INDIAN ACCOUNTING STANDARDS (IND AS)

Your Company has adopted Indian Accounting Standard (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 01, 2017. Accordingly, these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued there under and the other accounting principles generally accepted in India.

The Consolidated and Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. Please note that the Company has transitioned to Indian Accounting Standard (Ind AS) with effect from April 01, 2017. Accordingly, the impact of transition has been provided in the opening reserves as at April 01, 2016 and figures for the financial year ended March, 2017 have been restated accordingly For all the periods up to the year ended March 31, 2017, the Company/Group had earlier prepared and presented its financial statements in accordance with Accounting Standards notified under section 133 of the Companies Act 2013 (Indian GAAP). These financial statements for the financial year ended March 31, 2018 are the first financial with comparatives, prepared under Ind AS. The adoption was carried out in accordance with Ind AS 101, First Time adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principle generally accepted in India as prescribed under Section 133 of the Act read with the Rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP), which was the previous GAAP. Reconciliations and description of the effect of the transition to Ind AS from Indian GAAP is given in Note 33 of the Consolidated Financial Statement and Note 32 of the Standalone Financial Statement.

All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the consolidated/standalone financial statements under both Ind AS and Indian GAAP as of the Transition Date have been recognized directly in equity at the Transition Date. In preparing the financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101. Financial results for all the periods presented have been prepared in accordance with the recognition and measurement principles of IND AS 34, Interim Financial Reporting.

23. PUBLIC DEPOSITS

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

24. MANAGEMENT DISCUSSION AND ANALYSIS

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

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

(a) Conservation of energy and Technology absorption

The Company is entirely a Services Company and thus essentially, a non-energy intensive organization. Additionally, the Company''s facilities are set up at locations chosen for adequate availability and supply of energy, regardless of power shortages recently witnessed across many markets.

Further, The Company was able to reduce the power consumption by 18% over the previous year, through monitoring energy use and installing LED lights. To further save energy and improve efficiency, we implemented smarter solutions with automated controls to maintain optimal temperature at optimal power consumption. Edification of our offices as well as replacement of old power guzzler with new smarter solutions has helped to reduce energy costs as well. The Company is studying the viability of a solar powered energy / hot water solution for our cafeteria. The initiative is currently in the initial stage.

Company is also studying the viability of a solar powered energy / hot water solution for the cafeteria. The initiative is currently in the initial stages.

(b) Foreign exchange earnings and outgo

Total Foreign Exchange used and earned by the Company are given as follows:

Rs, in Lakhs

Particulars

Year Ended March 31, 2018

Year Ended March 31, 2017

Exchange Used

490

795

Exchange Earned

16,026

12,749

26. CORPORATE GOVERNANCE

The Company has complied fully with Corporate Governance requirements under the Companies Act, 2013 and SEBI Listing Regulations. A separate section on Corporate Governance practices followed by the Company together with the Certificate from Mr. Prashant Mehta, Practicing Company Secretary, appearing elsewhere in this report, forms an integral part of this report.

27. 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 (CSR) Committee. The committee met two times during the year and a detailed report about CSR activities undertaken during the year is annexed as Annexure 7. Pursuant to the recommendation of the CSR Committee, the Board has approved a CSR Policy and the same has been uploaded on the website of the Company www.mastek.com/corporate-governance. The contents of the policy are as follows:-

Mastek CSR programmes shall fall under the following categories:

1. Promoting education, enhancing skills of children, and development of children and 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 there from

- Surplus arising out of the above activities

- Payroll contribution from the employees

- Fund-raising events

Mastek may pool its resources and CSR spending with other groups or associate companies on collaborative efforts that qualify as CSR spending.

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

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

- Submit a report to the Board of Directors on all CSR activities/projects spent during the financial year.

- 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, Mr. Sudhakar Ram and Mr. Ashank Desai. The Company Secretary Act as the Secretary to the Committee.

During the financial year ended March 31, 2018 the Board approved a Budget of Rs, 84 lakhs. 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 financial year 2017-18 was budgeted at Rs, 83.94 lakhs. A total sum of Rs, 84 lakhs was spent on Projects approved under Section 135 of the Companies Act, 2013 on CSR activities during the year.

The said expenditure is within the prescribed parameters and the Company is in compliance of the provisions of Section 135 of the Companies Act, 2013.

28. TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company has transferred a sum Rs, 1,68,805/- of Final Dividend for the year 2009-10 during the financial year 2017-18 to Investor Education and Protection Fund (IEPF), established by Central Government in compliance with section 125 of the Companies Act, 2013. The said amounts represent unclaimed Dividends which were lying with the Company for a consecutive period of 7 (seven) years from their respective due dates of initial payment.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has already filed the necessary form and uploaded the details of unpaid / unclaimed amounts lying with the Company, as on the date of last Annual General Meeting (i.e. June 22, 2017), and with the Ministry of Corporate Affairs website.

TRANSFER OF CONCERNED EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY (IEPF AUTHORITY)

Pursuant to the provisions of Section 124 and 125 of the Companies Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, and amendments made thereunder all the concerned shares in respect of which dividend had not been claimed or remained unpaid for seven consecutive years or more had been transferred by the Company in the name of Investor Education and Protection Fund Authority ("IEPF Authority") in their Demat Account in November, 2017 and January, 2018.

The Company had identified and initiated the share transfer process with Depositories and transferred 48,285 shares in November, 2017 and 7,033 shares in January, 2018 (due to be transferred to IEPF based on Un-Paid Interim Dividend of year 2009-10 and Un-Paid Final Dividend of year 2009-10 in November 2017 and January, 2018 respectively) to Investor Education and Protection Fund Authority Demat Account to comply with the said Rules. The List of shares transferred to IEPF Authority is available on the Company''s website at https:// www.mastek.com/investor-information

I n case the shareholders have any queries on the subject matter and the Rules, they may contact the Company''s Share Transfer Agent, Karvy Computershare Private Limited. The Members / claimants whose shares, unclaimed dividend, etc. have been transferred to IEPF may claim their shares and unclaimed dividend or apply for refund by making an application to IEPF Authority in IEPF Form-5 (available on www.iepf.gov.in). The Member / claimant can file only one consolidated claim in a financial year as per the IEPF Rules. It is in the Members interest to claim any un-encashed dividends from IEPF and for future, to consider dematerialization of their shares and opt for Automated Clearing House (ACH) mode with the Company, so that dividends paid by the Company are credited to the investor''s account on time.

29. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Mastek has zero tolerance towards any action on the part of any employee which may fall under the ambit of ''Sexual Harassment'' at workplace, and is fully committed to uphold and maintain the dignity of every women employee working in the Company. The Company''s Policy provides for protection against sexual harassment of women employees at workplace and for prevention and redressal of such complaints.

The Company has a qualified Internal Committee, who along with the external member review the policy and framework on a regular basis. Additionally the company ensures that every new employee undergoes an awareness program which will sensitize them to uphold the dignity of their colleagues at workplace, particularly with respect to prevention of sexual harassment. During the year, no such case was reported.

30. ACKNOWLEDGEMENT

Your Directors are grateful to the Investors for their continued patronage and confidence in the Company. Your Directors also thank the Central and State Governments, other statutory and regulatory authorities for their continued support.

Your Directors thank all our esteemed clients for the faith and trust reposed in the Company. With continuous learning, skill up-gradation and technology development

Company will continue to provide world class professionalism and services to its clients.

Your Directors wish to thank all associates, vendors and contractors within the country and abroad, for their continued support without which Mastek could not have achieved the desired results.

Your Directors also wish to convey their appreciation to all employees at all levels for the valuable services and cooperation extended by them and are confident that they will continue to contribute their best towards achieving still better performance in future.

For and on behalf of the Board

Sudhakar Ram S. Sandilya

Vice Chairman & Non-Executive Chairman

Managing Director and Independent Director

Date : April 18, 2018

Place : Mumbai


Mar 31, 2017

The Company does take necessary insurance or related cover in cases as necessary.

Dear Shareholders,

The Board of Directors has pleasure to forward the following Report for the year ended March 31, 2017.

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

(Rs, in lakhs)

PARTICULARS

Year Ended March 31, 2017

Year Ended March 31, 2016

Revenue

Income from IT Services

55,942.19

52,526.65

Other operating revenue

303.50

166.58

Total Operating Revenue

56,245.69

52,693.23

Other Income

972.09

1,738.82

Total Revenue

57,217.78

54,432.05

Expenses

50,958.26

50,873.27

Depreciation and amortization expenses

1286.01

1,605.31

Finance costs

257.89

50.31

Exceptional items

(340.00)

(254.28)

Profit before tax

4,375.62

1,648.87

Tax expense

684.64

274.41

Profit after tax

3,690.98

1,374.46

Add: Profit brought forward from Previous Year

24,705.38

42,918.78

Profit available for appropriation

28,396.37

44,293.24

Adjustment & Pursuant to Scheme of Arrangement

-

(18,940.12)

Dividend

(232.92)

(577.07)

Dividend Distribution Tax

-

(70.66)

Transfer to General Reserves

-

-

Balance carried to Balance Sheet

28,163.44

24,705.38

FINANCIAL RESULTS- MASTEK LIMITED STANDALONE

(Rs, in lakhs)

PARTICULARS

Year Ended March 31, 2017

Year Ended March 31, 2016

Revenue

Income from IT Services

16,127.89

37,843.96

Other operating revenue

1,050.33

22.81

Total Operating Revenue

17,178.22

37,866.77

Other Income

1,126.40

1,647.49

Total Revenue

18,304.62

39,514.26

Expenses

14,146.70

35,633.73

Depreciation and amortization expenses

1,203.84

1,488.51

Finance costs

16.83

23.68

Exceptional items

(340.00)

(300.20)

Profit before tax

2,597.25

2,068.14

Tax expense

71.72

731.57

Profit after tax

2,525.53

1,336.57

Add: Profit brought forward from Previous Year

14,846.30

36,037.15

Profit available for appropriation

17,371.83

37,373.71

Adjustment & Pursuant to Scheme of Arrangement

-

(21,879.69)

Dividend

(232.92)

(577.07)

Dividend Distribution Tax

-

(70.66)

Transfer to General Reserves

-

-

Balance carried to Balance Sheet

17,138.91

14,846.30

2. OVERVIEW OF THE FINANCIAL PERFORMANCE

A. MASTEK OPERATIONS

On a consolidated basis, the Group registered total operating revenue of Rs, 56,246 lakhs for the year ended March 31, 2017 as compared to Rs, 52,693 lakhs for the year ended March 31, 2016 which is an increase of 6.7%. The Group registered a net profit of Rs, 3,691 lakhs in the year ended March 31, 2017 as compared to Rs, 1,374 lakhs in the year ended March 31, 2016, thereby registering an increase of 168.6%.

On a standalone basis, Mastek reported an operating income of Rs, 17,178 lakhs for the year ended March 31, 2017, as compared to Rs, 37,867 lakhs for the year ended March 31, 2016. The Company made a Net profit of Rs, 2,526 lakhs for the year ended March 31, 2017 as compared to Net Profit of Rs, 1,337 lakhs for the year ended March 31, 2016. Standalone revenue is reduced during the year as Company has revised its pricing policy effective April, 2016. Further details are included in Notes 42 of notes to the Accounts of Standalone Financials.

The Consolidated Financial Statements of the Company for the year ended March 31, 2017 are prepared in compliance with the applicable provisions of the Companies Act, 2013, Accounting Standards and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said financial statements have been prepared on the basis of the audited financial statements of the Company and its subsidiaries which have been approved by their respective Board of Directors.

No material changes or commitments have occurred between the end of the Financial Year and the date of this Report which affect the financial statements of the Company in respect of the Financial Year.

Pursuant to the provisions of Section 136 of the Companies Act,

2013, the Standalone and Consolidated Financial Statements along with the Directors'' Report and Auditors'' Report thereon form part of this Annual Report. The Financial Statement of the Company are also available on the website of the Company and can be accessed at the weblink: http://www.mastek.com/financial-information.

B. BREAKUP OF THE OPERATING REVENUE BY REGIONS

Region

Year ended March 31, 2017

Year ended March 31, 2016

Rs, in lakhs

% of Revenue

Rs, in lakhs

% of Revenue

UK

47,504

84.4

50,370

95.6

North

America

5,615

10.0

-

-

(India/

Asia Pacific)

3,127

5.6

2,323

4.4

Total

Operating

Revenue

56,246

100.0

52,693

100.0

The U.K. operations clocked Revenues of Rs, 47,504 lakhs during the year 2016-17 as compared to Rs, 50,370 lakhs in the previous year, resulting in a decrease of (5.44%). This de-growth is due to depreciation of GBP vs INR. UK business grew by 1% on constant currency terms.

Mastek established its presence in the USA by acquisition of TAISTech LLC and Trans American Information Systems Inc. through Digility Inc. USA, a step-down subsidiary of Mastek Limited. The US operations clocked revenues of Rs, 5,615 lakhs for the period December 23, 2016 to March 31, 2017.

The share of total operating revenue of other region, i.e. India as a percentage of total operating revenue of the Group was 5.6%.

C. BREAKUP OF THE OPERATING REVENUE BY VERTICALS

Region

Year ended March 31, 2017

Year ended March 31, 2016

Rs, in lakhs

% of Revenue

Rs, in lakhs

% of Revenue

Government

23,547.07

41.9

29,151

55.2

Financial

Services

12,971.37

23.0

9,977

19.0

Retail

Services

12,175.14

21.7

7,115

13.5

IT & Other Services

7,552.11

13.4

6,450

12.3

Total

56,245.69

100

52,693

100

PROFITABILITY

During the Year ended March 31, 2017, the Group earned a profit of Rs, 3,691 lakhs as compared to Rs, 1,374 lakhs for the year ended March 31, 2016. The profits for the financial year ended 2016-17 witnessed growth on account of the following:

a. Operational Improvement and Cost Containment Initiatives across the Organization;

b. Conclusion of a challenging account in UK;

c. Focus on profitable growth across geographies.

D. UPDATE ON PROGRESS OF ACQUISITION

In December 20 16, Mastek Ltd entered into a share purchase agreement to acquire 100% stake in Trans American Information System Private Limited, India a Company engaged in IT Consulting and Software Services, for a fixed consideration of Rs, 1,187 lakhs. The Company has successfully completed all the closing formalities in relation to the share purchase agreement for acquisition of 100% equity shares of Trans American Information Systems Private Limited and consequently the said entity has become a wholly owned subsidiary of the Company with effect from December 23, 2016.

On December 23, 2016, Digility Inc., the step-down subsidiary of Mastek Limited in the USA successfully acquired 100% stake in Trans American Information Systems Inc., USA (TA USA) and TAISTech LLC, USA (TA LLC) companies engaged in IT Consulting and Software Services. The consideration for the acquisition comprises a fixed consideration of USD 12.25 million (Rs, 8,321 lakhs) plus a contingent consideration based on achievement of revenue and EBITDA targets over a period of 3 years, from the date of acquisition. Pursuant to acquisition, Trans American Information Systems Inc., USA (TA USA) and TAISTech LLC, USA (TA LLC) have now become wholly owned subsidiaries of Digility Inc., U.S. which is a wholly owned subsidiary of Mastek (UK) Limited, and consequently, they have become step down wholly owned overseas subsidiaries of the Company.

3. HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES AND THEIR CONTRIBUTION TO OVERALL PERFORMANCE OF THE COMPANY

Your Company continues to be the Holding Company of Mastek (UK) Limited, which in turn has IndigoBlue Consulting Ltd, UK and Digility Inc. USA as its wholly owned subsidiaries.

During the year under review, your Company has acquired 100% stake of Trans American Information Systems Private Limited and subsequently it became a Wholly Owned Subsidiary of Mastek Limited.

Digility Inc. USA, the step down subsidiary of your Company has acquired TAISTech LLC, USA and Trans American Information Systems Inc. USA, which in turn have become wholly owned subsidiaries of Digility Inc. USA and consequently, they have also become step down wholly owned overseas subsidiaries of the Company.

Legal Practice Technologies Limited, UK (LPT) a Joint Venture between the Law Society, UK and Mastek (UK) Limited (Wholly Owned Subsidiary of Mastek Limited) was dissolved with effect from December 6, 2016 after complying with the legal process.

About Subsidiaries: - Mastek (UK) Ltd, a wholly owned subsidiary of Mastek Ltd,

is a provider of Software Solutions which enable customers to solve their complex, mission critical business problems with innovative solutions that sustain and grow their business in the UK market. Its total turnover for the year was Rs, 37,654.34 lakhs and its contribution to Mastek profitability is 45.03% during the year.

- IndigoBlue Consulting Ltd, a wholly owned subsidiary of Mastek (UK) Ltd, is a leading UK consultancy organization specializing in Agile programme and project management. Its total turnover for the year was Rs, 5,728.03 lakhs and its contribution to Mastek profitability is 0.76% during the year.

- Digility Inc., USA, a wholly owned subsidiary of Mastek (UK) Ltd, is a niche digital transformation services provider, which uses agile methodologies to service customers in the financial and retail sectors through the Agile Development, Data Warehouse, Business Intelligence and Testing Services DNA. Its total turnover for the year was Rs, 67.77 lakhs. Investment in Sales and Marketing along with delivery cost resulted in losses. Its contribution to Mastek profitability is (26.01%) during the year.

- TAISTech LLC, USA and Trans American Information Systems Inc. USA are the wholly owned subsidiaries of Digility Inc, uSa. TAISTech is a global digital services firm focused on implementing and maintaining the Oracle Commerce and Oracle Commerce Cloud applications, as well as integrating them with the full suite of Oracle Customer Experience Products. Its total turnover for the year was Rs, 7,110.16 and its contribution to Mastek profitability is 8.18% during the year.

- Trans American Information Systems Private Limited, India, a wholly owned subsidiary of Mastek Limited is a Company with deep routed capability in providing high skilled resources and end-to-end e-commerce services including strategy, creative design, implementation and managed services. having presence in India and supporting US Customers. Its total turnover for the year was Rs, 898.57 and its contribution to Mastek profitability is 4.14% during the year.

- Legal Practice Technologies Ltd UK, a Joint Venture between The Law Society, UK and Mastek (UK) Ltd. It was incorporated in 2014 under the laws of England. Legal Practice Technologies Limited, UK (LPT) a Joint Venture between the Law Society, UK and Mastek (UK) Limited (Wholly Owned Subsidiary of Mastek Limited) had made by an application for strike off of name under local laws and was dissolved with effect from December 6, 2016 after complying with the legal process.

Your Company has two direct subsidiaries, and four step down subsidiaries as at March 31, 2017 and the statement containing salient features of the financial statements of all the subsidiaries, in Form AOC-1 is annexed as Annexure 1.

4. INDUSTRY SCENARIO

According to NASSCOM strategic review 2017, Indian IT Services and BPM industry is expected to grow approximately by 8% in FY2017 to USD 154 billion from USD 143 billion in FY2016. By 2020, India''s IT-BPM sector is projected to reach USD 200-225 billion revenue and USD 350-400 billion by 2025. IT-BPM exports from India is

expected to reach USD 117 billion in FY2017. Driven by the adoption of digital technologies, the total addressable market for global IT-BPM is expected to increase to USD 4 trillion by 2025, a CAGR of 3.6% for the forecast period of 2015 - 2025. Over next decade, the industry''s mix of technologies and demands is expected to change significantly. Digital technologies will continue to drive the sector and reach 23%/>38% share by 2020/ 2025. IT-BPM firms are focusing significant resources towards developing their digital capabilities and reorganizing themselves to catch the digital opportunity. Market evolution and thrust to get along with the disruptive environment is likely to lead the way to a new face of IT-BPM industry.

According to Gartner''s latest report, worldwide IT spending is projected to total USD 3.46 trillion in CY2017, a 2.7% increase from Cy2016 spending of USD 3.37 trillion. By CY2018, spending is forecast to exceed USD 3.55 trillion. The growth is expected to be driven by increase in software and IT services revenue. The worldwide IT services revenue is forecast to grow at 4.2% in CY2017 and 4.7% in CY2018 aided by increase in clients spend in digital, business intelligent, automation and services optimization and innovation. Global revenue in the business intelligence (BI) and analytics software market is forecast to reach USD 18.3 billion in CY2017, an increase of 7.3% from CY2016. By the end of CY2020, the market is forecast to grow to USD 22.8 billion.

According to Gartner, Software market in India is forecast to total USD

5.8 billion in CY2017, a 12.8% increase from CY2016 estimates of USD 5.2 billion. The enterprise software marketplace is dynamic and ever-changing. The growth is being driven by trends like increasing adoption of Software as a Service (SaaS) and open source software (OSS), changing buying behaviours, Digital India initiative of the Indian government, mobility, influence of other emerging markets, cloud-based implementations and new consumption models.

BI and Data Analytics Trends:

Gartner has projected to witness a solid growth in the BI and Analytics spend in the coming year, with the New Zealand and Australian markets both forecast to see growth in excess of the global average as businesses seek accessibility, agility and deeper analytical insight. While the growth is expected to remain solid and is forecast to grow to USD 22.8 billion by CY2020, Gartner notes that the market is expected to decelerate from 63.6% growth in CY2015 to a projected 19% by CY2020. This reflects data and analytics becoming mainstream with growth in terms of seat expansion but revenue is expected to be dampened by pricing pressure.

According to Markets, global BI and Analytics Software market is expected to grow from USD 17.90 billion in CY2015 to USD 26.78 billion by CY2020, at a CAGR of 8.4%. In the current scenario, North America is expected to be the largest market on the basis of spending and adoption of Business Intelligence and Analytics Software Market.

In CY2017, experts opined that IT firms will increase their investments in cloud-capable, robust BI platforms that can handle multiple data management capabilities such as integration, storage, visualization, statistical and quantitative analysis, instead of multiple specialty tools.

IT Spending: Market Size

CY2017 is poised to be a rebound year in IT spending. Gartner has projected the worldwide IT spending to touch USD 3.46 trillion in Cy2017, an increase of 2.7% from CY2016 spending of USD 3.37 trillion. For CY2020 worldwide IT spending is forecasted to grow 2.9% amounting to USD 3.79 trillion. The worldwide IT services spend is forecast to grow 4.2% in CY2017. The Gartner in its report said that during the year under review some major trends have converged, including cloud, blockchain, digital business and artificial intelligence which should have pushed IT spending much higher than 2.7% growth. However, due to political uncertainty in global markets that was seen in 2016, headed by the two most mediatic ones: Brexit and the intention of the UK to leave the EU and Presidential elections

of the United States, has fostered a wait-and-see approach causing many businesses to forestall IT investments.

Gartner has forecasted that the IT spending in Europe, the Middle East and Africa (EMEA) will total USD 1.25 trillion in cY2017, an increase of 1.9% from CY2016 spending of USD 1.23 trillion. Spending is on rise in EMEA and the segments that will contribute most to overall IT spending growth in CY2017 are Software and IT services which will grow by 6.8% and 4.1% respectively in CY2017.

According to Gartner, Government of India is projected to spend $7.8 billion on information technology in CY2017, an increase of 9.5% over CY2016. Software segment spending is projected to grow 15.7% in CY2017 to reach USD 1 billion. IT services is expected to grow 14.6% in CY2017 to reach USD 2 billion, making it the largest segment within the IT spending category. The key vertical segments driving IT spending growth include the communications, media and services, banking and securities, manufacturing and utilities markets. CIOs in India are prioritizing digitalization and rivalling global top performers when it comes to their commitment to digital business. Gartner''s annual global survey of CIOs found that average IT budgets in India are expected to grow by 10.7% in CY2017, nearly five times faster than the overall global average of a 2.2% increase. Enterprises investing in digital platform such as cloud, mobility and big data are the key drivers of spending growth.

5. BUSINESS OUTLOOK

The year ended was in line with Company''s expectations, both from financial performance as well as the capability building for driving the growth of the organization. The management continued to remain focused on its core business across key verticals - Government, Retail and Financial Services.

The year also marked by acquisition of Trans American Information Systems Private Limited, Trans American Information Systems Inc., USA (TA USA) and TAISTech LLC, USA (TA LLC). Mastek has successfully completed the acquisition and now the acquired entities are in the process of getting integrated with it. This acquisition has created a platform for Mastek''s accelerated growth in the US market and will augment Mastek''s 2020 vision to be a global leader in digital transformation services. The acquisition has allowed Mastek to leverage its service delivery capabilities in US geography. The said event was in line with the corporate transformation strategy and the Company expects a lot of cross-sell, up-sell opportunities between the TAISTech customer base and the Mastek capabilities going forward. The Company will continue to invest in agile methodologies in line with its aspiration of being involved in large and complex transformation programs which will help its customers to leverage digital opportunities in agile manner. The Company sees significant traction in agile and digital transformation solutions and expects good growth momentum going forward.

Another key event that happened during the year was the appointment of Mr. John Owen as Group CEO to lead Mastek. Mr. Owen has a strong background in sales, marketing and running business in UK/ Europe. He will be handling all the operational business of Mastek across geographies. He is an ideal fit to take Mastek to the next level. From the geography perspective, UK continued to be the major contributor to revenue of Mastek. It contributed 84% of the total revenue for the year. With acquisition of TAISTech and organic revenues in Digility Inc., US operations contributed to 10% of the revenue for the year. Company expects to see good revenue growth in the US going forward. India business remained steady and was in line with Company''s expectation. The Company is selective in bidding for profitable business in the current financial year.

Our Retail business has started picking up the growth momentum and has added new logos this year. Company did multiple pilot programs with large retailers and expects some of these to result in larger engagements through the years. In the Banking & Financial Services vertical, Company is focusing on Wealth Management and Digital Banking space based on its successful engagement in this space.

Overall, the Company is geared up to make rapid progress in Digital Transformation space and accelerate its growth in US and UK markets. It is well poised to become a leader in agile and digital transformation solutions. The Company expects to have a predictable and profitable financial performance in the coming years.

6. DIVIDEND & RESERVES

The Board of Directors at its meeting held on October 18, 2016 approved payment of Interim Dividend of Re. 1 per Equity share. The Board of Directors are pleased to recommend the payment of a final dividend at the rate of Rs, 2.50/- per equity share (face value of Rs, 5/- each). Therefore, the total dividend for the year ended March 31, 2017 (including interim dividend of Rs, 1/- per share) stands at Rs, 3.50/- per share, involving a total outflow of Rs, 232.92 lakhs The dividend payout ratio is 70%. The Company had paid total dividend of Rs, 2.50/- per share for the year ended March 31, 2016.

The dividend, if approved, at the ensuing 35th Annual General Meeting (AGM), will be paid to those shareholders whose names appear on the Register of Members of the Company as of the end of the day on June

15, 2017, being the record date.

During the year, under review, no amount from profit was transferred to General Reserves.

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

Details of Loans and Guarantees provided and Investments made are covered under provisions of Section 186 of the Companies Act, 2013 are given in detail in the notes to the financial statements.

Company has provided a Corporate guarantee for an amount of USD 12 mn. and also security/ charge/ mortgage over its Property at Pune as a Security for a term loan facility availed of an aggregate principal amount not exceeding USD 10 million from Axis Bank UK Ltd valid for a period of 5 (five) years for acquisition of 100% share-holding in two US based software services companies TAISTech LLC, USA and Trans American Information Systems Inc. USA by Digility Inc. a first level step-down subsidiary of Mastek Limited.

8. OTHER 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, extract of Annual Return is annexed as Annexure 2.

ii) Number of Board Meetings:

The Board of Directors met 8 (Eight) times during the financial year 2016-17. The details of the board meetings and the attendance of the Directors there at 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 3,80,259 Equity Shares of face value of Rs, 5/- each for a total nominal value of Rs, 19,01,295/under various ESOP Plans to the eligible employees of the Company, who exercised their vested Employee Stock Options. These Equity Shares rank pari passu in all respects with the existing Equity Shares of the Company.

As on March 31, 2017, the issued, subscribed and paid up share capital of your Company stood at Rs, 11,68,87,665/- comprising 2,33,77,533 Equity shares of Rs, 5/- each.

iv) Composition of Audit Committee:

Mastek has an Audit Committee that currently comprises of four Independent Directors and one Non-Executive Director. The

Chairman of the Audit Committee is an Independent Director. The Independent Directors are accomplished professionals from the corporate fields. The Chief Financial Officer of the Company attends the meetings on invitation. The Company Secretary is the Secretary of the Committee.

During the year ended March 31, 2017 the Committee met 4 (Four) times. The attendance of the members at the meetings is stated below:

Name of Members

Status

No. of Meetings attended

Mr. S. Sandilya

Chairman

4

Mr. Ashank Desai

Member

4

Mr. Atul Kanagat

Member

4

Ms. Priti Rao

Member

4

Mr. Sudhakar Ram (upto July 20, 2016)

Member

2

Mr. Keith Bogg

(Appointed w.e.f. January 17, 2017)

Member

NA

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

During the year all the recommendations of the Audit Committee were accepted by the Board.

v) Related Party Transactions:

All the Related Party Transactions are entered into on an arm''s length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (''Regulations''). There are no materially 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 on a quarterly basis. Omnibus approval is given by Audit Committee for the transactions which are foreseen and are repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The said transactions are approved by the Audit Committee as well as by the Board.

The approved Related Party Transactions Policy is available on the Company''s website http://www.mastek.com/corporate-governance.

In accordance with Section 134(3)(h) of the Companies Act , 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by the Company with related parties referred to in Section 188(1) in FORM AOC-2 is annexed as Annexure 3.

vi) Changes in the Nature of Business:

There has been no change in the nature of business of the Company during the financial year ended March 31, 2017.

vii) Listing with Stock Exchanges:

Your Company is listed with The BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges.

viii) Compliance with Secretarial Standards on Board and Annual General Meeting:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on meetings of Board of Directors and General Meetings.

ix) Insurance:

The Company has sufficiently insured itself under various Insurance policies to mitigate risks arising from third party or customer claims, property, casualty, etc.

9. CREDIT RATING

The Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligation. ICRA Limited, a reputed Rating Agency, has assigned [ICRA]A rating for fund based limits and [ICRA]A1 for non-fund based limits for the Working Capital facilitates granted to the Company by its Bankers.

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 Regulations, the Company has established a Whistle Blower Policy / Vigil Mechanism Policy and the same is placed on the web site of the Company. viz www.mastek.com/corporate-governance.

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism.

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

11. INDUSTRY RECOGNITION

Mastek, either directly or through its clients, received multiple awards and accolades during the year including:

- Home Office Immigration Platforms Technologies (IPT) Portfolio won the prestigious ''Best Agile Project Award 2016''at the European Testing Awards.

- Digility Inc. recognized by CIOReview magazine as one of the 20 most promising Financial Services Technology Solutions Provider in 2016.

- Mastek UK, recognized as an ''Agile Disruptor'' in UK Public Sector by TechMarketView in FY2016.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the 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 March 31, 2017, 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 judgments 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 March 31, 2017 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 such internal financial controls are adequate and were operating effectively; and

(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

M/s. Price Waterhouse Chartered Accountants LLP, were appointed as statutory auditors of the Company at the 32nd Annual General Meeting (AGM) held on July 23, 2014 for a period of 3 years and accordingly they will hold office of the auditors up to the conclusion of the 35th AGM and hence, would retire at the conclusion of the forthcoming 35th AGM. As per second proviso to Section 139(2) of the Companies Act, 2013 (''the Act''), a transition period of three years from the commencement of the Act is provided to appoint a new auditor when the existing auditor''s firm has completed two terms of five consecutive years. The Audit Committee and the Board places on record its appreciation for the contributions of M/s. Price Waterhouse Chartered Accountants LLP, during their tenure as the Statutory Auditors of the Company. For the purpose of appointment of new Auditors, the Audit Committee along with the Management invited proposals from the reputed firms of Chartered Accountants and had detailed discussion with representatives of those firms. The Committee considered various parameters such as reputation of the firm, knowledge and experience of the partners, understanding of business, technical assessment of the Audit skills and the Audit fees and based on these detailed analysis, the Audit Committee recommended M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/ N500013), Mumbai as the Company''s new Statutory Auditor.

Accordingly, as per the said requirements of the Companies Act, 2013, the Audit Committee and the Board of Directors at their meeting held on April 20, 2017 proposed the appointment of M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/ N500013), as the Statutory Auditors of the Company, subject to the approval of the shareholder at the ensuing Annual General Meeting (AGM), for a period of 5 years, commencing from the conclusion of 35th AGM till the conclusion of the 40th AGM, subject to ratification by members every year, as may be applicable.

M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), have consented to the said appointment, and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have also confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

M/s. Walker Chandiok & Co LLP (FRN 001076N/N500013), Chartered Accountants (the Firm) is an independent Indian Limited Liability Partnership firm established in 1935 with its head office at L-41, Connaught Circus, New Delhi- 110001.

The firm provides audit, tax and advisory services through its 42 partners with 850 staff from its offices in 11 cities, namely New Delhi, Mumbai, Bengaluru, Chandigarh, Chennai, Gurgaon, Hyderabad, Kolkata, Kochi, Noida and Pune. The firm is registered with the Institute of Chartered Accountants of India (ICAI) as well as the PCAOB (US Public Company Accountancy Oversight Board).

Further, the report of the Statutory Auditors along with the notes is enclosed with the financial statements. 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. Also the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

14. SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013 and Rules made there under, Mr. V. Sundaram, Practising Company Secretary, Mumbai was appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is annexed 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 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, 2017 Mastek Group had a total Head count of 1577. The Directors wish to place on record their appreciation for the contributions made by employees to the Company during the year under review at all levels.

The disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time is annexed as Annexure 5 and forms part of this report.

16. EMPLOYEE STOCK OPTIONS

During the year under review Company had allotted 3,80,259 equity shares under Employee Stock Option Plans. The Board of Directors confirms that there is no material change in the ESOP Scheme and all the ESOP Schemes are in compliance with the SEBI Guidelines. The required disclosures in this regard are annexed as Annexure 6.

17. RISK MANAGEMENT POLICY

In terms of the requirement of the Companies Act, 2013, the Company has developed and implemented the Risk Management Policy and the Audit Committee and the Governance Committee of the Board reviews the risks and remedial measures taken on a quarterly basis.

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

18. UPDATES ON BOARD OF DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP) / MANAGEMENT

A brief profile of all the existing Directors has been given in the Corporate Governance report which forms part of the Annual Report.

A. Evaluation of the Board''s Performance

In compliance with Companies Act, 2013 and Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance, Board Committees, Individual Directors, Chairpersons, Managing Director and the CEO for the year under review. In respect of individual directors including the nonexecutive chairman and the managing director, their personal performance was carried out using a peer review process, facilitated by an outside subject matter expert with confidential processing of inputs, interpretation of findings followed by one-on-one meeting of the individual Directors, and concluding with an aggregate presentation to the entire board.

Board and Committee functioning was reviewed and evaluated on the basis of responses from directors, Committee Members, Managing Director and the CEO to structured questionnaires, covering various aspects of the composition and functioning of the Board and its Committees.

In a separate meeting of the Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman were also evaluated, taking into account the views of executive directors and nonexecutive directors. The Directors were asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its committees and its areas of improvement for a higher degree of engagement with the Management.

The Board expressed its satisfaction with the Evaluation results, which reflects the high degree of engagement of the Board and its committees with the Company and its Management. Based on the outcome of the evaluation and assessment cum feedback of the Directors, the Board and the Management have also agreed on various points which will be implemented over an agreed timeframe.

B. Induction and familiarization programme for Directors

The details of the induction and familiarization program for the Directors are given in the Corporate Governance Report.

C. Independent Directors

Mr. S. Sandilya, Ms. Priti Rao, Mr. Atul Kanagat and Mr. Keith Bogg have been the Independent Directors on the Board of your Company as at March 31, 2017.

The Shareholders at the Extra Ordinary General Meeting held on March 05, 2015 had approved the appointment of Mr. S. Sandilya, Ms. Priti Rao and Mr. Atul Kanagat as Independent Directors of the Company for a term of four (4) years from April 01, 2015 to March 31, 2019 and Mr. Keith Bogg was appointed as an Additional Director (Independent) for a period of 5 years with effect from January 17, 2017, subject to the approval of the shareholders at the ensuing Annual General Meeting.

The Company has received necessary declarations from each of the Independent Directors under section 149(7) of the Companies Act, 2013, that they meets the criteria of Independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also in the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Companies Act, 2013 and the Rules made there under about their status as Independent Directors of the Company.

D. Appointment of Director/KMP:

- The Board, based on the recommendation of the Nomination and Remuneration Committee, appointed Mr. Keith Bogg (DIN: 07658511) as an Additional Director (Independent) not liable to retire by rotation, for a period of five years effective January 17, 2017, subject to the approval from shareholders. The Board recommend the same for members approval.

- Mr. Sudhakar Ram, Managing Director and Group CEO was redesignated as the Vice Chairman and Managing Director with effect from November 01, 2016.

- Mr. Abhishek Singh was appointed as a Chief Financial Officer effective September 17, 2016 in place of Mr. Jamshed Jussawalla who retired on his attaining the age of superannuation on September 16, 2016.

E. Re-appointment of Mr. Sudhakar Ram as Vice Chairman & Managing Director:

The Board, based on the recommendation of the Nomination and Remuneration Committee, re-appointed Mr. Sudhakar Ram as Vice Chairman & Managing Director, whose current term expires on June 30, 2017 effective July 01, 2017 for a term of 3 years i.e. from July 1, 2017 to June 30, 2020, subject to the approval from shareholders. He is also the Promoter and Managing Director of Cashless Technologies India Private Limited, a Private Company, initially promoted by himself and also draws remuneration. The Board recommend the same for members approval.

F. Retirement by Rotation:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sudhakar Ram retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. The Board recommend the same for members approval.

G. Management Update:

Mr. John Owen was appointed as a Group Chief Executive Officer (CEO) by Mastek with effect from November 01, 2016.

Mr. John Owen has held senior sales and marketing roles in organizations like Serco, HP and Nortel over the last 25 years. In his last job at Serco, Mr. Owen was the Sales and Marketing Director for UK and Europe with revenue responsibility for £2.6 bn and the relationship management of the UK Government -Serco''s largest customer. With his deep expertise in business development and his track record with the UK markets -especially the UK government market - Mr. Owen will be ideal to lead Mastek to the next level of growth. Mr. Owen''s appointment embodies Mastek''s commitment to the U.K.

The information relating to remuneration paid to directors as required, is given in the notes to Accounts.

H. Key Managerial Personnel:

Pursuant to the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial personnel of the Company:

- Mr. Sudhakar Ram- Vice Chairman & Managing Director;

- Mr. Abhishek Singh- Chief Financial Officer;

- Mr. Dinesh Kalani- Company Secretary.

19. COMPANY''S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND SENIOR MANAGERIAL PERSONNEL

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:

I. Directors'' appointment and remuneration; and

2. Remuneration of Key Managerial Personnel and other senior employees.

Details on the same are given in the Corporate Governance Report. The policy is available at the website of the Company at www.mastek.com

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 the Company''s operations.

21. INTERNAL CONTROL 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. INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with Generally Accepted Accounting Principles (GAAP) in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

23. INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS

The Ministry of Corporate affairs vide its notification dated February 16, 2015 has notified the Companies (Indian Accounting Standards) Rules, 2015. In pursuance of this notification, the Company will adopt IND As with effect from April 01, 2017, with a transition date of April 01, 2016.

The Company has substantially completed the assessment of the impact of the change to IND AS on reported reserves and surplus and on the reported profit for the relevant periods. The Company has also completed the modification of accounting and reporting systems to facilitate the changes. The implementation of IND AS is a major change process for which the Company is well positioned to ensure a seamless transition on the back of early completion of impact assessment.

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

The Company is entirely a services Company and thus essentially, a non-energy intensive organization. Additionally, the Company''s facilities are set up at locations chosen for adequate availability and supply of energy, regardless of power shortages recently witnessed across many markets.

(i)

the steps taken energy.

or impact on conservation of

(ii)

the steps taken by the Company for utilizing alternate sources of energy.

Not

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 of technology 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 the Company is as follows

Rs, in lakhs

Particulars

Year Ended

Year Ended

March 31, 2017

March 31, 2016

Exchange used

794.66

22,722.21

Exchange Earned

12,749.01

35,490.75

27. CORPORATE GOVERNANCE

The Company has complied with Corporate Governance requirements under the Companies Act, 2013 and as per SEBI Listing Regulations. A separate section on Corporate Governance practices followed by the Company together with the Certificate from Mr. Soumitra Mujumdar, Practising Company Secretary, 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 (CSR) Committee. The committee met two times during the year and a detailed report about CSR activities undertaken during the year is annexed as Annexure 7. Pursuant to the recommendation of the CSR Committee, the Board has approved a CSR Policy and the same has been uploaded on the website of the Company www.mastek.com/corporate-governance. The contents of the policy are as follows:-

Mastek CSR programmes shall fall under the following categories:

1. Promoting education, enhancing skills of children, and development of children and 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 there from

- Surplus arising out of the above activities

- Payroll contribution from the employees

- Fund-raising events

Mastek may pool its resources and CSR spending with other groups or associate companies on collaborative efforts that qualify as CSR spending.

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.

- 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.com

- 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, Mr. Sudhakar Ram and Mr. Ashank Desai. The Company Secretary is the Secretary of the Committee.

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 of the Company made during three immediately preceding financial years, pursuant to Corporate Social Responsibility policy.

During the financial year ended March 31, 2017 the Board approved a Budget of Rs, 110 lakhs. 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 financial year

2016-17 was Rs, 96.57 lakhs which was arrived at based on the net profit of the Company for financial year 2013-14, 2014-15 and 2015-16. However a total sum of Rs, 129.92 lakhs was spent on Projects approved under Section 135 of the Companies Act, 2013 on CSR activities during the year.

The said expenditure is within the prescribed parameters and the Company is in compliance of the provisions of Section 135 of the Companies Act, 2013.

29. REGISTRAR AND SHARE TRANSFER AGENT

Based on certain allegations of fraud and malpractices in the conduct and operations, SEBI investigated the affairs of Sharepro Services (India) Private Limited (Sharepro).

Sharepro, has been the Registrar and Share Transfer agent of the Company for a long period. The SEBI vide its Order dated March 22, 2016 had directed all the clients of Sharepro to carry out/switchover their activities related to a registrar to an issue and share transfer agent and also for conducting a thorough audit of the records and systems of Sharepro with respect to dividends paid and transfer of securities to determine whether dividends have been paid to actual/beneficial holders and whether securities have been properly transferred for past 10 years as per the provisions of law.

Accordingly, in these behalf, the Company had appointed a reputed firm of Chartered Accountants to carry out an Audit of Dividend payout and Share Transfer effected by Sharepro for past 10 years in accordance with the directions of SEBI Order. Based on the Audit Report, no irregularities or violations with respect to transfer of securities of the Company and the dividend pay-out over a period of past 10 (ten) years were reported.

Subsequently, in pursuance of the advisory issued by SEBI and in order to protect the interest of the Shareholders, the Company had appointed M/s. Karvy Computershare Private Limited as the Registrar and Share Transfer agent, effective April 04, 2016.

30. TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company has transferred a sum of Rs, 12,60,133/- during the financial year 2016-17 to Investor Education and Protection Fund (IEPF), established by Central Government in compliance with section 125 of the Companies Act, 2013. The said amounts represent unclaimed Dividends which were lying with the Company for a period of 7 (seven) years from their respective due dates of initial payment.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has already filed the necessary form and uploaded the details of unpaid / unclaimed amounts lying with the Company, as on the date of last AGM (i.e. July 25, 2016), with the Ministry of Corporate Affairs.

31. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has zero tolerance towards any action on the part of any employee which may fall under the ambit of ''Sexual Harassment'' at workplace, and is fully committed to uphold and maintain the dignity of every women employee working in the Company. The Company''s Policy provides for protection against sexual harassment of women employees at workplace and for prevention and redressal of such complaints. During the year, Company received one complaint which is under investigation by the Committee.

Awareness programmes were conducted across the Company to sensitize the employees to uphold the dignity of their colleagues at workplace, particularly with respect to prevention of sexual harassment.

32. 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

Sudhakar Ram S. Sandilya

Vice Chairman & Managing Director

Non-Executive Chairman and Independent Director

Date: April 20, 2017

Place: Mumbai


Mar 31, 2016

Dear Shareholders,

The Board of Directors has pleasure to forward the following Report for the year ended March 31, 2016.

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

Rs,In Lakhs

PARTICULARS

Year Ended March 31, 2016

Year Ended March 31, 2015

Revenue

Income from IT Services

52,526.65

100,196.28

Other operating revenue

166.58

1,062.11

Total Operating Revenue

52,693.23

101,258.39

Other Income

1,738.82

1,711.34

Total Revenue

54,432.05

102,969.73

Expenses

50,873.27

95,695.96

Depreciation and amortization expenses

1,605.31

3,733.43

Finance costs

50.31

147.10

Exceptional items

254.28

1,166.12

Profit before tax

1,648.87

2,227.12

Tax expense

274.41

454.07

Profit after tax

1,374.46

1,773.05

FINANCIAL RESULTS - MASTEK LIMITED

PARTICULARS

Year Ended March 31, 2016

Year Ended March 31, 2015

Revenue

Income from IT services

37,843.96

66,048.24

Other operating revenue

22.81

463.73

Other Income

1,647.49

2,305.40

Total Revenue

39,514.26

68,817.37

Expenses

35,633.73

58,769.70

Depreciation and amortization expenses

1,488.51

2,702.38

Finance costs

23.68

27.43

Exceptional Items - gain / (loss), net

(300.20)

494.95

Profit before tax

2,068.14

7,812.81

Tax expense

731.57

374.06

Profit after Tax

1,336.57

7,438.75

Add: Profit brought forward from Previous Year

36,037.15

29,311.97

Profit available for appropriation

37,373.71

36,750.72

Adjustment & Pursuant to Scheme of Arrangement

(21,879.69)

-

Dividend

(577.07)

(563.94)

Dividend Distribution Tax

70.66

(30.37)

Transfer to General Reserves

-

180

Balance carried to Balance Sheet

14,846.30

36,037.15

2. RESULTS OF OPERATIONS

A) Mastek Consolidated Operations Financials

On a consolidated basis, the Group registered total operating revenue of Rs, 52,693 lakhs for the year ended March 31, 2016 as compared to Rs, 101,258 lakhs for the year ended March 31, 2015. The Group registered a net profit of Rs, 1,374 lakhs in the year ended March 31, 2016 as compared to Rs, 1,773 lakhs in the year ended March 31, 2015.

Breakup of the Operating Revenue by regions

Region

Yearended March 31,2016

Year ended March 31, 2015

Rs,in Lakhs

%of

Revenue

Rs, in Lakhs

% of Revenue

UK

50,370

95.6

52,788.6

52.1

North

America

-

-

40,494.7

40.0

Others (India/ Asia

Pacific)

2,323

4.4

7,975.0

7.9

Total

Operating

Revenue

52,693

100

1,01,258.4

100

Post demerger, the Insurance Products and Services business across various geographies was demerged into Majesco.

The U.K. operations contributed Rs, 50,370 lakhs in revenue for the year 2015-16, of which Rs, 27,785 lakhs (i.e. 55%) was contributed by the Government vertical and Rs, 7,117 lakhs by the Retail vertical.

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 was 4.5%.

Breakup of the Operating Revenue by Verticals

Vertical

2015-16 Rs,in Lakhs

%of

Revenue

2014-15 Rs,in Lakhs

% of Revenue

Insurance

-

-

45,716

45.1

Government

29,151

55.1

29,902

29.6

Financial

Services

9,977

19.0

11,297

11.2

Retail

Services

7,115

13.5

-

-

IT & Other Services

6,450

12.3

14,343

14.0

Total

52,693

100

101,258

100

Profitability

During the Year ended March 31, 2016, the Group earned a profit ofRs, 1,374 lakhs as compared to Rs, 1,773 lakhs for the year ended March 31 2015. The profits for the year ended

2015-16 were on account of the following:

1. Cost over-run of Rs, 3,200 lakhs on one customer account due to requirement of Onsite Security cleared resources

2. Exceptional cost on account of reorganization and de-merger related expenses of Rs, 254 lakhs.

3. Share of loss from Legal Practice Technologies (LPT) JV in UK region of Rs, 1,071.5 lakhs.

Mastek standalone operations

On a standalone basis, Mastek reported an operating income of Rs, 37,867 lakhs for the year ended March 31,

2016, as compared to Rs, 66,512 lakhs for the year ended March 31, 2015. The Company made a Net profit ofRs, 1,337 lakhs for the year ended March 31, 2016 as compared to Net Profit of Rs, 7,439 lakhs for the year ended March 31,

2015.

Update on progress of Demerger

On April 30, 2015, the Hon. High Court of Gujarat and Hon. High Court of Bombay approved the Scheme of Arrangement, which was earlier approved by the Stock Exchanges on December 09, 2014. The Scheme envisaged creation of independent listed Insurance business company by demerger of Insurance business of Mastek to MCPL (renamed as Majesco Limited - "Majesco"). Post demerger Majesco achieved automatically listing with stock exchanges and all the shareholders of Mastek as on June 15,2015 were allotted shares in Majesco in the same proportion (shares entitlement being 1:1 pursuant to Part II of the Scheme of Arrangement in terms of clause 11.1.1).

3. HOLDING AND SUBSIDIARIES

Your Company continues to be the Holding Company of Mastek (UK) Limited, which in turn has IndigoBlue Consulting Ltd, UK and Digility Inc. USA as its subsidiaries.

During the year under review, Mastek Ltd sold its entire shareholding in Mastek Asia Pacific Pte, Ltd. to Majesco Sdn Bhd, Malaysia for a consideration of SGD 380,000. Mastek Asia Pacific Pte Limited ceased to be a Subsidiary of your Company effective October 31, 2015.

Your Company has one direct subsidiary, and two step down subsidiaries as at March 31, 2016 and the statement containing salient features of the financial statement of the subsidiary, in Form AOC-1 is given in Annexure 1.

4. INDUSTRY SCENARIO

According to NASSCOM strategic Review 2016, Indian IT Services and BPM industry is expected to grow at 10-12% in FY17 in constant currency terms. By 2020, India''s IT-BPM sector is projected to reach $ 200-225 billion revenue and $ 350-400 billion by 2025. Digital Technologies is expected to increase the addressable market for global technology services to $ 4 trillion by 2025. Over 80% of incremental expenditures over the next decade will be driven by digital technologies, such as platforms, cloud-based applications, big data analytics, mobile systems, social media, cyber security, and integration services with legacy technologies. Digital technologies will continue to drive the sector and reach 23%/>38% share by 2020/ 2025.

According to Gartner''s latest report, worldwide IT spending is forecast to total $3.54 trillion in CY2016, marginal increase of

0.6% over CY2015 spending of $3.52 trillion; largest U.S. dollar drop in IT spending since Gartner began tracking IT spending mainly impacted due to currency headwinds. By CY2019, spending

is forecast to exceed $3.8 trillion. Global revenue in the business intelligence (BI) and analytics market is forecast to reach $16.9 billion in CY2016, an increase of 5.2% from CY2015.

According to Gartner, Software market in India is expected to grow at 12.8% to reach $5.3 billion in CY2016. The enterprise software marketplace is dynamic and ever-changing. The growth is being driven by trends like increasing adoption of Software as a service (SaaS) and open source software (OSS), changing buying behaviors, Digital India initiative of the Indian government, mobility, influence of other emerging markets, cloud-based implementations and new consumption models.

BI and Data Analytics Trends:

According to Gartner, the BI and analytics market is in the final stages of a multiyear shift from IT-led, system-of-record reporting to business-led, self-service analytics. As a result, the modern business intelligence and analytics (BI&A) platform has emerged to meet new organizational requirements for accessibility, agility and deeper analytical insight.

According to 451 research report, ''Software 2016: Analytics, Acceleration and Agility'', data analytics will become more prevalent throughout the layers of technology businesses use, from development to IT management, and databases to customer experience management. This is happening as the natural result of the increasing digitization of business, which throws off massive amounts of new data. Along with that, new tools, techniques, and architectures provide the opportunity to analyze what could not previously be analyzed, and the chance exists for companies to differentiate themselves based on how they take advantage of that opportunity, the report says.

Data Analytics will surge further ahead in the form of contextual analytics, according to 451 Research - that is, the combination of text and advanced analytics with Machine Learning to uncover insight from a combination of structured and unstructured data. Applying advanced analytics with Machine Learning has been an industry goal for the last decade, the report says. Adoption will kick into higher gear now that algorithms are better at understanding unstructured data like text, so that intelligence can be derived from it in context with existing structured data.

IT Spending: Market Size

Worldwide IT spending is forecast to total $3.54 trillion in 2016, marginal increase of 0.6% over CY2015 spending of $3.52 trillion impacted mainly due to currency volatility. In 2015 U.S. multinationals'' faced currency headwinds however, in 2016 experts expect to go away these headwinds and they expect an additional 5% growth.

Spending in the IT services is expected to return to growth in 2016, following a decline of 4.5% in 2015. IT services spending is projected to reach $940 billion in 2016, up 3.1% from 2015. This is due to accelerating momentum in cloud infrastructure adoption and buyer acceptance of the cloud model.

According to a study released by Computer Economics, based on projections of IT spending plans by 86 organizations in the US and Canada, indicated that IT operational budgets appear to be growing at slower rate at about 2% in 2016 as compared to 3% growth rate in 2015.

The Computer Economics study also looked at what areas of IT organizations plan to invest money. A net of 46% of IT organizations plan to spend more on business applications in CY2016. The trend of investing more heavily in business applications has been growing for several years and appears to be accelerating, researchers said. A net 53% of organizations said they plan to spend more on cloud applications and 37% plan to spend more on cloud infrastructure.

The IT industry is increasingly turning to cloud-based services. While this means that businesses have a much greater ability to scale and procure the infrastructure and software that they need when they need it, it also means that the channel is ultimately selling less physical infrastructure than before. This trend is particularly prominent in the UK, with the country spending 33% of total IT spend on IT services compared to the global average of 18%.

BMI research report has maintained a relatively robust growth outlook for UK IT spending over the medium term in the Q1CY2016 update, with spending growth expected to outperform most other developed European markets with a CAGR of 3.4% over 2016-2019. The stronger economic environment is a key differentiator with other Western European markets, while the large financial sector will also make the UK a lucrative market for advanced software and services vendors. Market development will however be uneven, and researchers envisage a stagnant hardware market, while growth will be driven by areas such as the app economy, cloud computing and digitization.

5. BUSINESS OUTLOOK

This was first year post demerger where Mastek represented itself as a standalone company. During this period, the management was committed to remain focused on its core business across key verticals - Government, Retail and Financial Services.

The key highlight during the year was acquisition of Indigo Blue, a leading UK consultancy specializing in Agile programme and project management. The acquisition brings together Indigo Blue''s Agile consulting and programme management expertise with Mastek''s world-class technology delivery capability. Together, these synergistic offerings provide a compelling proposition across combined client base. This will allow company to offer a fully end-to-end transformational service/solution delivery to new as well as existing customer base of Mastek. Indigo blue has a robust customer acquisition method which will help the company to build its business mainly in UK and the company will also look at leveraging Indigo''s capability in other parts of the world going forward. The company has successfully completed the acquisition and now it is fully integrated with Mastek. The company will continue to invest in agile methodologies to get through its aspiration of being involved in large and complex transformation programs which will help its customers to leverage digital opportunities in agile manner.

On Government side, it had been muted during the year, but post UK election, now it is in place and the UK Government is ready to restart on its IT initiatives. The pipeline will start building up and the company expects to see revenue growth and profitability in these verticals going forward next year.

Retail business has started picking up the growth momentum. The company has added new logos this year. A few small pilot programs with large Retailers were seen and company expects them to start growing over a period of time.

On Financial Services with insurance exiting, the company had to re-strategize its position here. The company has an existing base of business with customers like IPF who are in the micro lending space but have now brought in a new Financial Services head to re-strategize this business and spearhead the growth in this segment within UK.

From the India geography perspective, the growth momentum got a bit slowed down last year due to elections but now as new government is focused on IT, the company is bidding in quite a few large deals and expect to grow that part of the business in this financial year.

Company has started focusing more on digital capabilities and it might make some acquisitions in this area where it wants to establish and grow over a period of time.

Overall business focus that has got by demerging, by completely focusing on digital solutions, deal momentum is going up and better pipeline is seen going forward. The company expect to have a very good growth in the business over the next 3to4 years.

6. DIVIDEND & RESERVES

The Board of Directors approved payment of First Interim Dividend of Rs, 1.50 per Equity share and was paid on February 04, 2016. The Board of Directors also approved payment of Second Interim Dividend of Rs, 1/- per Equity share and was paid on March 29,

2016. Having declared two Interim Dividends, your Board has not recommended payment of Final Dividend for the year ended March 31, 2016.

During the year, under review, no amount from profit was transferred to General Reserves.

7. 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 to the financial statements.

8. DISCLOSURES UNDER THE COMPANIES ACT, 2013

i) Extractor 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, extract of Annual Return is Annexed as Annexure 2.

ii) Number of Board Meetings:

The Board of Directors met 9 (Nine) times during the financial year 2015-16. The details of the 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 4,50,602 Equity Shares of face value of Rs, 5/- each for a total nominal value of Rs, 22,53,010/- to the eligible employees of the Company, who exercised their vested Employee Stock Options. These Equity Shares rank pari passu in all respects with the existing Equity Shares of the Company.

As on March 31, 2016, the issued, subscribed and paid up share capital of your Company stood at Rs, 11,49,86,370/comprising 2,29,97,274 Equity shares of Rs, 5/- each.

iv) Composition of Audit Committee

Mastek has an Audit Committee that currently comprises of three Independent Directors, one Non-Executive and one

Executive Promoter Director. The Chairman of the Audit Committee is an Independent Director. The Independent Directors are accomplished professionals from the corporate fields. The Chief Financial Officer of the Company attends the meetings on invitation. The Company Secretary is the Secretary of the Committee.

During the year ended March 31, 2016 the 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

6

Ms. Priti Rao

Member

6

Mr. Venkatesh Chakravarty Resigned w.e.f. June 19, 2015

Member

2

Mr. Atul Kanagat

Inducted w.e.f. October 15, 2015

Member

1

Mr. Sudhakar Ram

Inducted w.e.f. October 15, 2015

Member

2

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

During the year all the recommendations of the Audit Committee were accepted by the Board.

v) Related Party Transactions:

All the Related Party Transactions are entered into on an arm''s length basis and are in compliance with the applicable provisions of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (''Regulations''). There are no materially 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 are repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The said transactions are approved by the Audit Committee as well as by the Board.

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

9. 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 Regulations, the Company has established a Whistle Blower Policy / Vigil mechanism policy and the same is placed on the web site of the Company, viz 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.

10. AWARDS AND RECOGNITION

Mastek, either directly or through its clients was also recipient of many awards in India, notable among those being:

- Mastek ranked 71st in the Leader category in the ''The 2014 Global Outsourcing 100(R)'' service providers list by The International Association of Outsourcing Professional (IOAP);

- Mastek U.K., named as one of the top 41 fastest growing Indian companies in the UK;

- Mastek chosen by TEST Magazine as one of the 20 leading software testing providers 2014.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the 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 March 31, 2016, the applicable accounting standards had 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 judgments 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 March 31, 2016 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 such internal financial controls are adequate and were operating effectively; and

(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.

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

At the 32nd Annual General Meeting (AGM) held on July 23, 2014, M/s. Price Waterhouse, Chartered Accountants, LLP, were 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 of the Company at the ensuing AGM for the third year.

Further, the report of the Statutory Auditors along with notes to Schedules 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.

13. SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, M/s. V. Sundaram & Co., Practicing Company Secretary, Mumbai have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors 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.

14. HUMAN RESOURCES

Mastek Group 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 Group continually undertakes measures to attract and retain such high quality talent.

As on March 31, 2016 Mastek Group had a total Head count of 1298. 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 there under forms part of this report. However, as per the provisions of Section 136 (1) 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.

The other disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Perquisites (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 5 and forms on report of this part.

15. EMPLOYEE STOCK OPTIONS

The Board of Directors confirms that there is no material change in the ESOP Scheme and all the ESOP Schemes are in compliance with the SEBI Guidelines. The required disclosures are enclosed as Annexure 6.

16. 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 mitigation steps/measures are taken/initiated to mitigate the identified risks from time to time.

17. CHANGES AMONG DIRECTORS AND DECLARATION BY INDEPENDENT DIRECTORS

Mr. S. Sandilya, Ms. Priti Rao, and Mr. Atul Kanagat have been the Independent Directors on the Board of your Company as at March 31, 2016.

In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Companies Act, 2013 and the Rules made there under about their status as Independent Directors of the Company.

Dr. Rajendra Sisodia (Independent Director), resigned from the Directorship of Mastek Ltd. with effect from April 17, 2015.

Due to the De-merger of the Insurance Products and Services business to Majesco Ltd, the following Directors resigned from the Directorship of Mastek Ltd:

Dr. Arun Maheshwari, Indepenendent Director - effective June 01, 2015;

Mr. Radhakrishnan Sundar, Executive Director - effective June 01, 2015;

Mr. Ketan Mehta, Non-Executive Director - effective June 01, 2015; and

Mr. Venkatesh Chakravarty, Independent Director - effective June 19, 2015.

The Board places on record its sincere appreciation of the valuable services rendered by the above Board members during their tenure as Board members.

18. 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.

Details on the same are given in the Corporate Governance Report.

19. 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.

20. INTERNAL CONTROL 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.

21. INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations.

During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

22. INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS

The Ministry of Corporate affairs vide its notification dated February 16, 2015 has notified the Companies (Indian Accounting Standards) Rules, 2015. In pursuance of this notification , the Company will adopt IND AS with effect from April 01, 2017, with the comparatives for the periods ending March 31, 2016.

The implementation of IND AS is a major change process for which the Company has established a project team and is dedicating considerable resources. The impact of the change on adoption of IND AS is being assessed.

23. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

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

The Shareholders at the Extra Ordinary General Meeting held on March 05, 2015 had approved the appointment of Mr. S. Sandilya, Ms. Priti Rao and Mr. Atul Kanagat as Independent Directors of the company for a term of four (4) years from April 01, 2015 to March 31, 2019.

The information relating to remuneration paid to director as required under section 197(12) of the Act, is given in the notes to accounts.

Pursuant to the provisions of Section 203 of the Companies Act, 2013 the following changes took place in the KMPs during the year under review:

Mr. Farid Kazani, Group CFO and Finance Director''s services were transferred to Majesco Limited as a result of the De-merger on June 01, 2015. Mr. Jamshed Jussawalla was appointed as Chief Financial Officer effective June 01, 2015. Mr. Bhagwant Bhargawe, Company Secretary retired during the year effective from August 31, 2015 and Mr. Dinesh Kalani was appointed as Company Secretary effective September 01, 2015.

24. EVALUATION OF THE BOARD''S PERFORMANCE

In compliance with Companies Act, 2013 and Listing Regulations, 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 Expert, 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, who were evaluated on parameters of contribution to Board Processes and Outcomes including independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The Directors expressed satisfaction with the evaluation process.

25. PUBLIC DEPOSITS

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

26. 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.

27. 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.

Not

Applicable

(ii)

the steps taken by the company for utilizing alternate sources of energy.

(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

Applicable

(a) the details of technology imported;

(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 is as follows

Rs, in Lakhs

Particulars

Year Ended March 31, 2016

Year Ended March 31, 2015

Exchange used

22,722.22

28,896.99

Exchange Earned

35,490.75

63,172.14

28. CORPORATE GOVERNANCE

The Company has complied with Corporate Governance requirement under the Companies Act, 2013 and as per Listing Agreement and SEBI Listing Regulations. 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.

29. CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 of the Companies Act, 2013 the Board of Directors of the Company have already formed a Corporate Social Responsibility (CSR) Committee. The committee met four times during the year and a detailed report about CSR is given in Annexure 7.

The Committee has formulated a Corporate Social Responsibility Policy. The contents of the policy are as follows:-

Mastek CSR programmes shall fall under the following categories:

1. Promoting education, enhancing skills of children, and development of children and 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 centers, 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 there from

- Surplus arising out of the above activities

- Payroll contribution from the employees

- Fund-raising events

Mastek may pool its resources and CSR spending with other groups or associate companies on collaborative efforts that qualify as CSR spending.

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.com

- 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, Mr. Sudhakar Ram and Mr. Ashank Desai. The Company Secretary is the Secretary of the Committee. Dr. Rajendra Sisodia ceased to be a member during the year w.e.f. April 17, 2015.

During the year ended March 31, 2016 the Board approved Donations of Rs, 94.36 Lakhs. Of this, a sum of Rs, 74.51 Lakhs was spent on Projects approved under Section 135 of the Companies Act, 2013 on CSR activity and Rs, 19.85 lakhs was towards the salary and other Administrative Expenses of Mastek Foundation, relating to CSR activities of the Company.

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 of the Company made during three immediately preceding financial years, pursuant to 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 2015-16 was Rs, 94.03 Lakhs. The amount of Rs, 94.03 lakhs was arrived at based on the net profit of the Company for 2012-13, 2013-14 and of the continuing operations of the company for 2014

15, since the Company''s Insurance Products and Services business was demerged effective April 01, 2014.

The Company has spent Rs, 85.36 lakhs (including Rs, 19.85 lakhs was towards the salary and other Administrative Expenses of Mastek Foundation) on various projects approved under Section 135 of the Companies Act, 2013.

The shortfall is due to the following reasons:

a) Rs, 6.00 lakhs donation made to a very well-known non-profit organization, Goonj, located in Mumbai for victims of earthquake in Nepal, cannot be considered as an eligible expenditure under Section 135, since the relief work was done outside India.

b) Rs, 3.00 lakhs was unspent on establishment of shelter home - Suraksha under Aasara Trust at Neral, Maharashtra, since the milestone of the project was not achieved by March 31, 2016.

30. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company has transferred a sum of Rs, 11,41,859/- during the financial year 2015-16 to Investor Education and Protection Fund (IEPF), established by Central Government in compliance with section 205C of the Companies Act, 1956. The said amount represents unclaimed Dividends which were lying with the company for a period of 7 (seven) years from their respective due dates of initial 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. August 17, 2015), with the Ministry of Corporate Affairs.

31. NUMBER OF CASES FILED, IF ANY, AND THEIR DISPOSAL UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace, and is fully committed to uphold and maintain the dignity of every women employee working in the Company. The Company''s Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year, no such cases were reported.

32. 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

Sudhakar Ram S. Sandilya

Managing Director & Group CEO Non- Executive Chairman and

Independent Director

Date : April 19, 2016

Place : Mumbai


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, 2012

Dear Members,

The Board of Directors has pleasure to forward the following Report for the Financial Year ended on June 30, 2012.

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

Rs. In lakhs

PARTICULARS Year Year ended ended June 30, June 30, 2012 2011

Income from IT Services 72,296.43 58,863.19

Other operating Revenue 123.59 547.02

Other Income 1,485.45 2011.14

Total Revenue 73,905.47 61,421.35

Expenses other than 70,369.16 61,258.37 Depreciation, Amortization expenses and Finance costs

Depreciation & Amortization 2,878.37 2878.84 Expenses

Finance Costs 129.94 116.19

Profit / (Loss) Before 528.00 (2,832.05) Exceptional Item and Tax

Exceptional item - 2,719.93

Profit / (Loss) Before Tax 528.00 (5,551.98)

Tax, Expenses 477.97 42.36

Profit / (Loss) After Tax 50.03 (5,594.34)

FINANCIAL RESULTS - MASTEK LIMITED

Rs. In lakhs

PARTICULARS Year Year ended ended June 30, June 30, 2012 2011

Income (including other Income) 46,345.50 41,323.04

(Loss) before Tax (601.09) (557.35)

Tax expense/(credit) (43.81) (423.91)

(Loss) after Tax (557.28) (133.44)

Add: Profit brought forward 24,802.08 24,935.52 from Previous Year

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

Profit available for appropriation 26,353.73 24,802.08

Interim Dividend - -

Final Dividend - -

Corporate Dividend Tax - -

Transferred to General reserve - -

Balance carried to Balance Sheet 26,353.73 24,802.08

2. RESULTS OF OPERATIONS

A) Mastek Consolidated Operations

After a couple of years of decreasing revenues and eroding profitability, the last financial year saw the Group turnaround. The turnaround can be attributed primarily due to a focused approach by the management team driving sales enhancing strategies, margin improvement initiatives and the continued investment in product development spends in the insurance segment in North America.

The Group is witnessing a positive momentum in the business, specifically in the insurance space in North America, where the Company has garnered substantial wins in the last fiscal and expects the trend to continue. During the fiscal 2012, the Group has added 21 new logos as compared to 14 in fiscal 2011 and ended the year with a strong 12 month order backlog of Rs. 48,515.1 lakhs up 58% as compared to Rs. 30,599.1 lakhs in June 2011.

Financials

On a consolidated basis, the Group registered total operating revenue of Rs. 72,296.4 lakhs in FY2012. This represents a 22.8 % increase compared to Rs. 58,863.2 lakhs in the preceding year. As a consequence, the Group registered a net profit of Rs. 50.0 lakhs in FY 2012 as compared to a loss of Rs. 5,594.3 lakhs in FY 2011.

Break up of the Operating Revenue by regions

Region 2011-12 2010-11 Rs. % of Rs. % of in lakhs revenue in lakhs revenue

North America 31,764.1 43.9 25,804.4 43.8

Europe 34,903.3 48.3 29,090.9 49.4

Others (India / Asia Pacific) 5,629.0 7.8 3,967.9 6.8

Total Operating

Revenue 72,296.4 100.0 58,863.2 100.0

The North American operations, registered a growth of 23.1% to Rs. 31,764.1 lakhs from Rs. 25,804.4 lakhs last year primarily due to growth in the insurance segment both in the L & A and P & C space.

The European operations (primarily UK) contributed Rs. 34,903.3 lakhs in revenues, as compared to Rs. 29,090.9 lakhs during the corresponding period last year. The growth of 20% was led by increased business in the government vertical followed by financial services and others.

The growth of 41.8 % in the India Asia Pacific region was driven by good level of wins from the India Government side.

Break up of the Operating Revenue by Verticals

Vertical 2011-12 2010-11

Rs. % of Rs. % of in lakhs revenue in lakhs revenue

Insurance 28,302.9 39.1 24,574.8 41.7

Government 21,291.1 29.5 13,635.2 23.2

Financial Services 12,745.7 17.6 10,109.7 17.2

IT & Other Services 9,956.7 13.8 10,543.5 17.9

Total Operating Revenue 72,296.4 100.0 58,863.2 100.0

While the insurance vertical in the UK remained subdued, the large part of the growth of 15.2 % was led by a strong momentum in the insurance vertical in North America.

The Government vertical grew by 56.2 % supported by good 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 a growth of 26.1 %, whereas IT and other services saw a drop of 5.6% primarily due to volume fluctuations in North America.

Profitability

The Group ended the year with a profit of Rs. 50.0 lakhs in FY 2012 compared to a net loss of Rs. 5,594.3 lakhs in FY 2011. The return to profitability was driven by the following initiatives:

- Positioning the Group with a well-crafted sales strategy, leveraging its core competencies, resulting in improved order win ratios and expansion of the sales pipeline.

- Improving the overall productivity and efficiency at project levels across the three geographies.

- Various cost improvement initiatives.

- Higher foreign exchange realizations as compared to previous year.

While operating revenues grew 22.8%, the employee benefits expense together with consultancy charges paid to sub-contractors grew by 14.2%. Travel costs grew by 23.4% led by increased sales momentum and activities across the three geographies. While other operating expenses grew by 9.2%, depreciation and amortization expenses remained flat in absolute terms. Forex loss during the year of Rs. 580.0 lakhs was primarily on account of mark to market losses on forward covers whereas in the previous year, the Group had a forex gain of Rs. 1030.5 lakhs which is reflected as part of other income.

During the year, the Company adopted hedge accounting as per Accounting Standard 30 (AS-30) with effect from October 1, 2011.

(A more detailed discussion of the Company's business model, 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. 44,977.1 lakhs for FY 2012 as compared to Rs. 35,932.9 lakhs for FY 2011. The Company made a Net Loss of Rs. 557.3 lakhs compared to the Net Loss of Rs. 133.4 lakhs in FY 2011.

C) Update on Board of Directors

During the year under review, Mr. S. Sandilya was appointed as an Additional Director of the Company with effect from January 19, 2012 & is proposed to be appointed as Director liable to retire by rotation in ensuing Annual General Meeting. He is an Independent Director on the Board.

During the year under review, Mr. Diwan Arun Nanda and Mr. Anil Singhvi resigned as Directors of the Company due to their pre occupation,with effect from July 25, 2011 and October 18, 2011 respectively. The Board expressed its sincere appreciation of the valuable services rendered by Mr. Diwan Arun Nanda and Mr. Anil Singhvi during their tenure as Directors of the Company.

3. BUSINESS OUTLOOK

There are huge market opportunities in both the segments that we operate in - Insurance and Government. The market, in these geographies, has appreciated the fact that Mastek plays for the long term. They have seen us continuing to invest in product development, sales, marketing and capacity building. These investments have started paying off and will continue to do so in FY 2013 and beyond.

4. MERGER

The scheme of merger of Keystone Solutions India Private Limited (step down subsidiary) with the Company was approved by Hon'ble Bombay High Court vide its order dated December 2, 2011 and Gujarat High Court vide its order dated July 7, 2011. The appointed date of the merger scheme is 1st Day of July 2011.

5. LIQUIDITY

The Company continues to maintain a reasonably high level of Cash and Bank Balances and Investments in Mutual Funds 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. The amount of Cash and Bank Balances and Investments in Mutual Funds stand at Rs. 13,785.4 Lakhs which amounted to 65 days of expenses and Rs. 51.0 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.

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 July 27, 2012 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. ISSUE OF SHARE CAPITAL

During the year, the Company allotted 75,000 equity shares of Rs. 5/- each to its eligible employees who exercised their options under Employee Stock Option Plan.

8. DIVIDEND

In view of the loss incurred in Mastek Limited during the year and to conserve Cash resources for future business operations, the Directors do not propose a Dividend for the year ended June 30, 2012.

9. REMUNERATION PAID TO CHAIRMAN & MANAGING DIRECTOR AND EXECUTIVE DIRECTOR AND APPROVAL OF APPOINTMENT AND REMUNERATION FOR A PERIOD OF THREE YEARS WITH EFFECT FROM JULY 1, 2011 TO JUNE 30, 2014.

In the previous year's Annual General Meeting, the shareholders of the Company had given consent by approving Special Resolution for waiver for recovery of excess remuneration paid to Mr. Sudhakar Ram, Chairman and Managing Director and Mr. Radhakrishnan Sundar, Executive Director of the Company aggregating to Rs. 63.36 Lakhs and Rs. 22.50 Lakhs respectively. The Company had thereafter applied to the Ministry of Corporate Affairs (MCA) for its approval to the same. We have pleasure to inform you that both the applications were approved by MCA vide its letter No.B 22 040828/4/2011 dated March 1, 2012 and No.B 22 041347/4/2011 dated March 1, 2012.

Similarly, as approved by the shareholders of the Company by passing Special Resolutions in the previous year's Annual General Meeting, the Company had applied to the Ministry of Corporate Affairs (MCA) for their approval to the appointment and remuneration of Mr. Sudhakar Ram, as Chairman and Managing Director and Mr. Radhakrishnan Sundar as Executive Director of the Company . We have pleasure to inform you that both the applications were approved by MCA vide its letter No. B22064349/4/2011 - CL.VII dated March 1, 2012 and No. B22065346/4/2011 - CL.VII dated March 1, 2012.

10. 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 June 30, 2012, and of the profit/(loss) 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;

11. DIRECTORS

As per Article 134 of Articles of Association of the Company, Mr. Ashank Desai and Mr. Ketan Mehta, Directors of the Company retire by rotation and, being eligible, offer themselves for re-appointment.

During the year ended June 30 2012 the Company has paid an amount of Rs. 648,808 to Mr. Ashank Desai towards benefits/perquisites like re-imbursement of telephone, mobile bills and credit card fees, premium of mediclaim policy and personal accident policy, use of Chauffer driven Company car maintained by Company. The Company has already received an approval of Central Government for the said payment.

The Approval given by Central Government to make payment of benefits/perquisites vide their letter No.SRN No. A71828073CL.VII dated May 13, 2010 has been for a period of 3 (three years) with effect from July 01, 2009 to June 30, 2012.

Mr. Ashank Desai, one of the founders of the Company, being a non-executive director, represents the Company at various industry and public forums, both domestic and international. In view of his long association and in-depth knowledge of the Company and the industry, the Company is immensely benefited by his continuous interaction with Government/Semi-Government organizations. He has been actively involved with industry forums such as NASSCOM, ASSOCHAM and CII. Mr. Desai is the Chairman of Mastek Limited's Corporate Governance Committee and Share Transfer cum Investor Grievance Committee.

Considering the above, the Board has proposed to continue the payment of aforesaid benefits/perquisites to Mr. Ashank Desai for a further period of 3(three) years from July 1, 2012 till June 30, 2015. The Monetary value for the said benefits/perquisites shall not exceed Rs. 15 Lakhs per annum. Taxes, if any on the above benefits/perquisites will be borne by the Company.

12. ALTERATION OF ARTICLES OF ASSOCIATION OF THE COMPANY.

Pursuant to notifications issued by Ministry of Corporate Affairs, Govt. of India, New Delhi about participation at Board Meetings and General Meetings of Members changes are sought to be introduced in the Articles of Association of the Company to permit the Company to adopt such practices.

Accordingly, following amendments have been proposed in the Articles of Association of the Company for members consideration and approval.

a. Amendment of Article 86 to conduct General Meeting through video conferencing or teleconferencing or through any other electronic or other media as permitted by law

b. Amendment of Article No. 99 to permit voting by shareholders through electronic or other media as permitted by law

c. Amendment of Article No. 147 to determine quorum of Directors participating in Board / Committee meeting through video conferencing or teleconferencing or through any other electronic or other media as permitted by law

13. 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.

14. 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 June 30, 2012, Mastek Group had a total of 3,083 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, 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.

15. 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 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.

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. The options 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.

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 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. The options 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.

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. The options granted during the financial year ended June 30, 2012 and June 30, 2011 have been granted at an exercise price which is equal to the market price of the underlying equity shares except for nil Options (Previous Year 50,000 options), which had been granted at a price less than the market price. Consequently, amortized compensation cost of Rs. 35.00 Lakhs (Previous Year Rs. 88.50 Lakhs) in respect of options granted in earlier periods has been charged to the Profit and Loss account during the current year.

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 year.

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. At the Annual General Meeting of the Company held on October 1, 2010, the shareholders of the Company approved the further issue of 20,00,000 options.

a) Options granted: Opening 25,73,478

b) Issued during the year 5,41,500

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: 8,48,112

e) Options exercised 75,000

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

75,000

g) Options lapsed: 6,75,736

h) Variations of terms of options NIL

i) Money realized by exercise of options

Rs. 3,75,000/-

j) Total number of options in force

2,364,242

k) Employee-wise details of options granted to: (1) Senior managerial personnel: 5

(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

1

(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

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

Rs. (2.06)

(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.

16. 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, 2012:

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 and Outgo used and earned by the Company

17. CORPORATE GOVERNANCE

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

18. 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 27, 2012 Chairman & Managing Director


Jun 30, 2011

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

Rs. in Crore

PARTICULARS Year Year ended ended June 30, June 30, 2011 2010

Income

Income from It services and 593.3 713.8 Products

Other Income 20.9 8.1

Total Income 614.2 721.9

Expenses 612.5 626.6

Depreciation 28.8 26.7

Interest and Financial Charges 1.2 1.3

(Loss)/Profit Before (28.3) 67.3 Exceptional Items and Tax

Exceptional item 27.2 –

(Loss)/Profit Before Tax (55.5) 67.3

provision for tax, net charge/ 0.4 (0.4) (credit)

(Loss)/Profit After Tax (55.9) 67.7

FINANCIAL RESULTS – MASTEK LIMITED (STANDALONE)

Rs. in Crore

PARTICULARS Year Year ended ended June 30, June 30, 2011 2010

Income 413.2 440.9

(Loss)/Profit before Tax (5.6) 24.0

Tax Expense/(Credit) (4.3) (13.0)

(Loss)/Profit After Tax (1.3) 37.0

Add: Profit brought forward 249.4 239.5 from previous year

Profit available for 248.1 276.5 appropriation

Interim Dividend - 5.4

Final Dividend - 3.4

Corporate Dividend tax - 1.5

transferred to general - 16.9 reserve

Balance carried to Balance 248.1 249.4 Sheet

2. RESULTS OF OPERATIONS

A) Group global operations

The Company’s performance for the financial year ended June 30, 2011 under review (FY 2011) was affected by a number of factors. key among those was the marked decrease in clients engaging in transformational deals due to the global economic crisis and particularly in UK where Mastek has a substantial presence. the long sales cycles as well as reduction in insurance revenues from Capita, UK added to the head winds that the Company faced this year. the above mentioned reasons along with the continued product development spends in the insurance vertical in North America and wage hikes to retain the best talent had a substantial impact on the financial performance.

On a consolidated basis, the Company registered a total income of Rs. 614.2 crore in FY2011. this represents a 14.9% decline compared to Rs. 721.9 crore in the preceding year. As a consequence, it had a loss of Rs. 55.9 crore in FY 2011 compared to the profit of Rs. 67.7 crore in FY 2010. the loss in FY 2011 is after considering an exceptional item of Rs. 27.2 crore in relation to impairment of goodwill of Vector Insurance services. Despite the adverse circumstances, the Company registered a Cash croft of Rs. 0.5 crore in FY 2011 compared to Rs. 94 crore in FY 2010.

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. 290.9 crore in revenues, amounting to 49% of overall consolidated revenues for the year. this was however a de-growth of 22% compared to Rs. 373.9 crore during the corresponding period last year. one of the key clients, Capita UK, took a relook at its strategy with respect to migrating policies of its clients on to the Elixir4 platform. the further development on this platform has been put on hold leading to a reduction in the revenues from the insurance vertical.

The North American operations, which now includes both the us and Canada businesses, also registered a de-growth of 11.9% to Rs. 258.0 crore from Rs. 292.8 crore last year primarily due to lack of new account wins in the first half of the year.

During the year under review, the Company has targeted its product development spends

in North America with the objective of building the end to end platform in the Life and Annuity space. the Company also acquired substantially all of the assets of Glastonbury, CT based SEG software, LLC, a leading provider of policy administration systems covering individual and group life, health & annuity insurance products. this acquisition reinforces the Company’s commitment to the North American insurance market and will expand its presence and capabilities in the life and annuity policy administration arena.

Mastek’s operations in the Asia-Pacific region, specifically India, were impacted on the insurance side due to the new IRDA regulations which have forced providers to become competitive to survive in the market place. expenses related to It and marketing have been slashed leading to a decreased pipeline of opportunities for the It players in the insurance space. However, there was good traction from government projects in India and have been involved in implementing niche projects on the social justice, sales tax and the education fields for various State governments in India. During FY 2011, these operations (Asia-Pacific including India & middle east) contributed Rs. 44.3 crore to overall consolidated revenues as compared to Rs. 47.1 crore in FY 2010 refecting a de-growth of 6%.

The last quarter of the year has refected improved performance with the 12 month order backlog ending higher at Rs. 309 crore. overall, the Company added 14 new clients in this financial year.

(A more detailed discussion of the Company’s business model, 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 a total income of Rs. 413.2 crore for FY 2011 as compared to Rs. 440.9 crore for FY 2010. the Company made a Net Loss of Rs. 1.3 crore compared to the profit of Rs. 37 crore in FY 2010.

C) Board and management

During the year under review, Ms. Priti Rao, Mr. Venkatesh Chakravarty and Dr. Rajendra Sisodia were inducted as Independent Directors of the Company. In the same period,

Mr. Raj Nair and Mr. Amit shah resigned from the Board of the Company.

Mr. Mrinal Sattawala, group president resigned from the services of the Company in June, 2011. Mr. Sudhakar Ram, the Company’s Chairman & managing Director has now taken over responsibility of all operations and the senior leadership team reports to him directly.

3. BUSINESS OUTLOOK

FY 2012 is expected to be a better year with increased traction across the key geographies in UK and North America. positive signals of the momentum can be witnessed from the deal wins in UK in the last quarter of FY 2011, increasing pipeline of opportunities in the Non-Life (property & Casualty) space in North America, improved order backlog position and some exciting developments on the government side in India. the initiatives that were put in place at the start of the year are expected to translate into revenue growth while the Company will strive towards profitability.

4. LIQUIDITY AND CASH EQUIVALENT

The Company continues to maintain a good level of cash and cash equivalent, which enables 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 mutual Funds and Fixed Deposits with leading Banks. As of June 30, 2011, the Cash and Cash equivalent (including investment in mutual Funds) stood at Rs. 159 Crore.

5. AUDITED ACCOUNTS OF SUBSIDIARY COMPANIES

In view of the Circular No.2/2011 dated 8th February, 2011 issued by the government of India, ministry of Company 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 has given consent for not attaching the Annual Accounts of the subsidiary companies. 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.

6. ISSUE OF SHARE CAPITAL

During the year, the Company allotted 7,250 equity shares of Rs. 5 each to its eligible employees who exercised their options under employee stock option plan.

7. DIVIDEND

In view of the loss incurred by the Company during the year and to conserve Cash resources for future business operations, the Directors do not propose a Dividend for the year ended June 30, 2011.

8. EXCESS REMUNERATION PAID TO CHAIRMAN & MANAGING DIRECTOR AND EXECUTIVE DIRECTOR

In response to the paragraph 4 of the Auditor’s Report for the year ended June 30, 2011 in respect of excess remuneration paid to Chairman & managing Director and executive Director aggregating to Rs. 0.6 crore and Rs. 0.2 crore respectively, the Company is approaching the shareholders and Central government to seek their approval in respect of the waiver for recovery of excess remuneration paid as mentioned above.

9. DIRECTORS’ RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

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

- 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, 2011, and of the Loss of the Company for the year ended on that date;

- 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;

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

10. DIRECTORS

Mr. Anil Singhvi and Dr. Rajendra Sisodia, Directors of the Company, retire by rotation and, being eligible, offer themselves for re-appointment.

The Board of Directors, in modification of existing terms, re-appointed Mr. Sudhakar

Ram as Chairman & managing Director and Mr. Radhakrishnan Sundar as executive Director effective July 1, 2011, subject to approval of shareholders and other prescribed authorities for a period of 3 years.

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 224(1B) of the Companies act,1956.

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 June 30, 2011, the Company had a total of 2905 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, 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 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, 2011 2010

Opening Balance 7,750 91,520

Granted during the year – –

Exercised during the year (5,250) (14,458)

Cancelled during the year (2,500) (69,312)

Balance unexercised options – 7,750

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. 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, 2011 2010

Opening Balance 546,794 898,624

Granted during the year – –

Exercised during the year – (26,938)

Cancelled during the year (267,502) (324,892)

Balance unexercised options 279,292 546,794

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 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. 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, 2011 2010

Opening Balance 513,714 614,917

Granted during the year – –

Exercised during the year (2,000) (3,047)

Cancelled during the year (104,476) (98,156)

Balance unexercised options 407,238 513,714

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 AEBI 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. The options granted during the financial year ended June 30, 2011 and June 30, 2010 have been granted at an exercise price which is equal to the market price of the underlying equity shares except for 50,000 options (previous year 25,000 options), which had been granted at a price less than the market price. Consequently, compensation cost of Rs. 0.9 crore (previous year Rs. 0.6 crore) has been charged to the Profit and Loss account during the current year.

(No. of options)

Year Year ended ended June 30, June 30, 2011 2010

Opening Balance 891,000 61,000

Granted during the year 879,248 1,116,000

Exercised during the year – –

Cancelled during the year (452,900) (286,000)

Balance unexercised options 1,317,348 891,000

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. of options)

Year Year ended ended June 30, June 30, 2011 2010

Opening Balance – –

Granted during the year 569,600 –

Exercised during the year – –

Cancelled during the year – –

Balance unexercised options 569,600 –

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.

a) options granted: opening: 1,959,258

b) Issued during the year: 1,598,848

c) Pricing formula: Market Price as defned 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: 781,246

e) options exercised: 7,250

f) Total number of shares arising as a result of exercise of options: 7,250

g) Options lapsed: 827,378

h) Variations of terms of options: NIL

i) money realized by exercise of options: Rs. 1,129,625

j) total number of options in force: 2,723,478

k) employee-wise details of options granted to:

(1) senior managerial personnel: 37

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

(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: Mr. Mrinal Sattawala was granted 400,000 options during the year ended June 30, 2011.

l) Diluted EPS pursuant to issue of shares on exercise of option calculated in accordance with Accounting standard (As) 20 is Rs. (0.50).

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

(Rs. in Crore)

Profit After Tax (PAT) (1.33)

Less: Additional employee 4.27 compensation based on fair value

Adjusted PAT (5.60)

Adjusted EPS (in Rs.) (2.08)

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

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

July, 2010 295.40 153.93 295.40

October, 242.65 124.90 242.65 2010

April, 2011 125.30 63.57 125.30

o) Description of The Black Scholes the method option pricing model and significant was developed for assumptions used estimating fair value during the year of traded options to estimate the that have no vesting fair value of the restrictions and are options, including fully transferable. the following Since option pricing weighted average models require information: 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 Date July October April no 20, 2010 13, 2010 14, 2011

1 Risk Free Interest Rate 7.54% 7.94% 7.94%

2 Expected Life (years) 6 6 6

3 Expected Volatility 53.25% 51.46% 50.00%

4 Dividend Yield 1.54% 1.54% 1.54%

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 year ended June 30, 2011:

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 Crore)

June 30, June 30, 2011 2010

Exchange Used 162.1 173.3

Exchange Earned 384.0 383.1

15. CORPORATE GOVERNANCE

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

The Board of Directors re-appointed Mr. Sudhakar Ram as Chairman & managing Director and Mr. Radhakrishnan Sundar as executive Director with effect from July 1, 2011, subject to approval of shareholders and other prescribed authorities for a period of 3 years on the following terms and conditions:

Mr. Sudhakar Ram, Chairman & Managing Director

Basic Salary:

Rs. 3,35,000/- month (Rupees three Lakhs thirty Five thousand only), with an option of annual increment as may be decided by the Compensation Committee/ Board of Directors, from time to time.

Bonus:

Based on the performance as may be evaluated by the Board of the Directors/Compensation Committee, from time to time on the basis of Actual (1) order booking (2) Revenue and (3) Net profits for each year.

Company Accommodation:

The Company will provide rent-free furnished accommodation to Mr Ram and his family members and the annual cost to the Company thereof shall not exceed Rs. 20 Lakhs (Rupees twenty Lakhs only).

Special Allowance:

Rs. 332,000/- month (Rupees three Lakhs thirty two thousand only).

Car Facility:

Car facility with driver to be used for the business of the Company.

Club Fees:

Re-imbursement of Club Fees.

Education Expenses:

Reimbursement of education expenses for one dependent child, not exceeding Rs. 11 Lakhs per annum.

Telephone:

Free telephone facility at his residence to be used for the business of the Company.

Provident Fund Contribution:

Company’s contribution towards provident fund as per rules of the Company, but not exceeding 12% of the salary.

Gratuity:

As per rules of the Company.

Perquisites:

As may be permitted as per the policy of the Company or by the Board of Directors and/or the Compensation Committee of the Board of Directors.

For the purposes of calculating the above ceilings, perquisites shall be evaluated as per Income-tax Rules, wherever applicable. In the absence of any such Rules, perquisites shall be evaluated at actual basis. provision of car and telephone for use of the Company’s business and telephone at the Chairman and managing Director’s Residence will not be considered as perquisites. the following shall not be included for the purposes of computation of the Chairman and managing Director’s remuneration or perquisites as aforesaid:

(i) the Company’s contribution to provident fund,

(ii) encashment of leave at the end of the tenure of office of the Chairman and Managing Director,

(iii) Gratuity payable at the rate not exceeding half a month’s salary for each completed year of service.

Notice Period: six months notice or Notice pay equivalent to six months basic salary.

Severance Fees: The Company has not made any special provisions for severance fees.

Stock Options: NIL

Mr. Radhakrishnan Sundar, Executive Director

Basic Salary:

Rs. 2,35,000/- (Rupees two Lakhs thirty Five thousand only) per month, with an option of annual increment as may be decided by the Compensation Committee/ Board of Directors, from time to time.

Bonus:

Based on the performance as may be evaluated by the Board of the Directors/Compensation Committee, from time to time on the basis of Actual (1) order booking (2) Revenue and (3) Net profits for each year.

House Rent Allowance:

The Company will provide furnished accommodation to Mr Sundar. However, where no accommodation is provided by the Company to Mr Sundar or Mr Sundar does not opt for the accommodation provided by the Company, then he shall be entitled to House Rent Allowance subject to a ceiling of 50% of the basic salary i.e Rs. 1,17,500/- (Rupees one Lakh seventeen thousand Five hundred only) per month.

Adhoc Allowance:

Rs. 2,31,000 (Rupess two Lakhs thirty one thousand only) per month.

Car Facility:

Car facility with driver to be used for the business of the Company.

Telephone:

Free telephone facility at his residence to be used for the business of the Company.

Provident Fund Contribution:

Company’s contribution towards provident fund as per rules of the Company, but not exceeding 12% of the salary.

Gratuity:

As per rules of the Company.

Perquisites:

As may be permitted as per the policy of the Company or by the Board of Directors and/or the Compensation Committee of the Board of Directors.

For the purposes of calculating the above ceilings, perquisites shall be evaluated as per Income-tax Rules, wherever applicable. In the absence of any such Rules, perquisites shall be evaluated at actual basis.

Provision of car and telephone for use of the Company’s business and telephone at the executive Director’s Residence will not be considered as perquisites. the following shall not be included for the purposes of computation of the executive Director’s remuneration or perquisites as aforesaid:

(i) the Company’s contribution to provident fund,

(ii) encashment of leave at the end of the tenure of office of the Executive Director,

(iii)Gratuity payable at the rate not exceeding half a month’s salary for each completed year of service.

Notice Period: six months notice or Notice pay equivalent to six months basic salary.

Severance Fees: the Company has not made any special provisions for severance fees.

Stock Options: NIL

The report on corporate governance is included in the Annual Report.

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

Ashank Desai Director

Mumbai July 25,2011


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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