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Directors Report of Birlasoft Ltd.

Mar 31, 2023

The Directors are pleased to present the 32^nd Annual Report on the business and operations of the Company, along with the Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2023.

Summary of Financial Performance

The financial performance of the Company for the financial year ended March 31, 2023, is summarized below:

('' in million)
Particulars	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Total Revenue including Other Income	24,514.14	21,235.07	48,175.80	41,965.52
Earnings Before Interest, Depreciation and Tax	3,529.78	4,760.58	5,432.76	7,063.25
Less: Interest	98.44	10718	185.89	130.16
Less: Depreciation	759.36	685.10	822.65	765.10
Profit before exceptional items and tax	2,671.98	3,968.30	4,424.22	6,167.99
Exceptional items	-	-	-	(1.37)
Profit before tax	2,671.98	3,968.30	4,424.22	6,166.62
Less: Taxes	668.34	1,007.82	1,108.38	1,530.24
Profit for the Year	2,003.64	2,960.48	3,315.84	4,636.38
Other Comprehensive Income/(Loss)-net of tax	(107.54)	(102.34)	912.52	294.61
Total Comprehensive Income for the year	1,896.10	2,858.14	4,228.36	4,930.99

Payment of dividend declared/paid is taxable in the hands of the Members and hence, payment of dividend distribution tax is not required to be made by the Company.

The Record Date for determining the entitlement of the Members to the final dividend for the financial year 2022-23, if approved by the Members at the AGM, is Friday, July 14, 2023.

The Dividend Distribution Policy of the Company, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the SEBI (LODR) Regulations, 2015"), is available on the Company''s website at https://www.birlasoft.com/company/ investors/policies-reports-filings.

Share Capital

During the year under review, the Company allotted 3,174,465 equity shares of '' 2/- each, under its Employees Stock Option Plans and bought back 7,800,000 shares from the Members. The issued, subscribed and paid-up capital of the Company, as on March 31, 2023, is '' 549,741,094, consisting of 274,870,547 equity shares of '' 2/- each.

Transfer to General Reserves

During the year under review, the company has not transferred any amount to General Reserve. For complete details on movement in Reserves and Surplus during the financial year ended March 31,2023, please refer to the âStatement of Changes in Equity'' included in the standalone and consolidated financial statements of this Annual Report.

Credit Rating

The Company has been rated by CARE Ratings Limited ("Credit Rating Agency"), as below:

Facilities

Rating

Long-term Bank Facilities

Long-term/Short-term Bank Facilities

Short-term Bank Facilities

CARE AA; Stable

CARE AA; Stable / CARE A1

CARE A1

Business Performance

During the year under review (FY''23), the Company delivered a growth-led performance with expansion in revenue as well as deal signings. This was achieved during a period that witnessed rising macro-economic uncertainty, ascending interest rates owing to inflationary pressures, and challenges arising within certain industries in western economies.

On a consolidated basis, revenues for the year under review grew by 16.1% to '' 47,948 million from '' 41,304 million in the previous year. Earnings before interest, tax, depreciation, and amortization (EBITDA) stood at '' 5,205 million ('' 6,401 million in FY''22). Net Profit after tax stood at '' 3,316 million ('' 4,636 million in FY''22), translating into a basic earnings per share of '' 11.96 for the year ('' 16.63 in FY''22).

On a standalone basis, revenue from operations increased by 18.0% to '' 24,172 million in FY''23 from '' 20,494 million in the previous year. Net Profit after tax stood at '' 2,004 million ('' 2,960 in FY''22). The financial performance of the Company during the year under review, both consolidated and standalone, reflect the impact of one-time provision and the discontinuation of revenue pertaining to a customer that filed a petition for relief under Chapter 11 of Bankruptcy Code in the United States Bankruptcy Court, on 01 February 2023.

During the course of the financial year, Birlasoft continued to reinforce its management team, augment its capabilities, and accentuate its differentiators to drive sustained growth and deliver exceptional service to its customers. On the organization front, Birlasoft underwent a leadership transition with Angan

Guha taking over as the CEO and MD in December 2022. Further, the Company is undergoing an organizational transformation, which is chiefly around two dimensions in order to (1) become sharply focused on select verticals and service lines, and (2) culturally become more nimble and execution-oriented.

As part of ongoing investments in enhancing emerging technologies capability, the Company has expanded its delivery footprint with a new Delivery Centre in Coimbatore, Tamil Nadu. This new Delivery Centre, with 250 seating capacity that was operationalized during the fourth quarter of FY''23, enables access to an emerging lower-cost tech talent hub.

During the year under review, the Company also amicably entered into a Settlement and Mutual Release Agreement with one of its customers in the US, Invacare Corp (Invacare). This Agreement followed consultations after the filing of voluntary Chapter 11 proceedings under the US Bankruptcy Code by Invacare on February 1, 2023. As a prudent accounting practice, the Company created a provision amounting to US$ 18.97 million against the outstanding receivables and contract assets as on December 31, 2022. The resulting discontinuation of revenue contribution from this customer and the aforesaid provision are reflected in the Company''s financials for the period under review. In April 2023, the Company''s wholly-owned subsidiary Birlasoft Solutions Inc. entered into the aforementioned Settlement and Mutual Release Agreement with Invacare. As per the Settlement Agreement approved on April 24, 2023, parties have mutually provided releases and waiver from claims. Birlasoft Solutions Inc. would receive $ 2 million for Disengagement Services ending on May 31, 2023. This Settlement Agreement is a positive step forward for the Company as it puts the uncertainties around

this particular account behind and allows the management team to focus completely on driving business growth going forward.

On the back of its sales efforts, customer engagements, and established technology capabilities, Birlasoft registered some important operating accomplishments during the year, with multiple order wins including multi-million dollar engagements from both existing and new clients. This has resulted in strong deal wins amounting to a Total Contract Value (TCV) of US$ 869 million during FY''23, a 24.8% increase over the preceding financial year.

Strong deal signings and a healthy opportunity pipeline indicate a positive performance outlook in the next financial year.

The Management Discussion & Analysis of the Company''s business, industry, and performance, appears separately in this Annual Report.

Buyback of Equity Shares

The Company bought back 7,800,000 fully paid-up equity shares representing 2.79% of the total number of equity shares in its paid-up share capital as at March 31, 2022, at a price of '' 500/- per equity share, for an aggregate amount of '' 3,900 million (excluding transaction costs, applicable taxes and other incidental and related expenses) through the "tender offer" route as prescribed under the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 (the "Buyback").

The Buyback period commenced on August 11, 2022 and closed on August 26, 2022. The settlement of bids and payment of buyback consideration was made on September 2, 2022, and the shares were extinguished on September 6, 2022. A capital redemption reserve was created to the extent of share capital extinguished ('' 15.6 million).

The details pertaining to Buyback are available on the website of the Company at https://www.birlasoft.com/company/investors/ birlasoft-buyback-2022.

Dividend

During the year under review, the Board of Directors of the Company (the "Board") declared an interim dividend of '' 1.50/-(75%) per equity share of face value of '' 2/- each on the paid-up equity share capital of the Company.

Further, your Directors are pleased to recommend final dividend of '' 2/- (100%) per equity share of face value of '' 2/- each for the financial year ended March 31, 2023, subject to approval of the Members at the ensuing Annual General Meeting ("AGM") of the Company.

The total dividend amount for the financial year 2022-23, including the proposed final dividend, amounts to '' 3.50/- per equity share of the face value of '' 2/- each.

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, as amended, dividend paid or distributed by the companies shall be taxable in the hands of the Members. The Company shall, accordingly, make the payment of dividend after deduction of tax at source, at the rates prescribed therein.

Quality and Information Security

We continue to improve our quality focus through internal initiatives and by getting assessed against international standards. During the current Voice of Customer ("VOC") cycle, our customers have appreciated the value delivered by Project teams and have rated them on an average at 4.5 on a scale of 1-5,

5 being the highest. This further strengthens our resolve to make societies more productive by helping customers run businesses more efficiently.

In line with our focus to be assessed against international standards, Birlasoft is appraised for CMMI-DEVÂ® (Development)

6 CMMI-SVCÂ® (Services) V2.0 at Maturity Level 5. This milestone is testimony to our commitment to continuously improve on our quality & operational processes, while at the same time, strengthening our delivery capabilities to meet customer expectations. Our Quality Management system is certified for ISO

The following persons are currently designated as KMP of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed thereunder:

Sr. Name DIN / Membership Number Designation

No._

1 Angan Guha 09791436 Chief Executive Officer & Managing Director

2 Kamini Shah FCA 203593 Chief Financial Officer

3 Sneha Padve ACS 9678 Company Secretary

9001:2015 and ISO 20000:2018 Standards for IT Services and this reflects the Company''s belief in delivering the right quality.

Birlasoft continues to maintain a mature Information Security Management System & Privacy Information Management System. Policies, Processes and Controls have been defined and implemented to minimize and manage the cyber security risks. A robust governance and management of security compliance and risk are ensured by periodic reviews.

Birlasoft continues to leverage leading industry standards and controls to secure its infrastructure environment and has implemented world-class tools to prevent, detect, correct & recover from any security threats identified. Birlasoft has successfully retained its ISO 27001:2013 Information Security Management System and ISO 27701:2019 Privacy Information Management System certification. The NIST Cyber Security Framework has also been leveraged and is validated by third party vendors regularly.

Productivity

The Company is committed to productivity improvements to create a future abundant with a wealth of knowledge. Multiple initiatives like Knowledge Management, bRight, bAutomate, UREKA, MyTime and Value IN Customer''s Interest (âVINCI") enable the Company to harness latent knowledge in the organization and mobilize it.

bRight is an initiative that has been introduced to celebrate our accounts with exemplary performance, cross-account learning opportunities through eight different themes.

Delivery Process Automation has been introduced to improve the project or program execution efficiency.

A brand-new knowledge management repository has grown to a level where the Company can showcase efficiencies in the deliverables translating into real value for customers. Reusability of case-studies as a new key factor will be benefitting the teams within Birlasoft. MyTime is a crowdsourcing platform being utilized by technical enthusiasts to develop re-usable tools that enhance productivity.

Institutional Shareholding

As on March 31, 2023, the total Institutional Shareholding in the Company was 32.68% of the total paid-up equity share capital.

Subsidiaries, Associates and Joint Venture Companies

As on March 31, 2023, the Company has 14 subsidiaries, including step-down subsidiaries. The Company has two material subsidiaries, viz., Birlasoft Solutions Inc. & Birlasoft Inc., details of which are given in the Corporate Governance Report.

Further, Enablepath, LLC, a step-down subsidiary of the Company, has merged with Birlasoft Inc. (wholly owned subsidiary of the Company) w.e.f. April 1, 2023.

As per Section 129(3) of the Companies Act, 2013 (âthe Act"), consolidated financial statements of the Company and all its

subsidiaries have been prepared, and form a part of this Annual Report. In terms of Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of subsidiaries, in Form AOC-1, is annexed to this Report as âAnnexure 1â.

During the financial year 2022-23, the Company had no Associate or Joint Venture company.

Board of Directors, its Committees and Meetings thereof

The Company''s Board has an optimal combination of executive, non-executive and independent directors (including three women directors) who bring to the table the right mix of knowledge, skills and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of all stakeholders. The Board is supported by five Committees of Directors viz. Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee & Risk Management Committee.

The Board meets once every quarter. Additional meetings of the Board/Committees are convened as may be necessary for the proper management of the business operations of the Company. A separate meeting of Independent Directors is also held at least once in a year to review the performance of Non-Independent Directors, the Board as a whole and the Chairman.

During the year, six meetings of the Board were held on May 23, 2022, August 3, 2022, October 21, 2022, November 4, 2022, February 2, 2023, and March 30, 2023. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Act and SEBI (LODR) Regulations, 2015.

A detailed update on the Board and its Committees'' composition, meetings held and attendance of the Directors at these meetings is provided in the Corporate Governance Report, which forms a part of this Annual Report.

Directors and Key Managerial Personnel

During the year under review, Dharmander Kapoor (DIN: 08443715) resigned from the position of Chief Executive Officer & Managing Director (âCEO & MD") and as a Key Managerial Personnel (âKMP") of the Company effective end of business hours of November 30, 2022.

Pursuant to the recommendation of the Nomination and Remuneration Committee (the âNRC"), and approval of the Board on November 4, 2022 and of the Members (through postal ballot) on January 13, 2023. Angan Guha (DIN: 09791436) was appointed as the CEO & MD and a KMP of the Company for a period of 3 years, effective December 1, 2022. As Angan is not a resident of India as stipulated under Part 1 (e) of Schedule V to

the Companies Act, 2013, the Company has made an application to the Central Government for seeking its approval to the said appointment. As required under Section 197(14) of the Act, the details of remuneration paid to Angan Guha from Birlasoft Solutions Inc., a wholly owned subsidiary of the Company, are given in the Corporate Governance Report.

Anant Talaulicar (DIN: 00031051) completed his second term as Independent Director of the Company on October 20, 2022, and consequently ceased to be a Director of the Company.

Ananth Sankaranarayanan (DIN: 07527676) was appointed as an Independent Director of the Company, for a period of 5 years effective February 2, 2023, pursuant to the recommendation of the NRC, and approval of the Board on February 2, 2023 and of the Members (through postal ballot) on March 23, 2023.

Chandrasekar Thyagarajan resigned as the Chief Financial Officer and a KMP of the Company, effective end of business hours of February 2, 2023.

Independence of the Board

The Board comprises of optimal number of Independent Directors. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are independent in terms of Regulation 16(1)(b) and Regulation 25 of the SEBI (LODR) Regulations, 2015 and Section 149(6) of the Act:

1. Ashok Kumar Barat (DIN: 00492930);

2. Ananth Sankaranarayanan (DIN: 07527676);

3. Alka Bharucha (DIN: 00114067); and

4. Nandita Gurjar (DIN: 01318683).

All the abovenamed Directors have registered themselves with the Independent Directors Databank. They are either exempted from or have complied with the requirements of online proficiency self-assessment test conducted by âIndian Institute of Corporate Affairs''.

The Board is of the opinion that the Independent Directors of the Company, including those appointed during the year, possess the requisite qualifications, experience and expertise and hold the high standards of integrity.

Auditors

- Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No.: 101248W/W-100022), were re-appointed

Kamini Shah was appointed as the Chief Financial Officer and a KMP of the Company, effective April 3, 2023, pursuant to the recommendation of the NRC and approval of the Audit Committee and the Board.

Your Directors place on record their appreciation for the valuable contribution made by the retiring and resigning Directors and the CFO during their tenure with the Company.

In accordance with Section 152 of the Act, Chandrakant Birla (DIN: 00118473), Non-Executive Director of the Company, is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. The Board recommends the resolution for his re-appointment for the approval of the Members at the ensuing AGM. A brief profile and other details relating to Chandrakant Birla is provided in this Annual Report.

None of the Directors are disqualified under Section 164(2) of the Act.

as the Statutory Auditors of the Company, in the AGM held on August 7, 2019, for a period of 4 years till the conclusion of the AGM to be held in the year 2023. They have completed 10 years as Statutory Auditors of the Company. The provisions regarding rotation of auditors, as prescribed under the Act, are applicable to the Company. Hence, it is proposed to appoint M/s. S R B C & Co. LLP, Chartered Accountants, (Firm Registration Number - 324982E/ E300003), as the Statutory Auditors of the Company, for a period of 5 years, to hold office from the forthcoming AGM till the AGM to be held in the year 2028, to the Members for their approval.

Accordingly, an item for appointment of M/s S R B C & Co. LLP as the Statutory Auditors of the Company is being placed at the ensuing AGM for approval of the Members. Information about the proposed appointment of statutory auditor is given in the Notice of AGM, which forms part of this Annual Report. The Board recommend their appointment to the Members.

The Notes on the Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. There are no qualifications, reservations or adverse remarks in the Report of the Statutory Auditors for the financial year ended March 31, 2023.

During the year under review, the Auditor has not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

- Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Dr. K. R. Chandratre, Practising Company Secretary (FCS No.: 1370 and CP No.: 5144), was appointed as the Secretarial Auditor to conduct audit for the year under review. The Report of the Secretarial Auditor is annexed as âAnnexure 2â. It does not contain any qualification, reservation or adverse remark.

During the year under review, the Secretarial Auditor has not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.

- Internal Auditor

The Internal Auditor and the Head of Internal Audit function within the Company reports functionally to the Audit Committee of Board, which reviews and approves risk based annual internal audit plan and the performance of internal audit function. The scope of work, including annual internal audit plan, authority and resources, is regularly reviewed and approved by the Audit Committee. Annual internal audit plan is aligned with the ERM to ensure that all critical risks are covered in the audit plan. Besides, Internal Audit work is supported by the services of leading international audit firms.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the year ended March 31, 2023, pursuant to Regulation 24A of the SEBI (LODR) Regulations, 2015 for all applicable compliances as per the said Regulations. The Annual Secretarial Compliance Report duly signed by Dr. K. R. Chandratre, Practising Company Secretary is available on the website of the Company at https://www. birlasoft.com/companv/investors/policies-reports-filings.

Corporate Governance

Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, Corporate Governance Report for the year ended March 31, 2023, with a detailed compliance report thereon forms an integral part of this Annual Report and is set out as separate section herein. It also includes a certificate from the Statutory Auditors in respect of compliance with the provisions of the SEBI (LODR) Regulations, 2015 related to Corporate Governance.

Management Discussion and Analysis

In terms of provisions of Regulation 34(2) of the SEBI (LODR) Regulations, 2015, a detailed review of the operations, performance and outlook of the Company and its business is given in the Management Discussion and Analysis Report, which is presented in a separate section forming part of this Annual Report.

Awards & Recognitions

In recognition of its constant quest for excellence, the Company has been awarded and recognised at various forums. The prominent ones are listed below:

1. Recognized by Microsoft as a Solution Partner for Infrastructure and Cloud workloads (Azure) and for Azure Data and AI.

2. Birlasoft''s Project Shodhan conferred with CSR Project of the Year at India CSR Summit 2022.

3. Conferred with BTX Top Enterprise Award 2022 Asia at BTX Roadshow and Transformation Awards 2022 Asia.

4. Birlasoft conferred with the âCXO Cloud Leadership Award" under the category âDigital Transformation using Cloud" at CXO Cloud Summit and Award 2022.

5. Conferred with âBest Use of Cloud Services - IT" at the 3^rdTechnology Excellence Awards 2023

6. Birlasoft earns DevOps with GitHub on Microsoft Azure Advanced Specialization

7. Birlasoft won the Information Software System Integrator Innovator Award at Asia Pacific Partner Networkâ¢ Conference 2022 by Rockwell Automation

8. Birlasoft''s Partner Pernod Ricard India awarded Excellence in Debut Automation Program at UiPath Automation Excellence Awards 2022

9. Birlasoft recognized as âLeader'' in ISG''s SAP Ecosystem 2022 ISG Provider Lensâ¢ Study for the U.S.

10. Birlasoft identified as a âLeaderâ in the âSalesforce Ecosystem Partners 2023â ISG Provider Lensâ¢ Study for âImplementation Services for Core Clouds Midmarketâ and âManaged Application Services for Midmarketâ quadrants in the U.S. Also positioned as a âContenderâ in âImplementation Services for Industry Cloudsâ quadrant for the U.S. and âManaged Application Services for Midmarketâ for the U.K. quadrant.

11. Birlasoft recognized in the Leadership Zone in Zinnov Zonesâs Intelligent Automation Services H1- 2023

12. Birlasoft positioned as a âLeaderâ and âContenderâ in various quadrants for ISG Provider Lensâ¢ Quadrant study on Next-Gen ADM Services 2022.

13. Birlasoft identified as a âRising Starâ in the Digital Business Enablement and ESG Services 2022â ISG Provider Lensâ¢ Study - U.S. for the âSupply Chain Transformation Servicesâ quadrant. Also identified as âLeaderâ in âTraditional Enterpriseâ Archetype report of this study.

14. Birlasoft identified as a âLeader/Rising Starâ in the âOil and Gas Industry - Services and Solutions 2022â ISG Provider Lensâ¢ Study - North America, Nordics. Recognized as âLeaderâ in Data Management and Cloud Computing- North America; âRising Starâ in Data Management and Cloud Computing -Nordics, Next-Gen IT/OT Services- North America.

15. Birlasoft recognized as a âRising Starâ in Life Sciences Digital Services 2022 ISG Provider Lensâ¢ Study- Global for âMedTech Digital Transformationâ quadrant. Also positioned as âProduct Challengerâ in: âPatient Engagement Digital Transformationâ and âManufacturing Supply Chain Digital Transformationâ quadrants.

16. Birlasoft positioned as a âRising Starâ in the âEnterprise Service Management 2023â ISG Provider Lensâ¢ Study - U.S. for âESM Consulting Servicesâ quadrant. Also positioned as âProduct Challengerâ in: âESM Managed Servicesâ and âESM Implementation & Integration Servicesâ quadrants.

Particulars of Employees, Directors and Key Managerial Personnel

The ratio of remuneration of each Director to the median employeeâs remuneration and other details prescribed in Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report as âAnnexure 3â.

In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said Rules are set out in the Boardâs Report as an addendum thereto. However, in terms of provisions of the first proviso to Section 136(1) of the Act, this Annual Report is being sent to the Members of the Company excluding the aforesaid information. The said information is available for inspection and any Member interested in obtaining such information may write to the Company Secretary for the same.

Employees Stock Option Plans (âESOPsâ)

The information pursuant to the provisions of the Act and Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, relating to ESOPs of the Company, is annexed to this Report as âAnnexure 4â and has been uploaded on the website of the Company and can be accessed through web link https:// www.birlasoft.com/company/investors/policies-reports-filinqs.

Certificate from Dr. K. R. Chandratre, Practising Company Secretary (FCS No.: 1370 and CP No.: 5144), the Secretarial Auditor of the Company, confirming that the schemes have been implemented in accordance with the said SEBI Regulations, would be placed at the ensuing AGM of the Company for inspection by the Members.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention and prohibition of sexual harassment at workplace. The Company has also put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. This process ensures complete anonymity and confidentiality of information. An Internal Complaints Committee has been constituted which is responsible for redressal of complaints related to sexual harassment.

During the year under review, four complaints of sexual harassment were received by the Company. Details as per the provisions of Sections 21 and 22 of the Sexual Harassment of

Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, are as under:
Number of cases pending at the beginning of the financial year	Nil
Number of complaints filed during the financial year	4
Number of cases pending at the end of the financial year	1
Details of workshops or awareness programs against sexual harassment carried out	The Company regularly conducts necessary awareness programs & trainings for its employees & the Internal Complaints committee members. All new employees are provided detailed education during their induction and required to complete a mandatory training at the time of joining. All existing employees are required to complete annual refresher trainings.
Nature of action taken by the employer or district officer	Basis the inquiry and recommendations, the following actions were taken: - One accused employee was terminated. - Another accused employee was issued warning and transferred to another location. - Accused in the third incident was a vendor resource, whose contract was immediately terminated and vendor withdrew the resource from the services

Policy on Directorsâ appointment and remuneration

Pursuant to the provisions of Section 134(3)(e) of the Act, the policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act is annexed to this Report as âAnnexure 5â. This Nomination and Remuneration Policy as approved by the Board is available on the Companyâs website and can be accessed through the web link https://www. birlasofLcom/company/investors/policies-reports-filings.

Particulars of loans, guarantees or investments

The details of loans, guarantees and investments, if any, which are covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.

Related Party Transactions

Prior omnibus approval of the Audit Committee is obtained for the transactions that are repetitive in nature. These transactions are reviewed by the Audit Committee on a quarterly basis.

For details on related party transactions, Members may refer to the notes to the financial statements. The Policy on Related Party Transactions as approved by the Board is available on the Company''s website and can be accessed through the web link https://www.birlasoft.com/company/investors/policies-reports-filings.

Pursuant to the provisions of Section 134(3)(h) of the Act, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act and prescribed in Form AOC-2 of Companies (Accounts) Rules, 2014, is annexed to this Report as âAnnexure 6â.

Material changes and commitments

There are no material changes and commitments affecting the financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and till the date of this Report.

Risk Management Policy

The Company has constituted a Risk Management Committee (the âRMC") of the Board to review the risk management plan/ process of the Company. The RMC assists the Board in its oversight of the Company''s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.

The Company has a Risk Management Policy which has been approved by the Board. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews periodically the implementation of various aspects of the Risk Management Policy through the RMC.

A write-up on Enterprise Risk Management forms part of this Annual Report.

There are no risks identified by the Board which may threaten the existence of the Company.

Internal Control Systems and Adequacy of Internal Financial Controls

The Company has put in place adequate internal financial control procedures commensurate with its size, complexity and nature of business. The Company has identified and documented all key financials controls, which impact the financial statements as part of its Standard Operating Procedures. The financial controls are tested for operating effectiveness through ongoing monitoring and review process by the management and also independently by the Internal Auditor. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals.

Based on the review, nothing has come to the attention of Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review.

Audit Committee

The Board has a duly constituted Audit Committee in line with the provisions of the Act and the SEBI (LODR) Regulations, 2015. The primary objective of the Committee is to monitor and provide effective supervision of the management''s financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting. The Committee met five times during the year. Detailed information pertaining to the Audit Committee has been provided in the Corporate Governance Report.

Committee Recommendations

During the year, recommendations of all the Committees were accepted by the Board. The composition of the Committees is provided in the Corporate Governance Report, which forms a part of this Annual Report.

Corporate Social Responsibility (âCSRâ)

The details of the initiatives taken by the Company during the year on CSR, in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 & the amendments thereto, along with information about CSR Committee of the Board, have been annexed to this Report as âAnnexure 7â.

The CSR Policy of the Company is placed on the website of the Company and can be accessed through the web link https:// www.birlasoft.com/company/investors/policies-reports-filings.

Annual Evaluation of the Board, its Committees and Individual Directors

A formal evaluation of the performance of the Board, its Committees, the Chairman and the individual Directors was carried out for the financial year 2022-23. The performance evaluation was done using individual questionnaires, covering amongst others, composition of Board, receipt of regular inputs and information, functioning, performance and structure of Board Committees, skill set, knowledge and expertise of Directors, preparation and contribution at Board meetings, leadership, etc. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board, excluding the Director being evaluated. List of key skills, expertise & core competencies of the Board, including the Independent Directors is provided in the Corporate Governance Report.

The performance evaluation of Non-Independent Directors, the Chairman and the Board was done by the Independent Directors.

Establishment of Vigil Mechanism

The Company has a Whistle Blower Policy covering vigil mechanism as per Regulation 22 of the SEBI (LODR) Regulations, 2015, for the Directors and employees to report

their genuine concerns. The details of the same are explained in the Corporate Governance Report. The Whistle Blower Policy may be accessed on the Company''s website at https://www. birlasoft.com/companv/investors/policies-reports-filings.

Annual Return

Pursuant to Sections 134(3)(a) and 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules,

2014, the Annual Return in e-form MGT-7 may be accessed on the Company''s website at https://www.birlasoft.com/company/ investors/policies-reports-filings#annual-return.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed as âAnnexure 8â to this Report.

Responsibility Statement of the Board of Directors

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors, pursuant to Section 134(3)(c) and Section 134(5) of the Act, state that:

i) in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2023 and of the profit of the Company for the year ended March 31, 2023;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing fraud and other irregularities;

iv) they have prepared the annual financial statements on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO & CFO Certification

As required by Regulation 17(8) of the SEBI (LODR) Regulations,

2015, the CEO and CFO certificate, for the year under review was placed before the Board at its meeting held on May 8, 2023.

A copy of such certificate forms a part of the Corporate Governance Report.

Secretarial Standards issued by the Institute of Company Secretaries of India

The Company complies with all applicable mandatory Secretarial Standards as issued by the Institute of Company Secretaries of India.

Listing with Stock Exchanges

The Equity Shares of the Company continue to be listed on National Stock Exchange of India Limited and BSE Limited. The Annual Listing Fee for the financial year 2023-24 has been paid to these exchanges.

Directors & Officers Insurance Policy

The Company has in place an insurance policy for its Directors & Officers with a quantum and coverage as approved by the Board. The policy complies with the requirement of Regulation 25(10) of SEBI (LODR) Regulations, 2015.

Other Statutory Disclosures

Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:

- Details relating to Deposits covered under Chapter V of the Act;

- Issue of sweat equity shares or equity shares with differential rights as to dividend, voting or otherwise;

- Raising of funds through, preferential allotment or qualified institutions placement;

- Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees;

- Significant or material order passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company''s operations in future;

- Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016; and

- Instance of one-time settlement with any financial Institution.

- Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013.

Acknowledgments

The Board of Directors take this opportunity to thank all the Members of the Company for their continued support.

The Directors thank all the customers, vendors, investors and bankers for their continued support during the year. The Directors place on record their appreciation to the contribution made by the employees at all levels, the Company''s consistent growth

was made possible by their hard work, solidarity, co-operation and support.

The Directors further thank the governments of various countries where the Company has its operations. The Directors also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate

Affairs, the Customs and Indirect Taxes Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Development Centres (SDCs)/ Special Economic Zones (SEZs) - Pune, Noida, Mumbai, Navi Mumbai, Chennai, Bengaluru, Hyderabad and all other government agencies and look forward to their continued support in the future.

For and on behalf of the Board of Directors

Amita Birla Chairman

DIN: 00837718

Mar 31, 2022

Your Directors are pleased to present the 31^st Annual Report on the business and operations of the Company, along with the Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2022.

SUMMARY OF FINANCIAL PERFORMANCE

The financial performance of the Company for the financial year ended March 31, 2022, is summarized below:

('' in million)
Particulars	Standalone		consolidated
	2021-22	2020-21	2021-22	2020-21
Total Revenue including Other Income	21,235.07	16,524.81 \|	41,965.52	35,747.01
Earnings Before Interest, Depreciation and Tax	4,760.58	3,674.05	7,063.25	5,482.14
Less:Interest	107.18	102.38	130.16	130.44
Less: Depreciation	685.10	699.43	765.10	803.71
Profit before exceptional items and tax	3,968.30	2,872.24	6,167.99	4,547.99
Exceptional items	-	-	(1.37)	-
Profit before tax	3,968.30	2,872.24	6,166.62	4,547.99
Less: Taxes	1,007.82	936.65	1,530.24	1,339.68
Profit for the Year	2,960.48	1,935.59	4,636.38	3,208.31
Other Comprehensive Income/(Loss)-net of tax	(102.34)	319.77	294.61	106.99
Total Comprehensive Income for the year	2,858.14	2,255.36	4,930.99	3,315.30

BUSINESS PERFORMANCE

The Financial Year 2021-22 was a year of opportunities and challenges. Your company posted in-line mid-teen revenue growth, saw margins expand, posted a significant jump in profit after tax and won a record Total Contract Value (TCV) of new deals. However, the year also witnessed challenges on account of high attrition, a second and third wave of COVID-19, geopolitical conflict in Europe and high inflation in the developed world, including USA, which is a major revenue contributor to your Company.

As we close the year, COVID-19 appears to be moving to the endemic stage in many parts of the world. However, the two years of disruption have led to a lasting impact on organizations globally and their work culture. Information Technology saw resilience in its functioning due to almost 100% remote working by its employees in the pandemic impacted two years. As people across the globe prepare to transition back to the physical office, the organisation''s focus is now on how to effectively plan, communicate, and attract thousands of IT employees to return to offices for work versus work from home/anywhere environment. Returning to the office and consequently, physical proximity will enable better social interactions, productivity, collaboration, coordination, health and well-being. In India, where Birlasoft has its majority of the workforce the return to office in the IT sector has lagged as compared to the other sectors at the back of abnormally high attrition and a healthy demand. While organization will move to the hybrid working model i.e. a mix of working from the office and working from home during the typical work week, getting back the majority of employees in IT sector to the office remains a challenge.

As we enter into a post covid era of exponential transformation and with technology becoming indispensable towards progress, the forthcoming year for the Indian IT Industry promises to be a year of opportunities and growth. Birlasoft with its power of domain and reimagined enterprise and digital technologies is optimistic of leveraging the opportunities and keeping intact its growth momentum.

On a consolidated basis, the revenue from operations for the financial year under review was at '' 41,303.50 million as compared to '' 35,557.20 million in the previous year, registering a growth of 16.2%. The earnings before interest, tax, depreciation, and amortization was at '' 6,401.23 million versus '' 5,292.33 million, a growth of 21%. The Net Profit after tax was at '' 4,636.38 million versus '' 3,208.31 million registering a growth of 44.5%.

On a standalone basis, the revenue from operations was at '' 20,493.75 million. The earnings before interest, tax, depreciation, and amortization was at '' 4,019.26 million and the Net Profit after tax was at '' 2,960.48 million.

For more details, please refer to the Management Discussion & Analysis Report.

BUYBACK OF EQUITY SHARES

The Board of Directors of the Company at its meeting held on May 23, 2022 has, subject to the approval of members of the Company by way of Special Resolution through Postal Ballot and subject to approvals of statutory, regulatory or governmental authorities as may be required under applicable laws, approved a proposal to buyback up to 7,800,000 fully paid-up equity shares of face value of '' 2/- each representing upto 2.79% of the total number

of equity shares in the paid-up share capital of the Company, at a price of '' 500/- per equity share payable in cash, for an aggregate amount not exceeding '' 3,900 million/- (excluding transaction costs, applicable taxes and other incidental and related expenses) through the "tender offer" route as prescribed under the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018, as amended.

The aggregate consideration for the aforesaid buyback shall be less than 25% of the aggregate of the fully paid-up equity share capital and free reserves of the Company as per the latest audited standalone and consolidated financial statements of the Company as at March 31, 2022.

The buyback is generally expected to improve return on equity through distribution of surplus cash and improve earnings per share by reduction in the equity base of the Company, thereby leading to long term increase in shareholders'' value.

DiViDEND

Furthermore, your Directors are pleased to recommend final dividend of '' 3/- (150%) per equity share of face value of '' 2/-each for the financial year ended March 31, 2022, subject to the approval of members at the ensuing Annual General Meeting ("AGM") of the Company.

The dividend declared/paid is taxable in the hands of the members and hence, payment of dividend distribution tax is not required to be made by the Company.

The Record Date for determining the entitlement of the members to the final dividend for the financial year 2021-22, if approved by the members at the AGM, is Friday, July 15, 2022.

The Dividend Distribution Policy of the Company, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "the SEBI (LODR) Regulations, 2015"), is available on the Company''s website at https://www. birlasoft.com/company/investors/policies-reports-filings.

SHARE CAPiTAL

During the year under review, the Company allotted 2,209,988 equity shares of '' 2/- each, under its Employees Stock Option Plans. The issued, subscribed and paid-up capital of the Company, as on March 31, 2022, is '' 558.99 million, consisting of 279,496,082 equity shares of '' 2/- each.

TRANSFER TO GENERAL RESERVES

During the year under review, the Company has not transferred any amount to General Reserves.

CREDiT RATiNG

The Company has been rated as below by CARE Ratings Limited ("Credit Rating Agency"):

Facilities	Rating
Long-term Bank Facilities	CARE AA; Stable
Long-term/Short-term Bank Facilities	CARE AA; Stable / CARE A1
Short-term Bank Facilities	CARE A1

QUALITY AND iNFORMATiON SECURiTY

Birlasoft is a CMMI Level 5 Organization for the past several years in a row. We continue to improve our quality focus through internal initiatives and by getting assessed against international standards. During the current Voice of Customer ("VOC") cycle, our customers have appreciated the value delivered by Project teams and have rated them on an average at 4.6 in a scale of 1-5,

5 being the highest. This further strengthens our resolve to make societies more productive by helping customers run businesses more efficiently.

In line with our focus to be assessed against international standards, Birlasoft is appraised for CMMI-DEVÂ® (Development)

6 CMMI-SVCÂ® (Services) V2.0 at Maturity Level 5. This milestone is testimony to our commitment to continuously improve our quality & operational processes, while at the same time, strengthening our delivery capabilities to meet customer expectations. Our quality management system is certified for ISO 9001:2015 and ISO 20000:2018 Standards for IT Services and this reflects the Company''s belief in delivering the right quality.

PRODUCTiViTY

Your Company is committed to productivity improvements to create a future abundant with a wealth of knowledge. Multiple initiatives - Knowledge Management, Productivity Forum, UREKA, MyTime and VINCI - enable the Company to harness latent knowledge in the organization and mobilize it.

bAutomate as an initiative has been introduced to further accentuate the engineering productivity by using tools and creating highly disciplined Software Engineering Culture.

Delivery Process Automation has been introduced to improve the project or program execution efficiency.

A brand-new knowledge management repository has grown to a level where the Company can showcase efficiencies in the deliverables translating into real value for customers.

Re-usability of case-studies as a new key factor will be benefitting the teams within Birlasoft. MyTime is a crowdsourcing platform being utilized by technical enthusiasts to develop re-usable tools that enhance productivity.

iNSTiTUTiONAL SHAREHOLDiNG

As on March 31, 2022, the total Institutional Shareholding in the Company was 38.07% of the total paid-up equity share capital.

SUBSiDiARiES, ASSOCiATES AND JOINT VENTURE Companies

As on March 31, 2022, the Company has 14 subsidiaries, including step-down subsidiaries. The Company has two material subsidiaries, namely, Birlasoft Solutions Inc. & Birlasoft Inc. Further, during the year, Birlasoft GmbH, ceased to be a step-down subsidiary of the Company w.e.f. July 26, 2021 on account of its voluntary liquidation.

As per Section 129(3) of the Companies Act, 2013 (hereinafter referred to as "the Act"), the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form a part of this Annual Report. In terms of Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiaries in Form AOC-1, is annexed to this Report as âAnnexure 1".

In accordance with Section 136(1) of the Act, this Annual Report of the Company, containing the standalone and the consolidated financial statements and all other documents required to be attached thereto has been placed on the website of the Company, www.birlasoft.com. Further, highlights of performance of subsidiaries and their contribution to the overall performance of the Company has also been placed on the Company''s website.

During the financial year 2021-22, the Company had no Associate or Joint Venture company.

BOARD Of DIRECTORS, ITS COMMITTEES AND MEETINGS Thereof

The Board meets once every quarter. Additional meetings of the Board/Committees are convened as may be necessary for the proper management of the business operations of the Company. A separate meeting of Independent Directors is also held at least once in a year to review the performance of non-independent Directors, the Board as a whole and the Chairman.

During the year, five meetings of the Board of Directors were held on May 21, 2021, July 28, 2021, October 26, 2021, January 27, 2022, and March 30, 2022. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Act and SEBI (LODR) Regulations, 2015.

In accordance with Section 152 of the Act, Dharmander Kapoor (DK) (DIN: 08443715), Executive Director of the Company, is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. The Board recommends the resolution for re-appointment of DK for the approval of the members at the ensuing AGM.

Further, the members of the Company had at the AGM held on August 7, 2019, approved the appointment of DK as the Chief Executive Officer ("CEO") & Managing Director of the Company for a period of three years effective June 1, 2019 upto May 31, 2022, along with other terms & conditions of appointment, including payment of remuneration.

Based on the performance evaluation of DK as the CEO & Managing Director of the Company, considering his knowledge of various aspects relating the Company''s affairs, long business experience and his contribution as a leader in the growth of the Company, the management of the Company, considers that the continued association of DK would be in the best interest of the Company.

Accordingly, the Board has proposed the re-appointment of DK as CEO & Managing Director, liable to retire by rotation and to hold office for a further period of three years with effect from June 1, 2022. This re-appointment is subject to the approval of members at the ensuing AGM & is in accordance with the provisions of Sections 196, 197 and 203 and Schedule V of the Act. The remuneration and the brief terms & conditions of his reappointment are mentioned in the AGM notice.

A brief profile and other details relating to the Director seeking re-appointment is provided in this Annual Report.

A detailed update on the Board and its Committees'' composition, number of meetings held during the financial year 2021-22 and attendance of the Directors at these meetings is provided in the Corporate Governance Report, which forms a part of this Annual Report.

None of the Directors are disqualified under Section 164(2) of the Act.

independence OF THE BOARD

1. Ashok Kumar Barat (DIN: 00492930);

2. Anant Talaulicar (DIN: 00031051);

3. Alka Bharucha (DIN: 00114067); and

4. Nandita Gurjar (DIN: 01318683).

All the abovenamed Directors have registered themselves with the Independent Directors Databank. They are exempted from the requirements of online proficiency self-assessment test conducted by âIndian Institute of Corporate Affairs''.

The Board is of the opinion that the Independent Directors of the Company possess the requisite qualifications, experience and expertise and they hold the highest standards of integrity.

KEY MANAGERIAL PERSONNEL

The following persons have been designated as the Key Managerial Personnel (âKMP") of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed thereunder:

Sr. Name No.	DiN / Membership Number	Designation
1 Dharmander Kapoor	08443715	Chief Executive Officer & Managing Director
2 Chandrasekar Thyagarajan	200-29108	Chief Financial Officer
3 Sneha Padve	ACS 9678	Company Secretary
There has been no change in the KMP of the Company during the year.

AUDITORS

- Statutory Auditors

Pursuant to the provisions of Section 139(1) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No.: 101248W/W-100022), were re-appointed as the Statutory Auditors of the Company, in the AGM held on August 7, 2019, for a period of four years till the conclusion of the AGM to be held in the year 2023.

During the year under review, the Auditor has not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

- Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Dr. K. R. Chandratre, Practising Company Secretary (FCS No.: 1370 and CP No.: 5144), was appointed as the Secretarial Auditor to conduct audit for the year under review. The Report of the Secretarial Auditor is annexed as âAnnexure 2". It does not contain any qualification, reservation or adverse remark.

- internal Auditor

corporate governance

Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, Corporate Governance Report for the year ended March 31, 2022, with a detailed compliance report thereon forms an integral part

of this Annual Report and is set out as separate section herein. It also includes a certificate from the Statutory Auditors in respect of compliance with the provisions of the SEBI (LODR) Regulations, 2015 related to Corporate Governance.

management discussion and analysis

awards & recognition

In recognition of its constant quest for excellence, your Company has been honoured and recognised at various forums. The prominent ones are listed below:

(i) Birlasoft is now Great Place to WorkÂ® certified

(ii) Birlasoft named a finalist for the â2021 Microsoft Partner of the Year''

(iii) Birlasoft honoured at the Mint-TechCircle Business Transformation Symposium Awards 2021

(iv) Birlasoft''s marquee community development and crop residue management initiative, Project Shodhan acknowledged with the Special Jury Award at Edition #8 of the India CSR Summit

particulars of employees, directors and key managerial personnel

The ratio of remuneration of each Director to the median employee''s remuneration and other details prescribed in Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report as âAnnexure 3".

In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said Rules are set out in the Board''s Report as an addendum thereto. However, in terms of provisions of the first proviso to Section 136(1) of the Act, this Annual Report is being sent to the members of the Company excluding

the aforesaid information. The said information is available for inspection and any member interested in obtaining such information may write to the Company Secretary for the same.

employees stock option PLANS (ESoPs)

The information pursuant to the provisions of the Act and Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, relating to ESOPs of the Company, is annexed to this Report as âAnnexure 4" and has been uploaded on the website of the Company and can be accessed through web link https:// www.birlasoft.com/companv/investors/policies-reports-filings.

disclosure under the sexual harassment of women at workplace (prevention, prohibition and REDRESSAL) act, 2013

The Company has a zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention and prohibition of sexual harassment at workplace and has also put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. As part of the orientation programs for all new joinees, the Company mandates that they complete an e-learning module on the same as well.

During the year under review, one complaint of sexual harassment was received by the Company. Details as per the provisions of Sections 21 and 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, are as under:

Number of cases pending at the beginning of the financial year	Nil
Number of complaints filed during the financial year	1
Number of cases pending at the end of the financial year	Nil
Details of workshops or awareness programs against sexual harassment carried out	The Company regularly conducts necessary awareness programs for its employees and all employees are provided detailed education during the induction
Nature of action taken by the employer or district officer	A stern action was decided to be taken in this matter. However, before it could be implemented, the employee resigned.

DEposiTs

During the financial year under review, the Company did not accept deposits covered under Chapter V of the Act.

policy on directorsâ appointment and remuneration

Pursuant to the provisions of Section 134(3)(e) of the Act, the policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act is annexed to this Report as âAnnexure 5". This Nomination and Remuneration Policy as approved by the Board is available on the Company''s website and can be accessed through the web link https://www.birlasoft. com/company/investors/policies-reports-filings.

particulars of loans, guarantees or investments under section 186 of the act

The details of loans, guarantees and investments, if any, which are covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

RELATED PARTY TRANSAcTioNS

The Company has adequate procedures for identification and monitoring of related party transactions. All the transactions entered into with the related parties during the financial year were on arm''s length basis and were in the ordinary course of business. All related party transactions were placed before the Audit Committee and the Board for approval, wherever required. Prior omnibus approval of the Audit Committee is obtained for the transactions that are repetitive in nature. These transactions are reviewed by the Audit Committee on a quarterly basis.

For details on related party transactions, members may refer to the notes to the financial statements. The Policy on Related Party Transactions as approved by the Board is available on the Company''s website and can be accessed through the web link https://www.birlasoft.com/company/investors/policies-reports-filings.

material changes and commitments

significant and material orders

There are no significant and material orders passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company''s operations in future.

risk management policy

The Company has constituted a Risk Management Committee (âRMC") of the Board to review the risk management plan/ process of the Company. The RMC assists the Board in its oversight of the Company''s management of key risks, including

strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.

A write-up on Enterprise Risk Management forms part of this Annual Report.

There are no risks identified by the Board which may threaten the existence of the Company.

INTERNAL CONTROL SYSTEMS AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

AUDIT COMMITTEE

The Board has a duly constituted Audit Committee in line with the provisions of the Act and the SEBI (LODR) Regulations, 2015. The primary objective of the Committee is to monitor and provide effective supervision of the management''s financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting. The Committee met four times during the year. Detailed information pertaining to the Audit Committee has been provided in the Corporate Governance Report.

COMMITTEE RECOMMENDATIONS

CORPORATE SOCIAL RESPONSIBILITY (âCSRâ)

The details of the initiatives taken by the Company during the year on CSR in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 & the amendments thereto, along with information about CSR Committee of the Board, has been annexed to this Report as âAnnexure 7".

The CSR Policy of the Company is placed on the website of the Company and can be accessed through the web link https://www. birlasoft.com/companv/investors/policies-reports-filings.

annual evaluation of the board, ITS

COMMITTEES AND INDiviDuAL DIRECTORS

A formal evaluation of the performance of the Board, its Committees, the Chairman and the individual Directors was carried out for the financial year 2021-22. The performance evaluation was done using individual questionnaires, covering amongst others, composition of Board, receipt of regular inputs and information, functioning, performance and structure of Board Committees, skill set, knowledge and expertise of Directors, preparation and contribution at Board meetings, leadership, etc. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board, excluding the Director being evaluated.

The performance evaluation of Non-Independent Directors, the Chairman and the Board was done by the Independent Directors.

ESTABLISHMENT OF viGIL MECHANISM

The Company has laid down the Whistle Blower Policy covering vigil mechanism as per Regulation 22 of the SEBI (LODR) Regulations, 2015, for the Directors and employees to report their genuine concerns. The details of the same are explained in the Corporate Governance Report. The Whistle Blower Policy may be accessed on the Company''s website at the web link https:// www.birlasoft.com/company/investors/policies-reports-filinqs.

annual return

Pursuant to Sections 134(3)(a) and 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in e-form MGT-7 may be accessed on the Company''s website at the web link https://www.birlasoft. com/company/investors/policies-reports-filings.

conservation of energy, technology

absorption AND FOREIGN ExCHANGEEARNINGS AND OuTGO

responsibility STATEMENT OF THE BOARD OF DIRECTORS

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors, pursuant to Section 134(3)(c) and Section 134(5) of the Act, state that:

i) in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2022 and of the profit of the Company for the year ended March 31, 2022;

iv) they have prepared the annual financial statements on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO & CFO CERTIFICATION

As required by Regulation 17(8) of the SEBI (LODR) Regulations, 2015, the CEO and CFO certificate, for the year under review was placed before the Board of Directors of the Company at its meeting held on May 23, 2022.

A copy of such certificate forms a part of the Corporate Governance Report.

COST RECORDS

The Company is not required to maintain cost records under the provisions of Section 148(1) of the Act.

SECRETARIAL STANDARDS ISSuED BY THE INSTITuTE OF COMpANY SECRETARIES OF INDIA

The Company complies with all applicable mandatory Secretarial Standards as issued by the Institute of Company Secretaries of India.

LISTING wiTH STOCK ExCHANGES

The Equity Shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. The Annual Listing Fees for the financial year 2022-23 have been paid to these exchanges.

DIRECTORS & OFFICERS INSuRANCE pOLICY

OTHER STATuTORY DISCLOSuRES

Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issues of sweat equity shares.

3. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.

4. Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

5. Difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

6. Receipt of any remuneration or commission by the CEO & Managing Director of the Company from any of its subsidiary company.

ACKNOwLEDGMENTS

Your Directors take this opportunity to thank all the members of the Company for their continued support.

Your Directors thank all the customers, vendors, investors and bankers for their continued support during the year. Your Directors place on record their appreciation to the contribution made by the employees at all levels. The Company''s consistent growth was made possible by their hard work, solidarity, co-operation and support.

Your Directors further thank the governments of various countries where the Company has its operations. Your Directors also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Indirect Taxes Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Development Centres (SDCs)/ Special Economic Zones (SEZs) - Pune, Noida, Mumbai, Navi Mumbai, Chennai, Bengaluru, Hyderabad and all other government agencies for their support and look forward to their continued support in the future.

Mar 31, 2018

BOARD''S REPORT

Dear Members,

The Directors are pleased to present the Twenty Seventh Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2018.

Performance of the Company

(In million)

Particulars	Standalone 2017-18		Consolidated 2017-18
	USD		USD
Revenue from operations	223.36	14,423.53	567.64	36,655.82
Profit before Tax (PBT)	31.07	2,006.62	50.19	3,241.21
Profit after Tax (PAT)	27.49	1,775.50	39.39	2,543.67

Result of Operations

During the year under review, the total revenues from operations (consolidated) increased to Rs, 36,655.82 million, a growth of over 10.30% of the previous year. Earnings before interest, tax, depreciation and amortization was Rs, 3,738.11 million on consolidated basis. Net profit after tax (consolidated) increased by 6.63% to Rs, 2,543.67 million.

In US Dollar terms, revenues from operations for the year on consolidated basis was Rs, 567.64 million as against Rs, 494.39 million during the previous year, a growth of 14.82%. Average realization rate was Rs, 64.58 per US Dollar.

Standalone sales for the financial year 2017-18 grew by 9.08% to reach Rs, 14,423.53 million. Net profit after tax increased to 4.88% to Rs, 1,775.50 million.

Dividend

The Directors are pleased to recommend a final dividend of Rs, 2.40/-per equity share of face value of Rs, 2/- each (120%) on the paid-up equity share capital of the Company for the year under review. The total pay-out will amount to Rs, 571.43 million including dividend distribution tax.

Share Capital

The issued, subscribed and paid-up capital of the Company as on March 31, 2018 is Rs, 394.99 million, consisting of 197,498,742 equity shares of Rs, 2/- each.

CRISIL Ratings

For the bank loan limits of Rs, 4,445.5 million, CRISIL has assigned the long term credit rating of AA-.

Quality and Information Security

Quality, Productivity and Innovation have been the three pillars that have driven our passion for continuous improvement in the way we determine and improve our process framework. This commitment to quality is ratified by our consistent endeavor in certifying ourselves to the best standards in the industry. In the past year, KPIT has been successfully certified on the Quality Management System on ISO 9001:2015.

We continue to improve our Quality focus through internal initiatives and by certifying against international standards. In accordance with this, we underwent an extensive CMMI-DEVÂ® V1.3 (Development) appraisal which resulted in us being appraised at Maturity level 5 by the CMMI Institute. We also continue to maintain our certifications for Information Security Management (ISO 27001:2013) and for Business Continuity Management (ISO 22301:2012).

Productivity

Our productivity journey continues to be strengthened by the 600 assets created in reusable repository by our practice teams. To further strengthen our competitive advantage in the AMS space, we have developed the Robotic Process Automation (RPA) Center of Excellence. Our experts have enabled some of our major customers to reap the benefits of RPA.

The bandwidth created by our productivity improvement initiatives is re-invested in learning and innovation through our crowdsourcing platform - my Time. On this platform, the employees get to select their areas of learning and innovation and accordingly complete a proof of concept. The framework enables them to collaborate with technocrats from across the organization and encourages growth and active exchange of knowledge.

Active learning and collaboration are a crucial part of the culture at KPIT. The Productivity Forum is a bi-annual platform for our project teams to share their innovations, best practices and learnings. The practice teams also share the latest tools, automations and industry best practices.

Institutional Shareholding

As on March 31, 2018, the total Institutional shareholding in the Company was 54% of the total share capital.

Merger Update

During the year under review, the Board of Directors of the Company approved a draft composite scheme for a) amalgamation of Birlasoft (India) Limited with the Company &

b) Demerger of the engineering business into KPIT Engineering Limited, a wholly owned subsidiary of the Company. The Company has received approval for the proposed merger from Competition Commission of India (CCI) and has filed the scheme with the Stock Exchanges and Securities & Exchange Board of India (SEBI) for their approval. Consequent to approvals from SEBI, an application will be filed with the National Company Law Tribunal (NCLT) for seeking further directions.

Information about the Subsidiary Companies

As on March 31, 2018, the Company had 17 subsidiaries, including step-down subsidiaries.

In accordance with Section 129(3) of the Companies Act, 2013, (hereinafter referred to as "the Act") the Company has prepared consolidated financial statements of the Company and all its subsidiary companies, which forms a part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is annexed to this Report as "Annexure 1".

In accordance with Section 136(1) of the Act, the Annual Report of the Company, containing the standalone and the consolidated financial statements and all other documents required to be attached thereto have been placed on the website of the Company, www.kpit.com. Further, a report on the highlights of performance of subsidiaries and their contribution to the overall performance of the Company has also been placed on the website of the Company. Members interested in obtaining a printed copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company''s registered office.

Directors

During the year, Mr. Anant Talaulicar, Mr. Nickhil Jakatdar & Ms. Alka Bharucha, were appointed as Additional & Independent Directors of the Company for a period of 5 years w.e.f October 21, 2017, January 24, 2018 & May 23, 2018 respectively, subject to shareholders approval. Dr. Klaus Blickle & Mr. Anjan Lahiri were appointed as Additional Directors w.e.f January 24, 2018 & May 23, 2018 respectively.

Owing to his other business commitments and preoccupations, Mr. Sanjay Kukreja resigned from the directorship of the Company w.e.f. September 15, 2017. Dr. R.A. Mashelkar ceased to be a Director of the Company w.e.f. August 24, 2017. The Board places on record its appreciation and valuable services provided by them during their tenure.

In accordance with Section 152 of the Act, Mr. Kishor Patil retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed there under:

1. Mr. Kishor Patil - Chief Executive Officer (CEO) and Managing Director;

2. Mr. Anil Patwardhan - Chief Financial Officer (CFO) till May

23, 2018;

3. Ms. Sneha Padve - Company Secretary.

Mr. Vinit Teredesai has been appointed as the Chief Financial Officer of the Company w.e.f. May 24, 2018.

Auditors

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The report does not contain any qualification, reservation or adverse remark.

The Board of Directors of the Company appointed Dr. K. R. Chandratre, Practicing Company Secretary, as the Secretarial Auditor to conduct audit for the year under review. The Secretarial Auditor''s report for the year under review is annexed to this Report as "Annexure 2". The report does not contain any qualification, reservation or adverse remark.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon forms a part of this Report. The Auditors'' Certificate in respect of compliance with the provisions concerning Corporate Governance, forms a part of this Annual Report, as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015 (hereinafter referred to as "the SEBI (LODR) Regulations, 2015").

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Awards & Recognition

- KPIT wins multiple accolades at Dassault Systemes''Â® 2018 Value Solutions Sales Convention

- KPIT recognized with the Most Influential Marketing Leaders Award for the third consecutive year

- KPIT recognized at The CSR Journal Excellence Awards 2017

- KPIT wins Best Event-led Communication Campaign Award at the Indian Communications Summit 2017

- KPIT Woman Leader acknowledged as Science and Technology Leader of the Year 2017

- KPIT receives Special Recognition by UITP India

- KPIT wins Smart Cities India Award 2017

- KPIT wins ERP Cloud Partner of the Year Award for service excellence in India

- KPIT awarded ''Outstanding Green Vehicle Integrated Solution Provider of the Year'' at 8th Green Vehicle Convention event, Beijing, China

Particulars of Employees

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of Rs, 1 crore 2 lakhs or more, or employed for part of the year and in receipt of Rs, 8.5 lakh or more a month, and other employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as "Annexure 3(a)".

The ratio of the remuneration of each director to the median employee''s remuneration and other details prescribed in Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report as "Annexure 3(b)".

Employees Stock Option Plan (ESOPs)

Information relating to ESOPs of the Company is annexed to this Report as "Annexure 4". The information is being provided in compliance with Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has a policy on prevention of sexual harassment and has put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. There was no case on sexual harassment registered for the last year. As a part of our orientation programs for all new joinees, we mandate that they complete an e-learning module on the same as well.

Fixed Deposits

The Company has not accepted any deposits as on March 31, 2018.

Conservation of Energy

KPIT always undertakes various activities to reduce energy consumption and achieve conservation of resources. Many initiatives taken in this connection have been detailed in the previous Board''s Reports which the Company continues to implement. Apart from those initiatives, the following PAN India measures were undertaken to reduce energy consumption resulting in Pune (30%), Bangalore (15%) and Mumbai (19%) saving over the period of 6 years. Few initiatives undertaken in FY17-18 are:

- Replaced 1000 CFL (56/72W) with energy efficient LED lights (18/20W) (resulting into savings of 1.5 lakh units per year).

Features of energy efficient Phase-3 campus:

- Sun path analysis done to design building North cladded with Glass and South mix of wall and Glass and cladded with fins to avoid direct sun rays

- The glazing along the south and west is in a form of Double Glazing with reflective glasses and aluminum fins. This reduces the heat load on the building

- A VRF with latest digital scroll energy efficient HVAC system installed

- Use of natural light by designing optimum building width

- Lighting load reduced substantially by using task lighting and using energy efficient LED lights

- UPS installed with latest energy efficient Modular technology with 98% efficiency

- Energy efficient equipment installed e.g. MRL lifts, Hydro Pneumatic pumping etc.

- Terrace kept vacant to adopt Solar (150 KVA)

Green Initiatives

The following initiatives were undertaken at the Company level to create awareness about importance of environmental protection and reducing pollution:

- At Maan village, Hinjawadi, in association with Hinjawadi Companies Association, KPIT planted 160 saplings.

- Water Conservation through Mass Volunteering supported 8 villages this year, benefitting 1,895 people with 1.5 million litres of water

- Covered 1 village under Government of Maharashtra''s Jalyukta Shivar Abhiyan

- Through Zero Garbage Initiative 570 Chronic Black Spots have been eliminated

- Environment Week Celebration: The Environment Week on the "World Environment Day" is been celebrated for the past seven years since 2010

- Conservation of Private Forests in Koyna - Chandoli corridor by planting 5,000 saplings

- Aerial Reforestation in Bengaluru by 15,000 seed-ball bombings

Occupational Health and Safety Assessment Series (OHSAS)

The following activities were carried out by the Company under

OHSAS in 2017-18:

- Health Risk Assessment was mandated during the GMC enrollment drive

- Zumba and Yoga was continued as a practice looking at the popularity

- Health Carnival was introduced for the first time in KPIT across all locations.

- Subsidized health check-up packages offered for employees

- BMI, Eye, Skin, Hair & Scalp analysis, Pulmonary test, Dietician and Dental Checkup was done free of cost for all employees

- Health checkup tools provided at a discounted price

- New apps were introduced to employees for buying medicines and booking for health check-ups at discounted rates

- On Occasion of International Women''s Day "Anemia Free KPIT Campaign" was held

- Anemia awareness session was held

- Complete Haemogram test was held free of cost for women employees.

- Women found with deficiency was consulted by our in house doctor.

- Engagement through Wellness o Laughter Session

- Masala Bhangra Sessions o Tug of War

- Awareness session linked to the WHO days

- Newsletters are sent via Wellness ID on International days currently observed by the United Nations

- Skin and Scalp check-up camps on campus for employees

- "Health Warrior" - Various fitness challenges for employees

- " Health Tips for the week" mails shared with the employees

- Iyengar Yoga sessions from renowned Yoga instructor, Rajashree Tupe

- Executive Health Check-ups for Senior Grade employees

- Health Check-ups for employees (35 years and above)

- Health Check-ups were done from HOD.life at discounted rates-o Anemia Profile o Pancreas Profile o Diabetes o Lipid Profile

- Kidney Profile o Iron deficiency o Vitamin D deficiency Technology Absorption

Last year, we rolled out an initiative to implement integrated collaboration platform using Cisco''s Web Ex technology. This has led to substantial cost reductions vis-a-vis traditional audio conferencing services while providing a seamless meeting experience that is greatly enhanced by features like ''one touch audio/video calling'' from any device, application and presentation sharing, personalized meeting rooms for relevant users, meeting recording and sharing etc. As a logical next step, the same platform is getting upgraded to Cisco Spark - an app for continuous teamwork with video meetings, messaging, file sharing and white boarding.

Cyber security is becoming more and more important in the digital age. Advancement of digital technologies are enabling hackers to use smart algorithms to generate more sophisticated attacks. Traditional tools have too much dependency on people to continuously monitor and take preventive actions to protect organization from advance threats. However, it is difficult to protect customer and organizational assets from threats generated by Smart machines and cannot be defended just by Smart people. Hence, we relooked at our cyber security architecture and invested substantially in securing our infrastructure against advance threats in the digital age. In addition to Next Generation Firewall implementation to protect perimeter security, this year the implementation of the Next Generation firewall in datacenter (to monitor East to West traffic) was a major step forward. It is helping us in securing business applications and infrastructure from advanced threats even in the LAN and WAN network. We have increased the footprint and penetration of ''TRAPs'' from Palo Alto Networks for Advance Threat Protection solutions on end points. This solution protects end user devices against Advanced Malwares and Exploits. Recently we also invested in another tool from Palo Alto Networks - ''Magnifier behavioral analytics''. This tool identifies behavioral anomalies to expose hard-to-detect threats, such as targeted attacks, malicious insiders, risky behavior and compromised endpoints. When used along with Next Generation Firewall, the tool efficiently and automatically identifies abnormal activity in the network while providing us with the exact information to rapidly evaluate potential threats, then isolate and remove those threats from the network before they can perform real damage.

On the smart Campus front we have taken our story to the next level and created more improved user experience by using technologies such as Face recognition and Voice based assistant. Integrating these technologies in Kassist App now with ''one click'' reporting of incidents is done by scanning the QR codes applied in designated common areas. Voice based access to functionality has also been added.

A key focus area this year was on creating a ''Digital Lab'', wherein we have designed and developed various solutions based on digital technologies to change the user experience in the office, optimizing cost and increase the productivity. Few applications that were born out of the lab are:

Book your seat: Employee can book his/her seat for a day or a week using KIOSK or app. Once the seat is booked by the time, user gets the appropriate network and VOIP phone gets configured as per the user profile. We also build a capability on adjusting the height of the workplace table using the same App.

Smart Mirror a mirror that doubles up as a voice assistant for providing information such as time to reach a place, eating place around, nearest exit in case of evacuation, game scores etc.

Under the aegis of the Digital Lab, we have also created a Centre of Excellence (CoE) with an aim to showcase transformational use cases that are built using digital technologies. The lab will be available for use by customers to co-innovate with us the solutions as per their need.

Another very strategic initiative we rolled out this year was ''#Think Digital''. This initiative was to build digital culture across the organization ensuring all employees understand power of digital technologies to solve customer problems in innovative ways and also improve business productivity by task automation and process augmentation. We launched various e-learning modules to create digital mindset and we got excellent response by having 11,000 employees becoming Digi Champ Certified. We also launched various technical training to reskill employees on new age digital technologies and also conducted workshops for customer facing teams to educate them on digital trends and solving customer problems differently.

To improve the effectiveness of systems and creating differentiated experience for employees, this year we have developed intelligent ERP by upgrading our Systems of Record to SAP S/4 Hana and building Systems of Engagement using cloud native technologies like micro services and containers. Also to improve in the moment effectiveness of employees, we are developing Systems of Intelligence using advance analytics. Some of the dashboards giving real time insights were already rolled out last year. We are working on predictive analytics in various business areas and will be rolled out soon to business users.

Research and Development (R&D) Activity

1. '' KPIT''s Intelligent Transport System'' received an award under the category ''Smart Urban Mobility'' on 12th May 2017 at ''One Mega Event 2017''. The award was given by Shri D. N. Modi, IAS Commissioner - Gandhinagar Municipal Corporation.

2. KPIT received Special Recognition from UITP India for its entry ''Helping India double its public transport usage with smart and green technologies''. KPIT was selected by UITP India to acknowledge the bouquet of transportation solutions that it provides.

3. KPIT Technologies is a Frost & Sullivan 2018 Manufacturing Leadership Award winner. KPIT has been selected from a considerable pool of nominees to receive two prestigious awards for its Integrated Intelligent Transport System and its REVOLO projects.

The total amount spent on R & D activities is given below: R & D expenses for the year ended March 31, 2018

Particulars	Amount (? in million)	Key Project Details
Expensed in the statement of profit and loss (Refer Note 1)	199.11	Solar, Bus_Program (HEV), ITS Eng, Innovation
Capital work-in-progress	110.42	K-BIKE
Assets capitalized during the year	9.89
Total	319.43

Notes:

Out of total R & D expenditure of '' 199.11 million, eligible R & D revenue expenditure under Section 35(2AB) of the Income Tax Act, 1961, for the Company is '' 141.94 million.

A separate section on R&D activities forms a part of this Annual Report.

Foreign Exchange Earnings and Outgo

Given the global nature of the business of the Company, exports always form its thrust. Total foreign exchange earnings during the year have been Rs, 9,969.73 million (previous year Rs, 9,586.28 million) and foreign exchange outgo (including imports) has been Rs, 494.55 million (previous year Rs, 705.62 million).

Board Meetings

Six meetings of the Board of Directors were held during the year. More details about the meetings are available in the Report on Corporate Governance, which forms a part of this Annual Report.

Committees of Board

The details regarding Committees of the Board of Directors of the Company are given in the report on Corporate Governance, which forms a part of this Annual Report.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and Section 149(6) of the Act:

1. Ms. Lila Poonawalla

2. Mr. Adi Engineer

3. Prof. Alberto Sangiovanni Vincentelli

4. Mr. Anant Talaulicar

5. Mr. Nickhil Jakatdar

6. Ms. Alka Bharucha

Company''s Policy on Directors'' appointment and remuneration

Particulars of loans, guarantees or investments under Section 186 of the Act Particulars of loans, guarantees or investments made during the year under review, pursuant to the provisions of Section 186 of the Act are as below:

Sr. No.	Name of the subsidiary	Nature of transaction	Duration	Rate of Interest (%)	Amount (? in million)	Purpose
1	Impact Automotive Solutions Limited	Investment	NA	NA	367.50	Equity infusion
2	Impact Automotive Solutions Limited	Loan given	5 years	9.15% p.a.	100.00	Working capital loan
3	Yantra Digital Services Private Limited	Guarantee	3 years	NA	149.16	For setting up credit facilities
4	KPIT Engineering Limited	Investment	NA	NA	1.00	Equity infusion

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act

Material changes and commitments affecting the financial position of the Company

The Board of the Company approved, at its meeting held on January 29, 2018, a draft composite scheme for: (a) amalgamation of Birlasoft (India) Limited with the Company and (b) demerger of the engineering business of the Company into KPIT Engineering Limited, a wholly owned subsidiary of the Company, to be renamed as KPIT Technologies Limited, in terms of the Draft Scheme and other agreements that are to be executed between the Company, Birlasoft and other parties. The completion of the Proposed Merger and Proposed Demerger will be subject to terms of such agreements and receipt of necessary approvals, such as SEBI & NCLT.

Due to this the Business IT segment of the Company and the business run by Birlasoft (India) Limited will get merged into the Company whereas the engineering business of the Company will be demerged into new engineering Co and this is a material re-structuring activity undertaken by the Company. This is not likely to have any adverse impact on the Company, however, it will affect the financial position of the Company consequent to said merger & demerger.

Change in nature of business

KPIT is engaged in two business segments (i) the enterprise resource planning business of Oracle and SAP, digital business (as comprised under digital technology SBU) along with IMS and EPLM business; and (ii) engineering business which includes solutions of electronic or mechanical engineering and usage of this data for diagnostics, maintenance and tracking of assets and related connectivity solutions including data and analytics beyond embedded or mechanical engineering and their connectivity and integration with backend IT systems and platforms.

The Proposed Merger of Birlasoft into the Company and the subsequent Proposed Demerger will create two specialized companies focused on:

1. Business IT and consulting with strong expertise into enterprise resource planning, digital solutions and consulting with wider industry coverage

2. Deep domain expertise in auto engineering and mobility solutions

This will enable both companies to have sharp focus, retain and attract best talent, bring better value to customers and make necessary investments in building technologies and solutions. This will accelerate profitable growth and industry recognition in respective areas.

The engineering business of the Company includes solutions of electronic or mechanical engineering and usage of this data for diagnostics, maintenance and tracking of assets and related connectivity solutions including data and analytics beyond embedded or mechanical engineering and their connectivity and integration with backend IT systems and platforms and this will remain the core business of the new engineering Company, going forward.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Risk Management Policy

A mechanism to identify, assess, monitor and mitigate various risks to key business objectives of the Company is in place. A write-up on Enterprise Risk Management is included in this Annual Report.

Internal Control Systems and Adequacy of Internal Financial Controls

The internal control systems of the Company are adequate considering the nature of its business, size and complexity. The Statutory Auditors as well as the Internal Auditors of the Company review the same on periodical basis. Further, significant observations, if any, and action taken reports on the same are considered by Audit Committee at their meeting.

The Act has made it mandatory for the Directors in their Responsibility Statement in the Board''s Report to state that "the directors, in the case of a listed company, has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively". The above statement has to be affirmed to by the Statutory Auditors in their Audit Report.

As per explanation provided to Section 134(5)(e) of the Act, "internal financial controls" means "the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information".

Components of internal control define internal control over financial reporting as "a process designed by, or under the supervision of CEO and CFO" office and effected and approved by the Board of Directors and management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Indian Accounting Standard (IND-AS) and includes those policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets and liabilities of the Company;

- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IND-AS and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and

- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company''s assets that could have a material effect on the financial statements.

Audit Committee Recommendations

During the year, all the recommendations of the Audit Committee were accepted by the Board. The composition of the Audit Committee is as mentioned in the Report on Corporate Governance, which forms a part of this Annual Report.

Corporate Social Responsibility (CSR)

The Policy on Corporate Social Responsibility of the Company and the details about the development of CSR Policy and initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed to this Report as "Annexure 7".

Formal Annual Evaluation by the Board

A separate meeting of the Independent Directors of the Company was held on February 14, 2018, in which a formal evaluation of performance of the Board, Committees and the individual Directors was carried out. The performance evaluation was conducted based on the criteria specified in the Act, Regulation 17 of the SEBI (LODR) Regulations, 2015 and Guidance Note on Board Evaluation issued by SEBI.

The feedback based on evaluation was discussed with the Chairman of the Board and given to the Directors.

Vigil mechanism

The Company has established a vigil mechanism as per Regulation 22 of the SEBI (LODR) Regulations, 2015 for Directors and employees to report their genuine concerns. The details of the same are explained in the Report on Corporate Governance. The Policy on Vigil Mechanism may be accessed on the Company''s website at the link: (http://www.kpit.com/ company/investors/corporate-governance).

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed to this Report as "Annexure 8".

Responsibility Statement of the Board of Directors

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that:

i) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended March 31, 2018;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO & CFO Certification

Certificate by Mr. Kishor Patil, CEO & Managing Director and Mr. Anil Patwardhan, Chief Financial Officer, pursuant to the provisions of Regulation 17(8) of the SEBI (LODR) Regulations, 2015, for the year under review was placed before the Board of Directors of the Company at its meeting held on May 23, 2018.

A copy of such certificate forms a part of the Report on Corporate Governance.

Acknowledgments

We take this opportunity to thank all the shareholders of the Company for their continued support.

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

We further thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Development Centers (SDCs)/Special Economic Zones (SEZs)- Navi Mumbai, Chennai, Bengaluru, Hyderabad, Noida, Pune and all other government agencies for their support and look forward for their continued support in future.

For and on behalf of the Board of Directors

Pune S. B. (Ravi) Pandit

May 23, 2018 Chairman & Group CEO

Mar 31, 2017

Dear Members,

The Directors are pleased to present the Twenty Sixth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2017.

Performance of the Company

(In millions)

Particulars	Standalone 2016-17		Consolidated 2016-17
Particulars	USD		USD
Revenue from operations	196.72	13,223.23	494.40	33,233.61
Profit before Tax (PBT)	29.49	1,982.44	44.50	2,991.17
Profit after Tax (PAT)	25.19	1,692.94	35.49	2,385.44

Result of Operations

During the year under review, the total revenues from operations (consolidated) increased to Rs, 33,233.61 million, a growth of 3% over the previous year. Earnings before interest, tax, depreciation and amortization was Rs, 3,747.19 million on consolidated basis. Net profit after tax (consolidated) decreased by 15.08% to Rs, 2,385.44 million.

In US Dollar terms, revenues from operations for the year on consolidated basis was Rs, 494.40 million as against Rs, 490.31 million during the previous year, a growth of 0.83%. Average realization rate was Rs, 67.22 per US Dollar.

Standalone sales for the financial year 2016-17 grew by 4.61 % to reach Rs, 13,223.23 million. Net profit after tax decreased by 16.67% to Rs, 1,692.94 million.

Dividend

The Directors are pleased to recommend a final dividend of Rs, 2.20/- per equity share of face value of Rs, 2/- each (110%)on the paid-up equity share capital of the Company for the year under review. The total pay-out will amount to Rs, 522.95 million including dividend distribution tax.

Share Capital

The issued, subscribed and paid-up capital of the Company as on March 31, 2017 is Rs, 394.99 million, consisting of 197,498,742 equity shares of Rs, 2/- each.

CRISIL Ratings

For the bank loan limits of Rs, 4,445.50 million, CRISIL has assigned the long term credit rating of AA-/ Negative.

Quality and Information Security

Our focus on quality and innovation has helped us deliver increased value to our customers. We continue to focus on strengthening our commitment to quality by sustaining and increasing the scope of our existing certifications. During the year under review, the Company has successfully completed surveillance audit of ISO 9001:2008 (Quality Management Systems).

We also continue to maintain certifications for ISO 27001:2013 (Information Security Management Systems) and ISO 22301:2012 (Business Continuity Management). We have successfully completed our surveillance audits for the above two certifications in this year. The Company continues to maintain the highest level of process maturity at Level 5 for CMMI-DEVÂ® V1.3 (Development) and the Automotive SPICE Â® organization maturity Level 5.

Our customers and market place are changing at an unprecedented speed and it is imperative for the Company to align with the changes in the market by utilizing tools and governance mechanisms which can adapt and facilitate change with ease. Keeping this in mind, we have adopted industry leading project management tool which has enhanced features like mobile support, custom workflow definition and Agile support apart from being a platform for aggregating information and data to offer consolidated engineering analytics. We also continue to strengthen its Business IT delivery through focus on automation levers across SBUs and Practices.

Productivity

To enhance productivity, a key initiative has been taken to create a RAD (Rapid Application Development) Framework -named FoundationK, which has been developed to address the need of the market which is trending towards Agile, rapid go to market and achieve significant not just incremental productivity improvements. This is Transformational and Disruptive application development framework which has equipped our developers to build Scalable, Secure, High Performance, Reliable, Responsive UI and Multilingual application with a framework which has fundamental components available eliminating the effort to develop from scratch. This has provided significant improvement in productivity, greater reduction in time to market and significant code quality improvement leading to enhanced customer satisfaction.

Our process improvement drive continues to be strengthened by leveraging workflow optimization, six sigma and lean principles. We are committed to support the dynamic business needs of our customers through continuous focus on operational and quality excellence.

Institutional Shareholding

As on March 31, 2017, the total Institutional shareholding in the Company was 54.30% of the total share capital.

Information about the Subsidiary Companies

As on March 31, 2017, the Company had 15 subsidiaries, including step-down subsidiaries.

During the year under review, KPIT medini Technologies AG was sold to ANSYS Germany GmbH on November 2, 2016. Also MicroFuzzy Industrie - Elektronic GmbH, a German based company was acquired through KPIT Technologies GmbH, effective November 30, 2016.

1 is annexed to this Report as "Annexure 1".

Directors

During the year, Mr. Sachin Tikekar, Whole-time Director of the Company was re-appointed for a period of 5 years w.e.f October 20, 2016.

In accordance with Section 152 of the Act, Mr. S. B. (Ravi) Pandit retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Ms. Lila Poonawalla, Dr. R. A. Mashelkar, Mr. Adi Engineer, Prof Alberto Sangiovanni Vincentelli were appointed as Additional & Independent Directors for a period of 5 years w.e.f April 1, 2017, subject to approval of the shareholders. The proposal for the same is being made to the shareholders for their approval at the forthcoming Annual General Meeting.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed there under:

1. Mr. Kishor Patil - Chief Executive Officer (CEO) and Managing Director;

2. Mr. Anil Patwardhan - Chief Financial Officer (CFO);

3. Ms. Sneha Padve - Company Secretary.

Auditors

Pursuant to the provisions of Section 139(1) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company in the Annual General Meeting held on July 25, 2014 for a period of five years, subject to ratification by the members in every Annual General Meeting. Based on the recommendation of the Audit Committee, the Board recommends ratification of the appointment of B S R & Co. LLP, as the Statutory Auditors of the Company, at the ensuing Annual General Meeting.

Corporate Governance

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Awards & Recognition

- KPIT''s Electric Bus technology, Revolo, selected as a Finalist for United Nation''s Energy Grant for sustainable development;

- KPIT recognized as a "Challenger" in Gartner''s 2017 Magic Quadrant for SAP Application Services, North America;

- KPIT Won "Newcomer of the Year" Award at Annual SAP Hybris Summit;

- Ms. Vaishali Vaid, VP & Head - Global HR, was recognized as the ''Most influential HR leaders in India'' by the World HRD Congress and also recognized with the Women Leadership Achievement Awards at the 4^th World Women Leadership Congress & Awards (WWLCA);

- KPIT''s community driven water conservation project received jury award by FICCI;

- KPIT bags ''Order of Merit'' awards for its ITS at the Businessworld Smart Cities Conclave & Awards;

- KPIT wins Oracle Excellence Award for Specialized Partner of the Year - North America in Mobility Category;

- IDC names KPIT Worldwide leader in delivering SAP Business Suite Powered by SAP HANA.

Particulars of Employees

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of '' 1 crore 2 lakhs or more, or employed for part of the year and in receipt of '' 8.5 lakh or more a month, and other employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as "Annexure 3(a)".

Employees Stock Option Plan (ESOPs)

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,

2013

The Company has in place a policy on prevention of sexual harassment and has put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. One case of sexual harassment was reported and due diligence was followed as part of the process. The case was closed post investigation by the internal committee.

Fixed Deposits

The Company has not accepted any deposits as on March 31, 2017.

Conservation of Energy

The Company always endeavors to reduce energy consumption and achieve conservation of resources. Many initiatives taken in this connection have been detailed in the previous Board''s Reports which the Company continues to implement. Apart from those initiatives, the following PAN India measures were undertaken to reduce energy consumption resulting in Pune (30%), Bangalore (15%) and Mumbai (19%) saving over the period of 6 years. Few initiatives undertaken in FY16-17 are listed below:

- Replaced 500 CFLs (56W) with energy efficient LED lights (20W), resulting in energy saving of 45000 KWH units per annum.

- Roof top PV solar cell installed at Pune capacity of 125 KW in December 2016, which is generating average 500 - 600 KWH units per day. This is expected to generate 200,000 KWH units annually.

- Energy Efficient VRF HVAC system installed at new facility at Mahape which has resulted in 25% energy savings. The average savings expected is 700 units per day.

Green Initiatives

KPIT is committed towards giving our future generations a

sustainable world through efficiency in our business operations

and conservation of natural resources. Highlights from 201617 include:

- 3 rain water harvesting farm ponds created / desilted in Alladahalli (Nelmangala Taluka), Karnataka and Ranza (Shivapur) Village, Maharashtra.

- Well excavation & construction at Guhini & Metpilawar Village, District Pune resulting in a capacity to store 2.5 million litres of water.

- Widening and deepening of water canal at Wajeghar Village, District Pune, creating a water reservoir of 10 million litres of capacity.

- Soil Dam at Varoti & Pasali, District Pune, with a capacity to conserve 8 million litres ofwater.

- Cement Nala Bund (CNB) at Shelgaon Village, District Osmanabad, enabling a water corridor of 22m x 600m x 2m. This will result in a storage of 16 million litres of water.

- Afforestation efforts led to planting of saplings at Bengaluru and Pune locations, with an overall survival rate of 80 percent.

- As a part of Zero Garbage project, in association with Janwani, Pune - a total of 1,069 awareness programs have been conducted across Pune city.

- Since 2010, we have been celebrating the Environment Week on the occasion of "World Environment Day". In the year 2016-17, Environment Week was celebrated from June 1 to June 6, at all our locations in India.

- Mr. Ravi Pandit has been nominated as a National expert on ''Technology Evaluation Committee for Solid & Liquid Waste and Water Supply''.

Occupational Health and Safety Assessment Series (OHSAS)

The following activities were carried out by the Company under

OHSAS in 2016-17:

- Framework created to move away from a week of health and wellness to annual approach for "Health and Wellness";

- Choice of workout provided considering the popularity and trendy ways of exercise:

o IntroductionofZumba

o Introduction of Yoga

- Health check-ups & diagnostic support to employees and their families:

o Subsidized health check-up package offered for employee family

o Negotiated discounts on expensive tests for employee family

- Initiated hospital tie ups for discounted check-ups for OPD and other tests (addition to diagnostic centers);

- Awareness Communication on "World Health Organization (WHO) Days";

- Engagement Through Wellness: o Laughter sessions

- Special Pranayama sessions for International Yoga Day

- Tug of War

- Random blood sugar testing on World Diabetes Day o Dental check-up camps

- Eye check-up camps on campus for employees

- Meditation activity conducted as a mark of "Healthy Mind"

- Balloon blowing activity on the World Heart Day

- Awareness session linked to the WHO days

- Awareness sessions exclusively on alternate therapies Technology Absorption

This year, we took a goal of improving the organizational productivity and enhanced end user experience. In pursuit of this goal, we have undertaken a strategic initiative called ''Simplificar'' which aims for process standardization, simplification and actionable business insights spanning organization wide business processes. SAP S/4 Hana has been chosen as the ERP application and will be the mainstay of the "System of Records". We have also initiated the development of ''Next Generation Engagement Systems'' which will integrate with the System of Records. The constituents of the ''Engagement systems'' are being developed using the Agile application development methodology. The engagement systems that are being designed, leverage various cognitive technologies that will improve user experience on one hand and pursue process optimization on the other. Some key features of the ''Engagement System'' include responsive UX, Device Agnostic UI, highly personalized Context and Persona based content delivery that gives proactive insights which would improve ''In the moment effectiveness''. This will be a true blue "conversational system" with a focus on ''Experience first!''

Last year, we also rolled out an initiative to implement integrated collaboration platform using Cisco''s WebEx technology. This has led to substantial cost reductions vis a vis traditional audio conferencing services while providing a seamless meeting experience that is greatly enhanced by features like ''one touch audio / video calling'' from any device, application and presentation sharing, personalised meeting rooms for relevant users, meeting recording and sharing etc. We also invested substantially in securing our infrastructure against cyber security threats. The implementation of the Next Generation Firewall and Wildfire platforms from Palo Alto Networks are major steps taken in this direction and have helped in securing business applications and infrastructure from advance threats. In the same vein, we have also implemented ''TRAPs'' from Palo Alto networks for Advance Threat Protection solutions on end points. This solution protects end user devices against Advance Malwares and Exploits. All these preventive security technologies have led to us running a ''Zero Incident'' infrastructure in the last year.

We focused not only digitizing IT infrastructure but also invested in making the campus infrastructure ''Smart''. Using our Smart Campus platform, last year we rolled out many applications like Smart Parking that uses automatic number plate recognition technologies, Smart Cafeteria uses location aware solution, provides online ordering of food and uses e-payments. Our Smart Asset Management application provides real time inventory of all the assets while the Smart Incident Management application helps our employees initiate a ''one click'' reporting of incidents by scanning the QR codes designated to common areas. These apps have improved employee experience and productivity. We are also in process of digitizing all campus infrastructure like HVAC, CCTV, pumps, water level controllers, elevators, power meters, D.G sets, access control etc. and bringing real time insights on our campus platform.

Next year, we aim to focus on setting up Digital Labs and a Centre of Excellence (CoE) that will showcase transformational use cases using digital technologies. The CoE would enable our customers to co-innovate with us using the lab infrastructure. We have realized the important role of digital technology on every business unit / function and our customers. We are focusing on creating ''Think Digital'' culture and initiating steps towards propagation of digital skills across the organization.

Research and Development (R&D) Activity We have received an "Order of Merit" Award at the Business world Smart Cities Conclave & Awards for its Intelligent Transport System - A solution that enables higher ridership in buses by making it safer, smarter and more efficient. Business world Smart Cities Conclave & Awards is a platform that recognizes the solutions that address problems posed by rapid urbanization in the domain of transportation for the cities.

KPIT''s innovative and indigenous electric bus technology -Revolo was featured in the UN ''Energy Grant'' list.

KPIT was nominated among 8 finalists from 157 international applicants for the prestigious 2016 UN-DESA (United Nations Department of Economic and Social Affairs) Grant on Energy, themed around ''Energy for Sustainable Transport.'' KPIT was recognized with a ''Certificate of Appreciation'' for its indigenous electric bus technology â Revolo â that enables clean urban mobility.

KPIT was invited to the United Nations HQ in New York, on December 14, 2016, for a special event organized by the secretariat entity.

We bagged the ''Promising Transport Innovation Award'' at the International Transport Forum (ITF) 2016 Summit in Leipzig, Germany. KPIT won the award for its technology ''REVOLO'' that enables clean urban mobility.

The ITF Promising Transport Innovation Award recognizes innovations that have the potential to significantly improve the quality, performance, user experience, accessibility, sustainability or inter-modality of the transport. It is instituted by ITF, an inter-governmental organization which acts as a think tank for transport policy with 57 member nations.

REVOLO is a versatile system, designed to work across different bus formats. The key components of the system are lithium ion batteries, electric motors, a power transmission unit and smart electronic control units. The Smart Electric buses have multiple features like Intelligent Transport Systems, Mobile Phone App for journey planning and ticketing, Wi-Fi Infotainment etc. which provide a superior ride experience that can help encourage adoption of public transport.

A separate section on R & D activities forms a part of this Annual Report.

The total amount spent on R&D activities is given below: R&D expenses for the year ended March 31, 2017

Particulars	Amount (Rs, in millions)	Key Project Details
Expensed in the statement of Profit and Loss (Refer Note 1)	188.53	Solar,Bus_Program (HEV), ITS Eng, Innovation
Capital work-in-progress	230.22	ADAS, Autosar, K-SAR, BUS, CREST, Power train
Assets capitalized during the year	38.69
Total	457.44

Notes:

1. Out of total R & D expenditure of Rs, 188.53 million, eligible R&D revenue expenditure under Section 35(2AB) of the Income Tax Act, 1961, for the Company is Rs, 125.61 million.

Foreign Exchange Earnings and Outgo

Given the global nature of the business of the Company, exports always form its thrust. Total foreign exchange earnings during the year have been Rs, 9,586.28 million (previous year'' 9,900.37 million) and foreign exchange outgo (including imports) has been '' 324.53 million (previous year'' 688.24 million).

Board Meetings

Six meetings of the Board of Directors were held during the year. More details about the meetings are available in the Report on Corporate Governance, which forms a part of this Annual Report.

Committees of Board

The details regarding Committees of the Board of Directors of the Company are given in the report on Corporate Governance, which forms a part of this Annual Report.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and Section 149(6) of theAct:

Sr.

No.

Name of the subsidiary

Nature of transaction

Duration

Rate of Interest

(%)

Amount (Rs, in million)

Purpose

KPIT Technologies (UK) Limited

Guarantee

Till April 30, 2017

80.88

For setting up the credit facilities

Impact Automotive Solutions Limited

Acquisition

500.10

Equity infusion

1. Ms. Lila Poonawalla

2. Dr. R. A. Mashelkar

3. Mr. Adi Engineer

4. Prof. Alberto Sangiovanni Vincentelli

5. Mr. Anant Talaulicar

Company''s Policy on Directors'' appointment and remuneration

Particulars of loans, guarantees or investments under Section 186 of the Act

Particulars of loans, guarantees or investments made during the year under review, pursuant to the provisions of Section 186 of the Act are as below:

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act

Material changes and commitments affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Risk Management Policy

A mechanism to identify, assess, monitor and mitigate various risks to key business objectives of the Company is in place. A write-up on Enterprise Risk Management is included in this Annual Report.

Internal Control Systems and Adequacy of Internal Financial Controls

The Act has made it mandatory for the Directors in their Responsibility Statement in the Board''s Report to state that "the directors, in the case of a listed company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating "effectively". The above statement has to be affirmed to by the Statutory Auditors in their Audit Report.

Components of internal control define internal control over financial reporting as a process designed by, or under the supervision of CEO and CFO office and effected and approved by the Board of Directors and management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Indian Accounting Standard (IND-AS) and includes those policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets and liabilities of the Company;

Audit Committee Recommendations

Corporate Social Responsibility (CSR)

Formal Annual Evaluation by the Board

A separate meeting of the Independent Directors of the Company was held on February 17, 2017, in which a formal evaluation of performance of the Board, Committees and the individual Directors was carried out. The performance evaluation was conducted based on the criteria specified in the Act, Regulation 17 of the SEBI (LODR) Regulations, 2015 and Guidance Note on Board Evaluation issued by SEBI.

The feedback based on evaluation was discussed with the Chairman of the Board and given to the Directors.

Vigil mechanism

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed to this Report as "Annexure 8".

Responsibility Statement of the Board of Directors

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that:

i) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended March 31, 2017;

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

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO& CFO Certification

A copy of such certificate forms a part of the Report on Corporate Governance.

Acknowledgments

We take this opportunity to thank all the shareholders of the Company for their continued support.

We further thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Development Centers (SDCs) / Special Economic Zones (SEZs) - Navi Mumbai, Chennai, Bengaluru, Hyderabad, Noida, Pune and all other government agencies for their support and look forward for their continued support in future.

For and on behalf of the Board of Directors

Pune S. B. (Ravi) Pandit

April 26, 2017 Chairman & Group CEO

Mar 31, 2016

Dear Members,

The Directors are pleased to present the Twenty Fifth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2016.

Performance of the Company

(In million)

Particulars Standalone 2015-16 Consolidated 2015-16

USD Rs. USD Rs.

Revenue from operations 191.89 12,618.56 490.31 32,242.91

Profit before Tax (PBT) 37.45 2,462.76 55.42 3,64467

Profit after Tax (PAT) 30.70 2,019.14 42.81 2,815.00

Result of Operations

During the year under review, the total revenues from operations (consolidated) increased to Rs. 32,242.91 million, a growth of 7.84% over the previous year. Earnings before interest, tax, depreciation and amortization was Rs. 4,240.15 million on consolidated basis. Net profit after tax (consolidated) increased by 18.78% to Rs. 2,815 million.

In US Dollar terms, revenues from operations for the year on consolidated basis was Rs. 490.31 million as against Rs. 489.03 million during the previous year, a growth of 0.26%. Average realization rate was Rs. 65.76 per US Dollar.

Standalone sales for the financial year 2015-16 grew by 1.29% to reach Rs. 12,618.56 million. Net profit after tax increased by 32.80 % to Rs. 2,019.14 million.

Dividend

The Directors are pleased to inform that in FY2015-16 an interim dividend of Rs. 1.10/- per equity share of face value of Rs. 2/- each (55%) was decleared and paid by passing a circular Board resolution dated March 31, 2016.

Futher, the Board recommends a final dividend of Rs. 1.10/- per equity share of face value of Rs. 2/- each (55%) on the paid-up equity share capital of the Company for the year under review. The total pay-out will amount to Rs. 262.66 million including dividend distribution tax.

Transfer to Reserves

Your Directors propose to transfer Rs. 202.00 million to the General Reserve. An amount of Rs. 7,050.81 million is proposed to be retained in the Profit & Loss Account.

Share Capital

The Company issued and allotted 732,629 equity shares of Rs. 2/- each, to the eligible employees on exercise of options under the Employee Stock Option Schemes of the Company and 104,000 shares have been allotted to KPIT Technologies Employees Welfare Trust during the financial year 2015-16.

Consequently, the outstanding issued, subscribed and paid- up capital of the Company as on March 31, 2016, is Rs. 394.99 million, consisting of 197,498,742 equity shares of Rs. 2/- each.

CRISIL Ratings

For the bank loan limits of Rs. 4,445.50 million, CRISIL has assigned the long term credit rating of AA-/ Negative.

Quality, Information Security and Productivity

We continue to strengthen our commitment to quality by sustaining and increasing the scope of the existing certifications. During the year under review, the Company achieved recertification for ISO 9001:2008 (Quality Management Systems), ISO 20000-1:2011 (Information Technology Service Management) by TUV Nord Cert GmbH for providing software development, product engineering, product support and enabling services. We also continue to maintain certifications for ISO 27001:2013 (Information Security Management Systems) and IS022301:2012 (Business Continuity Management). The Company continues to maintain the highest maturity level 5 for CMMI-DEVÂ® v1.3 (Development) and the Automotive SPICEÂ® organization maturity level 5 upgraded from v2.5 to v3.0 during the year under review.

Our Customers and the market place are changing at an unprecedented speed and it is imperative to have robust tools and governance mechanisms which can adapt and facilitate change with ease. Keeping this in mind, we have developed Klarity, a platform for aggregating information and data from various tools within the organization to offer consolidated engineering analytics. The Company also continues to strengthen its Business IT delivery through focus on automation levers across SBUs and Practices. The ERP practice harnesses the power of the tools and accelerators developed in-house via a cloud based solution to utilize these individual tools in the form of an end-to- end tool chain.

Our process improvement drive continues to be strengthened by leveraging on workflow optimization, six sigma and lean principles. The Products and Platforms SBU now leverages on Agile methodology for faster time to market as well as cohesive communication amongst the product development stakeholders. We are committed to support the dynamic business needs of our customers through continuous focus on operational and quality excellence.

Institutional Shareholding

As on March 31, 2016, the total Institutional shareholding in the Company was 51.61% of the total share capital.

Information about the Subsidiary Companies

As on March 31, 2016, the Company had 15 subsidiaries, including step-down subsidiaries.

During the year under review, Integrated Industrial Information, Inc. and CPG Solutions, LLC were merged with KPIT Infosystems Incorporated, USA, with effect from January 01, 2016.

In accordance with Section 129(3) of the Companies Act, 2013, (hereinafter referred to as "the Act") the Company has prepared consolidated financial statements of the Company and all its subsidiary companies, which is forming part of this Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is annexed to this Report as "Annexure 1".

In accordance with Section 136(1) of the Act, the Annual Report of the Company, containing the standalone and the consolidated financial statements and all other documents required to be attached thereto have been placed on the website of the Company, www.kpit.com. Further, a report on the performance and financial position of each of the subsidiaries has also been placed on the website of the Company. Members interested in obtaining a printed copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company''s Registered Office.

Directors

Pursuant to Section 152 of the Act, Mr. B V R Subbu retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

During the year, Mr. Dwayne Allen, Alternate Director to Mr. Anant Talaulicar, Independent Director, resigned from the directorship effective March 12, 2016, owing to his other business commitments and pre-occupations.

The Board places on record its appreciation of the valuable services provided by Mr. Dwayne Allen during his tenure as a Director.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed thereunder:

1. Mr. Kishor Patil- Chief Executive Officer (CEO) and Managing Director;

2. Mr. Anil Patwardhan- Chief Financial Officer (CFO);

3. Ms. Sneha Padve- Company Secretary.

Ms. Sneha Padve has been appointed as the Company Secretary and Compliance Officer of the Company, effective July 22, 2015, consequent upon Mr. R. Swaminathan moving into a new business role within the Company and getting relieved from the role of the Company Secretary and Compliance Officer.

Auditors

Pursuant to the provisions of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company in the Annual General Meeting held on July 25, 2014 for a period of five years, subject to ratification by the members in every Annual General Meeting. Based on the recommendation of the Audit Committee, the Board recommends ratification of the appointment of B S R & Co. LLP, as the Statutory Auditors of the Company, at the ensuing Annual General Meeting.

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

The Board of Directors of the Company appointed Dr. K. R. Chandratre, Practicing Company Secretary, as the Secretarial Auditor to conduct audit for the year under review. The Secretarial Auditor''s report for the year under review is annexed to this Report as "Annexure 2". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon forms a part of this Report. The Auditors'' Certificate in respect of compliance with the provisions concerning Corporate Governance, forms a part of this Annual Report, as required under the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "the SEBI (LODR) Regulations, 2015").

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Awards & Recognition

- KPIT''s Smart Electric Bus technology wins the "One Globe Award for Excellence in Research & Development";

- KPIT Featured as a "Niche Player" in Gartner''s 2015 "Magic Quadrant for Oracle Application Management Services, Worldwide";

- KPIT Won "Newcomer of the Year" Award at Annual SAP Hybris Summit;

- KPIT''s solution for Consul Neowatt Power Solutions wins SAP ACE Award for Customer Excellence in Service;

KPIT was honored for Successful Digital Transformation with ''Jewels of Digital Maestro Award'';

- KPIT was conferred with the Most Influential Marketing Leaders Awards;

- Ms. Vaishali Vaid, VP & Head - Global HR, was honored with the ''100 Most Talented Global HR Leaders Award'' by CHRO Asia for the second time in a row;

- KPIT was honored with the ''Best CSR Practice Award'' by the World CSR Congress.

Particulars of Employees

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as "Annexure 3(a)".

The ratio of the remuneration of each Director to the median employee''s remuneration and other details prescribed in Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report as "Annexure 3(b)".

Employees Stock Option Plans (ESOPs)

Information relating to ESOPs of the Company is annexed to this Report as "Annexure 4". The information is being provided in compliance with Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a policy on prevention of sexual harassment and has put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices. No case of sexual harassment and discriminatory employment was reported during the financial year under review.

Fixed Deposits

The Company has not accepted any deposits and as such, no amount of principal or interest was outstanding as on March 31, 2016.

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014

Conservation of Energy

The Company always endeavors to reduce energy consumption and achieve conservation of resources. Some of the initiatives taken by the Company in this connection have been detailed in the previous years'' Board''s Reports which the Company continues to implement. Apart from those initiatives, the following PAN India measures were undertaken to reduce energy consumption resulting in Pune (30%), Bangalore (15%) and Mumbai (19%) saving over the period of 6 years.

Replaced 300 CFLs (72W) with energy efficient LED lights (36W), resulting in energy saving of 2,750kwh units per month amounting to Rs. 2.00 lacs;

- Replaced UPS with higher energy efficiency thereby reduction in energy consumption by 10%, for which capital invested was Rs. 34 lacs;

- Mild-concentrated Solar Photovoltaic Technology: We have developed a low-cost and light weight concentrator, which can concentrate up to 3-5 times the light that is incident on it.

Green Initiatives

The following initiatives were undertaken at the Company level to create awareness about importance of environmental protection and reducing pollution:

- 50 trees saplings have been planted within the Company premises in the month of June 2015;

247 Computer Assets and 300 CFL lights sent for recycling in the month of October 2015;

- 1,200 acres of agricultural land under irrigation, benefiting 21,000 people from 7 villages;

Covered 2 villages under Government of Maharashtra''s Jalyukta Shivar Abhiyan;

- KPITes spread awareness about the Zero Garbage initiative;

Environment Week Celebration: We have been celebrating the Environment Week on the occasion of the "World Environment Day" for the past six years since 2010;

Conservation of Private Forests in Koyna - Chandoli Corridor in Maharashtra;

Tree Plantation Programs: 1,050 trees planted in Pune & Bangalore.

Occupational Health and Safety Assessment Series (OHSAS)

The following activities were carried out by the Company under OHSAS in 2015-16:

Framework created to move away from a week of health and wellness to annual approach for "Health and Wellness";

Following choice of work out provided considering the popularity and trendy ways of exercise:

- Introduction of Zumba

- Introduction of Yoga

Following health check-ups & diagnostic support to employees and their families:

- Subsidized health check-up package offered for employee family

- Negotiated discounts on expensive tests for employee family

Health awareness vaccination drives to address health hazards such as:

- H1N1 Vaccination drive done for employee family

Initiated hospital tie ups for discounted check-ups for OPD and other tests (addition to diagnostic centers);

- Awareness Communication on "WHO Days";

- Engagement Through Wellness:

- Laughter sessions

- Special Pranayama sessions for International Yoga Day

- Tug of War

- Random blood sugar testing on World Diabetes Day

- Dental check-up camps

- Eye check-up camps on campus for employees

- Meditation activity conducted as a mark of "Healthy Mind"

- Balloon blowing activity on the World Heart Day

Technology Absorption

During the year under review, we have taken Smart Enterprise initiative to digitally transform key business processes creating differentiated experiences for everyone interacting with us and also improve people productivity. We have successfully deployed Pivotal Cloud Foundry a KPIT digital platform hosted on Smart Infrastructure. Various productivity mobile apps are made available to employees using the Company''s store hosted on Microsoft Intune platform.

Smart Infrastructure consists of software defined Data Centre technologies comprising of integrated self-service software defined compute, network and storage improving agility and governance for IT asset provisioning. This year, we also rolled out KPITube.com, a video gallery for our employees to collaborate and share videos and access live sessions using any smart devices. To take the collaboration experience to next level and allowing employees to participate in audio/video conference from any place, any device, we are rolling out ''WebEx'' to global users.

In addition to the above, following are the key initiatives planned in the coming year:

Transforming IT with ''IT as a Service'' focusing on business value than technology;

- Implementing context aware smart business applications with mobile first, cloud first, platform enabled architecture;

Digital Engagement Hub: Global integrated Omni- channel Service Desk for all enabling functions.

Research and Development (R&D) Activity

EV bus project

Hon''ble Prime Minister of India Shri Narendra Modi flagged off the Smart Electric Bus, an indigenous technology developed by our Company, at the Indian Parliament on the December 21, 2015. This project was initiated by Shri Nitin Gadkari, Hon''ble Minister of Road Transport and Highways (MoRTH), Government of India.

The Central Institute of Road Transport (CIRT) supported this project to validate and ensure that the electric bus technology is safe, reliable and well suited for Indian road conditions. This initiative is inspired by Shri Nitin Gadkari''s call to the industry and research organizations to develop indigenous, innovative and pollution free public transport for India. Our Smart Electric Bus enables clean mobility and is aligned with the Indian government''s initiatives of Make in India, Smart Cities and Swachh Bharat.

The indigenously developed electric system, with the intellectual property rights being owned by us, consists of components like motors, lithium ion batteries and a power transmission unit. It is a versatile system and features like range (100 to 200 km), top speed (up to 100 kmph), air conditioning, etc. can be configured as required. This system is being designed to work in all bus formats, i.e. front engine and rear engine, high floor and low floor etc.

Major benefits from this technology would be:

1. Zero emissions

2. Increased passenger comfort

3. Low maintenance

4. Versatile design to meet customer requirement

Replacing one diesel bus with an electric bus can save carbon dioxide emissions up to 48,000 kg a year which is equal to planting 2,400 trees annually. It will also save diesel worth Rs. 10 lacs a year.

Hybrid bus

We received an award from the Indian Automotive Technology and Innovation Awards (IATIA) titled "Technology innovation of the year 2015" for hybrid conversion technology.

Currently, we are running hybrid pilot buses along with some of the transportation undertakings to collect data and results about the performance.

The total amount spent on R&D activities is given below:

R&D expenses for the year ended March 31, 2016

Particulars Amount Key Project Details (Rs. in million)

Expensed in the - CREST Projects

Statement of - its engineering

Profit and Loss

- Revolo Bus

(Refer Note 2) 92.34

- Solar

- Smart traffic monitoring

- Data science and analytics

Capital work-in- 204.76 Autosar, BUS hybrid, progress K-SAR

Assets capitalized 31.53 Linux during the year

Total 328.63

Notes:

1. During the previous year, the Company had set up a state-of-the-art facility for its R & D activities, construction of which is completed as of March 31, 2015. The Company has been granted recognition of this of facility with the Department of Science & Industrial Research which is valid up to March 31, 2018.

2. Out of total R & D expenditure of Rs. 92.34 million, eligible R & D revenue expenditure under Section 35(2AB) of the Income Tax Act, 1961, for the Company is Rs. 78.00 million.

A separate section on R&D activities undertaken by the Company has also been included in this Annual Report.

Foreign Exchange Earnings and Outgo

Given the global nature of the business of the Company, exports always form its thrust total foreign exchange earnings during the year have been Rs. 9,900.37 million (previous year Rs. 8,783.50 million) and foreign exchange outgo (including imports) has been Rs. 688.24 million (previous year Rs. 589.13 million).

Board Meetings

Six meetings of the Board of Directors were held during the year. More details about the meetings are available in the Report on Corporate Governance, which forms a part of this Annual Report.

Committees of Board

The details regarding Committees of the Board of Directors of the Company are given in the report on Corporate Governance, which forms a part of this Annual Report.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and Section 149(6) of the Act:

1. Ms. Lila Poonawalla

2. Dr. R. A. Mashelkar

3. Mr. Adi Engineer

4. Prof. Alberto Sangiovanni Vincentelli

5. Mr. Anant Talaulicar

Company''s Policy on Directors'' appointment and remuneration

Pursuant to the provisions of Section 134(3)(e) of the Act, the policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3), of the Act is annexed to this Report as "Annexure 5".

Particulars of loans, guarantees or investments under Section 186 of the Act

Particulars of loans, guarantees or investments made during the year under review, pursuant to the provisions of Section 186 of the Act are as below:

Sr. Name of the subsidiary Nature of Duration Rate of No. Transaction Interest (%)

1. KPIT Technologies (UK) Guarantee Till April 30, 2016 NA Limited

2. Impact Automotive Acquisition NA NA SolutionsLimited

3. KPIT (Shanghai) Acquisition NA NA Software Technology Co.,Limited

4. KPIT Technologies Loan NA 7.55% Employees Welfare Trust

5. KPIT Infosystems Guarantee Till July 31, 2020 NA Incorporated

6. KPIT Infosystems ME FZE Guarantee Till December NA 31,2016

7. Mr. Kishor Patil Loan Till December 7.60% 31,2020

Sr. No. Name of the subsidiary Amount Purpose (Rs. in million)

1. KPIT Technologies (UK) Limited 95.09 For setting up the credit facilities

2. Impact Automotive Solutions Limited 181.80 Equity infusion

3. KIPT (Shanghai Software Technology Co., Limited 32.01 Equity infusion

4. KIPT Technologies Employees Welfare Trust 150.00 For operation of Employee Stock Option Plans

5. KPIT Infosystems Incorporated 663.33 For setting up the credit facilities

6. KPIT Infosystems ME FZE 66.33 For setting up the credit facilities

7. Mr.Kishor Patil 30.00 Housing loan under loan policy of the Company

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act

Pursuant to the provisions of Section 134(3)(h) of the Act, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act and prescribed in Form AOC-2 of Companies (Accounts) Rules, 2014, is annexed to this Report as "Annexure 6".

Material changes and commitments affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Risk Management Policy

A mechanism to identify, assess, monitor and mitigate various risks to key business objectives of the Company is in place. A write-up on enterprise risk management is included elsewhere in this Annual Report.

Internal Control Systems and Adequacy of Internal Financial Controls

The internal control systems of the Company are adequate considering the nature of its business, size and complexity. The Statutory Auditors as well as the Internal Auditors of the Company review the same on periodical basis. Further, significant observations, if any, and action taken reports on the same are considered by Audit Committee at their meeting.

The Act has made it mandatory for the Directors in their Responsibility Statement in the Board''s Report to state that "the directors, in the case of a listed company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively." The above statement has to be affirmed to by the Statutory Auditors in their Audit Report.

As per explanation provided to Section 134(5)(e) of the Act, "internal financial controls" means "the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information".

Components of internal control define internal control over financial reporting as "a process designed by, or under the supervision of the CEO and CFO" office and effected and approved by the Board of Directors and management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Indian GAAP (IGAAP) and includes those policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets and liabilities of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IGAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company''s assets that could have a material effect on the financial statements.

Audit Committee Recommendations

During the year, all the recommendations of the Audit Committee were accepted by the Board. The composition of the Audit Committee is as mentioned in the Report on Corporate Governance, which forms a part of this Annual Report.

Corporate Social Responsibility (CSR)

The Policy on Corporate Social Responsibility of the Company and the details about the development of CSR Policy and initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed to this Report as "Annexure 7".

Formal Annual Evaluation by the Board

A separate meeting of the Independent Directors of the Company was held on March 16, 2016, in which a formal evaluation of performance of the Board, Committees and the individual Directors was carried out. The performance evaluation was conducted based on the criteria specified in the Act and Regulation 17 of the SEBI (LODR) Regulations, 2015.

The feedback based on evaluation was discussed with the Chairman of the Board and given to the Directors.

Vigil mechanism

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. The details of the same are explained in the Report on Corporate Governance. The Policy on Vigil Mechanism may be accessed on the Company''s website at the link: http:// www.kpit.com/company/investors/corporate-governance.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed to this Report as "Annexure 8".

Responsibility Statement of the Board of Directors

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that:

i) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO & CFO Certification

Certificate by Mr. Kishor Patil, CEO & Managing Director and Mr. Anil Patwardhan, Chief Financial Officer, pursuant to the provisions of Regulation 17(8) of the SEBI (LODR) Regulations, 2015, for the year under review was placed before the Board of Directors of the Company at its meeting held on April 27, 2016.

A copy of such certificate forms a part of the Report on Corporate Governance.

Acknowledgments

We take this opportunity to thank all the shareholders of the Company for their continued support.

We thank customers, vendors, investors and bankers of the Company for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

We further thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Development Centers (SDCs)/Special Economic Zones (SEZs) - Navi Mumbai, Chennai, Bengaluru, Hyderabad, Noida, Pune and all other government agencies for their support and look forward for their continued support in future.

For and on behalf of the Board of Directors

Pune S. B. (Ravi) Pandit

April 27, 2016 Chairman & Group CEO

Mar 31, 2015

Dear Shareholders,

The Directors are pleased to present the Twenty Fourth Annual Report together with the Audited Accounts of the Company for the Financial Year that ended on March 31, 2015.

Performance of the Company (In Million) Particulars Standalone 2014-15 USD Rs

Revenue from operations 203.75 12,457.47

Profit before Tax (PBT) 28.03 1,714.02

Profit after Tax (PAT) 24.87 1,520.44

Consolidated 2014-15 USD Rs. Rs

Revenue from operations 489.03 29,899.17

Profit before Tax (PBT) 40.64 2,484.67

Profit after Tax (PAT) 38.76 2,369.87

Result of Operations

During the year under review, the total revenues from operations (consolidated) increased to Rs. 29,899.17 Million, a growth of 10.98% over the previous year. Earnings before interest, tax, depreciation and amortization was Rs. 3,244.07 Million on consolidated basis. Net profit aftertax (consolidated) decreased by 4.81% to Rs. 2,369.87 Million.

In US Dollar terms, revenues from operations for the year on consolidated basis was 489.03 Million as against 444.32 Million during the previous year, a growth of 10.03%. Average realization rate was Rs. 61.14 per US Dollar.

Standalone sales for the fiscal year 2014-15 grew by 33.92% to reach Rs. 12,457.47 Million. Net profit after tax increased by 1.94 % to Rs. 1,520.44 Million.

Dividend

The Directors are pleased to recommend a dividend of Rs. 1.10/- per equity share of face value of Rs. 2/- each (55%) for the year under review. The total pay-out will amount to Rs. 259.58 Million including dividend distribution tax.

Transfer to Reserves

Your Directors propose to transfer Rs. 152.00 Million to the General Reserve. An amount of Rs. 5,873.56 Million is

proposed to be retained in the Profit & Loss Account.

Share Capital

The Company issued and allotted 2,589,906 equity shares of Rs. 2/- each, to the eligible employees on exercise of options under the employee stock option schemes during the financial year 2014-15.

Consequently, the outstanding issued, subscribed and paid-up capital of the Company as on March 31, 2015 is Rs.393.32 Million, consisting of 196,662,113 equity shares of Rs. 2/- each.

CRISIL Ratings

For the bank loan limits of Rs. 3,350 Million, CRISIL has assigned the long term credit rating of AA-/Stable and short term rating of A1 .

Quality, Information Security and Productivity

Our focus on quality, productivity and innovations has helped us deliver increased value to our customers. During the year, the Company achieved recertification for ISO 9001:2008 (Quality Management System). Further, our Systems Integration Facility was recommended for certification to ISO/TS-16949:2009 and ISO 20000-1:2011 (Information Technology Service Management System) by TUV Nord Cert GmbH for providing software development, product engineering, product support and enabling services. The Company continues to maintain the highest maturity level 5 for CMMI-DEVÂ® V1.3 (Development) as well as Automotive SPICEÂ®. The Company is also certified for ISO 27001:2005 (Information Security Management Systems) and ISO 22301:2012 (Business Continuity Management System).

A number of initiatives were introduced during the year in line with the focus on quality and productivity improvement. In an effort to ensure that our delivery teams are well informed of the automation trends and are ahead of the technology curve, the Company launched the

Tools Symposium event. As part of this event, our vendor partners and internal practice teams showcased the latest technology trends, tools and accelerators through an exhibition as well as through detailed technical tutorials for the delivery teams.

We continue to strengthen our software delivery through Strategic Business Unit (SBU) specific quality and productivity improvement strategies defined in line with the technology advancements, customer expectations and business direction. As part of its ERP strategy, the Company further reduced the ERP implementation time by creating industry vertical specific accelerators which come fully equipped with industry best practices. The Product Engineering Services (PES) SBU continues to leverage the Continuous Build Automation platform to further strengthen the quality of software delivery. The Products and Platforms SBU further strengthened its production processes during the year under review.

Our process improvement drive continues to be strengthened by Six Sigma and lean process improvement projects being completed successfully, benefiting both KPIT and its customers. During the year, the Company has also helped its customers in implementing data analytics and Six Sigma based process improvements with more opportunities in the pipeline. As a result, 92% of our strategic customers have endorsed their satisfaction with our services and products.

Institutional Shareholding

As on March 31, 2015, the total Institutional shareholding in the Company was 59.17% of the total share capital.

Information about the Subsidiary Companies

As on March 31, 2015, the Company had 17 subsidiaries, including step-down subsidiaries.

During the year, under review, KPIT Global Solutions Limited was merged with the Company with effect from September 26, 2014.

Impact Automotive Solutions Limited, previously an associate company, became a 100% subsidiary of the Company with effect from July 01, 2014, consequent to the acquisition of its entire share capital by the Company.

Integrated Industrial Information, Inc., a US based company specializing in Product Lifecycle Management (PLM) software business, was acquired through KPIT Infosystems Inc., USA, effective from May 09, 2014. HD Solutions GmbH, a German Company specializing in PLM space, was acquired through KPIT Technologies GmbH with effect November 01, 2014 and was subsequently rechristened as KPIT Solutions GmbH.

During the year under review, the names of various overseas subsidiaries were changed as a part of the branding strategy of KPIT Technologies Limited.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements along with its subsidiary companies, which is forming a part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is also included in the Annual Report as "Annexure 1".

In accordance with Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing the standalone and the consolidated financial statements and all other documents required to be attached thereto has been placed on the website of the Company, www.kpit.com. Further, a report on the performance and financial position of each of the subsidiaries has also been placed on the website of the Company. Shareholders interested in obtaining a printed copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company's registered office.

Directors

Pursuant to Section 152 of the Companies Act, 2013, Mr. Sachin Tikekar retires by rotation at the forthcoming annual general meeting and being eligible, offers himself for reappointment. The Board recommends his reappointment.

During the year, Mr. Anant Talaulicar and Ms. Elizabeth Carey resigned as Cummins nominee directors consequent upon Cummins Inc. divesting its investment in the Company. Further, upon their resignations, their alternate directors, Mr. Dwayne Allen and Mr. Cariappa Chenanda respectively also ceased to be alternate directors w.e.f. October 20, 2014.

Subsequently, Mr. Anant Talaulicar was appointed as an additional director w.e.f. October 21, 2014, to hold office up to the forthcoming annual general meeting. Further, Mr. Dwayne Allen was appointed as an alternate director of Mr. Anant Talaulicar w.e.f. October 21, 2014. A proposal is being put up for the approval of the shareholders at the forthcoming annual general meeting for the appointment of Mr. Anant Talaulicar as an independent director of the Company.

Owing to his other business commitments and preoccupations, Mr. Amit Kalyani resigned from the directorship of the Company w.e.f. February 20, 2015.

The Board places on record its appreciation of the valuable services provided by Ms. Elizabeth Carey, Mr. Amit Kalyani and Mr. Cariappa Chenanda during their tenure.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013 and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board at its meeting held on April 28, 2014, had noted the Whole-time Key Managerial Personnel (KMP) of the Company as below:

1. Mr. Kishor Patil - Chief Executive Officer (CEO) and Managing Director;

2. Mr. Anil Patwardhan - Chief Financial Officer (CFO);

3. Mr. R. Swaminathan - Company Secretary.

Auditors

Pursuant to the provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants, were appointed as statutory auditors of the Company in the last Annual General Meeting held on July 25, 2014, for a period of five years, subject to ratification by the members in every Annual General Meeting. Based on the recommendation of the audit committee, the Board recommends ratification of the appointment of B S R & Co. LLP, as the statutory auditors of the Company, at the forthcoming annual general meeting.

The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

The Board of Directors of the Company appointed Dr. K. R. Chandratre, Practicing Company Secretary, as the Secretarial Auditor to conduct Audit for the year under review. The Secretarial Auditor's report for the year under review is appended to this Report as "Annexure 2". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon forms a part of this Report. The Auditors' Certificate in respect of compliance with the provisions concerning Corporate Governance, as required by Clause 49 of the Listing Agreement is also attached.

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Awards & Recognition

- KPIT won 2015 Oracle JD Edwards Partner Excellence Award for Outstanding Year-Round Success Story Nominations;

- Ms. Vaishali Vaid, VP & Head, Global HR, KPIT honored with the Rs.100 Most Talented Global HR Leaders Award' by CHRO Asia;

- KPIT won FY15 Oracle Excellence Award in Growth Partner of the Year Category - India;

- KPIT honored by Volvo Buses India with Project Development Excellence Award 2014;

- Mr. Kishor Patil, CEO & MD, KPIT honored with CA Business Leader Award - Corporate at the 8th ICAI Awards, 2014 by the Institute of Chartered Accountants of India (ICAI);

- Infor India recently awarded KPIT with the Promising Partner of the Year 2014 award for the Indian Subcontinent for implementing Infor solutions that create value for customers and generate new business opportunities;

- KPIT Chairman & Group CEO Mr. Ravi Pandit and CEO & MD, Mr. Kishor Patil, honored with Maharashtra Corporate Excellence (MAXELL) Awards 2014 for Excellence in Entrepreneurship.

Particulars of Employees

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as "Annexure 3(a)" to the Board's report.

The ratio of the remuneration of each director to the median employee's remuneration and other details prescribed in sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached to this report as "Annexure 3(b)".

Employees Stock Option Plan (ESOP)

Information relating to stock option plans of the Company is provided in "Annexure 4" of this report. The information is being provided in compliance with Clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 and Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place, a policy on prevention of sexual harassment and has put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices. No case of sexual harassment and discriminatory employment was reported during the financial year under review.

Fixed Deposits

The Company has not accepted any deposits and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated

under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014

Conservation of Energy

The Company always endeavors to reduce energy consumption and achieve conservation of resources. Some of the initiatives taken by the Company in this connection have been detailed in the previous years' Directors' Reports which the Company continues to implement. Apart from those initiatives, the following measures were undertaken to reduce energy consumption resulting in saving of 27% for Pune facility, 12% for Bangalore facility and 19% for Mumbai facility over the period of last 5 years:

- Revamping of AC chillers at Mumbai;

- Regulation of timings for AC operations and setting of standard temperatures at all locations in India;

- Installation of AC remote controls at all meeting rooms and cabins;

- Replacing T5 lights (56W) with LED lights (14W);

- Regulation of UPS and Capacitors as per load requirement.

Green Initiatives

The following initiatives were undertaken at company level to create awareness about importance of environmental protection and reducing Traffic/Pollution:

- "Greenathon" awareness run for zero garbage organized on June 14, 2014.

- Company's initiative for launch of HIA MIDC Joint Transport Initiative (Metro-zip) on September 01, 2014 to reduce traffic congestion.

- Tree plantation drive conducted on August 09, 2014 during which 1,000 trees were planted.

Occupational Health and Safety Assessment Series (OHSAS)

The following activities were carried out by the Company under OHSAS during the year:

- Free Dental and Eye checkup conducted on May 28, 2014.

- Awareness Session on Tobacco Cessation was organized on June 25, 2014.

- Propel 2014 (Health week) in November-2014 which included:

- Yoga Sessions

- Complete Body Checkup (Total approx. 400 employees participated)

- Laughter session

- Health Sessions (Hair & Skin, Healthy Heart, Diabetes,

Ergonomics, Hormonal Imbalances in women)

- Zumba Health Related Games like running, Brisk walk, step climbing

- First Aid training and certification session for employees on December 16, 2014

- Road Safety awareness rally organized on February 5, 2015.

Technology Absorption

In the financial year 2014-15, we have successfully rolled out Microsoft Dynamics CRM across all SBUs and Industry Business Units (IBUs) globally. This has helped us in bringing uniformity and better visibility on opportunity to order processes. We have also launched Analytics platform using SAP, giving users self-service capabilities for analyzing data enabling data driven decision making culture. SAP reimplementation project is underway in the Company which will help in simplifying the business processes. We have seamlessly integrated IT infrastructure of all KPIT global offices helping to give ONE KPIT experience to customers and improving collaboration across the organization. Other Key initiatives planned in the coming year are rollout of Enterprise Digital Transformation called SMART Enterprise, where we are building digital platform for transforming business processes using SMACS technologies, implementation of Software defined data center including automation and self service provisioning of network, security & storage infra in addition to computing infrastructure.

Research and Development (R&D) Activity

Innovation forms the core of the Company. We are working on breakthrough & disruptive technologies, where the focus is to develop practice-based frugal innovation across all the SBUs. Our research activities in Engineering & Business Information Technology space strive towards co-innovation, where we work with our customers to jointly develop solutions and create value for the end consumer, who would be our customers' customer. The Company has been continuously investing in research and development with these goals in mind. These investments are made not just at the corporate level, but also in each Strategic Business Unit (SBU). These Research & Development expenses are being incurred under respective SBUs by setting up various cost projects. The Company has constructed a new R&D center in its Hinjewadi campus, and the building is home to the Center for Research in Engineering, Science and Technology (CREST) as well as other teams working on R&D projects. We have been re-certified by the Department of Scientific and Industrial Research as a recognized R&D center.

During the year, the Company successfully conducted research assignments for its customers which included technical consultations on electronics optimization in vehicles for a vehicle maker. We also conducted joint R&D with an automotive customer to deploy our technology for automatically converting software code to behavioral models. We have also been successful in getting customer projects based on the R&D work we have conducted in the area of Driver Status Monitoring for Advanced Driver

Assistance Systems. Discussions are on with a customer for yet another project related to an around view system based on our previous R&D work.

The Company has been investing into an affordable & Innovative Plug-in Hybrid Electric Vehicle Technology and the same is branded as "Revolo" to take it to the market place. Revolo is a technology that can be incorporated in existing vehicle to convert it to a plug-in hybrid electric vehicle and also as an original equipment fitment. The technology increases fuel efficiency by around 35% and reduces CO2 emission by around 30%. These performance parameters are tested at Automotive Research Association of India (ARAI). The solution is applicable from a small car of 800 cc to commercial vehicle up to 3000 cc. The benefit arising out of performance improvement, results in net energy saving of over 25%.

The R&D employed for the development of Revolo was based on the school of thought of frugal innovation.

Such an innovation would serve to be more affordable for the consumers at large. Revolo would go a long way in promoting clean energy technology that would protect the environment from harmful Green House Gases. Revolo employs electric power with an objective to improve the efficiency of existing powertrain. Currently 15 patents have been hied globally for the technology developed for Revolo.

The technology investment has been done by the Company with focus on building engineering solution for the automotive engines having capacity from 800 cc to 3000 cc applicable on both diesel as well as petrol driven vehicles. The homologation certification of Revolo aftermarket solution for one of the vehicle models has been completed and launch preparation is in process. KPIT continues to focus on building this technology and Impact Automotive Solutions Limited (wholly owned subsidiary of KPIT), will drive commercial use of this technology.

The total amount spent on R&D activities is given below:

Notes:

1. During the year, the Company has set up a state of the art facility for its R&D Activities, construction of which is complete as of March 31, 2015. The Company has incurred a capital expenditure of Rs. 94.27 million during the year for this facility. The company has been granted recognition of this of facility with the Department of Science & Industrial Research which is valid up to March 31, 2018. The eligible capital expenditure for 200 % weighed deduction is Rs. 37.55 million.

2. Out of balance R&D spend of Rs. 197.33 million , eligible R&D revenue expenditure under Section 35(2AB) of the Income Tax Act, 1961 for KPIT Technologies Limited is Rs. 78.21 Million. The weighted deduction is equal to 200% of such expenditure incurred. A separate section on R&D activities undertaken by the Company has also been included in the annual report.

Foreign Exchange Earnings and Outgo

Given the global nature of the business of the Company, exports always form its thrust. Total foreign exchange earnings during the year were Rs. 8,783.50 Million (previous year Rs. 5,955.68 Million) and foreign exchange outgo (including imports) was Rs. 564.07 Million (previous year Rs. 492.92 Million).

Board Meetings

Six meetings of the Board of Directors were held during the year. More details about the meetings are available in the report on Corporate Governance, which forms a part of this Report.

Committees of Board

The details regarding Committees of the Board of Directors of the Company are given in the Report on Corporate Governance, which forms a part of this Report.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013.

1. Dr. R. A. Mashelkar

2. Ms. Lila Poonawalla

3. Prof. Alberto Sangiovanni Vincentelli

4. Mr. Adi Engineer

5. Mr. Anant Talaulicar

6. Mr. Dwayne Allen

(Alternate Director to Mr. Anant Talaulicar)

Company's Policy on Directors' appointment and remuneration

Pursuant to the provisions of Section 134 (3) (e) of the Companies Act, 2013, the policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section 178 (3), is appended as "Annexure 5" to this report.

Particulars of loans, guarantees or investments under Section 186

Particulars of loans, guarantees or investments made during the year under review, pursuant to the provisions of Section 186 of the Companies Act, 2013 are as below:

Name of the subsidiary Nature of Duration Rate of Amount transaction Interest (Rs in Million (%)

KPIT Infosystems Inc. Investment - - 727.32

Impact Automotive Solutions Investment - - 107.84 Limited

KPIT (Shanghai) Software Investment - - 27.74 Technology Co. Limited

KPIT Technologies (UK) Limited Investment - - 195.38

KPIT Technologies (UK) Limited Loan 36 7.752 74.00 Months

KPIT Infosystems ME FZE Guarantee Valid - 62.59 till December 31,2015

Name of the subsidiary Purpose

KPIT Infosystems Inc. For funding the acquisition of Integrated Industrial Information Inc. Impact Automotive Solutions Limited Payment to Bharat Forge Limited for acquisition of 50% of the outstanding shares of Impact Automotive Solutions Limited

KPIT (Shanghai) Software Technology Co. Limited For funding working capital requirements of KPIT (Shanghai) Software Technology Co. Limited

KPIT Technologies (UK) Limited For funding the acquisition of HD Solutions GmBH

KPIT Technologies (UK) Limited For funding working capital requirements of KPIT Technologies (UK) Limited

KPIT Infosystems ME FZE For setting up credit facilities for KPIT Infosystems ME FZE

Particulars of contracts or arrangements with related parties referred to in Section 188(1)

Pursuant to the provisions of Section 134 (3) (h) of the Companies Act, 2013, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, and prescribed in Form AOC - 2 of Companies (Accounts) Rules, 2014, are appended as "Annexure 6" to this report.

Material changes and commitments affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

Risk Management Policy

A mechanism to identify, assess, monitor and mitigate various risks to key business objectives of the Company is in place. A write-up on enterprise risk management is included elsewhere in this annual report.

Internal Control Systems and Adequacy of Internal Financial Controls

The internal control systems of the Company are adequate considering the nature of its business, size and complexity. The Statutory Auditors as well as Internal Auditors of the Company review the same on periodical basis. Further, significant observations, if any, and action taken reports on the same are considered by Audit Committee at their meeting.

Audit Committee Recommendations

During the year, all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.

Corporate Social Responsibility

The Policy on Corporate Social Responsibility (CSR) of the Company and the details about the development of CSR Policy and initiatives taken by the Company on CSR during

the year as per Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as "Annexure 7" to this Report.

Formal Annual Evaluation by the Board

A separate meeting of the Independent Directors of the Company was held for formal evaluation of performance of the Board, Committees and the individual Directors. The performance evaluation was conducted based on the criteria specified in the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The feedback based on evaluation was given to the directors.

Vigil mechanism

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. The details of the same are explained in the Corporate Governance Report. The Policy on Vigil Mechanism may be accessed on the Company's website at the link: http://www.kpit.com/company/investors/corporate- governance.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure 8" to this Report.

Responsibility Statement of the Board of Directors

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state:

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

ii) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

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

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

v) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO & CFO Certification

Certificate by Mr. Kishor Patil, CEO & Managing Director and Mr. Anil Patwardhan, Chief Financial Officer, pursuant to the provisions of Clause 49 (IX) of the Listing Agreement, for the year under review was placed before the Board of Directors of the Company at its meeting held on April 28, 2015.

A copy of such certificate is annexed to this report.

Acknowledgments

Your Directors take this opportunity to thank all the shareholders of the Company for their continued support.

Your Directors hereby place on record their appreciation for the co-operation and support received from all the customers, vendors, financial institutions including State Bank of India, HDFC Bank Ltd., The Hongkong and Shanghai Banking Corporation Ltd., Citibank N.A., Axis Bank Ltd., BNP Paribas, Standard Chartered Bank, ICICI Bank Ltd., DBS Bank Ltd. and Kotak Mahindra Bank Ltd and the Registrars and Share Transfer Agent viz. Link Intime India Pvt. Ltd. We also thank all the employees of KPIT group for their valuable contribution to the Company.

We further place on record our gratitude to the Governments of United States of America, United Kingdom, Germany, France, Netherlands, Japan, Singapore, South Korea, China, UAE, South Africa, Canada and Brazil. We further thank all the constituents of the Government of India, particularly Ministry of Communication and Information Technology, the Software Technology Parks of India, Pune and Bengaluru, the Department of Central Excise & Customs, Maharashtra Industrial Development Corporation, National Association of Software and Service Companies, Stock Exchanges, Securities and Exchange Board of India, Registrar of Companies, Pune, Ministry of Corporate Affairs, Reserve Bank of India, the State Governments, and other government agencies, and the Media and Press for their support during the year and look forward to their continued support in the future.

For and on behalf of the Board of Directors

Sd/- Pune, S. B. (Ravi) Pandit April 28, 2015 Chairman & Group CEO

Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the Twenty Second Annual Report together with the Audited Accounts of the Company for the Financial Year ended on March 31, 2013.

Performance of the Company

Particulars Standalone Consolidated 2012-13 2012-13 USD Rs. USD Rs. Million Million Million Million

Revenue from operations 131.14 7,152.41 410.45 22,386.28

Expenses 107.68 5,872.60 360.16 19,643.38

Profit before exceptional items and Tax 24.96 1,361.39 52.44 2,860.28

Profit before Tax (PBT) 24.62 1,342.91 52.20 2,847.23

Profit after Tax (PAT), but before Minority Interest and share of profit in Associate 18.89 1,030.51 38.17 2,081.63

Profit for the period 18.89 1,030.51 36.49 1,990.05

Result of Operations

During the year under review, your Company continued to post industry- leading growth rate to clock total sales (consolidated) of Rs. 22,386.28 Million, a growth of 49.24%. Earnings before interest, tax, depreciation and amortization (EBITDA) was Rs. 3,639.86 Million on consolidated basis. Net profit after tax grew by 36.91% to Rs. 1,990.05 Million.

In USD terms, the sales for the year on a consolidated basis was 410.45 Million as against 309.28 Million during the previous year, a growth of 33%. Average realization rate was Rs. 54.54 per US Dollar.

Standalone sales for the fiscal year 2012-13 grew by 16.70% to reach Rs. 7,152.41 Million. Net profit after tax increased by 38% to Rs. 1,030.51 Million.

Dividend

The Directors are pleased to recommend a dividend @ 45% (Rs. 0.90 per equity share of face value of Rs. 2/- each) on the paid-up equity share capital of the Company. The total pay-out will amount to Rs. 201.69 Million-including dividend distribution tax.

Transfer to Reserves

Your Directors propose to transfer an amount of Rs. 10 Million towards KPIT Cummins Infosystems Limited Community Foundation Reserve. This Reserve would be utilized for various community benefit schemes as may be approved by the Management.

Your Directors also propose to transfer an amount of Rs. 100 Million towards KPIT Cummins Technology Fund. This fund would be utilized to drive high end innovative technology initiatives for promoting green growth and energy conservation, objectives that are dearer to the Company''s heart and which will benefit the Company''s ecosystem at large.

An amount of Rs. 100 Million is proposed to be transferred to KPIT Employees'' Welfare Fund. This Fund would be utilized to promote the welfare of the employees of KPIT group in various forms.

Your Directors propose to transfer Rs. 103.05 Million to the General Reserve. An amount of Rs. 515.47 Million is proposed to be added to the balance in the Profit & Loss Account.

Share Capital

Van Dyck (an affiliate of ChrysCapital), CX Partners Fund 1 Limited and AAJV Investment Trust (both affiliates of CX Partners) were allotted 12,960,000 equity shares on preferential basis for a total amount of Rs. 1,620 Million during the financial year under review. The proceeds of the issue will be utilized for funding the growth and operations of the Company and/or its subsidiaries, including the working capital and capital expenditure requirements of the Company and/or its subsidiaries, acquisition,investments in joint ventures and general corporate purposes. Pending their deployment for the aforesaid purposes, these funds have been invested in liquid plans of mutual funds.

The Company also allotted 1,912,323 equity shares of Rs. 2/- each, to employees under the ESOP schemes in the financial year 2012-13.

The outstanding issued, subscribed and paid-up capital of the Company as on March 31, 2013 is Rs. 385.63 Million, consisting of 192,815,199 equity shares of Rs. 2/- each.

People

The Company, together with its subsidiaries, had 8,321 employees as on March 31, 2013.

CRISIL Ratings

For the revised bank loan limits of Rs. 3,350 million, CRISIL has assigned the long term credit rating of AA-/Stable and short term rating of A1 .

Quality, Information Security and Productivity

Quality is an integral part of our business and is woven into every aspect of our operations. Our constant quest for quality is evidenced by the certification/re-certification for ISO 9001:2008 (Quality Management Systems) and ISO 20000:2011 (Information Technology Service Management) by TUV Nord Cert GmbH for providing software development, product engineering, product support and enabling services. We continue to hold our CMMI Level 5 certification for Development Ver. 1.2 and Auto Spice Level 5 certification. The Company is also certified for ISO 27001:2005 (Information Security Management Systems) and ISO22301:2012 (Business Continuity Management). Most of our customers have endorsed their satisfaction with our services and products by giving us an average customer satisfaction score of 87%. During the year, the Company also initiated the deployment of a productivity improvement tool which helps employees and their managers analyse the time utilization and productivity of employees and the results have been encouraging.

Institutional Holding

As on March 31, 2013, the Institutional Holding in the Company was 49.70% of the listed capital including the shares held by Warhol Limited, Van Dyck and CX Partners Fund 1 Limited to whom shares were issued through preferential allotment.

Change of Name

Over the years, the Company has emerged as a major technology service provider, catering to customers in the automotive, manufacturing, energy & utilities sectors. With its technology focus, the Company has attained technology leadership position in the industry. Therefore, the Board believes that the name of the Company should also reflect the Company''s technology focus & leadership position. Hence, the Directors propose to change the name of the Company as ''KPIT Technologies Limited''. Special resolutions have been put up for shareholders'' approval of the name change and the consequential amendments in the Company''s memorandum and articles of association.

Information about the Subsidiaries

As on March 31, 2013, the Company had 15 subsidiaries, including step-down subsidiaries.

During the year under review, the Company increased its shareholding in Systime Global Solutions Private Limited to 76%. Systime ME FZCO, a wholly owned subsidiary of SYSTIME Global Solutions Pvt. Ltd., was rechristened as KPIT Infosystems ME FZE during the year.

It is proposed to amalgamate Sparta Infotech India Private Limited with the Company and in this connection, the Board of Directors of the Company and that of Sparta Infotech India Private Limited have already approved the scheme of amalgamation. The Company has filed the applications with Bombay Stock Exchange and National Stock Exchange for in-principle approval to the said scheme of amalgamation. The merger application is expected to be filed with the High Court shortly.

SolvCentral.com Inc, a direct wholly-owned subsidiary of KPIT Infosystems Inc, and In2Soft GmbH, a direct wholly-owned subsidiary of KPIT Infosystems GmbH, were merged with their respective parent companies during the year.

The details of individual financial performance of the subsidiaries have been reported in the statement pursuant to Section 212 of the Companies Act, 1956, which is given elsewhere in the Annual Report.

Particulars required as per Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, a holding Company is required to attach the Directors'' Report, Auditors'' Report, Balance Sheet and Profit and Loss Account of all the subsidiaries. However the Government of India vide General Circular No: 2/2011 has given a general exemption to the companies from attaching the annual reports of subsidiaries provided certain conditions are fulfilled. Accordingly, this annual report contains the consolidated financial statements of the Company and does not contain the financial statements of the individual subsidiaries. The Statement pursuant to Section 212 of the Companies Act, 1956, is given elsewhere in this annual report. The Company will make available the audited annual accounts and related detailed information of the subsidiary companies, where applicable, upon request by any member of the Company. The Company will also upload the accounts of the individual subsidiaries on its official website. These documents will also be available for inspection during business hours at our registered office.

Directors

Pursuant to Article 72 of the Articles of Association of the Company read with Section 256 of the Companies Act, 1956, Mr. Anant Talaulicar and Mr. Amit Kalyani retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Sanjay Kukreja was appointed as an additional director during the year. Mr. Kukreja holds a MBA from Indian Institute of Management, Bangalore. He has been associated with ChrysCapital, a leading fund management house for more than a decade. A proposal is being put up for the approval of the shareholders at the forthcoming annual general meeting for the appointment of Mr. Kukreja as a director of the Company.

Mr. BVR Subbu was appointed as an additional director on April 29, 2013. Mr. Subbu holds a Post Graduate Diploma from Indian Institute of Foreign Trade, Delhi. He was President of Hyundai India and was also associated with the Tata group for over two decades, holding various responsibilities, including its commercial vehicles business. A proposal is being put up for the approval of the shareholders at the forthcoming annual general meeting for the appointment of Mr. Subbu as a director of the Company.

Mr. Dwayne Allen has joined the board recently as alternate director to Mr. Anant Talaulicar. Mr. Allen is Executive Director of Cummins Inc responsible for Global IT for Cummins'' components business and Functional Excellence leader for PLM (Product Lifecycle Management).

Ms. Manisha Girotra was appointed as an additional director during the year and holds office till the date of the ensuing Annual General Meeting. Due to her professional pre-occupations, Ms. Girotra does not intend to seek appointment as a director at the ensuing Annual General Meeting.

Mr. Bruce Carver, director and Mr. Mark Gerstle, alternate director, resigned from the board with effect from April 29, 2013. During the period of their directorship, Mr. Carver and Mr. Gerstle made significant contributions to the Company. The Board places on record its sincere appreciation of the valuable services and guidance provided by Mr. Bruce Carver and Mr. Mark Gerstle during their tenure as Directors of the Company.

Auditors

M/s. Deloitte, Haskins & Sells, have been the statutory auditors of the Company for the past 10 years. The Board believes that periodic rotation of statutory auditors is a good corporate governance practice the Company should adopt. The proposed Companies Bill also includes provisions for rotation of audit firms after two consecutive terms of five years each.

The Audit Committee, at its meeting held on April 29, 2013, recommended the appointment of M/s. B S R & Co, Chartered Accountants, 703, 7th floor, Godrej Castlemaine, Bund Garden Road, Pune 411 001 as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting of the Company. Pursuant to the Audit Committee''s recommendation, the Board of Directors has, at its meeting held on April 29, 2013, approved the appointment of M/s. B S R & Co, Chartered Accountants as the Statutory Auditors of the Company at the forthcoming Annual General Meeting for the financial year 2013-14. This is subject to shareholders passing the necessary resolution for appointment of M/s. B S R & Co, Chartered Accountants at the forthcoming Annual General Meeting.

In this connection, the Company has received a special notice pursuant to the provisions of Sections 190 and 225 of the Companies Act, 1956 proposing the appointment of M/s. B S R & Co, Chartered Accountants, as the Statutory Auditors of the Company in place of M/s. Deloitte, Haskins & Sells for the year 2013-14. The resolution for appointment of M/s. B S R & Co, Chartered Accountants, as the Statutory Auditors of the Company is being included in the notice of the Annual General Meeting. The requisite certificate pursuant to Section 224(1B) of the Companies Act, 1956, has been received from M/s. B S R & Co, Chartered Accountants.

M/s. Deloitte, Haskins & Sells, retire at the conclusion of the ensuing Annual General Meeting and do not intend to seek re-appointment.

The Board of Directors records its deepest sense of appreciation of the valuable services provided by M/s. Deloitte, Haskins & Sells as the Statutory Auditors of the Company during their tenure with the Company.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon is annexed to this Annual Report. The Auditors'' Certificate in respect of compliance with the provisions concerning Corporate Governance, as required by Clause 49 of the Listing Agreement, is also annexed.

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Particulars of Employees

As required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, a statement showing the names and other particulars of employees forms a part of this report. However, having regard to the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid statement is being sent to all the members of the Company. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the registered office of the Company.

Responsibility Statement of the Board of Directors

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

i) in the preparation of the accounts for the financial year ended March 31, 2013, the applicable accounting standards have been followed and there has been no material departure;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the said financial year and of the profit of the Company for the said financial year;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the accounts for the year ended March 31, 2013 on a ''going concern'' basis.

Employees Stock Option Plan (ESOP)

Information relating to stock option programme of the Company is provided in the Annexure I of this report. The information is being provided in compliance with Clause 12 of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Fixed Deposits

The Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

Conservation of Energy - Our Company''s primary business being Software services, our operations are conducted with energy conservation as a focus area. The Company always endeavors to reduce energy consumption and achieve conservation of resources. Some of the initiatives taken by the Company in this connection are as follows:

1. Energy Conservation measures:

The facility at Hinjawadi Pune reflects KPIT''s commitment to energy efficiency and "green growth". The green features incorporated in the building design have been detailed in the directors'' report of the previous year. As a result of various initiaties taken by the Company for reducing energy consumption, NASSCOM has declared KPIT Hinjawadi campus as "Energy Champion", one of the only three companies in IT / ITES sector to be so declared.

2. Various steps have been undertaken to utilize the energy in an optimum manner some of which are given below:

a. Introduced innovative solution to extract energy from kitchen exhaust air. Wind turbine, installed on kitchen exhaust stystem, which is called as waste air co-generation system along with solar energy panels generates energy.

b. Replacement of normal TFT monitor based computers with energy efficient thin clients.

c. Consolidation of desktop servers.

3. Continuation of PC Shut Down Drive undertaken to switch off PCs during non working hours resulting into considerable reduction in energy consumption.

Computer hardware:

a. Significant reduction in e-waste generation achieved due to increased IT Hardware Refreshment Cycle for desktops, laptops & workstations.

b. Reduction in the asset ratio to 1.10:1 due to deployment of the Vblock platform with VDI, thereby thereby reducing the consumption of computer hardware.

Water Conservation measures:

The Company''s conservation measures also focus on reduction of consumption of water. 70% of water gets treated through sewage treatement plant and is recycled & used for gardening purposes. Following initiatives were carried out for reducing water consumption which has resulted into 25% savings in water usage:

a. Revamping of Sprinkler system.

b. Adjusting water pressures at taps.

c. Controlling fresh water usage for gardening.

Environment Improvement initiatives:

a. Tree plantation within KPIT Campus during environment week.

b. Vermi Compost Plant: A vermicompost plant has been set up for treating the organic waste, which generates 3,500 kg vermin compost manure every year.

c. Recycling or disposal of E-waste through authorized vendors.

d. Signification savings in consumption of paper and reduction in generation of municipal waste and recyclable waste by around 23%.

e. Arranged lectures from environmentalists for employees to create awareness.

Occupational Health and Safety Assessment Series (OHSAS):

The Company''s Hinjawadi site was successfully certified for ISO 14001:2004 (Environmental Management System) & OHSAS 18001:2007 standards in January 2013. We are proud to mention that these certifications were won on the basis of in-house efforts and without any external consultancy. During the year, the following activities were carried out by the Company under OHSAS:

- Music & meditation session

- Propel (Health week)

- Health risk assessment survey

- Drum Circle

- Health talk on Dengue and its precautions

- Health talk on homeopathy

- Health talk on Cervical Cancer

- Bone Mineral Density Camp

- Lectures by RANJAI on Occupational health & Environment protection as part of International Safety Week.

Research and Development (R & D) Activities:

Innovation forms the core of the Company and the Company has been continuously investing in research and development. Innovation being key focus area, the Company has been making significant investments in the Research & Development activities, not just at the corporate level but for each respective Strategic Business Units (SBU). These Research & Development expenses are being incurred under respective SBUs by setting up various cost projects. We are working on breakthrough & disruptive technologies, where the focus is to develop practice based frugal innovation across all the SBUs. Our research activities in Engineering & Business Information technology space will strive towards co-innovation, where we would work with our customers to jointly develop solutions and create value for the end consumer, who would be our customers'' customer.

During the year, the Company continued its research in software engineering. These efforts have resulted in innovative products in software engineering to support both maintenance and development projects. Research and Development costs are expensed as incurred under SBU budget as cost project and Development costs of the marketable software are capitalized when its commercial feasibility is established, future economic benefits of the project are probable and its costs can be measured reliably. The total spend on these activities across all group entities is given below.

Amt in INR Mn.

KPIT R&D - Expenses for the year ended March 31, 2013

SBU A&E SBU Details IES SBU

Expensed 33.76 A&E Crest Projects 21.47

Capital Work in Progress 26.13 Revolo *** -

Capital Work in Progress 43.93 Infotainment *** -

103.821 21.47

SBU Details SAP SBU Details Total

Expensed IES Crest Projects - - 55.23 ***

Capital Work in Progress 31.15 SAP Projects 57.28

Capital Work in Progress - 43.93

31.15 156.43

*** Please refer Note no. 45 (3) under Standalone Financial Statements of KPIT Cummins Infosystems Limited.

The Company has set up its own research and development center called ''Center for Research in Engineering Sciences and Technology'' or CREST. A separate section on R&D activities undertaken by the Company, forms a part of this report.

Technology Absorption - In its pursuit of growth, the Company constantly and actively seeks and absorbs new technology in its operations. During the year, the Company successfully conducted research for its customers. It includes automatic parallelization of sequential code for multicore, automated software code validation checks, parallelization of advanced driver safety system to run it at real time speeds, developing traffic density estimation and raindrop removal from windshield. The Company has implemented global MPLS connectivity across all Indian and international offices and deployed Telepresence solution (High Definition Video Conferencing). This has helped company to demonstrate global capabilities to customers seamlessly. Further, the Company has developed the technology for secure interaction of apps between a mobile device and infotainment system of a car. With this, customers can use KPIT infotainment platform to enable smartphone interaction with a car in a unique manner. The Company continues to focus on using these technologies for its own use as well as creating value for customers.

Foreign Exchange Earnings and Outgo - Given the global nature of the business of the Company, exports always form its thrust The Company''s growth at rates above the industry rates bears testimony to its export competitiveness. Total foreign exchange earnings during the year have been Rs. 5,885.51 Million (previous year Rs. 5158.17 Million) and foreign exchange outgo has been Rs. 275.23 Million (previous year Rs. 434.56 Million).

Awards/Recognition

- Mr. Kishor Patil, Chief Executive Officer and Managing Director was selected among 16 finalists for the Ernst & Young Entrepreneur of the Year Award 2012.

- KPIT Cummins was awarded with EMC Transformers Award 2012 for successful implementation of innovative solutions that helped in transforming internal IT functions.

- KPIT Cummins received EDGE 2012 award (Enterprise Driving Growth and Excellence through IT) in the category of "Data Centre and Networking" at ITEROP 2012, Mumbai for effective implementation of Unified computing infrastructure.

- KPIT Cummins was awarded with the prestigious Mahesh Modi Environment Excellence award for 2013. Revolo - the plug-in hybrid solution was honoured for its impact on environmental improvement.

- KPIT Cummins was awarded with the 2012 Oracle Excellence Award for Specialized Partner of the Year - North America for demonstrating an outstanding and innovative solution based on Oracle products.

- KPIT unveiled Rapid App Deployment Framework to Develop & Deploy Apps Anywhere - Apps-to-Go is a safe, secure and seamless solution for car makers to deploy vehicle centric custom branded apps on head units and mobile devices.

- KPIT Cummins partnered with Livio to bring new applications to cars. The partnership aims to integrate Livio Connect with GENIVI compliant KIVI software framework allowing cars to seamlessly and securely communicate with mobile devices.

- Two patents awarded - KPIT was granted two US patents by USPTO which were filed in the area of hybrid technology.

Acknowledgments

Your Directors take this opportunity to thank all the shareholders of the Company for their continued support.

Your Directors hereby place on record their appreciation for the co-operation and support received from all the customers, vendors, financial institutions including State Bank of India, HDFC Bank Ltd, The Hongkong and Shanghai Banking Corporation Ltd, Citibank N.A., Axis Bank Ltd., BNP Paribas, Standard Chartered Bank, ICICI Bank Ltd., DBS Bank Ltd. and Kotak Mahindra Bank Ltd and the Registrars and Share Transfer Agent viz. Link Intime India Pvt. Ltd. We also thank all the employees of the KPIT group for their valuable contribution in the growth of the Company.

We also thank the Governments of United States of America, United Kingdom, Germany, France, Netherlands, Japan, Singapore, South Korea, China, UAE, South Africa, Canada and Brazil. We further thank all the constituents of the Government of India, particularly Ministry of Communication and Information Technology, the Software Technology Parks of India, Pune and Bangalore, the Department of Central Excise & Customs, Maharashtra Industrial Development Corporation, National Association of Software and Service Companies, Stock Exchanges, Securities and Exchange Board of India, Registrar of Companies, Pune, Ministry of Corporate Affairs, Reserve Bank of India, the State Governments, and other government agencies, and the Media and Press for their support during the year and look forward to their continued support in the future.

For and on behalf of the Board of Directors

Pune, S. B. (Ravi) Pandit

April 29, 2013 Chairman & Group CEO

Mar 31, 2012

The Directors are pleased to present the Twenty First Annual Report together with the Audited Accounts of the Company for the Financial Year ended on March 31, 2012.

Performance of the Company

Particulars Standalone Consolidated

2011-2012 2011-2012

USD Rs USD Rs Million Million Million Million

Revenue from operations 126.37 6,128.92 309.28 15,000.12

Expenses 107.63 5,219.97 275.31 13,352.46

Profit before exceptional items and Tax 19.96 968.17 36.82 1,785.90

Profit before Tax (PBT) 22.03 1,068.62 38.89 1,886.35

Profit after Tax (PAT), but before Minority Interest and share of profit in Associate 15.40 746.68 29.89 1,449.67

Profit for the period 15.40 746.68 29.97 1,453.54

Result of Operations

Total consolidated revenue for the fiscal year 2011-12 (FY12) was Rs 15,000.12 Million. Gross Profit and Earnings before interest, tax, depreciation and amortization (EBITDA) are Rs 5,065.69 Million and Rs 2,165.76 Million, respectively. Gross profit margin is 33.77% of the revenue. Net profit after tax grew by 53.68% to Rs 1,453.54 Million.

The revenues for the year on a consolidated basis in USD terms are USD 309.28 Million as against USD 216.17 Million during the previous year. Average realization rate was Rs 48.50 per US Dollar.

Standalone revenue for the fiscal year 2011-12 (FY12) was Rs 6,128.92 Million. Net profit after tax increased by 7.46% to Rs 746.68 Million.

Transfer to Reserves

Your Directors propose to transfer Rs 75 Million to the General Reserve. An amount of Rs 1,006.42 Million is proposed to be retained in the Profit & Loss Account.

Your Directors propose to transfer an amount of Rs 27.20 Million towards KPIT Cummins Infosystems Limited Community Foundation Reserve. This Reserve would be utilized for various community benefit schemes as may be approved by the Management.

Your Directors propose to transfer an amount of Rs 100 Million towards KPIT Cummins Technology Fund. This fund would be utilized to drive high end innovative technology initiatives for promoting green growth and energy conservation, which will successively benefit the Company.

Your Directors propose to transfer an amount of Rs 100 Million towards KPIT Employees' Welfare Fund. This Fund would be utilized to promote welfare of its employees in various forms.

Dividend

The Directors are pleased to recommend a dividend @ 35% (Rs 0.70) per equity share of face value of Rs 2/- each on the paid-up equity share capital of the Company.

Share Capital

During the year the Company declared issue of bonus shares in the ratio of 1:1 (that is one equity share of Rs 2/- each for every share of Rs 2/- held). On March 15, 2012, the Company allotted 88,971,438 equity shares in the ratio 1:1 and a sum of Rs 177,942,876 out of reserves and surplus was capitalized for distribution amongst the members.

The Company allotted 1,108,023 equity shares of Rs 2/- each, to the employees under the ESOP schemes in the financial year 2011-12.

The outstanding issued, subscribed and paid-up capital of the Company as on March 31, 2012 is Rs 355,885,752 consisting of 177,942,876 equity shares of Rs 2/- each.

Manpower Strength

The Company had 7,719 employees as on March 31, 2012. During the year there was a net addition of 1,405 employees, which increased the employee strength by 21.57% over the previous year.

CRISIL Ratings

CRISIL has confirmed the financial credit rating of AA-/Stable for the revised bank limits of Cash Credit and Term Loan facilities and P1 for Bank Guarantee & Letter of Credit, for the Company.

Quality

The Company is highly committed to International standards raised by the Industry. The Company has been awarded ISO 9001:2008 (Quality Management Systems), ISO 27001:2005 (Information Security Management Systems), ISO 20000:2005 (Information Technology Service Management) and BS2599:2007 (Business Continuity Management) certificates by TUV Nord Cert GmbH for providing Software Development, Product Engineering, Product Support and Enabling Services

Institutional Holding

As on March 31, 2012, the Institutional Holding in the Company was 30.03% of the listed capital. This does not include approximately 9.55% held by Warhol Limited. The total institutional holding including that of Warhol Limited as on March 31, 2012 stood at 39.58%.

Information about the Subsidiary Companies

As on March 31, 2012 the Company had twenty three subsidiaries:

1. KPIT Infosystems Inc. (KPIT US) was incorporated in 1998, in the US, for catering to the demand of US based customers. The Company holds 100% of the share capital and voting power of KPIT US. KPIT US earned revenues of Rs 4,970.94 Million (previous year Rs 3,763.04 Million) and recorded a profit of Rs 6.07 Million (previous year loss of Rs 32.16 Million) ended on March 31, 2012. The above profit does not include translation gain of Rs 131.52 Million.

2. KPIT Infosystems Limited (KPIT UK) was incorporated in 1996, in UK, for catering to the demand of customers based out of UK & Europe. The Company holds 100% of the share capital and voting power of KPIT UK. During the year, KPIT UK has earned revenues of Rs 1,070.03 Million (previous year Rs 788. 33 Million) and registered a loss of Rs 0.14 Million (previous year loss of Rs 17.04 Million). The above loss does not include translation gain of Rs 42.91 Million.

3. KPIT Infosystems GmbH (KPIT Germany) was added as a step down subsidiary in 2005. KPIT Germany is a 100% subsidiary of KPIT UK. This subsidiary is completely focused on huge automotive market in Germany and was added to expand our customer base in this segment with a vision to become No. 1 global product engineering partner to the automotive industry. KPIT Germany reported a profit of Rs 37.71 Million for the year ended March 31, 2012 (previous year a profit of Rs 16.36 Million) on revenues of Rs 908.93 Million (previous year Rs 555.45 Million). The above profit does not include translation gain of Rs 16.08 Million.

4. KPIT Infosystems Inc. [a.k.a. SolvCentral.com Inc.] (SolvCentral), based in US was added as a step down subsidiary in 2005. SolvCentral is focused in the Business Intelligence (BI) space in the US market. SolvCentral reported a profit of Rs 0.41 Million for the year ended March 31, 2012 (previous year loss of Rs 27.17 Million) with revenues of Rs 6.33 Million (previous year Rs 74.84 Million).

5. KPIT Infosystems France SAS (KPIT France) was formerly known as Pivolis. KPIT France has provided direct presence in France which is an important market in European region from KPIT's growth perspective. In the Financial year 2011-12 KPIT France reported a loss of Rs 3.97 Million (previous year a profit of Rs 1.22 Million) with revenues of Rs 260.51 Million (previous year Rs 325.99 Million).

6. Sparta Consulting Inc. (Sparta Inc.) was added as a step down subsidiary in 2009. Sparta Inc. is a leading provider of high end SAP solutions and is one of the fastest growing SAP consultancies in North America. Sparta Inc. reported a profit of Rs 111.14 Million for the year ended March 31, 2012 (previous year profit of Rs 119.51 Million) on revenues of Rs 4,089.51 Million (previous year Rs 2,691.40 Million).

7. Sparta Infotech India Private Limited (Sparta India), is a subsidiary of Sparta Inc. Sparta India was incorporated to cater Sparta's India based clientele. Sparta India reported a profit of Rs 130.61 Million for the year ended March 31, 2012 (previous year profit of Rs 111.22 Million) on revenues of Rs 373.73 Million (previous year Rs 304.73 Million).

8. In2Soft GmbH (In2Soft) based in Munich, Germany, is a wholly owned subsidiary of KPIT Germany. During the year, KPIT Germany acquired the remaining stake of 26% in In2Soft. In2Soft is an expert in diagnostics and telematics for the automotive industry. In2Soft develops the OBU software for the tolling systems in Germany, Europe and world-wide and provides with VisualODX, a modern and complete tool set for vehicle diagnostics. In2Soft reported a profit of Rs 44.28 Million for the year ended March 31, 2012 (previous period a profit of Rs 7.33 Million) on revenues of Rs 294.03 Million (previous period Rs 99.19 Million). (Previous period's figures are for post acquisition period i.e. October 1, 2010 to March 31, 2011).

9. CPG Solutions, LLC ('CPG') is a wholly owned subsidiary of KPIT US. CPG, an Oracle Gold Partner, is a focused player in solutions for companies in Manufacturing, Supply Chain and Engineering space with over a decade of specialized consulting experience in this focused area. CPG reported a profit of Rs 102.84 Million for the year ended March 31, 2012 (previous period a profit of Rs 46.61 Million) on revenues of Rs 997.86 Million (previous period Rs 337.21 Million). (Previous period's figures are for post acquisition period i.e. October 1, 2010 to March 31, 2011).

10. KPIT (Shanghai) Software Technology Co., Ltd. (KPIT China) is a China based wholly owned subsidiary of the Company incorporated on January 12, 2011. KPIT China is formed to provide software development and consultancy to customers in China. During the Financial year 2011-12, KPIT China reported a loss of Rs 8.88 Million on revenues of Rs 3.87 Million.

11. KPIT Infosystems Netherlands B.V. (KPIT Netherlands) is a wholly owned subsidiary of the Company based in the Netherlands and was incorporated on February 16, 2012. KPIT Netherlands is yet to commence its commercial operations.

12. KPIT Infosystem (Brasil) Servicos De Technologiae Participacoes Ltda (KPIT Brazil) is a wholly owned subsidiary of the Company based in Brazil and incorporated on March 6, 2012. KPIT Brazil is yet to commence its commercial operations.

13. SYSTIME Global Solutions Private Limited (SYSTIME) is one of the world's largest J D Edwards solution provider and Oracle Platinum partner. The Board of Directors of the Company, at their meeting held on May 24, 2011 had approved the proposal of investment in SYSTIME over a period of time. The Company has accordingly invested 57.5% in the shareholding of SYSTIME during FY2012. The objective of the investment in SYSTIME is to make a foray in the ERP space and thereby leverage Oracle relationship. J D Edwards is the leading ERP for certain Industry verticals including manufacturing, which is also the Company's largest vertical. As on March 31, 2012, SYSTIME has ten subsidiaries (including step down subsidiaries). SYSTIME (consolidated) reported a profit of Rs 51.66 Million for the period ended March 31, 2012 on revenues of Rs 688.05 Million. (Figures of revenue and profit have been taken into consideration for the period January 1, 2012 till March 31, 2012 i.e. post SYSTIME becoming a subsidiary of the Company).

Particulars required as per Section 212 of the Companies Act, 1956 As per Section 212 of the Companies Act, 1956, a holding Company is required to attach the Directors' Report, Balance Sheet and Profit and Loss Account of all the subsidiaries. However the Government of India vide General Circular No: 2 /2011 has given a general exemption to the companies from attaching the Annual Reports of subsidiaries provided certain conditions are fulfilled. Accordingly, this Annual Report does not contain the financial statements of the subsidiaries. Statement pursuant to Section 212 of the Companies Act, 1956, is given elsewhere in this Annual Report. The Company will make available the audited annual accounts and related detailed information of the subsidiary companies, where applicable, upon request by any member of the Company. The Company will also upload the accounts of the individual subsidiaries on its official website. These documents will also be available for inspection during business hours at our registered office.

Directors

Pursuant to Article 72 of the Articles of Association of the Company read with Section 256 of the Companies Act, 1956, Mr. S. B. (Ravi) Pandit and Ms. Lila Poonawalla retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Mr. Sudheer Tilloo, Director, who is liable to retire by rotation, at the ensuing Annual General Meeting, has expressed unwillingness to be re-appointed as Director of the Company.

During the year, Mr. Sachin Tikekar was appointed as a Whole-time Director for a period of 5 years with effect from October 20, 2011. Mr. Sachin Tikekar is a founding member of the Company and has played various leadership roles over the years. Prior to assuming the role of Chief of People Operations, Mr. Sachin Tikekar was the Chief Operating Officer of the US operations of the Company, and was instrumental in building the Company's sales presence across US, Asia and Europe. Mr. Sachin Tikekar has a Masters degree in Strategic Management and International Finance from Temple University's Fox School of Business and Management, Pennsylvania, USA.

Mr. Dwayne Allen, alternate director to Ms. Elizabeth Carey, resigned from the directorship of the Company with effect from February 18, 2012. Mr. Dinesh Castellino, alternate director to Mr. Bruce Carver, resigned from the directorship of the Company with effect from April 30, 2012. The Company has immensely benefited from the expert professional guidance of Mr. Dwayne Allen and Mr. Dinesh Castellino. The Board places on record its sincere appreciation for all the help and guidance provided by Mr. Dwayne Allen and Mr. Dinesh Castellino during their tenure as Directors of the Company.

Auditors

The Statutory Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon is annexed to this Annual Report. The Auditors' Certificate in respect of compliance with the provisions concerning Corporate Governance, as required by Clause 49 of the Listing Agreement, is also annexed.

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Particulars of Employees

As required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, a statement showing the names and other particulars of employees forms a part of this report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid statement is being sent to all the members of the Company. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the registered office of the Company.

Responsibility Statement of the Board of Directors

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors confirm that:

i) in the preparation of the accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed and there has been no material departure;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the said financial year and of the profit of the Company for the said financial year;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the accounts for the year ended March 31, 2012 on a "going concern" basis.

Employees Stock Option Plan (ESOP)

Information relating to stock option programme of the Company is provided in the Annexure I of this report. The information is being provided in compliance with Clause 12 of the 'Disclosure in the Directors' Report of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Fixed Deposits

The Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

Conservation of Energy - Our Company's primary business being Software services, our operations are conducted with energy conservation as a focus area. The Company has taken various initiatives for optimum utilization and conservation of resources. Some of the initiatives taken by the Company are as follows:

1. Energy Conservation measures:

In Electricity consumption the Company stands at 170 KWH/ sqmt/yr as against the industry standard of 220 (published by NASSCOM). The facility at Hinjawadi Pune reflects KPIT's commitment to energy efficiency and "Green Growth". The features incorporated in building design are as follows:

a. Buildings are clad with Clay Tiles, which prevent the ingress of heat inside the building, thus reducing the heat load and consequently, lessen load on AC.

b. Facility is built in such a way where in we make maximum use of natural light thus saving energy. Internal gardens make the facility cooler which helps in reducing dependency on AC.

c. Internal lighting is integrated with occupancy sensors which reduces the energy consumption.

d. AC system installed is of VRF technology which facilitates in the control of local cooling thus resulting in considerable saving vis-a-vis a conventional central AC system. The facility has won the Emerson Cup GOLD Award for the Lowest Energy Consumption in India and South East Asian Countries.

e. Installation of Ozonized air purification system has considerably reduced load on AC system.

2. Two Six Sigma Green Belt projects completed on minimizing wastage in energy consumption for Pune Facility which has resulted in 15% savings.

3. Various steps have been undertaken to utilize the energy in an optimum manner like:

a. All lights replaced with CFL;

b. Lift lights replaced with LEDs;

c. Correction done to capacitor bank to achieve 1.0 power factor to minimize the power losses;

d. Shutting down UPS at night and on weekends;

e. Defined AC working hours and temperatures to suit seasonal changes;

f. Optimization of LUX level in working areas by removing extra lights;

g. Changing over to LED lamp projectors.

4. PC Shut Down Drive undertaken to shut down PCs during non working hours resulting into considerable reduction in energy consumption.

5. Computer hardware:

i. Ratio of per employee hardware reduced from 1.35 to 1.15 within the last 3 years.

ii. VDI deployment will increase life of old PCs.

iii. Thin client has got more life compared to PCs resulting in less consumption and waste generation in future.

6. Water Conservation measures:

The Company's Hinjawadi site has reduced its water consumption by 26% over the last three years. This is largely attributable to the following measures taken by the Company:

1. Hydro pneumatic system of water supply installed there by ensuring minimum wastage of water.

2. Almost 1.2 lakh litres of recycled water generated through Sewage treatment plant used for gardening purpose.

3. Control over water usage for Housekeeping activities.

7. Environment Improvement initiatives:

1. Tree plantation: Initiated within and outside the premises.

2. Vermi Compost Plant: A vermi compost plant has been set up for treating the organic waste, which generates 3,500 kg vermin compost manure every year.

3. Recycling or disposal of E-waste through authorized vendor.

4. Employee Transport: Various steps taken in employee transport to reduce fuel consumption such as:-

a. Control on unscheduled cab requirements thereby ensuring optimum seat utilization. This has resulted in achievement and utilization of 3.70 seats out of 4.i.e. 92%

b. Use of buses in lieu of cabs as well as optimization done through grouping and route selections achieving 95% occupancy.

c. Other operational control activities like vehicle check- ups, drivers training etc.

Occupational Health and Safety Assessment Services (OHSAS):-

The Company's Hinjawadi site was successfully certified for ISO 14001:2004 (Environmental Management System) & OHSAS 18001:2007 standards in July 2011. We are proud to mention that these certifications were won on the basis of independent efforts and without any external consultancy. The concerned functions have put in substantial efforts for a considerable period of time to obtain these certifications. The Company has won a number of accolades from various client audit teams since the certification.

Research and Development (R & D) Activities:-

The Company has been laying thrust on Research & Development activities for the past few years. The Company has formed its own R&D center called 'Center for Research in Engineering Sciences and Technology' or CREST. A separate section on R&D activities undertaken by the Company, forms a part of this report.

Technology Absorption - The Company is in the forefront of deploying leading edge technology while partnering with leading vendors in the IT domain. During the year, the Company successfully deployed private cloud, virtual desktop infrastructure and brought in work place flexibility and scalability. Amongst many other initiatives, the Company has deployed Digital Media System to communicate with employees across locations. The Company focuses on using these technologies for its own use as well as creating showcase for customers.

Foreign Exchange Earnings and Outgo - The Company focuses on exports and undertakes all possible efforts to expand its presence in the export markets. Total foreign exchange earnings during the year have been Rs 5,158.17 Million (previous year Rs 4,554.63 Million) and foreign exchange outgo has been Rs 434.56 Million (previous year Rs 555.23 Million).

Awards/Recognition

- Mr. Anil Patwardhan, VP and Head Corporate Finance & Governance was awarded with "Recognition of Excellence" at CFO India's 2nd Annual CFO 100 Roll of Honour. He received the award for "Winning edge - in Mergers & Acquisitions."

- KPIT Cummins was awarded with the 2011 Wall Street Journal Innovation Award in the 'Transportation' category. The award recognizes KPIT Cummins' commitment to advancing green and sustainable technology for automobiles.

- SAP honored KPIT Cummins with SAP ACE Awards 2011 "BEST - RUN End to End Business Process". The award reflects KPIT Cummins' commitment to run business on smart and efficient systems that help deliver higher value to customers and employees.

- KPIT Cummins was awarded the EMC Cloud Pioneer Award 2011, for early adoption, coverage, size and maturity of cloud deployment at KPIT Cummins.

- Mr. Shrikant Kulkarni, Chief Information Officer was selected amongst the Top Fifty CIOs in the country. This was announced by CIO association of India in January 2012.

- In Automotive SBU, KPIT received the 'Best Paper' award for 'Fast and Accurate GHT (Generalized Hough Transform)' in ICoMec 2011 conference.

- The Company was shortlisted amongst the three finalists at the Bloomberg UTV CXO Awards 2011 in the "Best Innovative Use of Information Technology - Large Enterprise" category.

- KPIT Cummins won the 2012 SAPÃÃÂ® North American Partner Impact Award for Momentum and we have been recognized by SAP as fastest growing System Integrator in North America - moved up from rank #49 in 2010 to #8 in 2011.

Acknowledgments

Your Directors take this opportunity to thank all the members and investors of the Company for their continued support.

Your Directors hereby place on record their appreciation for the co-operation and support received from all the customers, vendors, financial institutions including State Bank of India, HDFC Bank Ltd., The Hongkong and Shanghai Banking Corporation Ltd, Citibank N.A., Axis Bank Ltd., BNP Paribas, Standard Chartered Bank, ICICI Bank Ltd., DBS Bank Ltd. and Kotak Mahindra Bank Ltd. and the Registrars and Share Transfer Agent viz. Link Intime India Pvt. Ltd. and also thank all the employees of the Company for their valuable contribution in the growth of the Company.

We also thank the Governments of United States of America, United Kingdom, Germany, France, Japan, Singapore, South Korea, South Africa, China, the Netherlands and Brazil. We further thank all the constituents of the Government of India, particularly Ministry of Communication and Information Technology, the Software Technology Parks of India, Pune and Bengaluru, the Department of Central Excise & Customs, Maharashtra Industrial Development Corporation, National Association of Software and Service Companies, Stock Exchanges (where our shares are listed), Securities and Exchange Board of India, Registrar of Companies, Pune, Ministry of Corporate Affairs, Reserve Bank of India, the State Governments, and other government agencies, and the Media and Press for their support during the year and look forward to their continued support in the future.

By Order of the Board of Directors

For KPIT Cummins Infosystems Limited

S. B. (Ravi) Pandit

Pune, April 30, 2012 Chairman & Group CEO

Mar 31, 2011

The Directors are pleased to present the Twentieth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2011.

Performance of the Company

Particulars Standalone Consolidated 2010-2011 2010-2011

USD Rs. USD Rs. Million Million Million Million

Total Sales and Income 117.96 5,385.55 224.07 10,230.14

Total Expenses 92.37 4,217.22 190.73 8,708.06

PBDIT 25.59 1,168.33 33.34 1,522.08

Profit/(Loss) before Tax (PBT) 17.29 789.43 24.15 1,102.58

Profit/(Loss) after Tax (PAT) 15.22 694.88 20.72 945.82

Profit Available for appropriation 15.22 694.88 20.72 945.82

Result of Operations

There was a turnaround in the fiscal 2010-2011 for the IT industry and the economy at large and the Company has witnessed the effects of the same. With an improvement in the Revenue growth over the last fiscal the Company has progressed substantially as reported herein below.

Total consolidated revenue for the fiscal year 2010-11 (FY11) was Rs. 10,230.14 Million. Gross Profit and Earnings before interest, tax, depreciation and amortization (EBITDA) are Rs. 3,630.80 Million and Rs. 1,522.08 Million, respectively. Gross profit margin stands at 36% of the revenue. Net profit after tax grew by 10.32% to Rs. 945.82 Million.

The revenues for the year on a consolidated basis in USD terms are USD 224.07 Million as against USD 153.76 Million during the previous year. Average realization rate was Rs. 45.66 per US Dollar.

Standalone revenue for the fiscal year 2010-11 (FY11) was Rs. 5,385.55 Million. Gross profit stands at Rs. 2,033.59 Million. Net profit after tax decreased by 11.42% to Rs. 694.88 Million.

Transfer to Reserves

Your Directors propose to transfer Rs. 70 Million to the General Reserve. An amount of Rs. 594.10 Million is proposed to be retained in the Profit & Loss Account.

Your Directors propose to transfer an amount of Rs. 10 Million towards KPIT Cummins Infosystems Limited Community Foundation Reserve. This Reserve would be utilized for various community benefit schemes as may be approved by the Management.

Your Directors propose to transfer an amount of Rs. 100 Million towards KPIT Cummins Technology Fund. This fund would be utilized to drive high end innovative technology initiatives for promoting green growth and energy conservation, which will successively benefit the Company.

Your Directors propose to transfer an amount of Rs. 100 Million towards KPIT EmployeesÃ Welfare Fund. This Fund would be utilized to promote welfare of its employees in various forms such as Medical, Education, Housing, Holiday homes, Recreation facilities, Activities related to Sports, Music Research, Artistic Pursuits etc.

Dividend

The Directors are pleased to recommend a dividend @ 35% (Rs. 0.70) per equity share of face value of Rs. 2/- each on the paid-up equity share capital of the Company.

Share Capital

Warhol Limited (Warhol) (an affiliate of ChrysCapital) is a Mauritius based, Foreign Institutional Investor. Warhol was issued 77,58,621 equity shares on preferential basis for an aggregate consideration of Rs. 112 crores, in terms of the Special Resolution passed by the shareholders of the Company in the Extra-Ordinary General Meeting held on February 8, 2011. The shares were issued at a price of Rs. 145/- . The proceeds of the issue will be utilized for bona fide business purposes and for funding the growth and operations of the Company and/or its subsidiaries, to meet the working capital and capital expenditure requirements of the Company/subsidiaries and for investment in subsidiaries and joint ventures. The shares were allotted to Warhol on February 17, 2011. Warhol currently holds approximately 8.83% of the paid up share capital of the Company.

The Company allotted 1,581,753 equity shares of Rs. 2/- each, to the employees under the ESOP schemes in the financial year 2010-11.

The outstanding issued, subscribed and paid-up capital of the Company as on March 31, 2011 is Rs. 175,726,830 consisting of 87,863,415 equity shares of Rs. 2/- each.

Manpower Strength

The Company had 6,514 employees as on March 31, 2011. During the year there was a net addition of 1,596 employees, which increased the employee strength by 32% over the previous year.

CRISIL Ratings

CRISIL has confirmed the financial credit rating of AA-/ stable for the revised bank limits of Cash Credit and Term Loan facilities and P1+ for Bank Guarantee & Letter of Credit, for the Company.

Quality

The Company is highly committed to International standards raised by the Industry. The Company has been awarded ISO 9001:2008 (Quality Management Systems), ISO 27001:2005 (Information Security Management Systems), ISO 20000:2005 (Information Technology Service Management) and BS25999:2007 (Business Continuity Management) certificates by TUV Nord Cert GmbH for providing Software Development, Product Engineering, Product Support and Enabling Services.

Institutional Holding

As on March 31, 2011, the Institutional Holding in the Company was 28.70% of the listed capital. This excludes the following

(i) approximately 8.88% held by Warhol Limited, (ii) approximately 0.67% held by International Finance Corporation, (iii) approximately 1.68% held by Cargill Mauritius Limited (CML). Including the aforementioned three shareholders, total institutional holding as on March 31, 2011 stood at 39.93%.

Information about the Subsidiary Companies

As on March 31, 2011 the Company had nine operational subsidiaries:

1. KPIT Infosystems Inc. (KPIT US) was incorporated in 1998, in the US, for catering to the demand of US based customers. The Company holds 100% of the share capital and voting power of KPIT US. KPIT US earned revenues of Rs. 3,763.04 Million (previous year Rs. 3,483.74 Million) and recorded a loss of Rs. 32.16 Million (previous year profit of Rs. 12.60 Million) ended on March 31, 2011. The loss above does not include translation loss of Rs. 32.97 Million.

2. KPIT Infosystems Limited (KPIT UK) was incorporated in 1996, in UK, for catering to the demand of customers based out of UK & Europe. The Company holds 100% of the share capital and voting power of KPIT UK. During the year, KPIT UK has earned revenues of Rs. 788.33 Million (previous year Rs. 872.60 Million) and registered a loss of Rs. 17.04 Million (previous year loss of Rs. 6.64 Million). The loss above does not include translation loss of Rs. 19.39 Million.

3. KPIT Infosystems GmbH (KPIT Germany) was added as a step down subsidiary in 2005. KPIT Germany is a 100% subsidiary of KPIT UK. This subsidiary is completely focused on huge automotive market in Germany to expand our customer base in this segment with a vision to become No. 1 global product engineering partner to the automotive industry. KPIT Germany reported a profit of Rs. 16.36 Million for the year ended March 31, 2011 (previous year a loss of Rs. 18.04 Million) on revenues of Rs. 555.45 Million (previous year Rs. 503.44 Million).

4. KPIT Infosystems Inc. [a.k.a. SolvCentral.com Inc.] (SolvCentral), based in US was added as a step down subsidiary in 2005 when KPIT US acquired 90% of its shares. SolvCentral is a 100% subsidiary of KPIT US. SolvCentral is focused in the Business Intelligence (BI) space in the US market. SolvCentral reported a loss of Rs. 27.17 Million during the year ended March 31, 2011 (previous year loss of Rs. 0.66 Million) with revenues of Rs. 74.84 Million (previous year Rs. 128.90 Million).

5. KPIT Infosystems France SAS (KPIT France) was formerly known as Pivolis. KPIT France has provided direct presence in France which is an important market in European region from KPITÃs growth perspective. In the Financial year 2010-11 KPIT France reported a profit of Rs. 1.22 Million during the year (Previous year a profit of Rs. 6.13 Million) with revenues of Rs. 325.99 Million (previous year Rs. 341.97 Million).

6. Sparta Consulting Inc. (Sparta Inc.) was added as a step down subsidiary in 2009, when KPIT US acquired 100% of its shares. Sparta Inc. is a leading provider of high end SAP solutions and is one of the fastest growing SAP consultancies in North America. Sparta Inc. (consolidated) reported a profit of Rs. 234.20 Million during the year ended March 31, 2011 (previous period profit of Rs. 29.85 Million) on revenues of Rs. 2,691.72 Million (previous period Rs. 578.70 Million).

7. Sparta Infotech India Private Limited (Sparta India), was a

subsidiary of Sparta Inc. Consequent upon the acquisition of 100% shares of Sparta Inc., by KPIT US, Sparta India is now a subsidiary of KPIT US. Sparta India was incorporated to cater SpartaÃs India based clientele. Sparta India reported a profit of Rs. 111.22 Million during the year ended March 31, 2011 (previous period profit of Rs. 3.46 Million) on revenues of Rs. 304.73 Million (previous period Rs. 50.29 Million).

8. In2Soft GmbH (In2Soft) is based in Munich, Germany, whose 74% share capital was acquired by KPIT Germany on October 1, 2010. The fixed consideration payable for acquisition of ln2Soft is Euro 2.5 Million. In2Soft is an expert in diagnostics and telematics for the automotive industry. In2Soft develops the OBU software for the tolling systems in Germany, Europe and world- wide and provides with VisualODX, a modern and complete tool set for vehicle diagnostics. The objective of the acquisition was to have productized solutions for global automotive customers and to have an onsite German presence to potentially serve strategic automotive customers in Germany. ln2Soft reported a profit of Rs. 7.33 Million during the period ended March 31, 2011 on revenues of Rs. 99.19 Million. (ln2softs figures of revenue and profit have been taken into consideration for post acquisition period i.e. after October 1, 2010 till March 31, 2011).

9. CPG Solutions, LLC (CPGÃ) is based in Florida, USA. KPIT US, the CompanyÃs wholly owned subsidiary in USA, acquired 100% shares in CPG. CPG became wholly owned subsidiary of KPIT US with effect from October 1, 2010. The total consideration payable for acquisition of CPG is USD 13.2 Million. CPG, an Oracle Gold Partner, is a focused player in solutions for companies in Manufacturing, Supply Chain and Engineering space with over a decade of specialized consulting experience in this focused area. The acquisition of CPG will strengthen the CompanyÃs strategic position as preferred Oracle partner for manufacturing companies and is designed to complement the CompanyÃs strengths in global ERP roll outs, implementation and support and maintenance services. CPG reported a profit of Rs. 46.61 Million during the period ended March 31, 2011 on revenues of Rs. 337.21 Million. (CPGs figures of revenue and profit have been taken into consideration for post acquisition period i.e. after October 1, 2010 till March 31, 2011).

Companies ceasing to be subsidiaries:

KPIT Infosystems Central Europe Sp. Z.o.o. (KPIT PolandÃ) and KPIT Cummins Global Business Solutions Limited (KPIT GBSÃ): The HonÃble High Court of Judicature at Mumbai passed the merger order and approved the Scheme of amalgamation of KPIT Infosystems Central Europe Sp. Z.o.o., Poland (KPIT Poland) and KPIT Cummins Global Business Solutions Limited (KPIT GBSÃ) with the Company on January 28, 2011. The effective date of merger of KPIT Poland and KPIT GBS with the Company was March 1, 2011.

The operations of KPIT Poland were not commercially viable to run as a separate company, since its major customer had merged with another company. Hence it was decided to merge the same with the Company and close KPIT PolandÃs operations as per the Polish laws.

KPIT GBS was engaged in BPO activity and achieved its operational breakeven in FY10. Consolidation of the operations of KPIT GBS with the Company was aimed at improving operational efficiencies.

Particulars required as per Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, a holding Company is required to attach the Directors Report, Balance Sheet and Profit and Loss Account of all the subsidiaries. However the Government of India vide General Circular No: 2 /2011 has given a general exemption to the companies from attaching the annual reports of subsidiaries provided certain conditions are fulfilled. Accordingly, this annual report does not contain the financial statements of the subsidiaries. Statement pursuant to Section 212 of the Companies Act, 1956, is given elsewhere in this annual report. The Company will make available the audited annual accounts and related detailed information of the subsidiary companies, where applicable, upon request by any member of the Company. The Company will also upload the accounts of the individual subsidiaries on its official website. These documents will also be available for inspection during business hours at our registered office.

Directors

Pursuant to Article 72 of the Articles of Association of the Company read with Section 256 of the Companies Act, 1956, Dr. R. A. Mashelkar, Mr. Bruce Carver and Ms. Elizabeth Carey retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

Mr. Girish Wardadkar, President and Executive Director resigned from the directorship of the Company with effect from April 25, 2011 after a tenure of 6 years with the Company. Mr. Girish Wardadkar has been instrumental in establishing strong systems with a focus on improving quality and productivity. He has also contributed significantly in building reporting and control systems. The Board places on record its sincere appreciation for his tremendous contribution towards the growth and success of the Company over the years.

Mr. Deepak Malik resigned from the directorship of the Company with effect from April 25, 2011. The Company has immensely benefitted from the expert professional guidance of Mr. Deepak Malik. The Board places on record its sincere appreciation for all the help and guidance provided by him.

Auditors

The Statutory Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re- appointed.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon is annexed to this annual report. The Auditors Certificate in respect of compliance with the provisions concerning Corporate Governance, as required by Clause 49 of the Listing Agreement, is also annexed.

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Responsibility Statement of the Board of Directors

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors confirm that:

i) in the preparation of the accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed and there has been no material departure;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the said financial year and of the profit of the Company for the said financial year;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the accounts for the year ended March 31, 2011 on a going concernÃ basis.

Particulars of Employees

As required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, a statement showing the names and other particulars of employees forms a part of this report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report

excluding the aforesaid statement is being sent to all the members of the Company. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the registered office of the Company.

Employees Stock Option Plan (ESOP)

Information relating to stock option programme of the Company is provided in the Annexure I of this report. The information is being provided in compliance with Clause 12 of the Disclosure in the DirectorsÃ Report of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Fixed Deposits

The Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

Conservation of Energy - Our CompanyÃs primary business being Software services, our operations are conducted with energy conservation as a focus area. The Company has taken various initiatives for optimum utilization and conservation of resources. Some of the initiatives taken by the Company are as follows:

1. Energy Conservation measures:

The facility at Hinjawadi Pune reflects KPITs commitment to energy efficiency and "Green GrowthÃ. The features incorporated in building design are as follows:

a. Buildings are clad with Clay Tiles, which prevent the ingress of heat inside the building, thus reducing the heat load and consequently, lessen load on AC.

b. Facility is built in such a way wherein we make maximum use of natural light thus saving energy. Internal gardens make the facility cooler which helps in reducing dependency on AC.

c. Internal lighting is integrated with occupancy sensors which reduces the energy consumption.

d. AC system installed is of VRF technology which facilitates in the control of local cooling thus resulting in considerable saving vis-a-vis a conventional central AC system. The facility has won the Emerson Cup GOLD Award for the Lowest Energy Consumption in India and South East Asian Countries.

e. Installation of Ozonized air purification system has considerably reduced load on AC system.

2. Two Six Sigma Green Belt projects completed on minimizing wastage in energy consumption for Pune Facility which has resulted in 15% savings.

3. Various steps have been undertaken to utilize the energy in an optimum manner like:

a. All lights replaced with CFL;

b. Lift lights replaced with LEDs;

c. Correction done to capacitor bank to achieve 1.0 power factor to minimize the power losses;

d. Shutting down UPS at night and on weekends;

e. Defined AC working hours and temperatures to suit seasonal changes;

f. Optimization of LUX level in working areas by removing extra lights;

g. Changing over to LED lamp projectors.

4. PC Shut Down Drive undertaken to shut down PCs during non working hours resulting into considerable reduction in energy consumption.

Water Conservation measures:

1. Hydro pneumatic system of water supply installed there by ensuring minimum wastage of water.

2. Recycled water generated through Sewage treatment plant used for gardening purpose.

Environment Improvement initiatives:

1. Tree plantation: Initiated within and outside the premises.

2. Vermi Compost Plant: A vermi compost plant has been set up for treating the organic waste, which generates organic manure.

3. Employee Transport: Various steps taken in employee transport to reduce fuel consumption such as:

a. Control on unscheduled cab requirements thereby ensuring optimum seat utilization.

b. Use of buses in lieu of cabs.

Research and Development (R & D) Activities -

The Company has been laying thrust on Research & Development activities for the past few years. The Company has formed its own R&D center called Center for Research in Engineering Sciences and TechnologyÃ or CREST. A separate section on R&D activities undertaken by the Company, forms a part of this report.

Technology Absorption - The Company is constantly upgrading its technological excellence through its Infrastructure, Technology and Services (ITS) function. The Company has started building partnerships with leading technology vendors like Microsoft, SAP, Oracle, HP, IBM and VMware. Through these partnerships the Company has the advantage to create and build technical solutions for its customers and for its own consumption. The Company focuses on using the technology for its own use as well as creating showcase for customers.

Foreign Exchange Earnings and Outgo - The Company focuses on exports and undertakes all possible efforts to expand its presence in the export markets. Total foreign exchange earnings during the year have been Rs. 4,632.95 Million (previous year Rs. 3,714.09 Million) and foreign exchange outgo has been Rs. 633.55 Million (previous year Rs. 613.96 Million).

Awards/Recognition

- KPIT Cummins was awarded the Economic Times Zigwheels Automotive Idea of the Year AwardÃ for 2010, for its intelligent plug-in parallel hybrid solution, REVOLO.

- NASSCOM has awarded the Promising Innovation of the Year, 2011Ã Award to KPIT Cummins for REVOLO. This award is an acknowledgement of KPITÃs commitment to fostering automotive technology innovation.

- KPIT CumminsÃ REVOLO was also awarded Best Electronic Product of the Year 2011Ã at Indian Semiconductor Association Technovation event. This award completes the hat-trick for REVOLO.

- KPIT Cummins has also won the global Cummins ChairmanÃs Quality AwardÃ in Six-Sigma which has the top most recognition for Six Sigma in the Cummins family.

- Our Chairman & Group CEO, Mr. Ravi Pandit was recently felicitated with Vocational Excellence AwardÃ of the Rotary Club of Pune, for his vision and excellence in the field of profession and business. He received the award from noted scientist and innovation evangelist, Dr. Raghunath Mashelkar.

- Mr. Anil Patwardhan, our CFO was honored with the CFO in Information Technology SectorÃ Award by the Institute of Chartered Accountants of India (ICAI) for exceptional performance and achievements as CFO in the Information Technology category for 2010.

- KPIT CumminsÃ REVOLO won a special recognition award for exceptional leadership in catalyzing consumer adoption of sustainable solutions, at the India Carbon OutlookÃs Parivartan Sustainability Leadership Awards, March 2011.

- KPIT CumminsÃ REVOLO has been selected as a winner in the knowledge@Wharton Innovation tournament in the Sustainable implemented SolutionÃ category, April 2011.

Acknowledgments

Your Directors take this opportunity to thank all the members and investors of the Company for their continued support.

Your Directors hereby place on record their appreciation for the co-operation and support received from all the customers, vendors, financial institutions including State Bank of India, International Finance Corporation, HDFC Bank Ltd., The Hongkong and Shanghai Banking Corporation Ltd., Citibank N.A., Axis Bank Ltd., BNP Paribas, Standard Chartered Bank, ICICI Bank Ltd., DBS Bank Ltd. and Kotak Mahindra Bank Ltd. and the Registrars and Share Transfer Agent viz. Link Intime India Pvt. Ltd. and also thank all the employees of the Company for their valuable contribution in the growth of the Company.

We also thank the Governments of United States of America, United Kingdom, Germany, France, Poland, Japan, Singapore, South Korea, South Africa and China. We further thank all the constituents of the Government of India, particularly Ministry of Communication and Information Technology, the Software Technology Parks of India, Pune and Bengaluru, the Department of Central Excise & Customs, Maharashtra Industrial Development Corporation, National Association of Software and Service Companies, Stock Exchanges (where our shares are listed), Securities and Exchange Board of India, Registrar of Companies, Pune, Ministry of Corporate Affairs, Reserve Bank of India, the State Governments, and other government agencies, and the Media and Press for their support during the year and look forward to their continued support in the future.

By Order of the Board of Directors For KPIT Cummins Infosystems Limited

S. B. (Ravi) Pandit Chairman & Group CEO

Pune, April 25, 2011

Mar 31, 2010

The Directors are pleased to present the Nineteenth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2010.

Performance of the Company

Particulars Standalone Consolidated 2009-2010 2009-2010

USD Rupees USD Rupees Million Million Million Million

Total Sales and Income 90.19 4,270.45 154.52 7,316.41

Total Expenses 62.30 2,949.86 120.42 5,701.97

PBDIT 27.89 1,320.58 34.10 1,614.43

Profit/(Loss) before Tax (PBT) 19.04 901.73 21.68 1,026.45

Profit/(Loss) after Tax (PAT) 16.57 784.50 18.11 857.31

Profit Available for appropriation 16.57 784-50 18-11 857.31

Result of Operations

The global meltdown has made a significant impact on the growth of the IT industry and the economy at large and KPIT is no exception to this. Revenue growth in the fiscal has declined, with total sales in revenue terms being comparatively lower than previous year. Due to the global meltdown, like other IT companies, the Company also decided to shift its onsite operations to offshore. The change in this business model, resulted into a decline in revenues. However the total volume of business and the number of employees working on the projects have remained almost same as previous year. The Company has managed to sustain its trend of growth in profits. In light of the same, the result of operations is reported herein below.

Total consolidated revenue for the fiscal year 2009-10 (FY10) was Rs. 7,316.41 Million. Gross Profit and Earnings before depreciation, interest and tax (EBITDA) are Rs.3,225.91 Million and Rs.1,614.43 Million, respectively. Gross profit margin improved by 0.41 % to 44.1 % of the revenue. Net profit after tax grew by 30.19% to Rs.857.31 Million.

The revenues for the year on a consolidated basis in USD terms are USD 154.52 Million as against USD 174.10 Million during the previous year. Average realization rate was Rs. 47.35 per US Dollar.

Standalone revenue for the fiscal year 2009-10 (FY10) was Rs. 4,270.45 Million. Gross profit is at Rs.1,945.55 Million. Net profit after tax grew by 24.98% to Rs.784.50 Million.

Transfer to Reserves

We propose to transfer Rs. 79 Million to the General Reserve. An amount of Rs. 704.21 Million is proposed to be retained in the Profit 6 Loss Account.

Dividend

The Directors are pleased to recommend a dividend @ 35% (Rs. 0.70) per equity share of face value of Rs. II- each on the paid-up equity share capital of the Company.

Share Capital

The Company allotted 480,080 equity shares of Rs. II- each, to the employees under the ESOP schemes in the financial year 2009-10.

The outstanding issued, subscribed and paid-up capital of the Company as on March 31, 2010 is 78,523,041 shares (of Rs. II- each).

Manpower Strength

The Company had 4,918 employees as on March 31, 2010. During the year there was a net addition of 1,719 employees. The employee strength increased by 5.9% over the previous year.

CRISIL Ratings

CRISIL has confirmed the financial credit rating of AA-/ Stable for the revised bank limits of Cash Credit and Term Loan facilities and P1+ for Bank Guarantee & Letter of Credit for the Company.

Quality

The Company is highly committed to security standards raised by the Industry. The Company has been awarded 9001:2008 and 27001:2005 certificates by TUV Nord Cert GmbH, for providing Software Development, Product Engineering, Product Support, etc.

Institutional Holding

As on March 31, 2010, the institutional holding in the Company was 22.88%. This excludes the following (i) approximately 4.54% held by LB India Holdings Mauritius II Limited, an affiliate of Lehman Brothers, US and its PAC, (ii) approximately 1.98% held by International Finance Corporation, Washington, and (iii) approximately 1.87% held by Cargill Mauritius Limited (CML). Including the aforementioned three shareholders, total institutional holding as on March 31, 2010 stood at 31.27%.

Information about the Subsidiary Companies

As on March 31, 2010 the Company had nine subsidiaries:

1. KPIT Infosystems Inc. (KPIT US) was incorporated in 1998, in the US, for catering to the demand of US based customers. The Company holds 100% of the share capital and voting power of KPIT US. KPIT US earned revenues of Rs. 3,483.74 Million (previous year Rs. 4,139.90 Million) and recorded a profit of Rs.12.60 Million (previous year profit of Rs. 40.99 Million) ended on March 31, 2010.

2. KPIT Infosystems Limited (KPIT UK) was incorporated in 1996, in UK, for catering the demand of customers based out of UK & Europe. The Company holds 100% of the share capital and voting power of KPIT UK. During the year, KPIT UK has earned revenues of Rs. 872.60 Million (previous year Rs. 1,170.40 Million) and registered a loss of Rs.6.64 Million (previous year profit of Rs. 9.53 Million).

3. KPIT Cummins Global Business Solutions Limited (KPIT GBS)

was incorporated in 2005 as a wholly owned subsidiary of the Company in India for rendering business process outsourcing and other business solutions. KPIT GBS specializes in providing BPO/KPO services and consulting in Governance & Regulatory Compliance. KPIT GBS reported a profit of Rs. 145.66 Million for the year ended March 31, 2010 (previous year a loss of Rs. 74.41 Million) on revenues of Rs. 516.64 Million (previous year Rs. 486.40 Million).

4. KPIT Infosystems GmbH (KPIT Germany) was added as a step down subsidiary in 2005. In the financial year 2009-10, KPIT UK acquired the balance shareholding of 40% in KPIT Germany. KPIT Germany is now a 100% subsidiary of KPIT UK. This subsidiary is completely focused on huge automotive market in Germany to expand our customer base in this segment with a vision to become No. 1 global product engineering partner to the automotive industry. KPIT Germany reported a loss of Rs. 18.04 Million for the year ended March 31, 2010 (previous year a profit of Rs. 5.49 Million) on revenues of Rs. 503.44 Million (previous year Rs. 651.97 Million).

5. KPIT Infosystems Inc. [a.k.a. SolvCentral.com Inc.] (SolvCentral),

based in US was added as a step down subsidiary in 2005 when KPIT US acquired 90% of its shares. In the financial year 2009-10, KPIT US acquired the balance shareholding of 10% in SolvCentral. SolvCentral is now a 100% subsidiary of KPIT US. SolvCentral is focused in the Business Intelligence (Bl) space in the US market. SolvCentral reported a loss of Rs. 0.66 Million during the year ended March 31, 2010 (previous year loss of Rs. 3.54 Million) with revenues of Rs. 128.90 Million (previous yearRs. 187.52 Million).

6. KPIT Infosystems France SAS (KPIT France) was formerly known as Pivolis. KPIT France has provided direct presence in France which is an important market in European region from KPITs growth perspective. In the Financial year 2009-10 KPIT France reported a profit of Rs. 6.13 Million during the year (Previous year a profit of Rs. 12.64 Million) with revenues of Rs. 341.97 Million (previous year Rs. 345.96 Million).

7. KPIT Infosystems Central Europe Sp.z o.o., (KPIT Poland),

was promoted by the Company as its wholly owned subsidiary in Poland in August 2006. KPIT Poland is providing near shore centre to the customers based out of Europe, who are looking forward to outsourcing from India based service providers. KPIT Poland reported a loss of Rs. 5.52 Million during the year ended March 31, 2010 (previous year loss of Rs. 23.26 Million) on revenues of Rs. 33.15 Million (previous year Rs. 55.73 Million).

8. Sparta Consulting Inc. (Sparta Inc.) merged into KPIT US on October 30, 2009 and is now a wholly owned subsidiary of KPIT US. The total consideration for merger of Sparta Inc., with KPIT US is upto USD 38 Million to be paid in a phased manner. Sparta Inc., a California, US-based company and a leading provider of high end SAP solutions is one of the fastest growing SAP consultancies in North America. With the merger of Sparta Inc., the Companys business model will be further strengthened to focus more on select industries like Automotive and Industrials and achieve market leadership by creating best in class SAP practice. It would also help leverage the Companys global presence especially in Europe and Asia Pacific.

9. Sparta Infotech India Private Limited (Sparta India), was a

subsidiary of Sparta Inc. Consequent to the merger for Sparta Inc., with KPIT US, Sparta India is now a subsidiary of KPIT US. Sparta India was incorporated to cater Spartas India based clientele.

Sparta Inc. (consolidated) reported a profit of Rs. 29.85 Million during the period ended March 31, 2010 on revenues of Rs. 578.70 Million. (Spartas figures of revenue and Profit have been takeninto consideration for post-merger period i.e. after October 30, 2009 till March 31, 2010)

Particulars required as per Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors Report, Balance Sheet and Profit and Loss Account of all the above subsidiaries. The Company had applied to the Government of India for an exemption from such attachment as we present the audited consolidated financial statements in the annual report. We believe that consolidated financial statements present a full and fair picture of the state of affairs and the financial condition of a

company, and are accepted globally. Government of India has granted us an exemption from complying with Section 212(8) vide its letter dated March 17, 2010. Accordingly, this annual report does not contain the financial statements of these subsidiaries. Statement pursuant to Section 212 of the Companies Act, 1956, is given elsewhere in this Annual Report. The Company will make available the audited annual accounts and related detailed information of the subsidiary companies, where applicable, upon request by any member of the Company. The Company will also upload the accounts of the individual subsidiaries on its official website. These documents will also be available for inspection during business hours at our registered office.

Directors

Pursuant to Article 72 of the Articles of Association of the Company read with Section 256 of the Companies Act, 1956, Mr. Anant Talaulicar, Mr. Amit Kalyani and Dr. Srikant Datar retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

Mr. Girish Wardadkar was re-appointed as the President & Executive Director of the Company for a further period of five years with effect from January 19, 2010. Mr. Girish Wardadkars re-appointment as President 6 Executive Director is subject to the approval of the members of the Company in general meeting. A detailed profile of Mr. Girish Wardadkar forms part of the notice of this ensuing meeting, which is attached with this Annual Report.

Mr. K. V. Krishnamurthy resigned from the directorship of the Company with effect from January 18, 2010. The Company has immensely benefitted from the expert professional guidance of Mr. K. V. Krishnamurthy. The Board places on record its sincere appreciation for all the help and guidance provided by him.

Auditors

The Statutory Auditors, M/s. Deloitte Haskins 6 Sells, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon is annexed to this annual report. The Auditors Certificate in respect of compliance with the provisions concerning Corporate Governance, as required by Clause 49 of the Listing Agreement, is also annexed.

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis, which forms a part of this Report.

Responsibility Statement of the Board of Directors

Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors confirm that:

i) in the preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed and there has been no material departure;

ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the said financial year and of the profit of the Company for the said financial year;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the accounts for the year ended March 31, 2010 on a going concern basis.

Particulars of Employees

As required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, a statement showing the names and other particulars of employees forms a part of this report. However, having regard to the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid statement is being sent to all the members of the Company. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the registered office of the Company.

Employees Stock Option Plan (ESOP)

Information relating to stock option programme of the Company is provided in the Annexure I of this report. The information is being provided in compliance with Clause 12 of the Disclosure in the Directors Report of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Fixed Deposits

The Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

Conservation of Energy - Our Companys primary business being- Software services, our operations are conducted with energy conservation as a focus area. The Company has taken various initiatives for optimum utilization and conservation of resources. Some of the initiatives taken by the Company are as follows:

1. Energy Conservation measures:

The facility at Hinjawadi Pune reflects KPITs commitment to energy efficiency and "Green Growth". The features incorporated in building design are as follows:

a) Buildings are clad with Clay Tiles, which prevent the ingress of heat inside the building, thus reducing the heat load and consequently, lessen load on AC.

b) Facility is built in such a way where in we make maximum use of natural light thus saving energy. Internal gardens make the facility cooler which helps in reducing dependency on AC.

c) Internal lighting is integrated with occupancy sensors which reduces the energy consumption.

d) AC system installed is of VRF technology which facilitates in the control of local cooling thus resulting in considerable saving vis-a-vis a conventional central AC system

e) Installation of Ozonized air purification system has considerably reduced load on AC system.

2. Two Six Sigma Green Belt projects completed on minimizing wastage in energy consumption for Pune Facility which has resulted in 15% savings.

3. Various steps have been undertaken to utilize the energy in an optimum manner like:

a) All lights replaced with CFL;

b) Lift lights replaced with LEDs;

c) Correction done to capacitor bank to achieve 1.0 power factor to minimize the power losses;

d) Shutting down UPS at night and on weekends;

e) Defined AC working hours and temperatures to suit seasonal changes;

f) Optimization of LUX level in working areas by removing extra lights;

g) Changing over to LED lamp projectors;

4. PC Shut Down Drive undertaken to shut down PCs during non- working hours resulting into considerable reduction in energy consumption.

Water Conservation measures:

1. Hydro pneumatic system of water supply installed there by ensuring minimum wastage of water.

2. Recycled water generated through Sewage treatment plant used for gardening purpose.

Environment Improvement initiatives:

1. Tree plantation: Initiated within and outside the premises.

2. Employee Transport: Various steps taken in employee transport to reduce fuel consumption such as:-

a) Control on unscheduled cab requirements thereby ensuring optimum seat utilization.

b) Use of buses in lieu of cabs

Research and Development (R 6 D) Activities - It has been 3 years since inception of our R&D center called Center for Research in Engineering Sciences and Technology or CREST. Every year CREST team has made significant contribution.

During the first year, we put focus on driver safety and image processing. The efforts put in the first year have now started paying off well in terms of concrete R&D projects from our customers.

In the second year, our focus was on High Performance Computing (HPC). In the second year itself we received a R 6 D project from power generation industry and we successfully solved the problem of load balancing based on our patented work in the High Performance Computing area.

This year, which is our third year, we started working in the cloud computing area. Our work on cloud computing along with HPC resulted in reduction of execution time for automotive crash simulation from 120 hours to only 12 hours, a savings of 90% in execution time! This resulted in customer delight and increased confidence that KPIT Cummins can do it.

Our significant research contribution this year includes unique design, development, and successful implementation of hybrid technology in a vehicle. The technology is so novel and unique that we have filed for 11 patents on this technology.

This year, the contribution to patents has been substantial. In one year, we have filed for 16 patents. With this new addition, we are glad that KPIT Cummins has reached a noteworthy milestone of 24 patents.

Client projects: Our research and development projects have continued to attract specialized customer projects and revenues throughout the year: An image processing-based manufacturing solution was delivered to one of our customers and a vision-based vehicle safety application is in the pipeline. To help us serve the increasing customer requirements, our carefully-grown expertise in Image Processing is being consolidated into an Image Processing Center of Excellence.

Last year, we reported Lab-on-Wheels, our experimentation platform for developing and testing embedded algorithms, with a successful demonstration of collision avoidance. We have expanded our range of applications in the development which includes:

1) Lane Departure warning System

2) Driver Status Monitoring

3) Around View system

High Performance Computing, Cloud Computing: We began R&D in the area of Cloud Computing, which is a promising new technology for cost-effective and pervasive computing.

Our work in parallel computing has resulted in significant reduction in execution time for automotive crash simulation. Initially the crash simulation software used to take 5 to 6 days to run. Our team parallelized the program to give dramatic 90% reduction in execution time.

Recognitions: Based on our successful technology demonstrations and strong connect with academic as well as research institutions, we received World Bank support through a soft loan of one million dollars for our R&D projects.

Nalanda and Budding Technologist Program: Nalanda is our International Student Internship Program. We hosted three students from France and the U.S. last year. The program continues to be popular as we receive more nominations than we can accommodate.

Budding technologist is an engineering student project program specifically meant for students in India. We have significantly expanded our collaboration with local institutions by interviewing 250 students, selecting about 100 students, and sponsoring 21 student projects at the Bachelors and Masters level. This partnership bore fruit in the form of tangible demonstrations, one patentable project, seven papers, and industry-aware students. Our subject matter experts also helped in building strong technical skills amongst students through presentations, student projects, paper reviews, and mentoring students.

TechTalk: TechTalk@KPITCummins is our quarterly technical journal. We are now in the third year of the journal. We continue to receive very good response from our readers as well as authors. In the past year, we published issues covering topics in Concurrent Computing Systems, Sensor Networks, Energy - the next frontier, and Reaching New Heights with Intellectual Property. We also published a special issue with articles from our customers, shedding light on a variety of business aspects. We are planning issues on "Journey of the Wheel - Transportation" and "Advances in Driver Safety Applications" for the coming year.

Additional Recognitions received: To share knowledge and learn from other researchers we sent in the research papers for publication in international conferences. This year, five papers were accepted in the national and international conferences and online technology journals. Our commitment to R & D held steady in the past year despite the uncertain world market scenario. We will maintain our drive for solving customers issues as well as developing new cost effective solutions. Our focus areas will be on battery management, driver safety, vision systems, Lab-on Wheels, multicore, high performance computing, hybrid vehicles, and energy. We will continue to take other initiatives such as Nalanda, TechTalk, and University connect to greater heights to ensure breadth as well as depth in the R&D activities.

Technology Absorption Ã The Company is constantly upgrading its technological excellence through its Infrastructure, Technology and Services (ITS) function. The Company has started building partnerships with leading technology vendors like Microsoft, SAP, HP and Oracle. Through these partnerships the Company has the advantage to create and build technical solutions for its customers and for its own consumption. The Company focuses on using the technology for its own use as well as create showcase for customers.

Foreign Exchange Earnings and Outgo Ã The Company focuses on exports and undertakes all possible efforts to expand its presence in

the export markets. Total foreign exchange earnings during the year have been Rs. 3,714.09 Million (previous year Rs. 5,949.02 Million) and foreign exchange outgo has been Rs. 705.84 Million (previous year Rs. 2,103.08 Million).

Awards/Recognition

> Mr. S. B. (Ravi) Pandit, Chairman & Group CEO, honored with the Top Management Consortiums (TMC) Award of Excellence 2008- 2009 for his contribution to the field of Information Technology. (March 2010)

> "Vocational Excellence Award" conferred on Mr. Kishor Patil, CEO & Managing Director, by Rotary Club of Pune, Pashan, for his outstanding contribution to the field of Information Technology. (September 2009).

> Among the Best 5 Companies by Industry Focus: Automotive - International Association of Outsourcing Professionals. (April 2009).

> Among the Best 5 Companies by Geography Focus: Japan - International Association of Outsourcing Professionals. (April 2009).

> Among the top 25 companies to demonstrate excellence in Corporate Governance (fourth year in a row) - Institute of Company Secretaries of India - (December 2009).

Acknowledgements

Your Directors take this opportunity to thank all the members and investors of the Company for their continued support.

Your Directors hereby place on record their appreciation for the co-operation and support received from all the customers, vendors, financial institutions including State Bank of India, International Finance Corporation, HDFC Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, Citibank N.A., Axis Bank Limited, The Royal Bank of Scotland (erstwhile ABN Amro Bank NV). BNP Paribas, Standard Chartered, the Registrars and Share Transfer Agent viz. Link Intirne India Pvt. Ltd. and also thank all the employees of the Company for their valuable contribution in the growth of the Company.

We also thank the Governments of United States of America, United Kingdom, Germany, France, Poland, Japan, Singapore, South Korea and South Africa. We further thank all the constituents of the Government of India, particularly Ministry of Communication and Information Technology, the Software Technology Parks of India, Pune and Bangalore, the Department of Central Excise & Customs, Maharashtra Industrial Development Corporation, National Association of Software and Service Companies, Stock Exchanges (where our shares are listed), Securities and Exchange Board of India, Registrar of Companies, Pune, Ministry of Corporate Affairs, Reserve Bank of India, the State Governments, and other government agencies, and the Media and Press for their support during the year and look forward to their continued support in the future.

By Order of the Board of Directors For KPIT Cummins Infosystems Limited

S. B. (Ravi) Pandit

Pune, May 7, 2010 Chairman & Group CEO

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