The Directors are pleased to present the Third Annual Report together with the AuditedAccounts of the Company for the Financial Year ended March 31 2020.
Performance of the Company
|Particulars || |
| ||USD || ||USD || |
|Revenue from operations ||134.60 ||9552.50 ||303.81 ||21561.69 |
|Profit before Tax (PBT) ||27.81 ||1973.80 ||25.45 ||1806.09 |
|Profit after Tax (PAT) ||25.14 ||1784.47 ||20.68 ||1467.75 |
Result of Operations
During the year under review the total revenues from operations (consolidated) were21561.69 million. Earnings before interest tax depreciation and amortization was2953.61 million on consolidated basis. Net profit after tax (consolidated) was 1467.75million.
In US Dollar terms revenues from operations for the year on consolidated basis was $303.81 million. Average realization rate was 70.97 per US Dollar.
Standalone sales for the financial year 2019-20 reached 9552.50 million and Net profitafter million.
The Board of Directors of the Company declared Interim Dividend I of 0.55 /- per equityshare of face value of 10/- each (at 5.5%) on January 29 2020 and Interim Dividend II of0.45 /- per equity share of face value of 10/- each (at 4.5%) on March 5 2020 during thefinancial year 2019-20. These 2 (two) Interim Dividends paid during this financial yearaggregating to 1/- per equity share of face value of 10/- each (at 10%) be considered asthe Final Dividend for the financial year under review.
Listing on Stock Exchanges
During the year under review the equity shares of the Company were listed on NationalStock Exchange of India Limited and BSE Limited on April 22 2019.
Awards & Recognition
1. Awarded as "Excellent Partner 2019" by Japanese
2. Awarded as "Excellent Partner 2019" for CoE strategy by leading JapaneseTier-1
3. Awarded as "Engineering Partner 2018" strategy by Japanese Tier-1
Industry Awards and Recognition
1. Received Adam Smith Award for the Best AR tax 1784.47 Solution at Adam Smith AwardsAsia 2019 in Singapore.
2. Awarded with Innovation in Retention Strategy award for achieving and sustainingindustry leading retention by World HRD Congress in Mumbai.
Other Awards and Recognition received by KPIT Employees
1. Mr. S. B. (Ravi) Pandit Chairman and Group
CEO appointed to the Board of Governors of the
Academy of Scientific and Innovative Research (AcSIR) - The Honorable Prime Minister ofIndia
Shri Narendra Modi as the president of the Council of Scientific and IndustrialResearch (CSIR) has nominated Mr. S. B. (Ravi) Pandit as a member to the Board ofGovernance of the AcSIR.
2. Mr. Kishor Patil CEO & MD of the Company was awarded "CEO with HROrientation" for transformative people initiatives and impact.
3. "Leapfrogging to Pole-vaulting" a book by Chairman and Group CEO Mr. S.B. (Ravi) Pandit and eminent scientist Dr. Raghunath Mashelkar won the "Business Bookof the Year" award at the prestigious "Tata Literature Live! The Mumbai LitFest2019" awards.
4. Mr. Vinit Teredesai Chief Financial Officer of the Company was awarded "CFORoll of Honour 2020" for Excellence in Cash Management from CFO India.
5. Dr. Manaswini Rath was awarded as "Women leader of the organization" atThe Women Empowerment Summit and GIWL 2019.
6. Mr. Rajesh Kumar Singh Head Global HR won the Global HR Excellence Leadership Awardby World HRD Congress & Awards.
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 commitment to quality is ratified by our consistent endeavour incertifying ourselves to the best standards in the Industry.
Zero Defect Delivery to customer has been our objective during the year that has drivenour passion for continuous improvement in our processes. To achieve this goal we came outwith a comprehensive quality framework. Initiatives for improvement were identified in theareas of People Process and Technology with a focus on improving performance atProject/Program level Practice level and Unit level. Process improvements were made inthis direction and deployed across all projects with involvement of all stakeholders.Deployment has been extensive and have been very successful in being very close toachieving our goal of zero-defect delivery. Last year we had rolled out a major initiativeis our internal product quality governance framework and rolled it out as Katapult and weincreased the coverage of this rollout in all applicable projects this year. Thisframework was intended to perform better with focus on productivity and quality. Katapultwas deployed on central cloud infrastructure and distributed to engineers and projects tomeasure the work delivered in terms of best practices and governing metrics. Thisinitiative has helped in moving towards our goal of Zero-Defect delivery.
Many initiatives were implemented and sustained during the year and many initiativesare in progress. One of the Initiative was to increase our CSAT coverage and CSAT rating.We have been very successful and achieved 97% coverage and achieved our targeted CSATrating goal for the year. In addition there has been substantial reduction in high riskand red projects which has contributed to our increased CSAT rating.
We continue to sharpen our Quality focus through internal initiatives and by certifyingagainst international standards. In accordance with this we underwent surveillance auditon ISO9001:2015. We continue to maintain our certification on Automotive SPICEOrganizational Maturity Level 5 and our next recertification assessment is planned thisyear. We also continue to maintain our certification on Information Security Management(ISO/IEC 27001:2013) IT Service
Management (ISO/IEC 20001-1:2011) and Business
Continuity Management (ISO 22301:2012). To sustain quality with our scalability thereis more dependence on our processes Tools and systems.
Continuous improvement is our focus to achieve efficiency in our processes and also tokeep it up-to-date with respect to new developments in the industry. These improvementscome through learnings in the projects feedback from customers and ideas from theemployees. During the year in addition to the quality framework initiatives we havetaken up many such improvements upgraded our process assets published and deployed inthe projects. The focus is on keeping the processes efficient and lean.
The issued subscribed and paid-up capital of the Company as on March 31 2020 is2741.43 million consisting of 274143808 equity shares of 10/- each.
As on March 31 2020 the total institutional shareholding in the Company was 35.94% tothe total share capital.
ICRA has assigned A1+ rating for the bank loan limits of 2650 millions and AA- ratingfor External Commercial Borrowing of $ 7.5 million.
Information about the Subsidiary & Associate Companies
As on March 31 2020 the Company had twelve subsidiaries and one associate company.During the year under review the Company has acquired ThaiGerTec Co. Limitedincorporated in Thailand.
In accordance with Section 129(3) of the Companies Act 2013 (hereinafter referred toas "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 and 17/2020 dated April 13 2020 provided certain relaxations forcompanies 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 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 12 2020 has extended these relaxations to Annual GeneralMeeting of companies to be conducted during the calendar year 2020 and it has alsodispensed with the printing and dispatch of annual reports to shareholders. In view of thesame Members interested in obtaining a soft copies of the audited annual accounts of theCompany and it's subsidiary companies may visit investor section on website of the Companywww.kpit.com.
During the year under review the shareholders have approved appointment of Mr. S. B.(Ravi) Pandit as a Chairman and Executive Director of the Company with effect from January16 2019 for a period ending
March 28 2020 and thereafter as a Chairman and Non-
Executive Director of the Company with effect from March 29 2020.
Owing to other business commitments and preoccupations Dr. Klaus Hermann Blickleresigned from the directorship of the Company with effect from May 15 2019. Further Mr.Rohit Saboo - Nominee of National Engineering Industries Limited has also resigned fromdirectorship of the Company with effect from February 1 2020.
Mr. Rafi Maor was appointed as Additional & Independent Director of the Companywith effect from October 23 2019 and shall hold office up to the date of the ensuingannual general meeting unless resigned earlier. However due to preoccupations and owingto other business commitments he has resigned from the post of directorship of theCompany with effect from June 9 2020.
The Board places on record its appreciation for valuable services provided by themduring their tenure. In accordance with Section 152 of the Act Mr. Kishor Patil retiresby rotation at the forthcoming Annual General Meeting and being eligible offers himselffor re-appointment. The Board recommends his reappointment.
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 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
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Companypursuant to
Sections 2(51) and 203 of the Act read with the Rules framed thereunder:
1. Mr. Kishor Patil-ChiefExecutiveOfficer (CEO) and Managing Director;
2. Mr. Vinit Teredesai- Chief Financial Officer (CFO) upto June 12 2020;
3. Ms. Nida Deshpande Company Secretary.
4. Ms. Priyamvada Hardikar has been appointed as the Chief Financial Officer of theCompany with effect from June 12 2020.
Six 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 remuneration
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 remuneration 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)
The Company has set up a Corporate Social
Responsibility (CSR) Committee and has framed the
Policy on Corporate Social Responsibility as per the provisions of section 135 of theCompanies Act 2013 and
Companies (Corporate Social Responsibility Policy) Rules 2014. The details of CSRPolicy and initiatives taken by the Company on CSR during the year as per the said ruleshas been annexed to this Report as "Annexure 5".
The Company has established a vigil mechanism as per Regulation 22 of the SEBI (LODR)Regulations 2015 for Directors and employees to report their genuine concerns. Thedetails of the same are explained in the Report on Corporate Governance. The Policy onVigil Mechanism may be accessed on the Company's website at the link:https://www.kpit.com/investors/#policies-reports-filings.
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 Auditor to conduct audit for the year under review. The SecretarialAuditor's report for the year under review is annexed to this Report as "Annexure7". 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 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.
A separate section on Corporate Governance with a detailed compliance report thereonforms a part of this
Report. The Auditors' Certificate in respect of compliance with the provisionsconcerning Corporate Governance forms a part of this Annual Report as required under theSecurities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations
2015 (hereinafter referred to as "the SEBI (LODR) Regulations 2015").
Management Discussion and Analysis
A detailed review of the operations performance and future outlook of the Company andits business is given in the Management Discussion and Analysis Report which forms a partof this Report.
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's remunerationand other details prescribed in Section 197(12) of the Act read with Rule
5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are annexed to this Report as "Annexure 3 (b)".
Employees Stock Option Schemes (ESOSs)
Information relating to ESOSs of the Company is annexed to this Report as"Annexure 4". The information is being provided in compliance with Regulation 14of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations2014.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has adopted a policy on prevention of sexual harassment at workplace andhas put in place a redressal mechanism for resolving complaints received with respect tosexual harassment 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 period under review 1 case was filedwith thePOSH committee and the same has been disposed off. Thus there were no complaints pendingas on March 31 2020.
The company has taken various measures to create awareness amongst employees such assending emails and communication to all employees conducted personal sessions formanagers and new joiners and a session for ICC members by Advocate for explaining themlegal remedies available to victims etc. for prevention of Sexual Harassment of Women atWorkplace.
As a part of our orientation programs for all new joinees the Company mandates thatthey complete an e-learning module on the same as well.
The Company has not accepted any deposits as on March 31 2020.
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. Many measureswere practiced such as setting up temperature change in timings of operations as perseasonal variation change in operations based on ambient temperature monitoringnon-working areas frequent switching off indoor units for meeting rooms etc. We have alsofocused on other utilities by continuous monitoring and measurement. Energy consumption isregularly monitored for betterment in efficiency.
We have planned to install solar plant of 670 KVA which will be placed for creatingshed for car parking. The proposed plant is estimated to generate 10 lac units per year.
The following initiatives were undertaken at the Company level to create awarenessabout importance of environmental protection and reducing pollution:
Mr. Kishor Patil inaugurated and handed over a drinking water well to villagers ofSalungan Village in Bhor Tehsil about 90 km from Pune. The well will help about 100families.
Construction of Vanrai Dam at Metpilaware village Pune that holds more than 1 lakhliters of water.
The Environment Week on the "World Environment Day" was celebrated sinceinception.
On the occasion of World Environment Day 200 native trees were planted in KPIT Punecampus and 23000 saplings were planted in association with the
Wildlife Research & Conservation Society (WRCS) at the Koyna-Chandoli corridor.
Aerial Reforestation in Bengaluru by 250 seed-ball bombings.
Mutha River Cleaning at Aundh Pune KPIT volunteers cleaned the riverbank collectedand segregated garbage. A total of 159 employee volunteers with their family membersparticipated in this activity.
Watering of Plants and Collecting Litter at Shivanahalli Forest Bengaluru.
De-weeding at Jakkur lake Bengaluru.
Sapling plantation by KPIT Family with the legend Padma Shri Saalumarada Thimmakka.100 saplings were planted.
Occupational Health and Safety Assessment Series (OHSAS)
The following activities were carried out by the Company for ensuring health and safetyof our employees in the year 2019-20.
Consultation through our in-house doctors and psychologists.
Zumba and Yoga sessions with expert trainers every Friday (Fun Fit Friday).
Health Fiesta Various health check-ups at discounted rates health and fitness productson display Medicines at discounted rates.
On occasion of International Women's Day quick workout and Zumba sessions wereorganized for women employees.
Engagement through Wellness activities throughout the year such as Aerobics sessionsTreks various sports activity Monthly Health and Wellness talk by experts.
Executive health check-ups for Senior Management free annual health checkup for allemployees spouse parents in laws.
Group Personal Accident Insurance enhanced to 20 Lacs.
Weekly webinars on nutrition wellness stress management COVID-19 lifestylediseases exercise mental health.
Specific preventive measures taken for safety of employees during COVID-19 pandemic:
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 door knobs switches etc. throughout the day.
Wearing mask made mandatory for everyone in the office and for all third party staffface masks and 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 the number of chairs in the cafeteria. Only 4 people could sit on one tableinitially and later only 2 people were seated on a table meant for 6. Face to Face seatingwas discontinued.
Personal hygiene and Safety First being followed all the time.
Temperature checks and Status check on Aarogya Setu app mandatory at office entrypoints.
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.
Temperature monitoring was done by keeping the air-conditioning at more than 25 degrees
Sanitizers were kept at all common places.
During the year under review the Company has developed below applications and releasedto business
a. Myworld Portal The new responsive UI is made available on all deviceformfactor (desktops & mobiles devices). Application availability scalabilit &performance has improved multi-fold compared to earlier legacy system. New UI is more userfriendly and has helped improve user productivity. With the help of new architecture wecan now release new business features more frequently without break in changes. Moreanalytics is now available to users such that users can get insight like team members onleave current team strength in office project allocation/expiry quick glimpse on teammembers birthdays/anniversaries centralized team attendance etc. Earlier there weremultiple portals for different use cases. users have to access a single portal where forall the applications are available with single sign. New platform is integrated tomultiple backend systems such that users can fetch desired intelligence at one place (e.g.leave OnDuty Swipe card Time Log TR etc.)
b. Kloudee - Last year we started an initiative of Digital lab; under thisinitiative we have devolved BOT to automate a few tasks in Human Resources (HR) andTechnology Infrastructure Management Services (TIMS) area. The BOT named as Kloudee.Kloudee is well integrated with Myworld. This BOT helps KPIT member to know the FAQ of HRand TIMS related to process and policy queries. Kloudee is based on machine learning andNatural Language processing technologies powered by Dialogflow (google). Kloudee hasspecial capability to correct the typos in user questions before answering.
Kloudee can understand user question and provide accurate answer. Machine learning ishelping to understand the user question better and provide self-training to the Kloudee.The Kloudee BOT is even ready for casual chat. In future this Bot can be used to automatemany tasks like submitting tickets/requests feeling and approving time loges also itcan seamlessly integration with human agents to fulfil all unanswered questions at one go.
c. SMART Campus Dashboard SMART campus dashboard is an important milestone inthe
SMART enterprise journey of KPIT. SMART Campus solution's centralized database collectsdata from the various systems in facilities domain. The systems include Water Pumps Flowmeters Tank level sensors DG PAC etc. These systems are otherwise managed maintainedand monitored in silos with practices involving manual intervention.
Smart campus dashboard enables the operator to monitor system status and health from asingle dashboard which is accessible using a web browser. Monitored systems can be in asingle campus or can be spread across multiple geographical locations. Smart campusdashboard analyses the data gathered from multiple systems and represents them in ameaningful way. The collective intelligence is drawn from the data received from thedispersed systems adds great value to the facilities management team who is newplatformresponsible for managing and monitoring these systems. Cause-Effect analysis can be doneproactively with the data gathered over a period of time. Smart Campus dashboard offersthe capability to send out notifications to the operator about the malfunctioning and/orunavailability of the device(s) through email based alerts. Smart campus dashboard alsohas the capability to generate the reports for the various scenarios including (but notlimited to) device uptime device data sets audit trails.
All above applications are running on a robust
Platform which is deployed for this purpose
Platform: Above result is achieved by adopting
DevOps culture and using CD/CD tool set. Chief Digital Officer (CDO) function achievedcontinuous integration continuous delivery & continuous deployment with the help ofEnterprise Jenkins & Pivotal Cloud Foundry. Along with this many tools were deployedto achieve agile practice. This approach helped in faster & flawless software deliveryto business under the SimpliFicar project. Multiple open source tools were evaluated inthis process and then deployed. Tools like Git as a code repository Maven as a ProjectManagement framework Nexus as an artefact repository
SonarQube for code quality Cobertura for code coverage and JUnit for unit tests weredeployed and leveraged. Sonatype IQ server helped in achieving security and compliancerequirements because of which we truly practiced DevSecOps. Pivotal Cloud Foundry (PCF)was deployed in multi-availability zones (data centre level resiliency). PCF helped inachieving faster and continuous application deployment in runtime. With new Platformapplication scaling is on demand and is highly available.
IT Infra: Above mentioned Platform is hosted on the new data centre technologycalled "Hyperconverged" infra. TIMS evaluated multiple options and deployed thisstate-of-the-art new technology in datacentre. Hyperconvergence is an integration ofcompute and virtualization resources in a single server system. This type of technologyeliminates the need of costly and complex SAN storage infra. It does not need highlyskilled resources to operate. This technology is deployed such that even if one datacentergoes down business critical applications will continue to run without or with leastinterruption. This deployment has reduced carbon footprint by almost 40% compared totraditional technology.
This also lowered electricity consumption and space requirement in datacenter.
We are getting below mentioned business benefits from this technology
- Linearly scale-out architecture (scale on demand)
- Use of commodity hardware (no hardware OEM lock-in)
- Hypervisor agnostic (lower cost & no vendor lock-in)
- Either scale only storage or compute or both
- Start small & grow big (no upfront cost)
- Lower skillset required for operations (lower
- Faster deployment (factory installed systems)
- Rapidly scalable (faster delivery to business)
- Unified management (faster adoption)
Security and collaboration enhancement: Enabled
Secure remote connections at all KPIT offices for remote users to connect and accessKPIT/client resources securely. The device from where the remote connection established isverified for the correct KPIT provided devices. The web proxy is geared up to take care ofroaming users protection against connecting to malicious sites. Each KPIT laptop/desktopcontains Advance threat prevention along with traditional Antivirus. The endpoint ismanaged for OS patch management remotely. User accountability is established usingMulti-factor authentication. Multifactor authentication is set for all kinds of possibleremote connections. Scaled-up the infrastructure to cater to all users to access the KPITresources for business purposes.
Research and Development (R&D) Activity
KPIT has received various awards related to Research and Development (R&D) activityas stated under "Awards & Recognition" in this Boards' Report.
The total amount spent on R & D activities is given below:
R & D expenses for the year ended March 31 2020
|Particulars ||Amount ||Key Project Details |
| ||(in million) || |
|Expensed in the statement of profit and loss (Refer Note 1) ||251.02 ||Mechatronics & Energy Storage Hardware & Embedded Sw (Only Revolo) Innovation Tools |
|Assets capitalized during the year ||5.43 ||Development Technology Leadership and Fuel Cell |
|Total ||256.45 || |
Out of total R & D expenditure of 251.02 million eligible R & D revenueexpenditure under Section 35(2AB) of the Income Tax Act 1961 for the Company is 184.20million. A separate section on R & D activities undertaken by the Company has alsobeen included in this Annual Report.
Foreign Exchange Earnings and Outgo
Given the global nature of the business of the Company exports always form its thrust.Total foreign exchange earnings during the year have been 8451.54 million (previous year2091.31 million) and foreign exchange outgo (including imports) has been 203.83 million(previous year 33.62 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:
|Sr. No. Name of the subsidiary ||Nature of transaction ||Duration ||Rate of Interest (%) ||Amount (in million) ||Purpose |
|1 KPIT Technologies (UK) Limited ||Investment in subsidiary ||N.A. ||N.A. ||326.64 ||Equity Infusion |
|2 KPIT Technologies Pte. Ltd. ||Investment in subsidiary ||N.A. ||N.A. ||34.63 ||Equity Infusion |
|3 KPIT Technologies (UK) Limited ||Loan ||36 months ||6m Euro LIBOR plus 325 bps ||498.30 ||Working capital |
|4 KPIT Technologies GK ||Guarantee ||36 months ||N.A. ||226.16 ||Setting up Overdraft Facility |
|1 ||Guarantee ||51 months ||N.A. ||226.16 ||For further investment in KPIT |
| || || || || ||Technologies Inc. |
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 this Report as "Annexure 2".
Update on Merger & Acquisition
During the year under review the Board of Directors of the Company approved a schemeof merger by absorption of Impact Automotive Solutions Limited a wholly owned subsidiaryof the Company with KPIT Technologies Limited. The Company has filed joint applicationfor obtaining approval for the said scheme from Hon'ble National Company Law Tribunal andthereafter the Official Liquidator has been appointed.
Further the Board of Directors of the Company also approved and entered into anagreement to acquire majority stake in Vayavya Labs Private Limited a companyincorporated in India having its development centers in Belgaum and Bengaluru. The deal isexpected to get closed by the fourth quarter of FY2021.
Material changes and commitments affecting the financial position of the Company andchange in nature of business
The Board of Directors the Company approved a draft scheme of merger between ImpactAutomotive Solutions Limited a wholly owned subsidiary of the Company as a result KPIThas redefined its strategy and is moving away from Manufacturing and/or Hardware relatedbusiness opportunities.
Further the rapid outbreak of the COVID-19 presents an alarming health crisis that theworld is grappling with. The impacts of COVID-19 pandemic are unfolding in real time. TheCOVID-19 outbreak is expected to have an impact on the economies of the affected countriesand the international markets. Countries across the globe resorted to lockdowns resultingin shutting down the manufacturing & services activities and bringing the globalsupply-chain to grinding halt. Globally across all industries companies are working hardto recoup revenue losses manage costs keep employees safe and at the same time ensureuninterrupted service to the clients. KPIT has received many testimonials from itsexisting clients for its seamless remote delivery model & managing this criseseffectively.
KPIT is working on bringing in appropriate changes in the business model to tackle thepossible future uncertainties in economic conditions due to the global pandemic and alsotaking appropriates measures to control its cost structure. We will continue to build onthe work we have done over the past years to drive efficiency in operations and strengthenthe foundations of the business. Since beginning of March 2020 KPIT started working onbusiness continuity enabling its employees work remotely to ensure both employee safetyand service to customers with due necessary approvals from the customers as well asregulatory authorities in various countries. We are glad to inform that by end of March31 2020 KPIT had over 98% of its global staff working from remote locations. Whiledirect vehicle sales and manufacturing plants of our customers were directly impactedKPIT revenue model did not have direct impact since its revenue model is not linked todirect vehicles sold during the year.
In view of pandemic relating to COVID-19 the group has considered internal andexternal information and has performed sensitivity analysis based on current estimates inassessing the recoverability of receivables unbilled revenues goodwill intangibleassets and other financial assets. However the actual impact of COVID-19 on the Group'sfinancial statements may differ from that estimated and KPIT will continue to closelymonitor any material changes to future economic conditions.
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 write-up on Enterprise Risk Management isincluded in this Annual Report.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedto this Report as "Annexure 6".
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 2020 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 2020 and of the profit of theCompany for the year ended March 31 2020;
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
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
Certificate and Mr. Vinit Teredesai Chief Financial Officer pursuant to theprovisions of Regulation 17(8) of the SEBI (LODR) Regulations 2015 for the year underreview was placed before the Board of Directors of the Company at its meeting held on May27 2020.
A copy of such certificate forms a part of the Report on Corporate Governance.
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.
We take this opportunity to thank all the shareholders of the Company for theircontinued support throughout the merger and demerger process.
We thank our customers vendors investors and bankers for their continued supportduring the year. We place on record our appreciation of the contribution made by ouremployees at all levels. Our consistent growth was made possible by their hard worksolidarity 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 and Communication and InformationTechnology the Ministry of Commerce the Ministry of Finance the Ministry of
Corporate 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 for their support and look forwardfor their continued byMr.KishorPatilCEO&ManagingDirector support in future.
May 27 2020
For and on behalf of the Board of Directors
S. B. (Ravi) Pandit