Investor Relations - Financial Information - Chairman's Address to the shareholders

Chairman's Address to the shareholders

At the 9th Annual General Meeting held on 29th July 2004 at Mumbai

Ladies and Gentlemen,
It's once again my pleasure to welcome you to the 9th Annual General Meeting of your company.

Economic Scenario
Early in the financial year ended March 2004, a small spark was lit in the US political arena expressing concern over outsourcing to India. This soon spread across the whole of the country gaining momentum from the political imperatives of the Presidential Election Year. The reverberations were also heard in the UK. In addition, the US Economy itself struggled in a slow recovery process. Add to this the phenomenon of the Dollar losing ground against all major currencies including the Indian Rupee. It was an economic situation that augured ill for Indian exports and particularly in the area of software.

Performance
Your company's performance during the year is a reflection of these conditions. Total Income at Rs.2241 million is a little lower of Rs.2578 million while Profit after Tax is lower at Rs.100.5 million against Rs.152 million the previous year.

Future Outlook
Inspite of an apparently popular sentiment against outsourcing to India, industry, as a whole, both in the US and in the UK, was actually committed to its newly discovered competitive and strategic option - Offshoring. Increasingly intense competition forced IT spend into a crunch; consequently, Offshoring was viewed as a practical way of having your cake and eating it.

Your company has continuously focused on building its core strengths and developing special skills. This process has taken a long time to yield results but has proved to be an enduring business model. The first quarter results, which have just been announced, are evidence of the early successes of this approach. Your company recognizes that a lot of work is still to be done to scale up existing customer relationships but the encouraging feature is that these customers have the potential to grow significantly. The challenge, your company faces, would be to replicate such customer successes across the board. The success of the company's strategy has encouraged investment in new facilities and additional employees. Your company has just inaugurated and started commercial production in a new facility in Bangalore under a new STP License. Your company is actively engaged in developing additional facilities in Hyderabad.

People
The contribution of our employees to implementing and pursuing this long-term strategy over a difficult period, gives the company its strength and confidence for the future. This is shared by all the stakeholders of the company, whose continuous support has been exemplary.

On behalf of my colleagues on the Board and myself, I would like to acknowledge our gratitude to all of you.

Sincerely
S B Ghia
Chairman