KPIT Technologies Ltd Directors Report.

Dear Members,

The Directors are pleased to present the Fourth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2021.

Performance of the Company

(In million)

Particulars

Standalone 2020-21

Consolidated 2020-21

USD USD
Revenue from operations 108.36 8,028.48 274.77 20,357.41
Profit before Tax (PBT) 13.41 993.51 23.97 1,776.23
Profit after Tax (PAT) 12.62 935.26 19.85 1,471.03

Result of Operations

During the year under review, the total revenues from operations (consolidated) were 20,357.41 million. Earnings before interest, tax, depreciation and amortization was 3,100.75 million on consolidated basis. Net profit after tax (consolidated) was 1,471.03 million. In US Dollar terms, revenues from operations for the year on consolidated basis was $ 274.77 million. Average realization rate was 74.09 per US Dollar.

Standalone sales for the financial year 2020-21 reached a 935.26 million. 8,028.48millionandNetprofit

Revision of Financial Statements giving effect to the Composite Scheme of Arrangement

The Board of Directors of the Company at its meeting held on April 28, 2021, had considered and approved the Audited Standalone as well as Consolidated financial statements of the Company for the year ended March 31, 2021. However, subsequently on receipt of merger order on June 15, 2021, approving the scheme of merger by absorption of Impact Automotive Solutions Limited, a wholly owned subsidiary, with KPIT Technologies Limited and their respective shareholders [Company Joint Petition No.: C.P. (CAA)/ 1058/MB-II/ 2020 Connected with Company Joint Application No.: C.A. (CAA)/3219/ MB-II/2019] by the Hon’ble Mumbai Bench of National Company Law Tribunal, with an appointed date of April 1, 2019, as defined in the Scheme itself and became effective on June 22, 2021 by filing the said order with Registrar of Companies. The Board of Directors at its meeting held on July 23, 2021 considered and approved the Revised Audited Standalone as well as Consolidated financial statements for the year ended March 31, 2021 for giving effect of merger accounting treatment.

Dividend

The Directors are pleased to recommend a final dividend of 1.50/- per equity share of face value of 10/- each (15%) on the paid-up equity share capital of the Company for the year under review. The total payout will amount to 411.22 million including dividend distribution tax.

Recently, the Company has amended its dividend Distribution Policy by increasing the Annual Dividend Payout Ratio up to 35% in coming two to three years.

The said Dividend Distribution Policy is uploaded on the website of the Company (https://www.kpit.com/ investors/#policies-reports-filings ).

Awards & Recognition

KPIT has received award for innovation from Marico Foundation as the top winner in their Innovate2BeatCOvId national challenge.

KPIT has received 18th FICCI CSR Award for KPIT Sparkle under Category 7 - Exemplary Innovation.

Quality, Productivity and Innovation

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 is driven with an objective to ensure zero defect delivery to our customers. To achieve this objective, we had come out with a comprehensive quality framework with involvement of all key stakeholders and leadership team. As part of this framework, key initiatives in the areas of People, Process and Technology were identified with a focus on improving performance at Project/Program level, Practice level and Unit level. We picked key initiatives for the year from this framework and started with detailed plan for each of the initiative. Initiatives that were deployed across all projects during the previous year were sustained through strong governance. For the initiatives planned during the year, we defined a framework for sustainable process, improved it through pilots and then tracked deployment across all projects through strong governance.

Competency Management and Knowledge Management was one of the key initiatives. A clear framework for identification of skill gaps at project and practice level and a clear structure for ramping down skill gaps through training and other mechanisms was put in place and deployed across all projects. This helped in improving competency at individual level, project level and practice level. Now, an integrated system has been designed to manage this and first phase of automation has been deployed. Katapult framework that was developed during previous year was deployed across all projects for improving code quality through daily run on the developed code.

The scope of this framework was extended to measure testing performance and now the deployment across all projects is in progress. This has started showing of achieving product quality on a continuous basis.

On the quantitative analysis initiative, actions started with defining/redefining KPIs in alignment to customer needs across all projects and now the focus is on achieving First Time Right. To get this framework and mindset across, new measures have been defined and the required automation is in place for uniform application across all projects.

All these initiatives helped us in moving towards zero defect delivery and resulted in higher CSAT ratings from customer with a consistent higher coverage in all quarters compared to previous year. This has also resulted in downward trend on high risk and red projects.

To sustain quality with our scalability, there is more dependence on our processes, Tools and Systems.

Continuous improvement is our focus to achieve efficiency in our processes and to keep at pace with new trends. These improvements come through learnings in the projects, feedback from customers and ideas from the employees. During the year, in addition to the quality framework initiatives, we took up many such improvements, upgraded our processes, published and deployed across projects. The focus is on keeping the processes efficient and lean.

Our commitment to quality is ratified by our consistent endeavour in certifying ourselves to the best standards in the Industry. We continue to sharpen our Quality focus through internal initiatives and by certifying against international standards. In accordance with this, we underwent surveillance audit on ISO9001:2015. We continue to maintain our certification on Automotive SPICE OML5 and our next recertification assessment is planned this year. We also continue to maintain our certification on Information Security Management (ISO/IEC 27001:2013), IT Service Management (ISO/IEC 20000-1:2011) and Business Continuity Management (ISO 22301:2012).

Share Capital

The issued, subscribed and paid-up capital of the Company as on March 31, 2021 is 2,741.43 million consisting of 274,143,808 equity shares of 10/- each.

Institutional Shareholding

As on March 31, 2021, the total institutional shareholding in the Company was 36.36% to the total share capital.

ICRA Ratings

ICRA has assigned the (ICRA) A1+ as short term rating and (ICRA) AA- with the "Positive" outlook as the Long term rating.

Information about the Subsidiary & Associate Companies

As on March 31, 2021, the Company had eleven subsidiaries and one associate company. 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. Ministry of Corporate Affairs (MCA), vide General Circular nos. 14/2020 dated April 8, 2020, 17/2020 dated April 13, 2020 and 02/2021 dated January 13, 2021 provided certain relaxations for companies, including conducting Extraordinary General Meeting (EGM) through Video Conferencing (VC) or through other audio visual means (OAVM) for passing of special and ordinary resolution by Company on account of threat posed by COVID-19. Further, MCA vide General Circular 20/2020 dated May 5, 2020, & Securities and Exchange Board of India vide circular SEBI/HO/CFD/ CMD1/CIR/P/2020/79 dated May 12, 2020 and SEBI/HO/ CFD/CMD2/CIR/P/2021/11 dated January 15, 2021 has extended these relaxations to Annual General Meeting of companies to be conducted during the calendar year 2021 and it has also dispensed with the printing and dispatch of annual reports to shareholders. In view of the same, Members interested in obtaining a soft copies of the audited annual accounts of the Company and it’s subsidiary companies may visit investor section on website of the Company www.kpit.com.

Directors

Owing to other business commitments and preoccupation, Mr. Rafi Maor resigned from the post of directorship of the Company with 9, 2020. Further, due to the urgent personal pressing engagements, Ms. Shubhalakshmi Panse has resigned from the post of directorship of the Company with effect from June 17, 2021. The Board places on record its appreciation for valuable services provided by them during their tenure. In accordance with Section 152 of the Act, Mr. Sachin Tikekar retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his reappointment. The Board at its meeting held on January 14, 2019, pursuant to the recommendation of Nomination and Remuneration (HR) Committee, appointed Prof. Alberto Sangiovanni Vincentelli as Additional Director and Independent Director for a period of 5 years with effect from January 16, 2019. Under Regulation 17(1A) of Listing Regulations, consent of the Members by way of Special Resolution is being sought by the Company in compliance with Regulation 17(1A) of Listing Regulations, for continuance of Prof. Alberto Sangiovanni Vincentelli beyond June 23, 2022 on account of his attaining the age of 75 years on that date.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. In the opinion of the Board, the independent directors possess integrity, expertise and experience (including the proficiency). 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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Act:

1. Mr. Anant Talaulicar

2. Mr. B V R Subbu

3. Prof. Alberto Sangiovanni Vincentelli

4. Mr. Nickhil Jakatdar

5. Ms. Shubhalakshmi Panse

(resigned w.e.f. June 17, 2021)

Key Managerial Personnel

from June 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. Ms. Priyamvada Hardikar - Chief Financial Officer with effect from June 12, 2020;

3. Ms. Nida deshpande – Company Secretary. during the year under review, Mr. vinit Teredesai resigned from the post of Chief Financial Officer with effect from June 12, 2020.

Board Meetings

Four 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 the 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.

Company’s Policy on Directors’ appointment and compensation

The Nomination and Remuneration Policy of the Company provides roles and responsibilities of the Nomination and Remuneration (HR) Committee and the criteria for evaluation of the Board and compensation of the directors and senior management. Further, as per the policy, the said Committee shall identify potential candidates for becoming members of the Board and determining the composition of the Board based on the need and requirements of the Company from time to time to bring out diversity in the Board and also identify persons to be recruited in the senior management of the Company and ensure the Companies compensation packages and other human resource practices are effective in maintaining a competent workforce and make recommendations relating thereto. Pursuant to the provisions of Section 134(3)(e) of the Act, the said policy of the Company on the appointment and compensation 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 available on Company’s website at the link: https://www.kpit.com/investors/#policies-reports-filings .

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)

KPIT’s Corporate Social Responsibility ("CSR") is aligned to have a stronger commitment towards the community.

KPIT demonstrate its commitment across all the regions of KPIT’s global presence. It also aims to create long-lasting impact across the focus areas of education, environment and employee engagement. KPIT firmly believe, through technology and innovation, KPIT can add significant values to the communities worldwide.

The Company had constituted a Corporate Social Responsibility (CSR) Committee and has framed the Policy on Corporate Social Responsibility as per the provisions of section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy including annual action plan is available on Company’s website at the link: https://www.kpit.com/investors/#policies-reports-filings. The initiatives taken by the Company on CSR during the year as per the said rules has been annexed to this Report as "Annexure 5".

Vigil mechanism/whistle blower policy

The Company has established a vigil mechanism/ whistle blower policy 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 & whistle blower may be accessed on the Company’s website at the link: https:// www.kpit.com/investors/#policies-reports-filings.

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 August 29, 2018 for a period of five years.

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 6". The report does not contain any qualification, reservation or adverse remark.

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 of the Company have expressed their opinion on adequacy of internal financial controls with reference to financial statements for the year under review and operating effectiveness of such controls.

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 Management discussion and Analysis Report giving detailed information on operations, performance and future outlook of the Company and its business forms a part of this Report.

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)".

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 Schemes (ESOSs)

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

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 at workplace and has 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. during the year under review, no case was filed with the POSH committee. Thus, there were no complaints pending as on March 31, 2021. The company has taken various measures to create awareness amongst employees such as sending emails and communication to all employees, conducted awareness sessions with new joiners and a session for ICC members by Advocate for explaining them legal remedies available to victims etc. for prevention of Sexual Harassment of Women at Workplace.

Fixed Deposits

The Company has not accepted any deposits as on March 31, 2021.

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 energy conservation is always a focus of KPIT. More than 50% of energy is consumed by HVAC. Hence the focus was on HVAC operations to maximize efficiency. Due to Pandemic conditions in year 2020-21, most of the employees were working from home hence, there is a drastic reduction in power consumption. New measures were implemented due to minimum occupancy in office, as AC and lights were put ON with respect to areas occupied. With these changed scenario, the Company has implemented various measures as putting on lights and HvAC only in areas where they are occupied and in use. Rounds were carried out frequently to identify areas to optimize usage of energy. As per COVID-19 guidelines, operating temperature of degree, thus reducing the consumption of energy. We have energyefficient lighting all across campus. The Company also focused on other utilities by continuous monitoring and measurement. Solar energy plant has been initiated by the Company and energy generated will be consumed internally.

Green Initiatives

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

In the state of Maharashtra, the Koyna-Chandoli corridor has been a host of KPIT’s afforestation efforts in association with the Wildlife Research & Conservation Society (WRCS). Continuing our previous year’s efforts, we aligned our afforestation activities with the onset of monsoon. Due to the COVID-19 pandemic, our volunteers have not been able to participate physically in the plantation activities this year. With the help of local villagers and full-time activists of WRCS, we planted a total of 5,000 saplings. With this, a cumulative of 45,900 saplings were planted in an area of 252 acres with an overall survival rate of 80 percent.

Our Chairman Mr. S. B. (Ravi) Pandit along with his family visited reforestation project at Koyna-Chandoli Corridor, Maharashtra. He further encouraged our contribution and efforts towards the environment and towards generating structured livelihood for the locals. The locals have been delighted to interact with Mr. Pandit and showcase the fruits of all the efforts. It was overwhelming to see them obtain vocational training with artifacts/t-shirts to generate further awareness towards environment conservation and further help support themselves financially.

KPIT celebrated World Environment Day as Environment month inviting all KPITians globally to be part of various virtual events with the theme "Celebrate Biodiversity". Events included Poster Design Campaign, Grow Your Plant Campaign and a guest talk on Biodiversity by Dr. Sanjay Joshi, (Ph.D, Zoology), Mumbai.

KPIT organized a "Make best out of waste" campaign inviting all KPITians to be part of various wasrestrictedto25 virtual workshops that included Eco-friendly Ganesha, Eco-friendly Diwali lanterns, Up-cycling old denim, Best out of E-waste.

KPIT, under its Water Conservation through Mass Volunteering Initiative, started the fourth fresh drinking water well in Maharashtra. This project, intended to address the potable water scarcity for the months when the nearby natural spring dries out; was a collaboration between KPIT, Jnana Prabodhini and the villagers. A well with 32 ft diameter and 32 ft depth will be able to store 7 lac litres of water. As a result, the village, with a population of 200 people and 1,000 cattle will now be tanker-free even in the arid months of the year. The project will be completed by January 2022.

Occupational Health and Safety Assessment Series (OHSAS)

In view of ongoing pandemic, the following activity sessions were carried out by the Company virtually for ensuring health and safety of our employees in the year 2020-21.

Weekly webinars on nutrition, wellness, stress management, infectious disease prevention, mental health, childcare, pain management, meditation.

Consultation through our in-house doctors and psychologists.

Yoga sessions from beginners to advanced level with expert trainers.

On Occasion of International Women’s Day, Fit mind

Body & Soul session, Talk with leading nutritionist, Talk with a senior gynecologist.

Engagement through Wellness activities throughout the year such as Zumba, Bolly fitness, Pilates exercise, ergonomics.

Specific preventive measures taken for safety of employees during COVID-19 pandemic:

I mplemented 96% Work From Home (WFH) to reduce risk of spread of COvId-19.

Weekly COvId-19/RTPCR tests from renowned lab for all employees and 3rd party staff.

V accination mandatory for all above 45 years.

Temperature monitoring was done by keeping the air-conditioning at more than 25 degrees in Pune and 23 degrees in Bengaluru Office.

Sanitizers were kept at all common places.

Alternate wash basin and Urinal are closed to maintain distancing in washrooms.

Daily windows are kept open for one hour before and after office hours for cross ventilation.

Formed cross functional team across the globe for safety, well-being and communication.

Deep cleaning and sanitization of office premises including increased frequency of cleaning all touch points like doorknobs, switches etc. throughout the day.

Wearing mask made mandatory for everyone in the office and for all third-party staff, face masks gloves were mandatory in the week leading to the lockdown.

Operations are being resumed with limited employees in staggered manner.

Social distancing measures at all times from commuting, office work, cafeteria, and reduced number of chairs in the cafeteria. Only 4 people could sit on one table initially and later only 2 people were seated on a table meant for 6. Face to

Face seating was discontinued.

Personal hygiene and Safety First being followed all the time.

Temperature checks and Status checks on Aarogya Setu app mandatory at officeentry points.

All doors including that of ODCs were kept open to reduce the touch points.

Restricted use of elevator and only stairs to be allowed.

Restrictions on use of Gym, recreation and resting rooms as per directions of the government.

Recommended QR code-based payments in cafeteria.

COVID warrior at every floor to oversee enforcement.

Continuous awareness among employees through leadership videos, myWorld banners and communication.

Technology Absorption

during the year under review, multiple technological improvement initiatives were rolled out. These initiatives helped to improve the systems and applications performance and reduction of cost.

Business Continuity Planning (BCP) Enabling Secured WFH

Given the unprecedented nature of COVID-19 crisis, KPIT is vigilant and working towards anticipating and planning for various scenarios. Business continuity planning team will keep track, assess incidents and work with client teams to build and execute specific plans.

Objectives of BCP:

Implementing a set of measures for avoiding possible failures.

Prioritization of Key services and providing for alternate service delivery.

Educating the users of their responsibility before, during and after the business interruptions.

Providing an orderly and efficient transition from normal to emergency condition and back to normal maintaining consistency in action.

Solution: Secure Work from Home (BCP) Enablement

Considering secure & successful working from home module, KPIT has created solution considering highly trusted technologies, Process & People framework.

Access to KPIT network over Next Generation Firewall

Global Protect IPSec VPN:

Secure Access through multifactor authentication overactive directory credentials to ensure access by an authorized individual only.

Before granting access Validating KPIT systems with HIPS for Security Certificate, Antivirus, Anti threat protections.

KPIT Laptops with hardened OS & with latest security patches.

Vir tual desktop infrastructure in applicable t task.l scenarios with hardened OS images with latest security patches and controls.

Endpoint protection using McAfee endpoint protection to detect and prohibit suspicious or malicious activity.

Endpoint ATP using advance threat and anti-exploit protection.

Endpoint Device DLP for threat monitoring, logging, and restriction on USB storage ports.

Data exchange over end-to-end encryption with IPSEC tunnel from endpoint till secure gateway.

Web-content filtering to protect against web malware.

Collaboration using Microsoft Teams, Cisco WebEx.

Process and Policy controls for BCP:

Strict adherence to KPIT Information Security Policy.

User acceptance of Work from Home undertaking.

Re-iteration of individual roles and responsibilities by Delivery Management.

Setting up of BCP Command center.

New Open-Source Platform during the year under review, KPIT has started exploring open-source platform based on Kubernetes and deployed state of the art, highly available, auto-scalable Open-Source Platform for Digital Technologies called OKD 4.5 (OpenShift’s Open-Source Community Distribution) to cater the need of data services, we deployed highly available open-source database clusters of MongoDB and Percona XtraDB for MySQL. With zero surprises, all the corporate applications and data is migrated from an Enterprise Platform to new Open-Source Platform. This helped organization in saving considerable yearly subscription cost.

Solution and Technology Deployed:

Considering hefty year on year subscription cost, KPIT decided to explore Open-Source option for an Enterprise Platform which was already in use. Identifying & creating a robust open-source platform without compromising difficu features provided by earlier platform was Also, it was not related to setting up a robust platform alone but building capability to support open-source technology was very critical. DevOps Team effectively took this challenge by deploying highly available and scalable OKD 4.5 on Fedora CoreOS with Kubernetes at its heart. dev Team recoded all the applications and seamlessly migrated to the new platform with zero surprises. End user experience with applications running on new platform is further enhanced.

Big Data Platform

Traditionally data has been residing in silos across the organization in multiple systems. data lake can help break these silos and enable organizations to get 360-degree actionable insights in true sense and leverage the benefits of data-driven, fact-based decision making. With Big Data, organization can shift interactions from reactive to proactive (e.g. from product mass branding to 1:1 targeting, from ‘break then fix’ approach to ‘repair before break’ etc.).

Solution and Technology Deployed:

By choosing right data, right interfaces and right big data platform (like Hortonworks Data Platform - HDP), KPIT was sure that this challenge can be overcome. HDP is powered by Hadoop and is highly scalable open-source platform for storing, processing and analyzing large volumes of data coming from sources like ERP, CRM, Web Logs, Click Streams, Sensor Data, Geolocation Data, Server Logs, documents, Emails, Social Media etc. This data can be ingested into HDP using batch processing or via APIs. devOps team took this challenge and deployed highly available Hortonworks Data Platform 3.1. Self-service is the key towards democratization of big data which can be realized using tools like Tableau, Power BI, Zeppelin etc. This platform will soon become available to larger community of business users.

Smart Campus Platform

KPIT has begun the Smart Campus initiative and rolled out various "Smart Applications" for Employees. These applications were aimed at changing the user experience while optimizing the energy consumption. KPIT has pursued this initiative further and taken it to the next level by deploying "Smart Campus" platform and has integrated fourteen different systems and sensor driven devices that come under the aegis of Building Management System (BMS). Traditionally all these BMS systems such as Access control, CCTv, Fire alarm system and air-conditioning systems operate within their own silos and use legacy (often proprietary) protocols. The siloed approach leads to an absence of ability to conduct common monitoring and controlling.

Solution and Technology Deployed:

KPIT has brought in higher level of automation in all these 14 systems by use of various control panels and adaptors and have got them integrated to our platform. This has enabled the Company to provide accurate instantaneous reporting data of all these systems along with control functionality in a single dashboard. We are getting more visibility on electrical consumption across floors buildings, with clarity on which system is consuming how much electricity, how it can be effectively optimized. Automation in various pumps and Fan system gives more operational efficiency for the operations team and reduction in human errors along with reduction in electrical usage. Operations team is now better equipped to see all the systems in single dashboard. Because of instantaneous alerts mapped on various gateways (SMS/E-mail), they are now better equipped to manage various BMS systems effectively, this also helps them in taking care employee safety at work.

Hyper-Converged Infrastructure

KPIT is an early adopter of Hyper-converged infrastructure and reaping its benefits since last 2 years. In our pursuit of continual services optimization, Company has adopted Hyper-converged Infrastructure from all the three OEM solutions Nutanix Acropolis, Cisco HyperFlex and EMC vxRAIL.

Solution and Technology Deployed:

KPIT was looking for an agile solution which will help us in making operations simpler, could be commissioned much faster, could be scaled on demand and could be effectively managed by skilling existing human resources. Hyper-converged infrastructure addressed these issues.

We could implement hyper-converged solution within a few hours. This infrastructure is helping us in adding capacity on demand, without vendor lockdown. Even achieving disaster Recovery (dR) is much simpler and it even supports multi-hypervisor environments. Besides easing datacenter migrations, Company do not have to make upfront investments now.

Following Environmental Returns are achieved: Hyper-converged Infrastructure has helped us in saving power, cooling and space by an additional 30%. We could also optimize the asset ratio from 7 to 1 for the same compute capacity in the datacenter. We continued investing into this technology last year too and the organization is reaping its benefits.

Virtual Desktop Environment

Like majority of business organizations globally, KPIT also relies on its internal IT implementations to make processes more efficient, increase automation and deploy IT to make collaboration across geographies easier. The Company has deployed the most advanced technologies for its processes. These deployments are scalable and future ready to support changing work styles, information security criteria and the changing usage patterns of computing devices. Solution: KPIT decided to shift from conventional desktop technology to Virtual Desktop Interface (VDI).

Following operational aspects were considered while implementing the vdI solution: deliver on-demand services for users Increase IT efficiency, Simplify management, Ensure software compliance. Though KPIT was already evaluating a virtualization solution that was deployed in a limited environment, it had not explored the idea of transitioning the core ERP processes onto the virtualized environment but had transitioned only the less critical ones. Taking a step further toward optimizing energy requirement and consumption, KPIT decided to increase use of virtualization technology.

Solution and technology deployed:

VMware, EMC and CISCO infrastructure platforms VMware Horizon View Virtual Desktop Infrastructure (VDI) Thin client

Following Environmental Returns were achieved after deployment of VDI:

1. Energy savings: More than 60% reduction in energy consumption was achieved by moving to the private cloud platform (including new technologies like hyper converged) with vdI as compared to using conventional computers. Cisco Unified Computing System, which is included as part of the private cloud platform, delivers high-memory capacity to support a large number of virtual machines on each blade server, thus reducing the amount of physical equipment to be powered and cooled. The desktop computers that consume around 150 watts of electricity, were replaced with very small devices called thin clients that consume just 30 watts. This has resulted in energy savings of approximately 3,00,000 units per year amounting to 375 MT of Co2 emission.

2. Reduction in e-waste: Almost 90% reduction in e-waste generation was achieved due to the increased IT hardware refreshment cycle for desktops, laptops and workstations. Lifespan of the above-mentioned hardware is about fiveyears due to high resource requirement, capacity and performance demand, and due to newer operating systems, application software and tools. Being a technology provider, it is extremely important for us to update our IT hardware platform and ready it for next generation development tools. The thin client on the other hand has more than eight years of lifespan. Till that time, it does not require upgrades or replacement as all the resources such as computing power, memory and disk space are accessed through vdI setup hosted in the datacenter. Under this infrastructure, we deployed 600 VDIs for the business users.

3. Reduced IT Asset Ratio from 1.20:1 to 1.10:1: VDI environment enables multiple users to access their accounts using a single machine without compromising on the security aspect. Before deploying the virtual desktop environment, the asset-to-employee ratio was 1.20:1. This meant that much of the IT infrastructure was underutilized and was consuming more natural resources. After the deployment of the Private Cloud platform with VDI, the asset ratio has reduced to 1.10:1 thereby reducing the computer hardware consumption by 10%

4. Workplace utilization increased by 10%: The VDI helped in improving the utilization and flexibility of IT assets. Users can access their desktop, applications and data from any location, without compromising on the security of the system. In addition, employees can connect to corporate resources using any of the personal devices like iPads, Windows and Android based mobiles, thus enabling Consumerization of IT. This has led to workplace flexibility workspaces.

5. Reduction in travel across locations: KPIT has deployed best of the solutions such as Cisco Telepresence (Audio/Video conferencing) & Microsoft Teams across the offices and Cisco WebEx for better collaborations. With these solutions, our users can have conference meetings from anywhere and through any device. Even our business reviews, recruitment and customer meeting are conducted using these technologies.

It has been observed that overall business travels across the globe has reduced by 25%. As this is a unified collaboration platform, end user productivity is also substantially improved. This solution hugely enabled remote collaborations during COvId-19 in big way.

Research and Development (R&D) Activity

during current year, the Company has not claimed any weighted deduction under section 35(2AB) of Income Tax Act 1961 for in-house R&D expenditure, as the same is not available with effect from April 1, 2020.

Foreign Exchange Earnings and Outgo

Total foreign exchange earnings during the year have been 6,993.48 million (previous year 8,465.52 million) and foreign exchange outgo (including imports) has been 167.56 million (previous year 217.99 million).

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:

Name of the subsidiary Nature of transaction Duration Rate of Interest (%) Amount (in million) Purpose
1 KPIT Technologies (UK) Limited Guarantee till revolving facility is open 2.69% p.a. GBP 5 For setting up revolving credit facility from Axis Bank UK
2 ThaiGerTec Co., Ltd. Investment in subsidiary N.A. N.A. INR 0.01 This is consequent to the transfer of investment from a wholly owned subsidiary, KPIT Technologies Pte Limited, Singapore.

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 2".

Update on Merger & Acquisition

during the year under review, the merger petition was filedwith Hon’ble National Company Law Tribunal, Mumbai Bench ("NCLT") for seeking approval to the Scheme of Merger of Impact Automotive Solutions Limited with the Company and to obtain further direction from NCLT. The Company has received certified copy of merger order from NCLT approving scheme on June 15, 2021. The scheme became effective on June 22, 2021 by filingthe said order with Registrar of Companies.

Further, on March 11, 2020, the Company had entered into an agreement with Vayavya Labs Private Limited ("VL") and its shareholders for acquiring majority stake in VL where the deal was expected to get closed by the fourth quarter of FY 2021. In view of the changed environment due to the COvId-19 pandemic, on November 2, 2020, the Company and VL decided not to go ahead with the proposed transaction. This withdrawal had no impact on the Company’s revenue and profit outlook for FY 2021.

Material changes and commitments affecting the financial position of the Company

FY21 saw unprecedented events with an advent of the COvId-19 pandemic. The world momentarily came to a standstill as governments enforced lockdowns and other measures for public health and safety. During this period of global crisis, our priority was to ensure the safety and wellbeing of our employees while helping our customers maintain seamless business service continuity. The Company scaled up fast to adopt social distancing norms, adopting new policies and restricting travel while enabling remote working for our associates. We enabled multilevel communication with clients, backed by a technology engagement plan covering detailed steps across various aspects of each program. We helped clients with their BCP, anticipating challenges in their business while addressing them with technological solutions. Customers have appreciated the swiftness of our response, quality control, data protection and the level of support to ensure business continuity.

Parallelly, the safety of our people and their families is of paramount importance to us. We are in constant communication with our teams across the globe for any assistance that they might need. We also prioritized the wellness of our associates for which various sessions such as consultation through doctors and psychologists, yoga trainer, talk with leading nutritionist etc. were conducted. We are equipped to support the communities we serve and the ones our people inhabit. It is our commitment to help citizens live and work sustainably and confidently in an ever-changing digital landscape.

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.

Enterprise Risk Management Policy

A policy to identify, assess, monitor and mitigate various risks to key business objectives of the Company is in place. A detailed information on Enterprise Risk

Management is included in this Annual Report.

Annual Return

The Annual Return of the Company for the financial year 2019-20 in Form MGT-7 has been uploaded on website of the Company i.e. www.kpit.com.

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, 2021, 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, 2021 and of the profit of the Company for the year ended March 31, 2021;

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 Ms. Priyamvada Hardikar, 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 28, 2021.

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

Cost Records

The Company is not required to maintain cost records under the provisions of Section 148(1) of the Companies Act, 2013.

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.

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) Bengaluru, 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
July 23, 2021 Chairman