KPIT Technologies provides update on subsidiary - Sparta Consulting Inc

Sparta in dispute with Copart Inc

KPIT Technologies announced as below:

Sparta Consulting Inc (Sparta), a 100% subsidiary of the Company, was hired by Copart Inc (Copart), a US corporation, to design a replacement for its legacy Enterprise Resource Planning system. Thereafter, Copart hired Sparta to build the new system between 2011 and 2013. The contract was terminated by Copart "without cause.

Under the relevant contractual provision, Copart invited Sparta to provide the amount it was owed for the services performed and completed as of the termination date. Sparta responded to Copart's request with a detailed analysis of the amount it believed it was owed and it requested a response from Copart. Following a dispute between the parties on the amount of fees payable to Sparta, Copart filed a suit against Sparta alleging that it is entitled to seek damages amounting to not less than $ 50 million for, among other things, breach of contract, fraudulent inducement and negligent misrepresentation. Copart also prayed for other relief such as indirect damages, punitive damages, attorney's fees, etc for an unquantified amount.

Sparta filed a suit against Copart seeking damages for, among other things, breach of contract, promissory estoppel and unjust enrichment. Sparta also prayed for other relief such as restitution and legal costs.

Recently, Copart amended its suit to seek fresh claims for damages for, among other things, misappropriation of its trade secrets and has added the Company and its subsidiary, KPIT infosystems Inc, as parties to the dispute. While the service of the process on the Company is yet to happen, we are making this present announcement as a measure of abundant precaution. KPIT has made adequate provision against the amount receivable from Copart.

Should KPIT be served and if the Court finds there is jurisdiction over KPIT, KPIT intends to vigorously defend against Copart's alleged claims, and pursue any available claims against Copart. The matters are pending before a California court.

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