INTRODUCTION
Though Intangible Assets are not assigned a book value, they give
companies a cutting edge when it comes to market value. They empower
people with knowledge and improve the overall work culture. Intangible
Assets (or Intellectual Capital) reporting, is based on a framework
and a set of surrogate measures that indicate the Companyís
strengths and direction of movement in those areas. Since the indices
and measures are expected to evolve over a period of time, we caution
our investors and analysts not to take this as a basis for predicting
future performance.
LOVE & COMMITMENT Fulfilling the customer vision
At Mastek, we believe in fulfilling our customerís IT vision
through a proven, cost-effective outsourcing delivery model that's
a virtual extension to customers IT department, enhancing value
generation.
Measures
1998
- 1999
1999
- 2000
2000
- 2001
2001
- 2002
2002
- 2003
2003 - 2004
% Revenues from
repeat Business
76
83
82
87
92
88
% Increase in revenues
from existing customers
82
64
(11)
31
31
0.7
Last year, besides the strategic shift to Fortune 1000 accounts
to enhance the outsourcing business, we also had a few achievements
that have strengthened our offshore delivery capabilities.
Creating practice lines for higher leverage and innovative
'product service' offerings, that has led to significant market
differentiation and increased value delivery. Presently, the Company
has an Insurance practice line, which has resulted in Mastek having
several global Insurance companies as satisfied customers.
To address the rapidly growing opportunity in the BPO arena,
we forayed into BPO to enhance our ability to service our customer
needs better and generate new synergies between IT and BPO.
From a quality of revenue perspective, 85% of revenues were
strategic and a large portion of revenues were from high technology,
mission critical, full life-cycle development projects.
Alliances and partnerships are still a critical component of our
vision to 'move up the value chain'. Our strategic relationship
with Deloitte has been quite fruitful. With Carreker and the two
other alliances, Mastek is hopeful to repeat this success in specific
market segments.
Fulfilling employee aspirations
In our endeavour to support Mastekeers improve their employability,
initiatives are on the anvil to make Mastek an employer of choice.
One such initiative, this year, was Competency Development. The
competency assessment & development model facilitates successful
job performance and plans career development in line with the employee's
aspirations and organisation needs.
Growth
& Sustainability
Growth and Sustainability are an outcome of a sound strategy effectively
executed. Our shift in strategy, three years back, has helped us
grow at 30% last year, when the industry as a whole, grew only at
18%. It also helped us improve our Nasscom Top 20 ranking by 3 places
- at number 13.
Measures
1998
- 1999
1999
- 2000
2000
- 2001
2001
- 2002
2002
- 2003
2003 - 2004
% of Revenue from
Top 10 customers
55
57
46
66
69
62
Revenue growth
rate in %
65
53
3
12
30
8
Gross Earnings
(EBIDT) %
11
18
10
22
19
14
ROC (PBIT / avg.
capital employed) %
27
50
16
56
44
21
EPS (Rs)
(F.V. - Rs. 5 per share effective November 2000)
25.13
55.24
4.49
29.04
35.64
20.31
Accounts added
30
60
78
27
32
9
The company strategy is to pursue growth and market share to take
advantage of the expected 'Offshoring' boom, when it happens a few
years from now. Thus, despite pressure on gross margins, the company
will continue to invest in sales and marketing, to ensure growth.
Systems & Processes
We have endeavored to build a world class process framework which
ensures consistency, predictability and customer focus. This helped
us reach another successful milestone - ISO 9001:2001 certification
in less than 50% of the time expected! A Quality Leaders movement
was initiated to foster a culture of quality across the organization.
You may see a slight drop in the on time delivery and quality
of delivery indices, which is not really a cause for concern. Last
year we had many complex architecture projects to execute on various
environments. It is visible that we have been able to control the
rework to 7% and to manage the deliveries with less than 1.8% defects
reported back and this has laid a good foundation for us to manage
similar projects efficiently in the future.
Measures
1998
- 1999
1999
- 2000
2000
- 2001
2001
- 2002
2002
- 2003
2003 - 2004
Quality of deliveries
(% of defects found by customer)
6
2
3
Less than
1
Less than
1.8
4.5
Efficiency %
89
98
91
93
93
87
Predictability
of on-time Delivery %
89
94
92
93
70
82
Rework
NA
NA
5
14
7
13
The London Congestion Charging project was one of the most complex
projects implemented by any Indian Software company. It was regarded
as an unqualified success across the globe, in terms of timeliness,
smooth implementation and for the results produced.
To continuously provide world-class software delivery capabilities
and services, many process improvement initiatives are being planned
to provide customers, business advantage and strategic leverage.
Measures
1999
- 2000
2000
- 2001
2001
- 2002
2002
- 2003
2003 - 2004
Investment in infrastructure
(Rs. in Million)
174
198
75
410
194
Offshore centres
available (Sq. Feet)
57,758
57,758
57,758
1,60,718
222,195
Countries covered
12
12
13
9
9
Branches
20
18
20
19
15
Investment in tools
for software engineering (Rs. in Million)
21.6
32.9
30.04
62
92
The Mastek infrastructure saw significant additions to capacity
at Mahape as well as a new facility for Mastek BPO at Thane. With
security practices in focus, Mastek's IT infrastructure and practices
have met international customer expectations on security.
Creativity & Fun
Mastek is committed to creating an environment of fun & joy
at the workplace, providing continuous learning opportunities, constant
communication & information flow across all levels, and celebrating
achievements and milestones achieved by the organization in a unique
way. "Wind Beneath My Wings", a new initiative, provides
more space for Mastekeers worldwide to exchange notes of appreciation
and acknowledge acts of contribution. Monthly Meetings are a mixture
of fun & seriousness, creating enthusiasm & energy at all
levels and a strong bond of togetherness amongst Mastekeers.
Our current mix of employees promotes creativity and fun, with
experience as well. More than 64% of the Mastekeers are below 30
years while about 30% of the work force has four or more years of
experience.
Volunteerism at Mastek - Making a valuable difference
The Mastek vision of 'Inspired Leadership' has been aptly demonstrated
in a unique pioneering initiative - more than 350 marginalized children
in Mumbai spend time with Mastekeers in an office environment. With
the ongoing success of the Knowledge Series Seminars for all IT
professionals, we are going beyond Mastek, to share our knowledge
with software professionals across the industry.
