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Notes to Accounts of Mastek Ltd.

Mar 31, 2023

The direct comparison approach involves a comparison of the subject property to similar properties that have actually sold in arms - length transactions or are offered for sale. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. Statute and case laws define a market value standard for assessment. In assessment litigation, under the ârules of evidenceâ a bona fide sale of the subject property is usually considered the best evidence of market value. In the absence of a sale of the subject, sales prices of comparable properties are usually considered the best evidence of market value. Consequently, the comparative sale approach is the preferred approach when sales data are available. The comparative sale approach models the behaviour of the market by comparing the properties being appraised with similar properties that have recently been sold (comparable properties) or for which offers to purchase have been made. Comparable properties are selected for similarity to the subject property by way of attributes, such as the age, size, quality of construction, building features, condition, design, gentry, etc. Their sale prices are then adjusted for their difference from the subject. Finally a market value for the subject is estimated from the adjusted sales price of the comparable properties. The economic principles of supply and demand provide a framework for understanding how the market works. The interaction of supply and demand factors determines property value.

(b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a face value of '' 5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of fully paid up equity shares held by the shareholders.

Distributions made and proposed

The Board of Directors at its meeting held on January 17, 2023 had declared an interim dividend of 140% ('' 7 per equity share of par value of '' 5 each). This has resulted in cash outflow of '' 2,129 lakhs. Further, the Board of Directors at its meeting held on April 19, 2023 have recommended a final dividend of 240% ('' 12 per equity share of par value of '' 5 each), which is subject to approval by the shareholders at their ensuing Annual General Meeting. Proposed dividend on equity shares is not recognised as a liability as at March 31, 2023. Dividend declared by the Company is based on profit available for distribution.

The provision for leave entitlement is presented as current since the Company does not have an unconditional right to defer settlement for this obligation. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months.

Remaining performance obligation

As of March 31, 2023 the aggregate amount of transaction price allocated to remaining performance obligations, was '' 251 lakhs,(March 31, 2022''285 lakhs) of which approximately 100% (March 31, 2022: 100%) is expected to be recognised as revenues within 3 years.

The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The weighted average duration of the defined benefit obligation of the Company as at March 31,2023 is 6.04 years (March 31,2022 6.22 years).

The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of another since some of the assumptions may be co-related.

i) The Company has setup an income tax approved irrevocable trust fund to finance the plan liability. The trustees of the trust fund are responsible for the overall governance of the plan. Expected contribution to the Fund in FY 2023-24 is

'' 200 lakhs. (FY 2022-23''200 lakhs)

ii) Plan assets are investment in unquoted insurer managed funds.

Plan is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the memberâs length of service and salary at the time of death/retirement/ termination age.

(b) The Obligation for compensated absence is recognised basis Companyâs leave policy and net charge to the standalone statement of profit and loss the year ended March 31, 2023 is '' 244 lakhs (March 31, 2022: '' 216 lakhs)

30 Segment reporting

The Company has opted to present information relating to its segments in its consolidated financial statements which are included in the same annual report. In accordance with Ind AS 108 - âOperating Segmentsâ, no disclosures related to segment are therefore presented in these standalone financial statements.

32 Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31, 2023 and March 31, 2022

33 Financial risk management

Market risk: Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market prices. The primary market risk to the Company is foreign exchange risk.

Foreign currency risk

The Companyâs exposure to risk of change in foreign currency exchange rates arising from foreign currency transactions, is primarily with respect to the currencies which are not fixed. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the Company. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The counter parties of these derivative instruments are primarily a bank. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that no trading in derivative for speculative purposes may be undertaken.

These derivative financial instruments are forward contracts and are qualified for cash flow hedge accounting when the instrument is designated for hedge. Company has designated major portion of derivative instruments as cash flow hedges to mitigate the foreign exchange exposure of forecasted highly probable cash flows.

Derivative financial instruments:

The Company holds derivative financial instrument i.e., foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is a bank. These derivative financial instruments are valued based on inputs that is directly or indirectly observable in the marketplace.

The objective of hedge accounting is to represent, in the Companyâs standalone financial statements, the effect of the Companyâs use of financial instruments to manage exposures arising from particular risks that could affect profit or loss. As part of its risk management strategy, the Company makes use of derivative financial instruments for hedging the risk arising on account of highly probable foreign currency forecasted sales.

The Company applies cash flow hedge to hedge the variability arising out of foreign currency exchange fluctuations on account of highly probable foreign currency forecasted sales. Such contracts are designated as cash flow hedges.

Accounting for cash flow hedge

The objective of hedge accounting is to represent, in the Companyâs financial statements, the effect of the Companyâs use of financial instruments to manage exposures arising from particular risks that could affect profit or loss. As part of its risk management strategy, the Company makes use of derivative financial instruments for hedging the risk arising on account of highly probable foreign currency forecasted sales.

The Company has a Board approved policy on assessment, measurement and monitoring of hedge effectiveness which provides a guideline for the evaluation of hedge effectiveness, treatment and monitoring of the hedge effective position from an accounting and risk monitoring perspective. Hedge effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. The Company assesses hedge effectiveness on prospective basis. The derivative contracts have been taken to hedge foreign currency fluctuations risk arising on account of highly probable foreign currency forecasted sales.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The foreign exchange forward contracts are denominated in the same currency as the highly probable forecasted sales. Further, the entity has included the foreign currency basis spread and takes the forward rates in hedging relationship.

For the guarantee issued by Mastek Limited on behalf of its wholly owned subsidiary, Mastek (UK) Limited, management does not expect any liability against the same.

As at March 31, 2023 and March 31, 2022 respectively, every 1% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact results by approximately '' 6 lakhs and '' 27 lakhs, respectively.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counter party credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment and accordingly the Companyâs accounts for the expected credit loss. There are two customers which contribute for more than 10% of outstanding total accounts receivables aggregating 72.52% as at March 31, 2023 (74.50%, March 31, 2022).There is one customer which contributes for more than 10% of revenue aggregating 84% as at March 31, 2023 (88%, March 31, 2022).

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has unutilized credit limits with banks. The Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The management monitors the Companyâs net liquidation through rolling forecast on the basis of expected cash flows. Also, the probability that guarantee given by Mastek Limited on behalf of Mastek (UK) Limited, wholly owned subsidiary (âMastek UKâ) for its borrowings, will be invoked is very remote considering the financial strength of Mastek UK and its past history of timely repayment. Accordingly, such guarantee is not impacting the liquidity risk profile of the company.

Interest rate sensitivity

The sensitivity analysis below have been determined based on exposure to interest rates for borrowings at the end of the reporting year and the stipulated change taking place at the beginning of the year and held constant throughout the reporting year in case of borrowings that have floating rates.

The Company does not have any borrowings with floating interest rate.

Volatility : Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility is used in Black Scholes option pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. Company considered the daily historical volatility of the Companyâs stock price on NSE over the expected life of each vest.

Risk free rate : The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on zero coupon yield curve for government securities.

Expected life of the options: Expected life of the options is the period for which the Company expects the options to be live. The minimum life of stock options is the minimum period before which the options canât be exercised and the maximum life of the option is the maximum period after which the options canât be exercised. The Company has calculated expected life as the average of the minimum and the maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as a total of interim and final dividend declared in last year preceding date of grant.

36 Leases

Company as a lessor

At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on systematic basis over the lease term.

If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract.

Company as lessee

The Companyâs leased assets primarily consist of leases for office premises, guest houses, laptops, lease lines, furniture and equipment. Leases of office premises and guest houses generally have lease term between 2 to 44 years (March 31, 2022 - 2 to 45 years). The Company has applied low value exemption for leases of laptops, lease lines, furniture and equipment accordingly these are excluded from Ind AS 116, at present.

i) The carrying amounts of right-of-use assets recognised and the movements during the period (Refer note 3 (b))

38 Capital commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2023 is '' 336 lakhs (March 31, 2022: '' 395 lakhs).

39 A. Contingent liabilities

Particulars

As at

March 31, 2023

As at

March 31, 2022

1. Claims against Company not acknowledged as debts

Disputed demands in respect of Sales tax (including pending litigation of various matters)

941

2. Provident fund

Based on the judgement by the Honourable Supreme Court dated February 28, 2019, past provident fund liability, is not determinable at present, in view of uncertainty on the applicability of the judgement to the Company with respect to timing and the components of its compensation structure. In absence of further clarification, the Company has been advised to await further developments in this matter to reasonably assess the implications on its financial statements, if any.

(i) The Company does not expect any cash outflows or any reimbursements in respect of the above contingent liabilities.

(ii) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending occurrence of the default event or resolution of respective proceedings.

3. Social Security Code

The Code on Social Security, 2020 (âthe Codeâ) relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

41 Note on acquisition

During the year ended March 31, 2020, Mastek acquired control of the business of Evolutionary Systems Private Limited

(âESPLâ) and its subsidiary companies (together referred to as âEvosysâ). The acquisition was as follows:-

(i) Mastek (UK) Limited, a wholly-owned subsidiary of Mastek Limited, entered into a Business Transfer Agreement (âBTAâ) on February 8, 2020 to acquire the business of Evosys Arabia FZ LLC and Share Transfer Agreements (STA) to acquire Middle East Companies (âMENA Acquisitionâ) by paying a cash consideration (net of cash and cash equivalents) of USD 64.9 million i.e. '' 48,204 lakhs. The closing of such transaction occurred on March 17, 2020, which is considered to be the date of transfer of control or the date of acquisition, as per Ind AS 103, and necessary effects have been recognised in the standalone financial statements of the respective entities, alongwith standalone and consolidated financial statements of the Company and its subsidiaries.

While the acquisition has been effected and full consideration has been paid, procedures to complete the legal processes like registering sale of shares in one of the geography was delayed due to the pandemic condition, which has been completed as at March 31, 2022.

(ii) With respect to a business undertaking of ESPL (including investments in certain subsidiaries of ESPL), the parties (Mastek group and Evosys group) entered into a Demerger Co-operation Agreement (DCA) and Shareholders Agreement on February 8, 2020. The manner of discharge of the non-cash consideration and the acquisition of legal ownership, was decided to be achieved through a demerger scheme filed before the National Company Law Tribunal (NCLT) (âthe Schemeâ), or, as per DCA, the parties were to complete this transaction with the same economic effect, by an alternate arrangement, within the period specified in the DCA. The DCA gave Mastek Enterprise Solutions Private Limited (formerly known as âTrans American Information Systems Private Limitedâ) (MESPL) a wholly owned subsidiary of Mastek, the right to appoint majority of the board of directors in ESPL and its subsidiaries and also provided for the relevant activities of ESPL and its subsidiaries to be decided by a majority vote of such board of directors, thereby resulting in transfer of control of business of ESPL and its subsidiaries to Mastek Group. The date of acquisition of business undertaking for the purposes of Ind AS 103 is the date of transfer of control to the Group, i.e. February 8, 2020. Discharge of consideration for demerger is through issue of 4,235,294 equity shares of Mastek Limited (face value '' 5 each) and balance through 15,000 Compulsorily Convertible Preference Shares (CCPS) of '' 10 each of MESPL, subsequently split into 150,000 CCPS of '' 1 each , which carry

a Put Option to be discharged at agreed EBITDA multiples, based on actual EBIDTA of 3 years commencing from financial year ending March 31, 2021 including adjustment for closing cash. Pending completion of legal acquisition, this transaction had only been considered for disclosure in the standalone financial statements for the years ended March 31, 2020 and 2021 and all periods ending June 30, 2021.

On September 14, 2021, the above transaction has been approved by the NCLT, pursuant to the Scheme of Demerger (âthe Schemeâ), for the demerger of Evolutionary Systems Private Limited (ESPL or demerged entity), into MESPL, with the effective date of February 1, 2020 (Appointed Date). Consequently, the effect of the De-merger has been considered in the previous yearâs financial statement in accordance with Ind AS 103 - âBusiness Combinationsâ. Accordingly, the year ended March 31, 2021 have been restated, to give effect to the business combination, as given below.

On December 17, 2021, a board meeting was held where the Board approved the buy out of first tranche of CCPS i.e. 1 /3^rd of the total outstanding CCPS (of MESPL) basis the agreed valuations in line with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (as amended). Accordingly, 254,755 equity shares of Mastek Limited (face value '' 5 each) have been issued on February 10, 2022, for said buy- out of first tranche of 50,000 CCPS of MESPL.

On December 11, 2022, a board meeting was held where the Board approved the buy out of second tranche of 50,000 CCPS of MESPL basis the agreed valuations in line with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (as amended). Accordingly, 320,752 equity shares of Mastek Limited (face value of '' 5 each) had been issued on January 17, 2023, for said buy- out of second tranche of 50,000 CCPS of MESPL.

b) Acquisition of entity - MST

During the year ended March 31, 2023, Mastek has acquired control of the business of Meta Soft Tech Systems Private Limited (âMST Indiaâ). The acquisition was as follows:-

Mastek Limited, entered into a Share purchase agreement (âSPAâ) on July 18, 2022 to acquire the business of Meta Soft Tech Systems Private Limited by paying a cash consideration including contingent consideration to be paid based on agreed revenue and gross margin performance (net of cash and cash equivalents) of USD 2.2 million i.e.

'' 1,846 lakhs. The closing of such transaction occurred on August 02, 2022, which is considered to be the date of transfer of control or the date of acquisition, as per Ind AS 103, and necessary effects have been recognised in the standalone financial statements of the respective entities and consolidated financial statements of the Company and its subsidiaries.

MetaSoft offers customer relationship management (CRM) and marketing automation consulting services. It offers salesforce, licensing solution, MuleSoft integrations, CPQ for salesforce, and Vlocity products. The company offers digital transformation, managed services, and marketing automation solutions. It serves education, healthcare, manufacturing, non-profit, and public sector industries. it is a trusted partner to several Fortune 1000 and large enterprise clients. The acquisition will enable the Company in CRM business.

44 Other statutory information

(i) The Company has not advanced or loaned or invested funds to any person or any entity, including foreign entities (Intermediaries) with the understanding that the intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by a or on behalf of the Company (Ultimate Beneficiaries); or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(ii) The Company has not received any fund from any person or any entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by a or on behalf of the Funding Party (Ultimate Beneficiaries); or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

45 The Company does not have any transactions and outstanding balances during the current as well previous year with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

46 The Company have not defaulted on any of the loan taken from banks, financial institutions or other lenders.

47 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

48 The Company does not have any charge or satisfaction which is yet to be registered with ROC beyond the Statutory period.

49 The Company has not traded or invested in Crypto currency or Virtual currency during the financials year.

50 The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provision of the Income Tax Act,1961)

51 Previous yearâs figures have been regrouped or reclassified wherever necessary to correspond with the current year classification/ disclosure, which are not considered material to these standalone financial statements

52 The Company has not been declared willful defaulter by any bank or financial institution or any other lender.

53 The Company has complied with the number of layers prescribed under section 2(87) of the Act.

54 The Company has not entered into any scheme of arrangement in terms of section 230 to 237 of the Act for the year ended March 31, 2023 and March 31, 2022.

These are the notes to the standalone financial statements referred to in our report of even date The Standalone Financial Statements were authorised for issue by the directors on April 19, 2023.

Mar 31, 2022

(i) For the year ended March 31, 2022 and year ended March 31, 2021, Investment properties includes Pune property mortgaged as security for loan availed by subsidiary. Since Pune property has been mortgaged as security, valuation has been carried out for the same.

(ii) Valuation for Prabhadevi, Mumbai property not carried out since the rental and carrying value are not significant and the same is not mortgaged as security.

(iii) The Companyâs investment properties consist of two commercial properties in India one situated at Prabhadevi, Mumbai and another at Cerebrum Park, Pune. Fair Valuation is done for Pune property only. These valuations are based on valuations performed by Muzoomdar Associates Private Limited, an accredited independent valuer. Muzoomdar Associates Private Limited, is a specialist in valuing these types of investment properties and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. A valuation approach in accordance with that recommended by the Indian Accounting Standards has been applied.

The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

The direct comparison approach involves a comparison of the subject property to similar properties that have actually sold in arms - length transactions or are offered for sale. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. Statute and case laws define a market value standard for assessment. In assessment litigation, under the ârules of evidenceâ a bona fide sale of the subject property is usually considered the best evidence of market value. In the absence of a sale of the subject, sales prices of comparable properties are usually considered the best evidence of market value. Consequently, the comparative sale approach is the preferred approach when sales data are available. The comparative sale approach models the behaviour of the market by comparing the properties being appraised with similar properties that have recently sold (comparable properties) or for which offers to purchase have been made. Comparable properties are selected for similarity to the subject property by way of attributes, such things as the age, size, quality of construction, building features, condition, design, gentry, etc. Their sale prices are then adjusted for their difference from the subject. Finally a market value for the subject is estimated from the adjusted sales price of the comparable properties. The economic principles of supply and demand provide a framework for understanding how the market works. The interaction of supply and demand factors determines property value.

(i) Company has a history of collecting all receivables in the age group of less than 6 months. Management has evaluated allowance for bad and doubtful debts on receivables having age of more than 6 months, which have significant increase in credit risk or are credit impaired. Accordingly, all trade receivables outstanding more than 6 months have been fully provided, except immaterial balances considered recoverable on specific basis.

(ii) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person, nor any trade or other receivable are due from firm or private companies respectively in which director is partner, a director or a member. Trade receivables are non-interest bearing.

(iii) Refer note 32 for information on credit risk and market risk.

(iv) Refer note 10 and 12 for information on assets provided as collateral or security for borrowings or finance facilities availed by the Company.

(b) Rights, preferences and restrictions attached to shares

9.1 Distributions made and proposed

The Board of Directors at its meeting held on January 19, 2022 had declared an interim dividend of 140% ('' 7 per equity share of par value of '' 5 each). This has resulted in cash outflow of '' 2,081 lakhs. Further, the Board of Directors at its meeting held on April 19, 2022 had recommended a final dividend of 240% ('' 12 per equity share of par value of '' 5 each), which is subject to approval by the shareholders at their ensuing Annual General Meeting. Proposed dividend on equity shares is not recognised as a liability as at March 31, 2022. Dividend declared by the Company are based on profit available for distribution.

Mastek Limited

Annual Report 2021-22

Summary of significant accounting policies and other

explanatory information as at and for the year ended March 31, 2022

_ _(? in lakhs)

	For the year ended March 31, 2022	For the year ended March 31, 2021
Timing of revenue recognition
Transferred at a point in time	685	578
Transferred over time	24,857	18,126
	25,542	18,704

The above figures exclude the amount pertaining to hedge in March 31, 2022 ? 128 lakhs (March 31, 2021 ? 10 lakhs). Remaining performance obligation

As of March 31, 2022 the aggregate amount of transaction price allocated to remaining performance obligations, was ? 285 lakhs, of which approximately 100% is expected to be recognised as revenues within 3 years. (March 31, 2021 ? 569 lakhs)

Changes in contract assets are as follows:

	For the year ended March 31, 2022	For the year ended March 31, 2021
Balance at the beginning of the year	263	227
Invoices raised that were included in the contract assets balance at the beginning of the year	(98)	(227)
Increase due to revenue recognised during the year, excluding amounts billed during the year	231	263
Balance at the end of the year	396	263

Changes in contract liabilities are as follows:

	For the year ended March 31, 2022	For the year ended March 31, 2021
Balance at the beginning of the year	398	103
Revenue recognised that was included in the contract liabilities balance at the beginning of the year	(311)	(33)
Increase due to invoicing during the year, excluding amounts recognised as revenue during the year	34	328
Balance at the end of the year	121	398

19 Other income

	For the year ended March 31, 2022	For the year ended March 31, 2021
Interest income
On bank deposits	238	274
On income tax refunds	10	65
On guarantee given	61	89
On others	3	6
Profit on sale of current investments	1,637	657
Rental income, net*	287	418
Profit on sale of property, plant and equipment	8	17
Net gain on foreign currency transactions and translation	52	218
Dividend income from Mastek UK Limited, subsidiary (Refer note 28)	4,721	1,345
Guarantee commission	191	244
Other non-operating income	146	154
	7,354	3,487

* Rent income is net of provision of ? 130 lakhs (March 31, 2021: Nil)

29 Segment reporting

31 Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31, 2022 and March 31, 2021

32 Financial risk management

The Companyâs activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and price risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimise potential adverse effects on its financial performance. The Companyâs management oversees the management of these risk and formulates the policies, the Board of Directors and Audit Committee reviews and approves policies for managing each of these risks, which are summarised below:

Foreign currency risk

Derivative financial instruments:

The Company holds derivative financial instrument i.e. foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is a bank. These derivative financial instruments are valued based on inputs that is directly or indirectly observable in the marketplace.

As at March 31, 2022 and March 31, 2021 respectively, every 1% increase/decrease of the respective foreign currencies compared to functional currency of the Company would impact results by approximately '' 27 lakhs and '' 18 lakhs, respectively.

Credit risk

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment and accordingly the Companyâs accounts for the expected credit loss. There is only one customer which contributes for more than 10% of outstanding total accounts receivables aggregating 74.50% as at March 31, 2022 (76.80%, March 31, 2021).

Liquidity risk

Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during the period. The measure of volatility is used in Black-Scholes option pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. Company considered the daily historical volatility of the Companyâs stock price on NSE over the expected life of each vest.

Risk free rate: The risk free rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on zero coupon yield curve for government securities.

the option is the maximum period after which the options canât be exercised. The Company has calculated expected life as the average of the minimum and the maximum life of the options.

Dividend yield: Expected dividend yield has been calculated as a total of interim and final dividend declared in last year preceding date of grant.

35 Leases Company as a lessor

If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract.

Company as lessee

The Companyâs leased assets primarily consist of leases for office premises, guest houses, laptops, lease lines, furniture and equipment. Leases of office premises and guest houses generally have lease term between 2 to 45 years. The Company has applied low value exemption for leases of laptops, lease lines, furniture and equipment and accordingly these are excluded from accounting as per Ind AS 116, at present.

i) The carrying amounts of right-of-use assets recognised and the movements during the period (Refer note 3 (b)).

ii) Below are the carrying amounts of operating lease liabilities (included under financial liabilities) and the movements during the period:

There are several lease agreements with extension and termination options, for which management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. Since it is reasonable certain to exercise extension option and not to exercise termination option, the Company has opted to include such extended term and ignore termination option in determination of lease term.

3. Social Security Code

The Code on Social Security, 2020 (âthe Codeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

37 Capital commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2022 is '' 395 lakhs (March 31, 2021: '' 18 lakhs).

38A Contingent liabilities
	As at	As at
	March 31, 2022	March 31, 2021
1. Claims against Company not acknowledged as debts
Disputed demands in respect of Sales tax (including pending litigation of various matters)	941	941

2. Provident fund

(i) The Company does not expect any cash outflows or any reimbursements in respect of the above contingent liabilities.

(ii) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending occurrence of the default event or resolution of respective proceedings.

40 Note on acquisition

During the quarter and year ended March 31, 2020, Mastek acquired control of the business of Evolutionary Systems Private

Limited (âESPLâ) and its subsidiary companies (together referred to as âEvosysâ). The acquisition was as follows:-

(i) Mastek (UK) Limited, a wholly-owned subsidiary of Mastek Limited, entered into a Business Transfer Agreement (âBTAâ) on February 8, 2020 to acquire the business of Evosys Arabia FZ LLC and Share Transfer Agreements (STA) to acquire Middle East Companies (âMENA Acquisitionâ) by paying a cash consideration (net of cash and cash equivalents) of USD 64.9 million i.e. '' 48,204 lakhs. The closing of such transaction occurred on March 17, 2020, which is considered to be the date of transfer of control or the date of acquisition, as per Ind AS 103, and necessary effects have been recognised in the standalone financial statements of the respective entities, standalone and consolidated financial statements of the Company and its subsidiaries.

While the acquisition has been effected and full consideration has been paid, procedures to complete the legal processes like registering sale of shares in one of the geography was pending due to the pandemic condition, which has been completed as at March 31, 2022.

(ii) With respect to a business undertaking of ESPL (including investments in certain subsidiaries of ESPL), the parties (Mastek group and Evosys group) entered into a Demerger Co-operation Agreement (DCA) and Shareholders Agreement on February 8, 2020. The manner of discharge of the non-cash consideration and the acquisition of legal ownership, was decided to be achieved through a demerger scheme filed before the National Company Law Tribunal (NCLT) (âthe Schemeâ), or, as per DCA, the parties were to complete this transaction with the same economic effect, by an alternate arrangement, within the period specified in the DCA. The DCA gave Mastek Enterprise Solutions Private Limited (formerly known as âTrans American Information Systems Private Limitedâ) (MESPL) a wholly-owned subsidiary of Mastek, the right to appoint majority of the board of directors in ESPL and its subsidiaries and also provided for the relevant activities of ESPL and its subsidiaries to be decided by a majority vote of such board of directors, thereby resulting in transfer of control of business of ESPL and its subsidiaries to Mastek Group. The date of acquisition of business undertaking for the purposes of Ind AS 103 is the date of transfer of control to the Group, i.e. February 8, 2020. Discharge of consideration for demerger

is through issue of 4,235,294 equity shares of Mastek Limited (face value '' 5 each) and balance through Compulsorily Convertible Preference Shares (CCPS) of '' 10 each of MESPL which carry a Put Option to be discharged at agreed EBITDA multiples, based on actual EBIDTA of 3 years commencing from financial year ending March 31, 2021 including adjustment for closing cash. Pending completion of legal acquisition, this transaction had only been considered for disclosure in the standalone financial statements for the years ended March 31, 2020 and 2021 and all periods ending June 30, 2021.

On September 14, 2021, the above transaction has been approved by the NCLT, pursuant to the Scheme of De-merger (âthe Schemeâ), for the demerger of Evolutionary Systems Private Limited (ESPL or demerged entity), into MESPL, with the effective date of February 1, 2020 (Appointed Date). Consequently, the effect of the De-merger has been considered in

the previous yearâs financial results in accordance with Ind AS 103 - âBusiness Combinationsâ. Accordingly, the year ended March 31, 2021 have been restated, to give effect to the business combination, as given below.

On December 17, 2021, a board meeting was held where the Board approved the buy out of first tranche of CCPS i.e. 1 /3^rdof the total outstanding CCPS basis the agreed valuations. Accordingly, 254,755 equity shares of Mastek Limited (face value '' 5 each) have been issued on February 10, 2022.

The Company has assessed the impact of COVID-19 Pandemic on its operations as well as financial reporting process, including but not limited to the areas of financial controls, credit risk, effectiveness of hedge relationship, impairment of financial and non-financial assets, and cyber security pertaining to the remote access of information for the year ended March 31, 2022 and up to the date of approval of its standalone financial statements. While assessing the impact, Company has considered all internal and external sources of information like industry reports, economic forecast, credit reports and Companyâs business forecast basis the global economic situations. Company expects to recover the carrying amount of its assets and retain effectiveness of its hedge transactions. Further, there have been no material changes in the financial control/process followed by the Company. However, the impact of COVID-19 may be different from that estimated as on the date of approval of these standalone financial statements and the Company will continue to closely monitor any material changes to the business due to future economic conditions.

51 Previous yearâs figures have been regrouped or reclassified wherever necessary.

These are the notes to the financial statements referred to in our report of even date. The Financial Statements were authorised for issue by the directors on April 19, 2022.

44 Other statutory information

(i) The Company has not advanced or loaned or invested funds to any person or any entity, including foreign entities (Intermediaries) with the understanding that the intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by a or on behalf of the Company (Ultimate Beneficiaries); or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by a or on behalf of the Funding Party (Ultimate Beneficiaries); or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

45 The Company does not have any transactions and outstanding balances during the current as well previous year with Companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.

46 The Company have not defaulted on any of the loan taken from banks, financial institutions or other lenders.

47 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

48 The Company does not have any charge or satisfaction which is yet to be registered with ROC beyond the Statutory period.

49 The Company has not traded or invested in Crypto currency or Virtual currency during the financials year.

Mar 31, 2019

1 Company Overview

Mastek Limited (the âCompanyâ) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is a provider of vertically-focused enterprise technology solutions.

The Companyâs offering portfolio includes business and technology services comprising of Application Development, Application Maintenance, Business Intelligence and Data Warehousing, Testing & Assurance and Legacy Modernisation. The Company carries out its operations in India and has its software development centres in India at Mumbai, Pune, Chennai and Mahape.

2 Basis of Preparation and Presentation

a. Statement of Compliance

These financial statements have been prepared in accordance with Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable.

These standalone financial statement of the Company as at and for the year ended 31 March, 2019 (including Comparatives) were approved and authorised by the Companyâs board of directors as on 16 April, 2019.

All amounts included in the financial statements are reported in Indian rupees (in lakhs) except share and per share data unless otherwise stated and â0â denotes amounts less than one lakh rupees.

b. Basis of Preparation

The financial statements have been prepared on a historical cost convention and on an accrual basis, except for the following material items that have been measured atfairvalue as required by relevant Ind AS:

i. Derivative financial instruments;

ii. Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments);

iii. Share based payment transactions and

iv. Defined benefit and other long-term employee benefits

All the assets and liabilities have been classified as current and non-current as per the companyâs normal operating cycle. The company has considered an operating cycle of 12 months (maximum).

c. Use of Estimate and Judgement

The preparation of standalone financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the standalone financial statements is included in the following notes:

(i) Revenue recognition: The Company applies the percentage of completion method in accounting for its fixed price contracts. Use of the percentage of completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date. (Also refer (d)(xi) below).

(ii) Income taxes: Significant judgments are involved in determining the provision for income taxes, including the amount expected to be paid or recovered in connection with uncertain tax positions.

(iii) Defined benefit plans and compensated absences: The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(iv) Property, plant and equipment: Property, plant and equipment represents a significant proportion of the asset base of the Company. The change in respect of periodic depreciation is derived after determining an estimate of an assets expected useful life and the expected residual at the end of its life. The useful lives and residual values of the Companyâs are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

(v) Expected credit losses on financial assets: On application of Ind AS 109, the impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. The Company uses judgments in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history of collections, customerâs credit-worthiness, existing market conditions as well as forward looking estimates at the end of each reporting period.

(vi) Deferred taxes: Deferred tax is recorded on temporary differences between the tax bases of assets and liabilities and their carrying amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry forwards become deductible. The Company considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. The amount of the deferred tax assets considered realisable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

(vii) Provisions: Provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can me made. Provisions (excluding retirement obligation and compensated expenses) are not discounted to its present value and are determined based on best estimate required to settle obligation at the balance sheet date. These are reviewed at each balance sheet date adjusted to reflect the current best estimates.

(viii) Share-based payments: The Grant date fair value of options granted to employees is recognised as employee expense, with corresponding increase in equity, over the period that the employee become unconditionally entitled to the option. The increase in equity recognised in connection with share based payment transaction is presented as a separate component in equity under âshare option outstanding accountâ. The amount recognised as expense is adjusted to reflect the impact of the revision estimates based on number of options that are expected to vest, in the statement of profit and loss with a corresponding adjustment to equity.

(b) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value ofRs. 5/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3.1 Distributions made and proposed

The Board of Directors at its meeting held on 18 April, 2018 had recommended a final dividend of 80% (Rs. 4 per equity share of par value Rs. 5 each). The proposal was approved by shareholders at the Annual General Meeting held on 19 June, 2018, this has resulted in a cash outflow of Rs. 951 lakhs, inclusive of dividend distribution tax. Also, the Board of Directors at its meeting held on 25 October, 2018 had declared an interim dividend of 70% (Rs. 3.5 per equity share of par value of Rs. 5 each). Further, the Board of Directors at its meeting held on 16 April, 2019 have recommended a final dividend of 100% (Rs. 5 per equity share of par value Rs. 5 each) which is subject to approval of shareholders. If approved, this would result in a cash outflow of approximately Rs. 1,199 lakhs, exclusive of dividend distribution tax.

Disaggregated Revenue

The table below presents disaggregated revenues from contracts with customers by customer location for each of companyâs business segments. Company believe this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

Remaining performance obligation

As of 31 March, 2019, the aggregate amount of transaction price allocated to remaining performance obligations, was Rs. 1,243 lakhs, of which approximately 85% is expected to be recognised as revenues within 4 years.

Mortality rate is considered as per the published rates under the Indian Assured Lives Mortality (2012-14) Ult table. Attrition rate varies between 10% to 21%.

[B] Leave Entitlement

The leave obligations cover the Companyâs liability and earned leave which is unfunded at present and the amount of the provision of Rs. 468 lakhs (31 March, 2018 - Rs. 445 lakhs) is recognised based on an actuarial valuation.

[C] Defined Contribution Plan

Refer notes 2 (d) (viii) A(a) and 17

4. Segment Reporting

The Company has presented the relevant information relating to its segments in its consolidated financial statements which are included in the same annual report as Mastek Limited. In terms of provisions of Indian Accounting Standard, no disclosures related to segments are therefore presented in these standalone financial statements.

5. Fair Value Hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at 31 March, 2019 and 31 March, 2018.

Derivative financial instrument

The Companyâs risk management policy is to hedge substantial amount of forecast transactions under GBP. Hedge is broadly classified as cash flow hedge. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

Risk management is predominantly managed by the Finance department of the Company under policies developed by Mastek UK Limited, a wholly owned subsidiary (âMUKâ). The Finance department identifies, evaluates and hedges financial risks under the guidance and instructions of MUK which predominantly provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk and use of derivative financial instruments.

The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. All forward contracts have been designated hedging instrument in cash flow hedge in accordance with Ind AS 109.

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

6. Financial Risk Management

The Companyâs activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Companyâs policy that no trading in derivative for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

Business and Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counter party credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Most of the Company doubtful debt pertains to the Public Sector which is undergoing through restructuring and therefore, the Company evaluate every receivable in the geography and create adequate provision after analysing specific risk.

Liquidity Risk

Foreign Currency Risk

The Companyâs activities expose it to market risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. The Company does not enter into any derivative instruments for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and three years.

7. Capital Management

The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximise shareholder value. The capital structure is as follows:

The Company is predominantly equity financed which is evident from capital structure table. Further, the Company has always been in a net cash position. Cash and bank balances along with current financial assets which is predominantly includes investment in liquid and short term mutual funds are in excess of debt.

8. Employee Stock Based Compensation

i) Plan IV

The Shareholders of the Company through Postal Ballot on 9 August, 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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

ii) 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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

iii) 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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

iv) Plan VII

The Company introduced a new scheme in 2013 for granting 2,500,000 stock options to its employees and employees of its subsidiaries, each option giving a right to apply for one equity share of the Company on its vesting. The vesting period of stock option will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

9. Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31 March, 2019 is Rs. 106 (31 March, 2018: Rs. 130)

(i) The Company does not expect any cash outflows or any reimbursements in respect of the above contingent liabilities.

(ii) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending occurrence of the default event or resolution of respective proceedings.

10. Provident Fund

Based on the judgement by the Honourable Supreme Court dated 28 February, 2019, past provident fund liability, is not determinable at present, in view of uncertainty on the applicability of the judgement to the Company with respect to timing and the components of its compensation structure. In absence of further clarification, the Company has been advised to await further developments in this matter to reasonably assess the implications on its financial statements, if any.

11. Expenditure on Corporate Social Responsibilities.

Mar 31, 2018

1. SEGMENT REPORTING

The Company has presented data relating to its segments in its consolidated financial statements which are included in the same annual report as Mastek Limited. In terms of provisions of Indian Accounting Standard, no disclosures related to segments are therefore presented in these standalone financial statements.

2. ACQUISITION OF TRANS AMERICAN INFORMATION SYSTEMS PRIVATE LIMITED

During the previous year, Company has acquired 100% stake in Trans American Information Systems Private Limited, a company engaged in IT consulting and Software Services, for a fixed consideration of 1187 lakhs. Trans American Information Systems Private 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.

3. FAIR VALUE HIERARCHY

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31, 2018, March 31, 2017 and April 1, 2016

Derivative financial instrument

The Company''s risk management policy is to hedge substantial amount of forecast transactions under GBP. Hedge is broadly classifies as revenue hedge. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

Risk management is predominately managed by the Finance department of the Company under policies developed by Mastek UK Limited, a wholly owned subsidiary ("MUK"). The Finance department identifies, evaluates and hedges financial risks under the guidance and instructions of MUK which predominantly provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk and use of derivative financial instruments.

The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. All forward contracts have been designated hedging instrument in cash flow hedge in accordance with Ind AS 109.

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date. The following table presents the aggregate contracted principal amounts of the Company''s derivative contracts outstanding:

4 FINANCIAL RISK MANAGEMENT

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivative for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:

Business and Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counter party credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Most of the Company doubtful debt pertains to the Public Sector which is undergoing through restructuring and therefore, the Company evaluate every receivable in the geography and create adequate provision after analyzing specific risk.

Liquidity Risk

Foreign Currency Risk

The Company''s activities expose it to market risk. In order to minimize any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. The Company does not enter into any derivative instruments for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and three years.

The Company is predominantly equity financed which is evident from capital structure table. Further, the Company has always been a net cash Company with cash and bank balances along with current financial assets which is predominantly investment in liquid and short term mutual funds being far in excess of debt.

5. FIRST-TIME ADOPTION OF INDIAN ACCOUNTING STANDARD (IND AS)

The Company''s standalone financial statements for the year ended March 31, 2018 are prepared in accordance with Ind ASs notified under the Companies (Indian Accounting Standards) Rules, 2015.

The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the Ind AS Financial Statements for the year ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented.

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 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 these financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with

Ind AS 101 as explained below:

(a) Exception from full retrospective application:

1. Estimates exception: Upon an assessment of the estimates made under previous GAAP, the management is of the opinion that there was no need to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by previous GAAP

(b) Exemption from retrospective application:

1. Share-based payment exemption: The Company has availed exemption available under Ind AS 101 on application of Ind AS 102, "Share Based Payment", to equity instruments that vested before the date of transition to Ind AS.

2. The Company has elected to continue with the carrying value of all its property, plant and equipment including asset held for sale as recognized in standalone financial statements as at April 1, 2016 (transition date) to Ind AS measured as per the Previous GAAP and use that as its deemed cost as at the transition date. On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognized as at April 1, 2016, measured as per the Previous GAAP, and use that carrying value as the deemed cost of such intangible assets.

3. The Company has designated various hedging relationships as cash flow hedges under the Previous GAAP. On date of transition to Ind AS, the Company has assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the date of transition to Ind AS.

4. In accordance with exemption given in Ind AS 101, the Company has recorded investments in subsidiaries at deemed cost

i.e previous GAAP carrying amount on transition date.

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from

Indian GAAP to Ind AS in accordance with Ind AS 101:

Equity as at April 1, 2016;

Equity as at March 31, 2017;

Total comprehensive income for the year ended March 31, 2017;

Notes

1. Fair valuation of investments:

a) Under Ind AS, financial assets and financial liabilities designated at fair value through profit and loss (FVTPL) are fair valued at each reporting date with changes in fair value recognized in the statement of profit and loss. Under previous GAAP, they are measured at lower of cost or net realizable value. Some mutual fund Liquid fund investments have been classified as FVTPL based on business model of the company. Consequently, increase in fair value of such investments in quoted mutual funds has resulted in a gain.

b) Under Ind AS, financial assets designated at fair value through other comprehensive income (FVTOCI) are fair valued at each reporting date with changes in fair value (net of deferred taxes) recognized directly in other comprehensive income. Under previous GAAP, they are measured at cost with provision for diminution other than temporary.

2. Under previous GAAP, actuarial gains and losses were recognized in the statement profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognized in other comprehensive income. Consequently, the tax effect of the same has also been recognized in other comprehensive income under Ind AS instead of statement of profit and loss.

3. Under the Previous GAAP, the Company was not required to present other comprehensive income (OCI) separately. As per Ind AS 1, Presentation of Financial Statements, Ind AS 19, Employee Benefits and Ind AS 109, actuarial gain / loss on defined benefit liability, effective portion of cash flow hedges reserve has been shown separately and gain/loss on other financial assets measured through OCI.

4. The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2017 as compared with the previous GAAP

5 EMPLOYEE STOCK BASED COMPENSATION

i) 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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of seven years from the date of vesting.

ii) Plan V

iii) Plan VI

iv) Plan VII

6 MICRO, SMALL AND MEDIUM ENTERPRISES

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or on balance brought forward from previous year.

7 CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2018 is Rs,130 (March 31, 2017: Rs,133 and April 1, 2016: Rs,295)

Mar 31, 2017

(b) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of '' 5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

1. Employee Stock Option Scheme

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

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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of 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.

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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of 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.

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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of 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. Compensation cost calculated at intrinsic value is fully cross charged to the subsidiaries amounting to Rs, 8.52 lakhs and to the entities demerged (as described in note 43) amounting to Rs, 4.52 lakhs, based on the employees where they are currently employed. Consequently, there is no charge to the statement of profit and loss of the company during the current year.

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 vesting period of stock options will range from one year to four years from the date of grant. The stock options are exercisable within a period of 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. Compensation cost calculated at intrinsic value is fully cross charged to the entities demerged (as described in note 43) amounting to Rs, 4.56 lakhs, based on the employees where they are currently employed. Consequently, there is no charge to the statement of profit and loss of the company during the current year.

The Company has adopted the intrinsic value method as permitted by the SEBI Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India for measuring the cost of stock options granted. The Company''s net profit and earnings per share would have been as under, had the compensation cost for employees stock options been recognized based on the fair value at the date of grant in accordance with Black Scholes model.

2. Income Taxes

(a) In accordance with the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). Payments under MAT can be carried forward and set off against future tax liability for a period of fifteen years. Accordingly, a sum of Rs, 2,373.82 (Previous year Rs, 2,436.59) has been carried forward and shown under ''Long-term loans and advances'' (Refer note 14).

(b) The Company had received tax demands aggregating to Rs, 3,788.83 (including interest of Rs, 1,553.93) primarily on account of transfer pricing issues for the assessment years 2006-07 to 2013-14. For the assessment year 2006 -07 and assessment year 2007-08, the second appellate authority (the Income Tax Appellate Tribunal) has allowed these issues in favour of the company and the income tax authorities have filed an appeal with the Honorable High Court. For the assessment years 2008-09 to 2010-11, the first appellate authority (the Commissioner of Income tax (Appeals)) has allowed most of these issues in favour of the company and the income tax authorities have filed an appeal with the second appellate authority (the Income Tax Appellate Tribunal). For the assessment years 2011-12 to 2013-14 the matter is pending before the first appellate authority (the Commissioner of Income tax (Appeals)).

Considering the facts, materiality and favorable order of the second appellate authority for assessment years 2006-07 and 2007-08 and the first appellate authority for 2008-09 to 2010-11, the management believes that the final outcome of majority of the above disputes for the remaining years should be in favour of the Company and there should not be any material impact on the financial statements.

3. Derivative Financial Instruments

The Company''s activities expose it to market risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. Risk management is predominately managed by the finance department of the Company under policies developed by Mastek UK Limited, a wholly owned subsidiary ("MUK"). The Finance department identifies, evaluates and hedges financial risks under the guidance and instructions of MUK, which predominantly provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk and use of derivative financial instruments.

The Company, in accordance with its risk management policies and procedures laid down by MUK, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. The Company does not enter into any derivative instruments for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and three years. The Company has no unheeded exposure in respect of receivables or payables denominated in foreign currency.

4. Related Party Disclosures

A. Enterprises where control exists Mastek (UK) Limited, UK

IndigoBlue Consulting Limited, India (w.e.f. May 1, 2015)

Digility Inc., USA (w.e.f. Nov 17, 2015)

Mastek Asia Pacific Pte Ltd., Singapore (up to Oct 31, 2015)

Trans American Information Systems Private Limited, India (w.e.f. December 23, 2016)

Trans American Information Systems Inc., USA (w.e.f. December 23, 2016)

Taistech LLC, USA (w.e.f. December 23, 2016)

B. Joint Venture - Legal Practice Technologies Limited (up to December 6, 2016)

C. Other related parties with whom the Company had transactions during the year

Key Management Personnel (KMP): Sudhakar Ram, Vice Chairman and Managing Director

Jamshed Jussawalla, Chief financial officer (from June 1, 2015 up to September 16, 2016) Hiren Shah, Senior Vice President

Abhishek Singh, Chief financial officer (from September 17, 2016)

Enterprise where KMP has control: Cashless Technologies India Private Limited (w.e.f. February 2, 2016)

Disclosure of transactions between the Company and related parties and the status of outstanding balances as on March 31, 2017, including names of the related parties comprising more than 10% of the total transactions / balances of the same type, are given below:

5. Micro, Small and Medium Enterprises

6. Other disclosures

a. The Company is engaged in the development of computer software and other software related services. Considering the nature of business, certain details required under the revised schedule VI are not applicable, to the Company.

7. Acquisition of Trans American Information Systems Private Limited, India

During the current year, Company has acquired 100% stake in Trans American Information Systems Private Limited, India a company engaged in IT Consulting and Software Services, for a fixed consideration of Rs, 1,187.38.

8. Considering the expansion in roles and responsibilities of Mastek (UK) Limited ("MUK") due to developments in the UK Business environment, effective April 1, 2016, the company has changed its pricing policy with MUK and has entered into a new agreement dated April 1, 2016 ("New Agreement"). Till March 31, 2016, the onsite services were provided by the Company''s UK branch which was bearing the cost of providing these services. Effective April 1, 2016, the onsite services are provided by MUK, which is bearing the cost of providing these services. The revision in pricing policy, as compared to the erstwhile pricing policy, has resulted in the Company''s revenue being lower by '' 21,646.11 and its profits being lower by '' 1,607.42 in the standalone results for the current year. Further, based on the New Agreement entered with MUK, the company had billed a one-time fee of '' 908.01 to MUK, due to the change in pricing policy and in accordance with the terms of the agreement and is included under the heading "Other operating income" in the Statement of Profit and Loss (Refer note 24).

9. Pursuant to the Scheme of Arrangement (the "Scheme") under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 and other applicable provisions 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 Majesco Limited (Formerly known as Minefields Computers Limited) ("Majesco India"), 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 was April 1, 2014 and the appointed date for the offshore insurance operations business transfer was November 1, 2014. The Company obtained the necessary approval for the scheme under Clause 24 (f) of the Listing Agreements with BSE and NSE from SEBI on December 9, 2014. The Scheme had also been approved by the Hon''ble High Court of Bombay and Hon''ble High Court of Gujarat and on filling with the Registrar of Companies (ROC) the said scheme became effective from June 1, 2015. As specified in the Scheme, Mastek shareholders had been issued one equity share in Majesco India for every share held in Mastek, while retaining their existing Mastek share. Majesco India shares were listed on August 19, 2015 on the BSE and NSE, being exchanges where Mastek is currently listed.

The demerger had resulted in transfer of the assets, liabilities, Employee stock options outstanding account and Hedging reserve account relevant to the Transferred Undertaking including the Company''s investment in Majesco, USA to Majesco India, the ultimate holding company of the Transferred Undertaking and had accordingly been given effect to in these Financials Statements. As prescribed in the Scheme, the book value of the above net assets aggregating to Rs, 24,401.43, in previous year had been debited to: Capital reserve Rs, 106.07, to General Reserve Rs, 2,415.67 and to Surplus in Profit and Loss Account Rs, 21,879.69 (Refer note 4).

10. Sale of Investment in Mastek Asia Pacific Pte. Limited, Singapore ("MAP")

During the previous year, the Company had sold its entire holding of 2,850,000 equity shares of MAP (a wholly owned subsidiary) to Majesco Sdn Bhd, Malaysia for a total consideration of Rs, 180.49. This sale had resulted in a gain of Rs, 4.95 after considering the provision for other than temporary decline in value made in earlier years. The Gain had been included under the heading "exceptional items" in the Statement of Profit and Loss (Refer note 30).

* Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated the 8th November, 2016.

11. Previous year figures have been regrouped or reclassified wherever necessary.

Mar 31, 2016

32. Employee Stock Option Scheme

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

i. 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. "

ii. 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.

iii. 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.

iv. 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.

1. Income Taxes

(a) In accordance with the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). Payments under MAT can be carried forward and set off against future tax liability for a period often years. Accordingly, a sum ofRs, 2,436.59 (Previous year Rs, 2,694.26) has been carried forward and shown under ''Long-term loans and advances'' (Refer note 14).

(b) The Company had received tax demands aggregating to Rs, 2,835.05 (including interest of Rs, 853.09) primarily on account of transfer pricing issues for the assessment years 2006-07 to 2011-12. For the assessment year 2006-07 and assessment year 2007-

OS, the second appellate authority (the Income Tax Appellate Tribunal) has allowed these issues in favour of the company and the income tax authorities have filed an appeal with the Honourable High Court. For the assessment years 2008-09 to 2010-11, the first appellate authority (the Commissioner of Income tax (Appeals)) has allowed most of these issues in favour of the company and the income tax authorities have filed an appeal with the second appellate authority (the Income Tax Appellate Tribunal). For the assessment years 2011-12 the matter is pending before the first appellate authority (the Commissioner of Income tax (Appeals)).

2. Derivative Financial Instruments

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to highly probable forecast transactions. The Company does not enter into any derivative instruments for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and two years. The company has no unheeded exposure in respect of receivables or payables denominated in foreign currency.

3. Related Party Disclosures

A. Enterprises where control exists Mastek (UK) Limited

IndigoBlue Consulting Limited (w.e.f May 1, 2015)

Digility Inc. (w.e.f Nov 17, 2015)

Mastek Asia Pacific Pte Ltd. (up to Oct 31, 2015)*

Majesco USA (up to March 31, 2015)

Majesco UK Limited (up to March 31, 2015)

Majesco Software and Solutions India Private Limited (up to March 31, 2015) Majesco Sdn. Bhd. (up to March 31, 2015)

Majesco (Thailand) Co. Ltd. (up to March 31, 2015)

Majesco Software and Solutions Inc. (up to March 31, 2015)

Majesco Canada Limited (up to March 31, 2015)

4. Related Party Disclosures (contd.)

"Majesco Limited (up to March 31, 2015)

* Sold during the year Demerged

B. Joint Venture - Legal Practice Technologies Limited (from May 14, 2014 to March 17, 2016)

C. Other related parties with whom the Company had transactions during the year

Key Management Personnel (KMP): Sudhakar Ram

Jamshed Jussawalla (from June 1, 2015)

Hiren Shah (from April 1, 2015)

Vinay Rajadhyaksha (up to August 13, 2014)

Stefan Van Overtveldt (up to April 30, 2014)

Kalpana Jaishankar (up to March 31, 2015)

Enterprise where KMP has control: Cashless Technologies India Private Limited (w.e.f. February 2, 2016)

Radhakrishnan Sundar and Farid Kazani who were KMP until last year have moved to Majesco Limited post the demerger described in note 44 and therefore are no longer KMP in Mastek Limited in the current year.

Disclosure of transactions between the Company and related parties and the status of outstanding balances as on March 31, 2016, including names of the related parties comprising more than 10% of the total transactions / balances of the same type, are given below:

c The Company has entered into transactions with the following related parties:

5 . Segment reporting

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting Standard (AS) 17 - ''Segment Reporting'', no disclosures related to segments are therefore presented in these stand-alone financial statements.

6. Micro, Small and Medium Enterprises

7. Other disclosures

8. Acquisition of Majesco Limited (Formerly - Minefields Computers Limited), India

During the previous year, the Company had purchased 10,000 equity shares (including 6 equity shares purchased jointly with other shareholders) of face value of Rs, 10/- each of Majesco Limited for a total consideration of Rs, 1. Further, the Company had subscribed to 40,000 additional equity shares of Majesco Limited of Rs, 10/- each for a total consideration of Rs, 4. Thus the total shareholding of the Company in Majesco Limited at March 31, 2015 amounted to 50,000 equity shares of Rs, 10/- each for a total consideration of Rs, 5 [Refer note 12(b)]. Pursuant to the Scheme of Arrangement Majesco Limited is no longer a subsidiary of the Company (Refer note 44).

9. Sale of Investment in Majesco Canada Limited, Canada (formerly MajescoMastek Canada Limited, Canada)

During the previous year, the Company sold its entire holding of 3,500,000 equity shares of Majesco Canada Limited, Canada ("MCAN") (a wholly owned subsidiary) to Majesco, USA for a total consideration of Rs, 439.47. This sale resulted in a gain of Rs, 439.47, as the carrying value of MCAN in the books of Mastek was reduced to nil, considering the provision for other than temporary decline in value made in earlier year. The Gain had been included under the heading "exceptional items" in the Statement of Profit and Loss (Refer note 29).

10. Purchase of Investment in Majesco, USA (formerly MajescoMastek, USA)

During the previous year, the Company had purchased 24,765,750 equity shares of Majesco, USA from Mastek (UK) Limited for a total consideration of Rs, 3,024.79 (USD 4,953 K). The investment in Majesco, USA is transferred pursuant to a Scheme of Arrangement (Refer note 44).

11. Sale of Investment in Majesco Sdn. Bhd., Malaysia (formerly Mastek MSC Sdn. Bhd., Malaysia)

During the previous year, the Company sold its entire holding of 11,262,000 equity shares of Majesco Sdn. Bhd., Malaysia ("MSC") (a wholly owned subsidiary) to Majesco, USA (a wholly owned subsidiary) for a total consideration of Rs, 2,042.94. This sale resulted in a gain of Rs, 599.52 to the Company which had been included under the heading "exceptional items" in the Statement of Profit and Loss (Refer note 29).

12. Pursuant to the Scheme of Arrangement (the "Scheme") under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 and other applicable provisions 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 Majesco Limited (Formerly known as Minefields Computers Limited) ("Majesco India"), 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 was April 1, 2014 and the appointed date for the offshore insurance operations business transfer was November 1, 2014. The Company obtained the necessary approval for the scheme under Clause 24 (f) of the Listing Agreements with BSE and NSE from SEBI on December 9, 2014. The Scheme has also been approved by the Hon''ble High Court of Bombay and Hon''ble High Court of Gujarat and on filing with the Registrar of Companies (ROC) the said scheme became effective from June 1,2015. As specified in the Scheme, Mastek shareholders have been issued one equity share in Majesco India for every share held in Mastek, while retaining their existing Mastek share. Majesco India shares were listed on August 19, 2015 on the BSE and NSE, being exchanges where Mastek is currently listed.

As the Companyâs Board had approved the demerger scheme of the Insurance Products and Services business (the "Transferred Undertaking") of the Company and an announcement thereof had been made, the Company in the previous financial year, had treated the Transferred Undertaking as a discontinuing operation with effect from the proposed appointed date of the scheme i.e April 1, 2014.

The demerger has resulted in transfer of the assets, liabilities, Employee stock options outstanding account and Hedging reserve account relevant to the Transferred Undertaking including the Companyâs investment in Majesco, USA to Majesco India, the ultimate holding company of the Transferred Undertaking and has accordingly been given effect to in these Financials Statements. As prescribed in the Scheme, the book value of the above net assets aggregating to Rs, 24,401.43 have been debited to: Capital reserve Rs, 106.07, to General Reserve Rs, 2,415.67 and to Surplus in Profit and Loss AccountRs, 21,879.69, (Refer note 4).

13. Sale of Investment in Mastek Asia Pacific Pte. Limited, Singapore ("MAP")

During the year, the Company sold its entire holding of 2,850,000 equity shares of MAP (a wholly owned subsidiary) to Majesco Sdn Bhd, Malaysia for a total consideration of Rs, 180.49. This sale resulted in a gain of Rs, 4.95 after considering the provision for other than temporary decline in value made in earlier years. The Gain has been included under the heading "exceptional items" in the Statement of Profit and Loss (Refer note 29).

14. Previous year figures have been regrouped or reclassified wherever necessary.

Mar 31, 2015

1. General information

Mastek Limited (the ''Company'') is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is a provider of vertically-focused enterprise technology solutions and platforms in Insurance (Life, Pensions and General), Government / Public Sector and Financial Services Sectors. Following the Company''s decision to demerge its Insurance Products and Services business through a court scheme (Refer note 44), that business has been treated as a discontinuing operation in these financial statements from the proposed appointment date of April 1, 2014.

The Company''s offering portfolio includes business and technology services comprising IT Consulting, Application Development, Systems Integration, Application Management Outsourcing, Testing, Data Warehousing and Business Intelligence, Application Security, CRM services and Legacy Modernisation. The Company operates through its offshore software development centres at Mumbai, Pune, Chennai and Mahape and through its subsidiaries / branch in U.S., Canada, U.K. and Asia-Pacific.

2. Contingent liabilities

As at As at March 31, 2015 March 31, 2014

Corporate performance guarantees given by the Company on behalf ofthe following subsidiaries:

(a) Majesco Canada Limited (Formerly - MajescoMastek Canada Limited) 7,354.88 7,837.96

(b) Majesco (Thailand) Co. Ltd. [Formerly -Mastek MSC (Thailand) Co. Ltd.] 1,562.50 1,497.88

(c) Mastek (UK) Limited 8,386.12 9,047.71 Corporate guarantees given by the Company on behalfofthe following subsidiary:

(a) Majesco, USA foritstermloan 1,875.00 - Standby letter of credit given by the Company on behalf of following subsidiary:

(a) Majesco, USA for its Line of credit for working capital loan from Bank 918.75 -

Claims against Company not acknowledged as debts

(a) Sales tax matter 173.77 -

(i) The Company does not expect any cash outflows or any reimbursements in respect of the above contingent liabilities.

(ii) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending occurrence of the default event or resolution of respective proceedings.

3. Employee Stock Option Scheme

(a) 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.

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.

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 ofthe 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.

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, out of which Rs. 82.67 have been charged to the subsidiaries based on the employees where they are employed and balance of Rs. 13.39 have been charged to the statement of profit and loss during the current year.

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. 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.

(b) The Company has adopted the intrinsic value method as permitted by the SEBI Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India for measuring the cost of stock options granted.

The Company''s net profit and earnings per share would have been as under, had the compensation cost for employees stock options been recognised based on the fair value at the date of grant in accordance with Black Scholes model.

4. Income Taxes

(a) In accordance with the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). Payments under MAT can be carried forward and set off against future tax liability for a period of ten years. Accordingly, a sum of Rs. 2,694.26 (Previous year Rs. 3,100.53) has been carried forward and shown under''Long-term loans and advances'' (Refer note 13).

(b) The Company had received tax demands aggregating to Rs. 2,835.05 (including interest of Rs. 853.09) primarily on account of transfer pricing issues for the assessment years 2006-07 to 2011-12. For the assessment year 2006-07 and assessment year 2007-08, the second appellate authority (the Income Tax Appellate Tribunal) has allowed these issues in favour of the company and the income tax authorities have hied an appeal with the Honourable High Court. For the assessment years 2008-09 and assessment year 2009-10, the first appellate authority (the Commissioner of Income tax (Appeals)) has allowed most of these issues in favour of the company. For the assessment years 2010-11 and 2011-12 the matter is pending before the first appellate authority (the Commissioner of Income tax (Appeals)).

Considering the facts, materiality and favourable order of the second appellate authority for assessment years 2006-07 and 2007-08 and the first appellate authority for 2008-09 and 2009-10, the management believes that the final outcome of majority of the above disputes for the remaining years should be in favour ofthe Company and there should not be any material impact on the financial statements.

5. Related Party Disclosures

A. Enterprises where control exists

Subsidiaries / step down subsidiaries - wholly owned, except as indicated: Majesco (Formerly - MajescoMastek), USA (83.50% held by the Company); Mastek UK Ltd., UK; Mastek Asia Pacific Pte. Ltd., Singapore; Majesco Sdn. Bhd., Malaysia (Formerly - Mastek MSC Sdn. Bhd.); Majesco Canada Limited, Canada (Formerly - MajescoMastek Canada Limited); Majesco (Thailand) Co. Ltd., Thailand (Formerly - Mastek MSC (Thailand) Co. Ltd.); Majesco Software and Solutions Inc., USA (Formerly - MajescoMastek Insurance Software and Solutions Inc.), Vector Insurance Services LLC, USA (Merged with Majesco USA w.e.f March 5, 2015), Minefields Computers Limited, India (99.99% held by the Company) and Majesco Software and Solutions India Private Limited, India.

B. Other related parties with whom the Company had transactions during the year

Key Management Personnel: Sudhakar Ram

Radhakrishnan Sundar

Vinay Rajadhyaksha (up to August 13, 2014)

Stefan Van Overtveldt (up to April 30, 2014)

Farid Kazani

Kalpana Jaishankar (up to March 31, 2015)

6. Segment reporting

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting Standard (AS) 17 - ''Segment Reporting'', no disclosures related to segments are therefore presented in these stand-alone financial statements.

7. Micro, Small and Medium Enterprises

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or on balance brought forward from previous year.

8. Acquisition of Minefields Computers Limited, India

During the year, the Company purchased 10,000 equity shares (including 6 equity shares purchased jointly with other shareholders) of face value of Rs. 10/- each of Minefields Computers Limited ("Minefields) for a total consideration of Rs. 1. Further, the Company has subscribed to 40,000 additional equity shares of Minefields of Rs. 10/- each for a total consideration of Rs. 4. Thus the total shareholding of the Company in Minefields at March 31, 2015 amounts to 50,000 equity shares of Rs. 10/- each for a total consideration of Rs. 5 [Refer note 11(b)].

9. Other than temporary decline in the value of Investment in Majesco Canada Limited, Canada During the previous year ended March 31, 2014 based on the review of the operations and the expected cash flow of its wholly owned subsidiary, Majesco Canada Limited (Formerly - MajescoMastek Canada Limited), Canada ("MCAN"), the Management of the Company had determined and accounted an other than temporary decline in the carrying value of this investment amounting to Rs. 1,555.01 [Refer note 11(b)].

10. Sale of Investment in Majesco Canada Limited, Canada (formerly MajescoMastek Canada Limited, Canada)

During the year, the Company sold its entire holding of 3,500,000 equity shares of Majesco Canada Limited, Canada ("MCAN") (a wholly owned subsidiary before this sale) to Majesco, USA (a wholly owned subsidiary) for a total consideration of Rs. 439.47. This sale resulted in a gain of Rs. 439.47, as the carrying value of MCAN in the books of Mastek was reduced to nil, considering the provision for other than temporary decline in value of Rs. 1,555 made in earlier year (Refer note 40). The Gain has been included under the heading "exceptional items" in the Statement of Profit and Loss (Refer note 28).

11. Purchase of Investment in Majesco, USA (formerly MajescoMastek, USA)

During the year, the Company purchased 24,765,750 equity shares of Majesco, USA from Mastek (UK) Limited for a total consideration of Rs. 3,024.79 (USD 4,953 K). Subsequent to purchase, Mastek Limited holds 83.5% of Majesco and the balance 16.5% is held by Mastek (UK) Limited.

12. Sale of Investment in Majesco Sdn. Bhd., Malaysia (formerly Mastek MSC Sdn. Bhd., Malaysia)

During the year, the Company sold its entire holding of 11,262,000 equity shares of Majesco Sdn. Bhd., Malaysia ("MSC") (a wholly owned subsidiary before this sale) to Majesco, USA (a wholly owned subsidiary) for a total consideration of Rs. 2,042.94. This sale resulted in a gain of Rs. 599.52 to the Company which has been included under the heading "exceptional items" in the Statement of Profit and Loss (Refer note 28).

13. Pursuant to the Scheme of Arrangement (the " Scheme") under Sections 391 to 394 read with Sections 100 to 103 and other applicable provisions of the Companies Act, 1956 and other applicable provisions 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 wholly owned subsidiary, 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 the approval of 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 the 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 ofobtaining requisite approval from the respective High Courts.

As the Company''s Board has approved the demerger scheme of the Insurance Products and Services business (the "Transferred Undertaking") of the Company and an announcement of the same has been made, the Company has treated the Transferred Undertaking as a discontinuing operation with effect from the proposed appointed date of the scheme i.e April 1, 2014. The demerger will result in transfer of the assets and liabilities and Indian and global operations relevant to the Transferred Undertaking and the Company''s investment in Majesco, USA to Minefields Computers Limited (to be renamed as Majesco Limited), the ultimate holding company of the Transferred Undertaking. The Transferred Undertaking predominately relates to the Insurance business vertical, reported under the secondary segment reporting by the Company in its consolidated financial statements. The existing shareholders of Mastek will be the shareholders of both the businesses post the demerger, through their shareholdings in two separate listed companies viz. Mastek Limited and Majesco Limited, subject to court and regulatory approvals.

14. Previous year figures have been regrouped or reclassified wherever necessary.

Mar 31, 2014

1. Provisions and Contingent Liabilities

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. A disclosure for a contingent liability is made where there is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from the past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. Where the Company expects a provision to be reimbursed, the reimbursement is recognized as a separate asset, only when such reimbursement is virtually certain.

2. Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, demand deposits with banks and other short term highly liquid investments with original maturities of three months or less.

(b) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 5/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Shares bought back during the year ended March 31, 2014 :

At the meeting of the Board of Directors of the Company held on January 08, 2014, the Board had given consent for the buy back of Company''s fully paid up equity shares of Rs. 5/- each from existing shareholders and beneficial owners in accordance with the relevant provisions of Companies Act, 1956 and Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1988 for an amount not exceeding Rs. 5,450 and for a price not exceeding Rs. 250/- per equity share. The number of shares to be bought back shall be subject to a minimum of 950,000 Equity Shares and a maximum of 3,200,000 Equity Shares.

Since the commencement of the buy back until the closure date (March 25, 2014), the Company had bought back 2,484,007 equity shares at an average price of Rs. 218.08 per equity share. Consequently a sum of Rs. 5,417.09 had been utilised from General Reserve in respect of the buy back. Out of the amount utilised from General Reserve, an amount of Rs. 124.20 had been appropriated to the Capital redemption reserve account and the paid up share capital had been reduced by the same amount. The company had fully extinguished the shares bought back during the above mentioned period.

Shares bought back during the period ended March 31, 2013 :

At the meeting of the Board of Directors of the Company held on November 05, 2012, the Board had given consent for the buy back of Company''s fully paid up equity shares of Rs. 5/- each from existing shareholders and beneficial owners in accordance with the relevant provisions of Companies Act, 1956 and Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1988 for an amount not exceeding Rs. 3,600 and for a price not exceeding Rs. 175/- per equity share. The number of shares to be bought back shall be subject to a minimum of 825,000 Equity Shares and a maximum of 3,200,000 Equity Shares.

Since the commencement of the buy back until the closure date (February 5, 2013), the Company had bought back 2,388,000 equity shares at an average price of Rs. 150.39 per equity share. Consequently a sum of Rs. 331.09 had been utilised from Securities Premium Account and a sum of Rs. 3,260.32 from General Reserve in respect of the buy back. Out of the amount utilised from General Reserve, an amount of Rs. 119.40 had been appropriated to the Capital redemption reserve account and the paid up share capital had been reduced by the same amount. The company had fully extinguished the shares bought back during the above mentioned period.

3. Employee Stock Option Scheme

(a) 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.

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.

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.

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. No options have been granted under the scheme at below market price and consequently, there is no compensation cost in the current year.

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. No options have been granted under the scheme during the year.

(b) The Company has adopted the intrinsic value method as permitted by the SEBI Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India for measuring the cost of stock options granted.

The Company''s net profit and earnings per share would have been as under, had the compensation cost for employees stock options been recognised based on the fair value at the date of grant in accordance with Black Scholes model.

(d) For stock options outstanding at the end of the year, the range of exercise prices and weighted average remaining contractual life (Vesting period exercise period)

The risk free interest rates are determined based on the zero-coupon yield curve for government securities. The volatility is determined based on annualized standard deviation of stock price on NSE over the time to maturity of the option. The expected dividend yield is based on the average dividend yields for preceding seven years.

(f) Effect of share-based payment plan on the Balance Sheet and Statement of Profit and Loss :

4. Income Taxes

(a) In accordance with the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). Payments under MAT can be carried forward and set off against future tax liability for a period of ten years. Accordingly, a sum of Rs. 3,100.53 (Previous yearRs. 3,001.75) has been carried forward and shown under "Long-term loans and advances''. (Refer Note 14).

(b) The Company had received tax demands aggregating to Rs. 2,385.72 (including interest of Rs. 784.55 ) primarily on account of transfer pricing issues for the assessment years 2006-07 to 2010-11. For the assessment year 2006 -07 and assessment year 2007-08, the second appellate authority (the Income Tax Appellate Tribunal) has allowed these issues in favour of the Company and for assessment year 2006-07, the income tax authorities have filed an appeal with the Honourable High Court. For the assessment years 2008-09, 2009-10 and 2010-11, the matter is pending before the first appellate authority (the Commissioner of Income tax (Appeals)).

Considering the facts and favourable order of the second appellate authority for assessment year 2006-07 and assessment year 2007-08, the management believes that the final outcome of the above disputes for the remaining years should be in favour of the Company and there should not be any material impact on financial statements.

5. Derivative Financial Instruments

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to hedge against foreign currency exposures relating to higly probable forecast transaction. The Company does not enter into any derivative instrument for trading or speculative purposes. The counter party is generally a bank. These contracts are for a period between one day and four years.

6. Related Party Disclosures

A. Enterprises where control exists

Subsidiaries / step down subsidiaries - wholly owned, except as indicated: MajescoMastek, USA (70% held by the Company); Mastek (UK) Ltd., UK; Mastek Asia Pacific Pte. Ltd., Singapore; Mastek MSC Sdn. Bhd., Malaysia; MajescoMastek Canada Ltd., Canada; Mastek MSC (Thailand) Co Ltd., Thailand; MajescoMastek Insurance Software and Solutions Inc., USA (Formerly "System Task Group International Ltd.") and Vector Insurance Services LLC, USA (90% held by the MajescoMastek, USA).

B. Other related parties with whom the Company had transactions during the year Key Management Personnel: Sudhakar Ram Radhakrishnan Sundar Vinay Rajadhyaksha Stefan Van Overtveldt Farid Kazani Kalpana Jaishankar

Disclosure of transactions between the Company and related parties and the status of outstanding balances as on March 31, 2014, including names of the related parties comprising more then 10% of the total transactions / balances of the same type :

7. Segment reporting

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting Standard (AS) 17 - "Segment Reporting'', no disclosures related to segments are therefore presented in these stand-alone financial statements.

8. Micro, Small and Medium Enterprises

Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous period.

9. Other disclosures

a. The Company is engaged in the development of computer software and other software related services. Considering the nature of business, certain details required under the revised schedule VI are not applicable.

10. Reduction of capital of Mastek Gmbh and subsequent closure

Pursuant to management decision to discontinue business operation in Germany during the period ended March 31, 2013 the share capital of Mastek GmbH (wholly owned subsidiary) has been reduced by Rs. 9.23 (Euro 13,500) to align with business requirements and the subsidiary is fully closed down. During the period ended March 31, 2013, the Company received Rs. 2.98 as liquidation proceeds and the resulting loss ofRs. 0.48 on closure has been charged to the Statement of Profit and Loss.

11. Reduction of capital of Mastek Asia Pacific Pte Ltd., Singapore

During the period ended March 31, 2013, the Company had reduced its investment in its wholly owned subsidiary Mastek Asia Pacific Pte Ltd, Singapore by Rs. 168.24. The remittance of proceeds had resulted in an exchange gain ofRs. 188.73 and a partial write back of provision for other than temporary decline in value of investment of Rs. 118.96, both of which had been credited in the Statement of Profit and Loss.

12. Exceptional Item - Other than temporary decline in the value of investment in a Subsidiary

Based on the review of the operations and the expected cash flow of its wholly owned subsidiary, MajescoMastek Canada Ltd., Canada ("MCAN"), the Management of the Company has determined and accounted an other than temporary decline in the carrying value of this investment amounting to Rs. 1,555.01. (Refer note 12).

13. During the previous period, the company had changed its accounts closing date from June 30 to March 31. Accordingly, the figures for the previous period are for the nine month period from July 1, 2012 to March 31, 2013 and are therefore not comparable with those of the current year.

14. Previous period figures have been regrouped and reclassified wherever necessary.

Mar 31, 2013

1 Company Information :

Mastek Limited (the ''Company'') is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is a provider of vertically-focused enterprise technology solutions and platforms in Insurance (Life, Pensions and General), Government / Public Sector and Financial Services sectors.

The Company''s offering portfolio includes business and technology services comprising IT Consulting, Application Development, Systems Integration, Application Management Outsourcing, Testing, Data Warehousing and Business Intelligence, Application Security, CRM services and Legacy Modernisation. The Company has operations through its subsidiaries / branch in U.S., Canada, U.K., India and Asia-Pacific and has its offshore software development centers in India at Mumbai, Pune, Chennai and Mahape.

(a) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

At the meeting of the Board of Directors of the Company held on November 05, 2012, the Board has given consent for the buy back of Company''s fully paid up equity shares of Rs. 5 each from existing shareholders and beneficial owners in accordance with the relevant provisions of the Companies Act, 1956 and Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 for an amount not exceeding Rs. 3,600 lakhs and for a price not exceeding Rs. 175 per equity share. The number of shares to be bought back shall be subject to a minimum of 825,000 Equity Shares and a maximum of 3,200,000 Equity Shares.

Since the commencement of the buy back until the closure date (February 5, 2013), the Company has bought back 2,388,000 equity shares at an average price of Rs. 150.39 per equity share. Consequently a sum of Rs. 331.09 lakhs has been utilized from Securities Premium Account and a sum of Rs. 3,260.32 lakhs from General Reserve in respect of the buy back. Out of the amount utilized from General Reserve, an amount of Rs. 119.40 lakhs has been appropriated to the Capital redemption reserve account and the paid up share capital has been reduced by the same amount. The company has fully extinguished the shares bought back during the above mentioned period.

2 Employee Stock option Scheme

(a) Nature and extent of employee share-based payment plans that existed during the period :

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 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.

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 period.

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 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.

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 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.

3 Income Taxes

(a) In accordance with the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). Payments under MAT can be carried forward and set off against future tax liability for a period of ten years. Accordingly, a sum of Rs. 3,001.75 (Previous year Rs. 2,679.11) has been carried forward and shown under ''Long-term loans and advances''. (Refer note 14).

(b) The Company had received tax demands aggregating to Rs. 2,319.22 (including interest of Rs. 771.37 ) primarily on account of transfer pricing issues for the assessment years 2006-07 to 2009-10. For the assessment year 2006-07 and assessment year 2007-08, the second appellate authority (the Income tax Appellate Tribunal) has allowed these issues in favour of the Company and against assessment year 2006-07, the income tax authorities have filed an appeal with the Honourable High Court. For the assessment years 2008-09 and 2009-10, the matter is pending before the first appellate authority (the Commissioner of Income tax (Appeals)).

Considering the facts and favourable order of the second appellate authority for assessment year 2006-07 and assessment year 2007-08, the management believes that the final outcome of the above disputes for the remaining years should be in favour of the Company and there should not be any material impact on financial statements.

4 Derivative Financial Instruments

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign currency. The counter party is generally a bank. These contracts are for a period between one day and four years.

5 Related party Disclosures

A. Enterprises where control exists

Subsidiaries / step down subsidiaries - wholly owned, except as indicated: MajescoMastek, USA (70% held by the Company); Mastek UK Ltd., UK; Mastek Asia Pacific Pte. Ltd., Singapore; Mastek GmBH,Germany*; Mastek MSC Sdn. Bhd., Malaysia; MajescoMastek Canada Ltd., Canada; Mastek MSC (Thailand) Co. Ltd., Thailand; MajescoMastek Insurance Software and Solutions Inc., USA (Formerly "Systems Task Group International Ltd.") and Vector Insurance Services LLC, USA (90% held by MajescoMastek, USA).

*- Closed down with effect from March 31, 2013.

B. Other related parties with whom the Company had transactions during the period Key Management Personnel: Sudhakar Ram

Ashank Desai Radhakrishnan Sundar Vinay Rajadhyaksha Stefan Van Overtveldt Farid Kazani Kalpana Jaishankar

6 Segment reporting

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting Standard (AS) 17 - ''Segment Reporting'', no disclosures related to segments are therefore presented in these stand-alone financial statements.

7 Micro, Small and Medium Enterprises

There are no dues to micro, small and medium enterprises which are outstanding at the Balance Sheet date. The information regarding micro, small and medium enterprises has been determined on the basis of the information available with the Company. This has been relied on by the auditors.

8 Other disclosures

a. The Company is engaged in the development of computer software and other software related services. Considering the nature of business, certain details required under the revised schedule VI are not applicable.

b. Value of Imports on C.I.F basis

9 Reduction of capital of Mastek Gmbh and subsequent closure

Pursuant to management decision to discontinue business operation in Germany, the share capital of Mastek GmbH (wholly owned subsidiary) has been reduced by Rs. 9.23 (Euro 13,500) to align with business requirements. Subsequently as on March 31, 2013 the subsidiary is fully closed down. The Company received Rs. 2.98 as liquidation proceeds and the resulting loss of Rs. 0.48 on closure has been charged to the Statement of Profit and Loss.

10 Reduction of capital of Mastek Asia Pacific Pte Ltd., Singapore

During the period ended March 31, 2013, the Company has reduced its investment in its wholly owned subsidiary Mastek Asia Pacific Pte Ltd, Singapore by Rs. 168.24. The remittance of proceeds has resulted in an exchange gain of Rs. 188.73 and a partial write back of provision for dimunition in the value of investment of Rs. 118.96, both of which have been credited in the Statement of Profit and Loss.

11 Acquisition of Keystone''s business and merger of Keystone Solutions Ltd with Mastek Ltd

During the year ended June 30, 2012, the Scheme of Amalgamation ("the Scheme") of Keystone Solutions Private Limited (a wholly owned step down subsidiary) with the Company had been sanctioned by the High Court of Mumbai with effective date from July 1, 2011, vide its order dated December 2, 2011. In accordance with the Scheme and the Accounting Standard (AS) 14, ''Accounting for Amalgamations'', the Company has followed the "pooling of interest" method in accounting for the amalgamation. The difference between the value of the net identified assets acquired and the consideration amounted to Rs. 106.05 which has been credited to ''Capital Reserve'' (Refer note 4).

12 During the period, the Company has changed its accounts closing date from June 30 to March 31. Accordingly, the figures for the current period are for the nine month period from July 1, 2012 to March 31, 2013 and are therefore not comparable with those of the previous year.

13 Previous year figures have been regrouped and reclassified wherever necessary.

Jun 30, 2012

1 Company Information :

Mastek Limited (the 'Company') is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is a provider of vertically-focused enterprise technology solutions and platforms in Insurance (Life, Pensions and General), Government / Public Sector, and Financial Services sectors.

The Company's offering portfolio includes business and technology services comprising IT Consulting, Application Development, Systems Integration, Application Management Outsourcing, Testing, Data Warehousing and Business Intelligence, Application Security, CRM services and Legacy Modernisation. The Company has operations through its subsidiaries / branch in U.S., Canada, U.K., India and Asia-Pacific and has its offshore software development centers in India at Mumbai, Pune, Chennai and Mahape.

2 Contingent liabilities

As at As at June 30, 2012 June 30, 2011

Claims against the Company not acknowledged as debts Ã 105.78

Guarantees

(a) Corporate performance guarantees given by the Company on behalf of the following subsidiaries

(a) MajescoMastek Canada Ltd 4,842.69 2,411.84

(b) Mastek MSC Thailand Co Ltd 508.99 229.34

(c) Mastek (UK) Limited 16,318.46 42,828.87

(b) Corporate guarantees given by the Company on behalf of the following subsidiaries

(a) MajescoMastek for its term loan Ã 1,341.00

(b) MajescoMastek for its Line of Credit for Working Capital from Bank 653.81 447.00

The Company does not expect any outflows in respect of the above contingent liabilities.

3 Employee Stock Option Scheme

(a) 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. 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.

(b) 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.

(c) 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 previous 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.

(d) 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, the amortised compensation cost of Rs. 35.00 (Previous Year Rs. 88.50) in respect of options granted in earlier periods has been charged to the Statement of Profit and Loss during the current year.

(e) 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.

4 Income Taxes

(a) In accordance with the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). Payments under MAT can be carried forward and set off against future tax liability. Accordingly, a sum of Rs. 2,679.11 (Previous year Rs. 2,263.90) has been carried forward and shown under 'Long-term loans and advances'. (Refer note 14).

(b) Provision for income tax for the year is the aggregate of the provision for the nine months ended March 31, 2012 and the three months ended June 30, 2012. However, the ultimate tax liability for the financial year 2011-12 will be determined on the basis of the profit for the year April 1, 2011 to March 31, 2012 and the profit for the year April 01, 2012 to March 31, 2013.

(c) The Company had received tax demands aggregating to Rs. 2,272.48 (including interest of Rs. 760.27 ) primarily on account of transfer pricing issues for the assessment years 2006-07, 2007-08 and 2008-09. For the assessment year 2006-07, the second appellate authority (the Income tax Appellate Tribunal) has allowed these issues in favour of the company and for the assessment years 2007-08 and 2008-09, the matter is pending before the first appellate authority (the Commissioner of Income tax (Appeals)).

Considering the facts and favourable order of the second appellate authority upholding the position of the Company for the assessment year 2006-07, the management believes that the final outcome of the above disputes for the remaining years should be in favour of the Company and there should not be any material impact on financial statements.

5 Related Party Disclosures

A. Enterprises where control exists

Subsidiaries - wholly owned, except as indicated: MajescoMastek USA (70% held by the Company) ; Mastek UK Ltd., UK; Mastek GmbH, Germany; Mastek Asia Pacific Pte. Ltd., Singapore; Mastek MSC Sdn. Bhd., Malaysia; MajescoMastek Canada Ltd, Keystone Solutions Private Limited, India; Mastek MSC Thailand Co Ltd., Thailand; System Task Group International Ltd., USA, and Vector Insurance Services LLC, USA (90% held by the Company) .

B. Other related parties with whom the Company had transactions during the year

Key Management Personnel: Sudhakar Ram (Chairman & Managing Director)

R Sundar (Executive Director)

Disclosure of transactions between the Company and related parties and the status of outstanding balances as on June 30, 2012

6 Segment reporting

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting Standard (AS) 17 Ã 'Segment Reporting', no disclosures related to segments are presented in these stand-alone financial statements.

7 Micro, Small and Medium Enterprises

There are no dues to micro, small and medium enterprises which are outstanding at the Balance Sheet date. The information regarding micro, small and medium enterprises has been determined on the basis of the information available with the Company. This has been relied on by the auditors.

8 Other disclosures

a. The Company is engaged in the development of computer software and other software related services. Considering the nature of business, certain details required under the revised schedule VI are not applicable.

9 Reduction of capital of Mastek Gmbh

Pursuant to management decision to discontinue business operation in Germany, the share capital of Mastek GmbH (wholly owned subsidiary) has been reduced by Rs. 261.42 (Euro 515,000) during the year ended June 30, 2011 to align with business requirements.

10 Sale of investment in Majescomastek, USA

During the year ended June 30, 2011, the Company sold 55,035,000 equity shares of MajescoMastek, USA (a wholly owned subsidiary before this sale) to Mastek UK Ltd (also a wholly owned subsidiary) for a total consideration of Rs. 4,914.54. After the sale, Mastek Ltd holds 70% of MajescoMastek and the balance 30% is held by Mastek UK Ltd.

11 Acquisition of Keystone's business and merger of Keystone Solutions Ltd with Mastek Ltd

During the year ended June 30, 2012, the Scheme of Amalgamation ("the Scheme") of Keystone Solutions Private Limited (a wholly owned step down subsidiary) with the Company has been sanctioned by the High Court of Mumbai with effective date from July 1, 2011, vide its order dated December 2, 2011. In accordance with the Scheme and the Accounting Standard (AS) 14, the Company has followed the "pooling of interest" method in accounting for the amalgamation. The difference between the value of the net identified assets acquired and the consideration amounted to Rs. 106.05 which has been credited to 'Capital Reserve' (Refer note 4).

12 Previous year figures

The financial statements for the year ended June 30, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended June 30, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures has not impacted recognition and measurement principles followed for preparation of financial statements.

The accompanying notes are an integral part of these financial statements.

Jun 30, 2011

1. CONTINGENT LIABILITIES AND COMMITMENTS

(Rs. in Lakhs)

As at As at June 30, 2011 June 30, 2010

(i) Counter guarantees outstanding in respect of guarantees given by banks on behalf of the Company 175.25 103.19

(ii) Corporate performance guarantees given by the Company:

- on behalf of subsidiary, MajescoMastek Canada Ltd. 2,411.84 967.53

- on behalf of subsidiary, Mastek MSC (Thailand) Co. Ltd. 229.34 153.49

- on behalf of subsidiary, Mastek (UK) Limited 42,828.87 36,462.26

(iii) Corporate guarantees given:

- on behalf of subsidiary, MajescoMastek for its term loan 1,341.00 4,180.05

- on behalf of subsidiary, MajescoMastek for its Line of Credit for Working Capital from Bank 447.00 Ã

(iv) Claims against the Company not acknowledged as debts* 2,309.06 105.78

(v) estimated amount of contracts remaining to be executed on capital account not provided for 196.95 1,813.15

* Claims against the Company not acknowledged as debts include:

a) a demand from the Indian tax authorities for payment of additional tax of Rs. 1,115.03 Lakhs, including interest of Rs. 379.47 Lakhs upon completion of their tax review for financial year ended March 31, 2006.

b) a demand from the Indian tax authorities for payment of additional tax of Rs. 1,088.25 Lakhs, including interest of Rs. 370.73 Lakhs upon completion of their tax review for financial year ended March 31, 2007. A substantial portion of both the tax demands pertains to the adjustment to total income carried out on account of transfer pricing. the matter in respect of 2006 is pending before the Income tax Appellate tribunal, Ahmedabad and in respect of 2007 before the Commissioner of Income-tax (Appeals), Ahmedabad. Against the additional tax demand of Rs. 1,115.03 Lakhs for the year 2006, the Income-tax department has adjusted Rs. 628.1 7 Lakhs in respect of Income tax Refunds due to the Company.

The Company has treated such adjustment as payment under protest and has accordingly refected this adjustment under Loans and advances. the Company is contesting the demands and the management believes that its position will likely be upheld in the appellate process and accordingly the same will not have a material adverse effect on the Company's financial position and the result of its operations. As a result, no provision has been made in the financial statements for the tax demands raised.

2. FORWARD CONTRACTS

Forward Contracts outstanding as on June 30, 2011 amounting to Rs. 21,113.84 Lakhs (previous year Rs. 28,034.66 Lakhs). Gain/(loss) of foreign exchange forward contracts are included under the head exchange gain/loss (net). Forward contracts amounting to Rs. Nil (previous year Rs. 3,830.93Lakhs) are backed by receivables.

3. 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.

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.

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.

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,

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. 88.50 Lakhs (previous year Rs. 57.00 Lakhs) 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

4. EMPLOYEE BENEFIT PLANS

a) Defned contribution plans

The Company makes contribution towards provident fund and superannuation fund to a defned contribution employee benefit plan for qualifying employees. the provident fund plan is operated by the Regional provident Fund Commissioner and the superannuation fund is maintained by making contribution to Life Insurance Corporation of India. under the schemes, the Company is required to contribute a specified percentage of payroll cost to the employee benefit schemes to fund the benefits.

The Company recognized Rs. 831.98 Lakhs (previous year Rs. 694.52 Lakhs) for provident fund contribution and Rs. 31.68 Lakhs (previous year Rs. 30.16 Lakhs) for superannuation contribution in the Profit and Loss account. the contributions payable to these plans by the Company are at rates specified in the rules of the schemes. In addition UK branch contributed Rs. 3.00 Lakhs (previous year Rs. 10.74 Lakhs) towards other funds as per the requirements of the local laws.

b) Defined benefit plans

The Company makes annual contributions to the Mastek Limited employees group gratuity Assurance scheme administered by Life Insurance Corporation of India. the scheme provides benefit to the members upon retirement on or after normal retirement date or upon death whilst in service or upon retirement owing to ill-health or incapacitation equivalent to 15 days of salary for each completed year of service. Further the scheme also provides benefit on death of a member whilst in service before normal retirement date equivalent to 15 days of salary for each completed year of service up to the date of death and the sum assured under the term assurance effected in respect of the member.

The Company also provides for leave encashment payable to employees. Leave encashment vest to the employees at time of retirement, death while in employment or on termination of employment equivalent to salary payable for number of days of accumulated leave balance.

c) The following table sets out the status of gratuity and the amounts recognized in the CompanyÃs financial statements as at June 30, 2011 and June 30, 2010.

d) Leave encashment charged during the year amount to Rs. 174.12 Lakhs (previous year Rs. 230.29 Lakhs).

5. INCOME TAXES

The Company follows Accounting standard 22 ÃAccounting for taxes on incomeÃ.

a) The CompanyÃs operations were eligible for signifcant tax incentives up to 31st March, 2011 under the Indian taxation laws. these incentives presently include an exemption from payment of Indian corporate taxes for a period of ten consecutive years of operations of software development facilities designated as software technology park or in special economic Zone. the management estimates the provision for current taxes and deferred taxes after considering such tax benefits and the expected results of the future operations of the Company.

b) Pursuant to the changes in the Indian Income tax Act, the Company has calculated its tax liability after considering minimum Alternate tax (MAT). the MAT liability can be carried forward and set off against future tax liability. Accordingly, a sum of Rs. 2,263.90 Lakhs (previous year Rs. 2,438.90 Lakhs) has been carried forward and shown under ÃLoans and AdvancesÃ.

c) Provision for income tax for the year is the aggregate of the provision for the nine months ended march 31, 2011 and provision on the profits, if any for the three months ended June 30, 2011. However, the ultimate tax liability for the financial year 2011-12 will be determined on the basis of the profit for the year April 1, 2011 to march 31, 2012.

6. RELATED PARTY DISCLOSURES

Subsidiaries: MajescoMastek USA; Mastek UK Ltd., UK; Mastek GmbH, Germany; Mastek Asia Pacific Pte. Ltd., Singapore; Mastek MSC Sdn. Bhd., Malaysia; MajescoMastek Canada Ltd., keystone solutions private Limited, India; Mastek MSC Thailand Co Ltd., Thailand; system task group International Ltd., USA; Vector Insurance Services LLC, USA (90% held by the Company) and Carretek LLC, USA (closed with effect from 27th September, 2010). these Companies constitute entities under the control of the Company.

key management personnel: Sudhakar Ram (Chairman & managing Director)

R Sundar (executive Director)

7. SEGMENTS

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting standard (As) 17 - ÃSegment ReportingÃ, no disclosures related to segments are presented in these stand alone financial statements.

8. MICRO, SMALL AND MEDIUM ENTERPRISES

There are no dues to micro, small and medium enterprises which are outstanding at the Balance sheet date. the information regarding micro, small and medium enterprises has been determined on the basis of the information available with the Company. this has been relied on by the auditors.

9. DIRECTORSÃ REMUNERATION

(a) Provision for gratuity and leave encashment benefit which is based on actuarial valuation carried out on an overall basis for the Company, has been excluded from the above remuneration.

(b) Also refer Note 20 of schedule 16.

10. ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956.

(i) the Company is engaged in the development of computer software and other software related services. Considering the nature of business, certain details required under part II of schedule VI are not applicable.

11. ACQUISITION OF KEYSTONE BUSINESS

The Board of Directors of the Company at its meeting held on may 9, 2009 had approved the acquisition of business activities pertaining to ÃKeystone Solutions Private LimitedÃ (ÃKeystoneÃ). Consequent to this, the Company had entered into a business transfer agreement dated June 8, 2009 and addendum to agreement dated August 1, 2009 with keystone to purchase the entire business on a slump sale basis as a going concern for a total consideration of Rs. 2,036 Lakhs with effect from August 31, 2009.

On acquisition, the Company has recorded net assets of Rs. 1,905.68 Lakhs and the balance of Rs. 130.32 Lakhs is shown as goodwill (to be amortized over a period of 3 years).

12. SALE OF INVESTMENT IN MAJESCOMASTEK, USA

During the year, the Company sold 55,035,000 equity shares of MajescoMastek, USA (a wholly owned subsidiary before this sale) to Mastek UK Ltd. (also a wholly owned subsidiary) for a total consideration of Rs. 4,914.54 Lakhs. After the sale, Mastek Ltd holds 70% of MajescoMastek and the balance 30% is held by Mastek UK Ltd.

Profit of Rs. 279.12 Lakhs arising from the transaction has been shown as ÃOther IncomeÃ in the current year Profit and Loss account.

13. REDUCTION OF CAPITAL OF MASTEK GmbH

Pursuant to management decision to discontinue business operation in Germany, the share capital of Mastek gmbH (wholly owned subsidiary) has been reduced by Rs. 261.42 Lakhs (euro 515,000) during the year to align with business requirements. Hence, the Investment of Mastek Ltd in Mastek gmbH stands reduced from Rs. 274.11 lakhs to Rs. 12.69 lakhs.

14. MERGER OF KEYSTONE SOLUTIONS LTD WITH MASTEK LTD.

the scheme of Amalgamation of keystone solutions private Limited (a wholly owned step down subsidiary) with the Company with appointed date as July 1, 2011 has been approved by the Boards of Directors of the respective Companies. under the scheme, all assets and liabilities of keystone will be transferred to and vested in the Company with effect from the appointed date. since the entire share capital of keystone is currently held by a wholly owned subsidiary of the Company, upon the scheme becoming effective, no shares will be issued by the Company as consideration in accordance with the scheme of amalgamation. the scheme is pending approval of the Jurisdictional High Court under sections 391 to 394 of the Companies Act, 1956.

15. Excess managerial remuneration paid during the year to the Chairman & managing Director and an executive Director of the Company, aggregating Rs. 63.36 Lakhs and Rs. 22.40 Lakhs respectively, over the permissible limits as prescribed under schedule XIII to the Companies Act, is subject to the approval of shareholders and Central government of India. the Company intends to apply to the Central government in this regard.

In the event that the Central government approval is not received for the amounts mentioned above, these amounts will have to be refunded by such Directors. Had the Company paid managerial remuneration to these Directors as per the limits prescribed under schedule XIII to the Companies Act, the loss for the year would have been lower by Rs. 85.76 Lakhs.

16. As per the annual practice to meet the requirement of tax legislation, the Company carried out a transfer pricing study for the year ended march 31, 2011 and has aligned its transfer prices for inter-Company transactions with the bench-marks obtained in the study. Accordingly, the additional revenue accruing to the Company pertaining to the previous period April to June 2011 amounting to Rs. 111.86 Lakhs has been recorded in the current financial year.

17. The previous yearÃs figures have been regrouped/ reclassified, wherever necessary.

Jun 30, 2010

1. CONTINGENT LIABILITIES AND COMMITMENTS

(Rs. in Lakhs)

As at As at

June 30, 2010 June 30, 2009

(i) Counter guarantees outstanding in respect of guarantees

given by banks on behalf of the Company 103.19 157.18

(ii) Corporate guarantees given

Ã on behalf of subsidiary, Majesco Mastek 4,180.05 6,946.23

Ã on behalf of subsidiary, Majesco

Mastek Enterprises Solutions Canada Co. Ltd 967.53 Ã

Ã on behalf of subsidiary, Mastek MSC Thailand Co Ltd 153.49 Ã

Ã on behalf of subsidiary, Mastek (UK) Limited 36,462.26 32,256.67

(iii) Claim against the Company not acknowledged as debts 105.78 105.78

(iv) Estimated amount of contracts remaining to be executed

on capital account not provided for 1,813.15 2,153.19

2. BUYBACK OF SHARES

The Board of Directors at their Meeting held on October 11, 2007 had announced buy back of its fully paid equity shares from existing shareholders and beneficial owners in accordance with the relevant provisions of Companies Act, 1956 and Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 at a price not exceeding Rs. 750 per share. The Company opted to buy back shares from open market through stock exchange route and the total offer size aggregates to Rs. 65 crores representing 25% of the Company s paid up capital and free reserves as on June 30, 2007.

During current year, the Company had bought back Nil (Previous year 176,863) equity shares of Rs. 5/- each at an average price of Nil (Previous year Rs. 374.45) per share and extinguished Nil (Previous year 744,381) equity shares of Rs. 5/- each. The difference between the nominal value and amount spent for buy back, amounting to Nil (Previous year Rs. 653.42 Lakhs) which has been appropriated from General Reserve to the tune of Nil (Previous year Rs. 653.42 Lakhs). The Company has transferred Rs. Nil (Previous year Rs. 8.85 Lakhs) from General Reserve to Capital Redemption Reserve which represented the nominal value of shares bought back during the year.

d) Description of significant lease agreements:

Ã The Company has given refundable interest free security deposit under the lease agreements.

Ã All agreements contain provision for renewal at the option of either parties.

Ã All agreements provide for restriction on sub lease.

3. FORWARD CONTRACTS

Forward Contracts outstanding as on June 30, 2010 amount to Rs. 7,250.52 Lakhs (Previous year Rs. 958.10 Lakhs). Gain / (loss) of foreign exchange forward contracts are included under the head Exchange loss (net). Forward contracts amounting to Rs. 3,830.93 Lakhs (Previous year Rs. 958.10 Lakhs) are backed by receivables.

4. 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.

Plan II

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.

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.

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 year have been granted at an exercise price which is equal to the market price of the underlying equity shares except for 25,000 options, which have been granted at a price less than the market price. Consequently, compensation cost of Rs 57.00 Lakhs (Previous Year Rs. Nil) has been charged to the Profit and Loss account during the current year.

7. RETIREMENT BENEFIT PLANS

a) Defined contribution plans

The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the superannuation fund is maintained by making contribution to Life Insurance Corporation of India. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company recognized Rs. 694.53 Lakhs (Previous year Rs. 715.61 Lakhs) for provident fund contribution and Rs. 30.16 Lakhs (Previous year Rs. 29.18 Lakhs) for superannuation contribution in the Profit and Loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

b) Defined benefit plans

The Company provided for liabilities towards gratuity and leave encashment payable to the employees. Gratuity vests to the employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. Leave encashment vest to the employees at the time of retirement, death while in employment or on termination of employment equivalent to salary payable for number of days of accumulated leave balance.

d) Leave encashment charged during the year amount to Rs. 230.29 Lakhs (Previous year Rs. 923.38 Lakhs).

8. INCOME TAXES

The Company follows Accounting Standard 22 Accounting for taxes on income .

a) The Company s operations are eligible for significant tax incentives under the Indian taxation laws. These incentives presently include an exemption from payment of Indian corporate taxes for a period of ten consecutive years of operations of software development facilities designated as Software Technology Park or in Special Economic Zone. The management estimates the provision for current taxes and deferred taxes after considering such tax benefits and the expected results of the future operations of the Company.

b) Pursuant to the changes in the Indian Income Tax Act, the Company has calculated its tax liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carry forward and set off against future tax liability. Accordingly, a sum of Rs. 289.38 Lakhs (Previous year Rs. 947.08 Lakhs) has been carried forward and shown under Loans and Advances .

9. RELATED PARTY DISCLOSURES

The Company has entered into transactions with the following related parties:

Subsidiaries: MajescoMastek USA; Mastek UK Ltd., UK; Mastek GmbH, Germany; Mastek Asia Pacific Pte. Ltd., Singapore; Mastek MSC Sdn. Bhd., Malaysia; Mastek Outsourcing Services Private Limited (closed down w.e.f August 21,2009), Majesco Mastek Canada Ltd, Canada; Keystone Solutions Private Limited, Mastek MSC Thailand Co Ltd, Thailand; System Task Group International Ltd., USA; and Carretek LLC, USA. These companies constitute entities under the control of the Company.

10. SEGMENTS

The Company has presented data relating to its segments in its consolidated financial statements which are presented in the same annual report as Mastek Limited. In terms of provisions of Accounting Standard (AS) 17 - Segment Reporting , no disclosures related to segments are presented in its stand-alone financial statements.

12. MICRO, SMALL AND MEDIUM ENTERPRISES

There are no dues to micro and small enterprises which are outstanding at the Balance Sheet date. The information regarding micro and small enterprises has been determined on the basis of the information available with the Company. This has been relied on by the auditors.

13. ACQUISITION OF KEYSTONE BUSINESS

The Board of Directors of the Company at its meeting held on May 9, 2009 approved the acquisition of business activities pertaining to Keystone Solutions Private Limited ( Keystone ). Consequent to this, the Company has entered into a business transfer agreement dated June 8, 2009 and addendum to agreement dated August 1, 2009 with Keystone to purchase the entire business on a slump sale basis as a going concern for a total consideration of Rs. 2,036 Lakhs with effect from August 31, 2009.

On acquisition, the Company has recorded net assets of Rs.1,905.68 Lakhs and the balance of Rs 130.32 Lakhs is shown as Goodwill (to be amortized over a period of 3 years).

Accordingly, figures for the current year are not comparable with figures of the previous year.

14. The previous years figures have been regrouped and reclassified, wherever necessary.

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