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KPIT Technologies Ltd.

BSE: 542651 Sector: IT
NSE: KPITTECH ISIN Code: INE04I401011
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OPEN 345.20
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VOLUME 320537
52-Week high 385.00
52-Week low 89.80
P/E 65.56
Mkt Cap.(Rs cr) 9,544
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 345.20
CLOSE 338.20
VOLUME 320537
52-Week high 385.00
52-Week low 89.80
P/E 65.56
Mkt Cap.(Rs cr) 9,544
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KPIT Technologies Ltd. (KPITTECH) - Director Report

Company director report

Dear Members

The Directors are pleased to present the Fourth Annual Report together with the AuditedAccounts 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 8028.48 274.77 20357.41
Profit before Tax (PBT) 13.41 993.51 23.97 1776.23
Profit after Tax (PAT) 12.62 935.26 19.85 1471.03

Result of Operations

During the year under review the total revenues from operations (consolidated) were20357.41 million. Earnings before interest tax depreciation and amortization was3100.75 million on consolidated basis. Net profit after tax (consolidated) was 1471.03million. In US Dollar terms revenues from operations for the year on consolidated basiswas $ 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.8028.48millionandNetprofit

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 hadconsidered and approved the Audited Standalone as well as Consolidated financialstatements of the Company for the year ended March 31 2021. However subsequently onreceipt of merger order on June 15 2021 approving the scheme of merger by absorption ofImpact Automotive Solutions Limited a wholly owned subsidiary with KPIT TechnologiesLimited 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 anappointed date of April 1 2019 as defined in the Scheme itself and became effective onJune 22 2021 by filing the said order with Registrar of Companies. The Board of Directorsat its meeting held on July 23 2021 considered and approved the Revised AuditedStandalone as well as Consolidated financial statements for the year ended March 31 2021for giving effect of merger accounting treatment.

Dividend

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

Recently the Company has amended its dividend Distribution Policy by increasing theAnnual 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 intheir Innovate2BeatCOvId national challenge.

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

Quality Productivity and Innovation

Quality Productivity and Innovation have been the three pillars that have driven ourpassion for continuous improvement in the way we determine and improve our processframework. This is driven with an objective to ensure zero defect delivery to ourcustomers. To achieve this objective we had come out with a comprehensive qualityframework with involvement of all key stakeholders and leadership team. As part of thisframework key initiatives in the areas of People Process and Technology were identifiedwith a focus on improving performance at Project/Program level Practice level and Unitlevel. We picked key initiatives for the year from this framework and started withdetailed plan for each of the initiative. Initiatives that were deployed across allprojects during the previous year were sustained through strong governance. For theinitiatives planned during the year we defined a framework for sustainable processimproved it through pilots and then tracked deployment across all projects through stronggovernance.

Competency Management and Knowledge Management was one of the key initiatives. A clearframework for identification of skill gaps at project and practice level and a clearstructure for ramping down skill gaps through training and other mechanisms was put inplace and deployed across all projects. This helped in improving competency at individuallevel project level and practice level. Now an integrated system has been designed tomanage this and first phase of automation has been deployed. Katapult framework that wasdeveloped during previous year was deployed across all projects for improving code qualitythrough daily run on the developed code.

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

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

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

To sustain quality with our scalability there is more dependence on our processesTools and Systems.

Continuous improvement is our focus to achieve efficiency in our processes and to keepat pace with new trends. These improvements come through learnings in the projectsfeedback from customers and ideas from the employees. During the year in addition to thequality framework initiatives we took up many such improvements upgraded our processespublished and deployed across projects. The focus is on keeping the processes efficientand lean.

Our commitment to quality is ratified by our consistent endeavour in certifyingourselves to the best standards in the Industry. We continue to sharpen our Quality focusthrough internal initiatives and by certifying against international standards. Inaccordance with this we underwent surveillance audit on ISO9001:2015. We continue tomaintain our certification on Automotive SPICE OML5 and our next recertificationassessment is planned this year. We also continue to maintain our certification onInformation Security Management (ISO/IEC 27001:2013) IT Service Management (ISO/IEC20000-1:2011) and Business Continuity Management (ISO 22301:2012).

Share Capital

The issued subscribed and paid-up capital of the Company as on March 31 2021 is2741.43 million consisting of 274143808 equity shares of 10/- each.

Institutional Shareholding

As on March 31 2021 the total institutional shareholding in the Company was 36.36% tothe 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. Inaccordance with Section 129(3) of the Companies Act 2013 (hereinafter referred to as"the Act") the Company has prepared consolidated financial statements of theCompany and all its subsidiary companies which forms a part of the Annual Report. Astatement containing salient features of the financial statements of the subsidiaryCompanies 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 Companycontaining the standalone and the consolidated financial statements and all otherdocuments required to be attached thereto have been placed on the website of the Companywww.kpit.com. Further a report on the highlights of performance of subsidiaries and theircontribution to the overall performance of the Company has also been placed on the websiteof the Company. Ministry of Corporate Affairs (MCA) vide General Circular nos. 14/2020dated April 8 2020 17/2020 dated April 13 2020 and 02/2021 dated January 13 2021provided certain relaxations for companies including conducting Extraordinary GeneralMeeting (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 byCOVID-19. Further MCA vide General Circular 20/2020 dated May 5 2020 & Securitiesand Exchange Board of India vide circular SEBI/HO/CFD/ CMD1/CIR/P/2020/79 dated May 122020 and SEBI/HO/ CFD/CMD2/CIR/P/2021/11 dated January 15 2021 has extended theserelaxations to Annual General Meeting of companies to be conducted during the calendaryear 2021 and it has also dispensed with the printing and dispatch of annual reports toshareholders. In view of the same Members interested in obtaining a soft copies of theaudited annual accounts of the Company and it’s subsidiary companies may visitinvestor section on website of the Company www.kpit.com.

Directors

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

Independence of the Board

The Board of Directors of the Company comprises of optimum number of IndependentDirectors. In the opinion of the Board the independent directors possess integrityexpertise and experience (including the proficiency). Based on theconfirmation/disclosures received from the Directors and on evaluation of therelationships disclosed the following Non-Executive Directors are Independent in terms ofRegulation 16(1) (b) of the Securities and Exchange Board of India (Listing Obligationsand 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 theCompany pursuant to Sections 2(51) and 203 of the Act read with the Rules framedthereunder:

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. vinitTeredesai resigned from the post of Chief Financial Officer with effect from June 122020.

Board Meetings

Four meetings of the Board of Directors were held during the year. More details aboutthe meetings are available in the Report on Corporate Governance which forms a part ofthis Annual Report.

Committees of Board

The details regarding the Committees of the Board of Directors of the Company are givenin 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 andresponsibilities of the Nomination and Remuneration (HR) Committee and the criteria forevaluation of the Board and compensation of the directors and senior management. Furtheras per the policy the said Committee shall identify potential candidates for becomingmembers of the Board and determining the composition of the Board based on the need andrequirements of the Company from time to time to bring out diversity in the Board and alsoidentify persons to be recruited in the senior management of the Company and ensure theCompanies compensation packages and other human resource practices are effective inmaintaining a competent workforce and make recommendations relating thereto. Pursuant tothe provisions of Section 134(3)(e) of the Act the said policy of the Company on theappointment and compensation of Directors including criteria for determiningqualifications positive attributes independence of a director and other matters providedunder 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 theBoard. The composition of the Audit Committee is as mentioned in the Report on CorporateGovernance which forms a part of this Annual Report.

Corporate Social Responsibility (CSR)

KPIT’s Corporate Social Responsibility ("CSR") is aligned to have astronger 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 educationenvironment and employee engagement. KPIT firmly believe through technology andinnovation KPIT can add significant values to the communities worldwide.

The Company had constituted a Corporate Social Responsibility (CSR) Committee and hasframed the Policy on Corporate Social Responsibility as per the provisions of section 135of the Companies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules2014. The CSR Policy including annual action plan is available on Company’s websiteat the link: https://www.kpit.com/investors/#policies-reports-filings. The initiativestaken by the Company on CSR during the year as per the said rules has been annexed to thisReport as "Annexure 5".

Vigil mechanism/whistle blower policy

The Company has established a vigil mechanism/ whistle blower policy as per Regulation22 of the SEBI (LODR) Regulations 2015 for Directors and employees to report theirgenuine concerns. The details of the same are explained in the Report on CorporateGovernance.

The Policy on Vigil Mechanism & whistle blower may be accessed on theCompany’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 (Auditand Auditors) Rules 2014 M/s. B S R & Co. LLP Chartered Accountants were appointedas the Statutory Auditors of the Company in the Annual General Meeting held on August 292018 for a period of five years.

The Notes on financial statements referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The report does not contain anyqualification reservation or adverse remark. The Board of Directors of the Companyappointed Dr. K. R. Chandratre Practicing Company Secretary as the Secretarial Auditorto conduct audit for the year under review. The Secretarial Auditor’s report for theyear under review is annexed to this Report as "Annexure 6". The report does notcontain 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 itsbusiness size and complexity. The Statutory Auditors of the Company have expressed theiropinion on adequacy of internal financial controls with reference to financial statementsfor the year under review and operating effectiveness of such controls.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereonforms a part of this Report. The Auditors’ Certificate in respect of compliance withthe provisions concerning Corporate Governance forms a part of this Annual Report asrequired under the Securities and Exchange Board of India (Listing Obligations andDisclosure 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 operationsperformance and future outlook of the Company and its business forms a part of thisReport.

Particulars of Employees

A statement containing the names of every employee employed throughout the financialyear and in receipt of remuneration of 1 crore 2 lakhs or more or employed for part ofthe year and in receipt of 8.5 lakh or more a month and other employees as required underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to this Report as "Annexure 3 (a)".

The ratio of the remuneration of each director to the median employee’sremuneration and other details prescribed in Section 197(12) of the Act read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are 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 (ShareBased Employee Benefits) Regulations 2014 information relating to ESOSs of the Companyis annexed to this Report as "Annexure 4".

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has a policy on prevention of sexual harassment at workplace and has put inplace a redressal mechanism for resolving complaints received with respect to sexualharassment and discriminatory employment practices for all genders. The Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. during the year under review no case was filed with thePOSH committee. Thus there were no complaints pending as on March 31 2021. The companyhas taken various measures to create awareness amongst employees such as sending emailsand communication to all employees conducted awareness sessions with new joiners and asession for ICC members by Advocate for explaining them legal remedies available tovictims 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 exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014

Conservation of Energy

The energy conservation is always a focus of KPIT. More than 50% of energy is consumedby HVAC. Hence the focus was on HVAC operations to maximize efficiency. Due to Pandemicconditions in year 2020-21 most of the employees were working from home hence there is adrastic reduction in power consumption. New measures were implemented due to minimumoccupancy in office as AC and lights were put ON with respect to areas occupied. Withthese changed scenario the Company has implemented various measures as putting on lightsand HvAC only in areas where they are occupied and in use. Rounds were carried outfrequently to identify areas to optimize usage of energy. As per COVID-19 guidelinesoperating temperature of degree thus reducing the consumption of energy. We haveenergyefficient lighting all across campus. The Company also focused on other utilities bycontinuous monitoring and measurement. Solar energy plant has been initiated by theCompany and energy generated will be consumed internally.

Green Initiatives

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

In the state of Maharashtra the Koyna-Chandoli corridor has been a host of KPIT’safforestation efforts in association with the Wildlife Research & Conservation Society(WRCS). Continuing our previous year’s efforts we aligned our afforestationactivities with the onset of monsoon. Due to the COVID-19 pandemic our volunteers havenot been able to participate physically in the plantation activities this year. With thehelp of local villagers and full-time activists of WRCS we planted a total of 5000saplings. With this a cumulative of 45900 saplings were planted in an area of 252 acreswith an overall survival rate of 80 percent.

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

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

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

KPIT under its Water Conservation through Mass Volunteering Initiative started thefourth fresh drinking water well in Maharashtra. This project intended to address thepotable water scarcity for the months when the nearby natural spring dries out; was acollaboration between KPIT Jnana Prabodhini and the villagers. A well with 32 ft diameterand 32 ft depth will be able to store 7 lac litres of water. As a result the villagewith a population of 200 people and 1000 cattle will now be tanker-free even in the aridmonths 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 theCompany virtually for ensuring health and safety of our employees in the year 2020-21.

Weekly webinars on nutrition wellness stress management infectious diseaseprevention 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 seniorgynecologist.

Engagement through Wellness activities throughout the year such as Zumba Bollyfitness 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 degreesin 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 crossventilation.

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

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

Wearing mask made mandatory for everyone in the office and for all third-party staffface 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 andreduced number of chairs in the cafeteria. Only 4 people could sit on one table initiallyand 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 officeentrypoints.

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 thegovernment.

Recommended QR code-based payments in cafeteria.

COVID warrior at every floor to oversee enforcement.

Continuous awareness among employees through leadership videos myWorld banners andcommunication.

Technology Absorption

during the year under review multiple technological improvement initiatives wererolled out. These initiatives helped to improve the systems and applications performanceand reduction of cost.

Business Continuity Planning (BCP) Enabling Secured WFH

Given the unprecedented nature of COVID-19 crisis KPIT is vigilant and working towardsanticipating and planning for various scenarios. Business continuity planning team willkeep track assess incidents and work with client teams to build and execute specificplans.

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 businessinterruptions.

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

Solution: Secure Work from Home (BCP) Enablement

Considering secure & successful working from home module KPIT has created solutionconsidering 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 toensure access by an authorized individual only.

Before granting access Validating KPIT systems with HIPS for Security CertificateAntivirus Anti threat protections.

KPIT Laptops with hardened OS & with latest security patches.

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

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

Endpoint ATP using advance threat and anti-exploit protection.

Endpoint Device DLP for threat monitoring logging and restriction on USB storageports.

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

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 exploringopen-source platform based on Kubernetes and deployed state of the art highly availableauto-scalable Open-Source Platform for Digital Technologies called OKD 4.5(OpenShift’s Open-Source Community Distribution) to cater the need of data serviceswe deployed highly available open-source database clusters of MongoDB and Percona XtraDBfor MySQL. With zero surprises all the corporate applications and data is migrated froman Enterprise Platform to new Open-Source Platform. This helped organization in savingconsiderable yearly subscription cost.

Solution and Technology Deployed:

Considering hefty year on year subscription cost KPIT decided to explore Open-Sourceoption for an Enterprise Platform which was already in use. Identifying & creating arobust open-source platform without compromising difficu features provided by earlierplatform was Also it was not related to setting up a robust platform alone but buildingcapability to support open-source technology was very critical. DevOps Team effectivelytook this challenge by deploying highly available and scalable OKD 4.5 on Fedora CoreOSwith Kubernetes at its heart. dev Team recoded all the applications and seamlesslymigrated to the new platform with zero surprises. End user experience with applicationsrunning on new platform is further enhanced.

Big Data Platform

Traditionally data has been residing in silos across the organization in multiplesystems. data lake can help break these silos and enable organizations to get 360-degreeactionable insights in true sense and leverage the benefits of data-driven fact-baseddecision making. With Big Data organization can shift interactions from reactive toproactive (e.g. from product mass branding to 1:1 targeting from ‘break thenfix’ approach to ‘repair before break’ etc.).

Solution and Technology Deployed:

By choosing right data right interfaces and right big data platform (like HortonworksData Platform - HDP) KPIT was sure that this challenge can be overcome. HDP is powered byHadoop and is highly scalable open-source platform for storing processing and analyzinglarge volumes of data coming from sources like ERP CRM Web Logs Click Streams SensorData Geolocation Data Server Logs documents Emails Social Media etc. This data can beingested into HDP using batch processing or via APIs. devOps team took this challenge anddeployed highly available Hortonworks Data Platform 3.1. Self-service is the key towardsdemocratization of big data which can be realized using tools like Tableau Power BIZeppelin etc. This platform will soon become available to larger community of businessusers.

Smart Campus Platform

KPIT has begun the Smart Campus initiative and rolled out various "SmartApplications" for Employees. These applications were aimed at changing the userexperience while optimizing the energy consumption. KPIT has pursued this initiativefurther and taken it to the next level by deploying "Smart Campus" platform andhas integrated fourteen different systems and sensor driven devices that come under theaegis of Building Management System (BMS). Traditionally all these BMS systems such asAccess control CCTv Fire alarm system and air-conditioning systems operate within theirown silos and use legacy (often proprietary) protocols. The siloed approach leads to anabsence 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 ofvarious control panels and adaptors and have got them integrated to our platform. This hasenabled the Company to provide accurate instantaneous reporting data of all these systemsalong with control functionality in a single dashboard. We are getting more visibility onelectrical consumption across floors buildings with clarity on which system is consuminghow much electricity how it can be effectively optimized. Automation in various pumps andFan system gives more operational efficiency for the operations team and reduction inhuman errors along with reduction in electrical usage. Operations team is now betterequipped to see all the systems in single dashboard. Because of instantaneous alertsmapped on various gateways (SMS/E-mail) they are now better equipped to manage variousBMS 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 benefitssince last 2 years. In our pursuit of continual services optimization Company has adoptedHyper-converged Infrastructure from all the three OEM solutions Nutanix Acropolis CiscoHyperFlex and EMC vxRAIL.

Solution and Technology Deployed:

KPIT was looking for an agile solution which will help us in making operations simplercould be commissioned much faster could be scaled on demand and could be effectivelymanaged by skilling existing human resources. Hyper-converged infrastructure addressedthese issues.

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

Following Environmental Returns are achieved: Hyper-converged Infrastructure has helpedus in saving power cooling and space by an additional 30%. We could also optimize theasset ratio from 7 to 1 for the same compute capacity in the datacenter. We continuedinvesting 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 ITimplementations to make processes more efficient increase automation and deploy IT tomake collaboration across geographies easier. The Company has deployed the most advancedtechnologies for its processes. These deployments are scalable and future ready to supportchanging work styles information security criteria and the changing usage patterns ofcomputing devices. Solution: KPIT decided to shift from conventional desktoptechnology 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 Ensuresoftware compliance. Though KPIT was already evaluating a virtualization solution that wasdeployed in a limited environment it had not explored the idea of transitioning the coreERP processes onto the virtualized environment but had transitioned only the less criticalones. Taking a step further toward optimizing energy requirement and consumption KPITdecided to increase use of virtualization technology.

Solution and technology deployed:

VMware EMC and CISCO infrastructure platforms VMware Horizon View Virtual DesktopInfrastructure (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 movingto the private cloud platform (including new technologies like hyper converged) with vdIas compared to using conventional computers. Cisco Unified Computing System which isincluded as part of the private cloud platform delivers high-memory capacity to support alarge number of virtual machines on each blade server thus reducing the amount ofphysical equipment to be powered and cooled. The desktop computers that consume around 150watts of electricity were replaced with very small devices called thin clients thatconsume just 30 watts. This has resulted in energy savings of approximately 300000units per year amounting to 375 MT of Co2 emission.

2. Reduction in e-waste: Almost 90% reduction in e-waste generation was achieved due tothe increased IT hardware refreshment cycle for desktops laptops and workstations.Lifespan of the above-mentioned hardware is about fiveyears due to high resourcerequirement capacity and performance demand and due to newer operating systemsapplication software and tools. Being a technology provider it is extremely important forus 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 timeit does not require upgrades or replacement as all the resources such as computing powermemory and disk space are accessed through vdI setup hosted in the datacenter. Under thisinfrastructure 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 usersto access their accounts using a single machine without compromising on the securityaspect. Before deploying the virtual desktop environment the asset-to-employee ratio was1.20:1. This meant that much of the IT infrastructure was underutilized and was consumingmore natural resources. After the deployment of the Private Cloud platform with VDI theasset ratio has reduced to 1.10:1 thereby reducing the computer hardware consumption by10%

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

5. Reduction in travel across locations: KPIT has deployed best of the solutions suchas Cisco Telepresence (Audio/Video conferencing) & Microsoft Teams across the officesand Cisco WebEx for better collaborations. With these solutions our users can haveconference meetings from anywhere and through any device. Even our business reviewsrecruitment 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 substantiallyimproved. 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 section35(2AB) of Income Tax Act 1961 for in-house R&D expenditure as the same is notavailable with effect from April 1 2020.

Foreign Exchange Earnings and Outgo

Total foreign exchange earnings during the year have been 6993.48 million (previousyear 8465.52 million) and foreign exchange outgo (including imports) has been 167.56million (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 reviewpursuant 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 Section188(1) of the Act

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

Update on Merger & Acquisition

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

Further on March 11 2020 the Company had entered into an agreement with Vayavya LabsPrivate Limited ("VL") and its shareholders for acquiring majority stake in VLwhere the deal was expected to get closed by the fourth quarter of FY 2021. In view of thechanged environment due to the COvId-19 pandemic on November 2 2020 the Company and VLdecided not to go ahead with the proposed transaction. This withdrawal had no impact onthe 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 worldmomentarily came to a standstill as governments enforced lockdowns and other measures forpublic health and safety. During this period of global crisis our priority was to ensurethe safety and wellbeing of our employees while helping our customers maintain seamlessbusiness service continuity. The Company scaled up fast to adopt social distancing normsadopting new policies and restricting travel while enabling remote working for ourassociates. We enabled multilevel communication with clients backed by a technologyengagement plan covering detailed steps across various aspects of each program. We helpedclients with their BCP anticipating challenges in their business while addressing themwith technological solutions. Customers have appreciated the swiftness of our responsequality 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 tous. We are in constant communication with our teams across the globe for any assistancethat they might need. We also prioritized the wellness of our associates for which varioussessions such as consultation through doctors and psychologists yoga trainer talk withleading nutritionist etc. were conducted. We are equipped to support the communities weserve and the ones our people inhabit. It is our commitment to help citizens live and worksustainably 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 ortribunals 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 businessobjectives 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 beenuploaded 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 andexplanations obtained by them your directors state that:

i) in the preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2021 and of the profit of theCompany for the year ended March 31 2021;

iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 andthat such internal financial controls are adequate and are operating effectively and

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

CEO & CFO Certification

Certificate by Mr. Kishor Patil CEO & Managing Director and Ms. PriyamvadaHardikar Chief Financial Officer pursuant to the provisions of regulation 17(8) of theSEBI (LODR) Regulations 2015 for the year under review was placed before the Board ofDirectors 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 Section148(1) of the Companies Act 2013.

Directors & Officers Insurance Policy

The Company has in place an insurance policy for its Directors & Officers with aquantum and coverage as approved by the Board.

Acknowledgments

We take this opportunity to thank all the shareholders of the Company for theircontinued support. We thank our customers vendors investors and bankers for theircontinued support during the year. We place on record our appreciation of the contributionmade by our employees at all levels. Our consistent growth was made possible by their hardwork solidarity co-operation and support.

We further thank the governments of various countries where we have our operations. Wealso thank the Government of India particularly the Ministry of Communication andInformation Technology the Ministry of Commerce the Ministry of Finance the Ministry ofCorporate Affairs the Customs and Excise Departments the Income Tax Department theReserve Bank of India the State Governments the Software Development Centers(SDCs)/Special Economic Zones (SEZs) Bengaluru Pune and all other government agencies fortheir 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

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