Sustainability Report - KPIT

Co-innovatingPossibilitiesfor a sustainable worldwww.kpit.com| Page 1

From the Chairman's deskWhat is the true purpose of technology?We believe it is to make the world a better place.Industries worldwide are looking to be more efcient and use less energy and fewer materials. They areconsciously being respectful towards the environment to ensure that we give our future generations a clean,green and sustainable world. At KPIT, we are passionate about environment and this concern for environmentruns in the blood of the organization.As a responsible global corporate citizen, KPIT believes that the interest of our future generations and thesociety at large will be best served by the efciency of our business operations. As a company, we are committedto protecting the environment along with the active involvement of our stakeholders. Our commitment toenvironment is evidenced by our choice of the verticals in which we operate as all the verticals that we operatein, namely, Automotive, Energy, Utilities and Manufacturing, are seeing a lot of action towards environmentalsustainability. This passion and commitment also permeate the products and solutions we develop for our clientswith a motto that remains unchanged: technology for a better world. We strive to use technology to designproducts that help our customers in their pursuit of sustainability of the environment and the ecological systemin general.Being an organization that provides IT Services, KPIT does not consume non-renewable resources, nor does itgenerate process wastes and emissions on scales comparable to conventional manufacturing industries. However,we do acknowledge the impact on the environment caused by the nature of our business in terms of consumptionof resources like energy, water and other secondary resources and have therefore put in place robust processesand systems in order to identify, quantify and reduce such adverse effects, if any, on the environment. Ourfacility at Hinjewadi bears testimony to environmental sustainability as the facility has been designed to use theleast amount of natural resources, be it electricity, water or fossil fuel.Our passion goes beyond the physical environment to encompass also the people that are part of it, namely, ourcustomers, employees, shareholders, service providers, government and the society at large. Our value systems,corporate governance and corporate social responsibility initiatives strive to ensure that we contribute to thewell-being of all our stakeholders. Our choice of the initiatives is based on our areas of core strengths as thiswill result in maximum benet for the stakeholders by blending our passion with our competencies.Our efforts in this direction are starting to pay off:The National Association of Software and Services Companies (NASSCOM) awarded KPIT Hinjewadi (Pune)campus with the "energy champion" award.Automotive Research Association of India (ARAI) awarded us the prestigious Mahesh Modi EnvironmentalExcellence award for Revolo, our plug-in parallel hybrid solution, recognizing our commitment towardsbuilding sustainable automotive solutions of tomorrow.We are an environment conscious company, and will always be committed towards ensuring the protection andimprovement of our society and its constituents. This report details our efforts and initiatives in that direction.S.B. (Ravi) PanditChairman & Group CEO| Page 2

IntroductionWe are glad to present you our Third Sustainability Report for the year 2012-2013. Sustainability is imperativefor us and therefore, not optional. We have always adhered to sustainable practices in our daily operations andhelped clients conduct their business in a sustainable manner.The report details the activities, initiatives, tasks implemented during 2012 -2013 and covers the economic,environmental and social dimensions of our sustainability strategy. This report presents our vision of building asuccessful business with commitment to sustainability - go beyond the mandate for the environment, theeconomy and the people. Here we refer to our core values, beliefs and principles of conduct which have alwaysserved as our bedrock.| Page 3

Index1. About the Company .................................................................................................1.1 Vision & Mission ................................................................................................1.2 Company Overview ............................................................................................1.3 Corporate DNA .................................................................................................1.4 Business Model .................................................................................................1.5 Industry Recognition & Leadership .........................................................................1.6 Geographic Overview .........................................................................................1.7 Financial Performance ........................................................................................1.8 Information about the Subsidiary Companies .............................................................1.9 Awards & Accolades ...........................................................................................1.10 Corporate Governance - Key Principles ....................................................................1.11 Enterprises Risk Management (ERM) Framework .........................................................2. Corporate Governance and Management practices ............................................................2.1 Board Composition ............................................................................................2.2 Board Compensation ..........................................................................................2.3 Whistle Blower Policy .........................................................................................3. Innovation @ KPIT .......................................................................................3.1 Patents: FY 12-13: Break-up .................................................................................3.2 Innovation Eco-System ........................................................................................3.3 Green Projects .................................................................................................4. Community contribution at KPIT .................................................................................4.1 Our Philosophy .................................................................................................4.2 Focus Areas .....................................................................................................4.3 Chhote Scientists: 400+ volunteers | 800 Kids from 20 schools .......................................4.4 Teaching Classes at Thayimane ..............................................................................4.5 School kit donation drive .....................................................................................4.6 Teach for India program ......................................................................................4.7 Janwani: An initiative for a better city ....................................................................4.8 Farm ponds: Towards conserving water through mass volunteering ...................................4.9 Environment Week 2012 @ Pune Ofce ....................................................................4.10 Environment Week @ MAHAPE Ofce .......................................................................4.11 Corporate Induction @ NGO place ..........................................................................5. Environment Initiatives at KPIT Campus ........................................................................5.1 KPIT Green Campus ...........................................................................................5.2 Power ............................................................................................................5.3 Project undertaken at KPIT for reduction in power consumption for Desktops ......................5.4 Air Conditioning ................................................................................................5.5 Lighting ..........................................................................................................5.6 Waste Air Cogeneration and Solar panels for Alternate Clean Energy .................................5.7 Waste Management at KPIT Campus ........................................................................5.8 Environment Awareness Campaigns .........................................................................5.9 Occupational Health & Safety ...............................................................................6. Employee Engagement at KPIT ....................................................................................6.1 Employee Communication ....................................................................................6.2 Employee Recreation .........................................................................................6.3 Labour Practices Strategy and Management Approach ..................................................6.4 Total workforce ................................................................................................6.5 Performance Appraisal ........................................................................................6.6 Rewards and Recognition .....................................................................................6.7 Talent Acquisition ..............................................................................................7. The growth path ahead ...........................................................................................55556677891011121215151717181921212121232323232425252627272728303030313232363636373737383840| Page 4

1. About the CompanyWe are a recognized technology leader in delivering Product Engineering services, ERP solutions and Enterprise ITconsulting with focus on Automotive & Transportation, Manufacturing and Energy & Utilities verticals. We areworking with global corporations by leveraging our technology and domain expertise to co-createtransformational value and help them build a sustainable world.With global revenues of USD 410 Million and a total strength of 8,321 KPITians, we have expanded our presenceacross 15 countries with 31 global ofces and 7 development centers.1.1 Vision & Mission:Our vision is to co-build, along with our partners and customers, an integrated sustainable world by leveragingtechnology.The mission of the company is to be a global partner of rst choice for our customers with leadership in selectareas.StrategyOfFocusFocus on select vertical :1) Automotive & Transportation2) Manufacturing3) Energy & Utilities1.2 Company Overview:Incorporated in 1990, we are a global IT consulting and product engineering partner to leading corporations inour focus industry verticals. We help businesses run their operations more efciently through Enterprise ITconsulting and services. The product engineering solutions we offer help customers to design, develop andmanufacture products that are greener, safer, cheaper and intelligent, thus delivering higher value to their endcustomers. As we have grown, we have evolved from a "Horizontal IT centric model" to a "customer centricmodel" and now to "vertical centric model for leadership",and focus and innovation have been the only constantsthat have helped us through these phases of transformation.Currently, we have a customer base of 183, including leading global OEMs and Tier 1s,and have established awide market reach across the key geographies of America, Europe and Asia Pacic. With strong focus on selectedindustry verticals we have categorized our business offerings into different strategic business units (SBUs) - IESSBU, A&E SBU, SAP SBU and BTU SBU. Within the Business Units, we have established a Practice based structureto enable us to create best-in-class practices for delivering maximum value to our customers.1.3 Corporate DNA:To achieve our business vision and mission we are guided by our seven core values, or CRICKET, as we call them.These values are well incorporated within our ecosystem and in our relationships with every stakeholder of thecompany.CustomerFocusRespect forIndividualIntegrityCommunityContributionKnowledgeWorshipEntrepreneurship& InnovationTeamwork &Boundrylessness| Page 5

grew by 49% to INR 22,386.3 Million. Our prot after tax for the year stood at INR 1,990 Million, a growth of 37%.Thus we achieved our guidance numbers both at revenue and PAT level.The highest growing SBU during the year was IES which grew by 66% to USD 193 Million followed by Auto andEngineering SBU which grew by 39% to USD 99 Million. SAP SBU's revenue increased by 37% to USD 118 Million.Interms of geographies, US led the growth with 62.9% while APAC grew by 35.7% during the year. Europe's growthwas the lowest at 6.2%. Our largest client Cummins grew by 31.6% while the Top 5 and Top 10 clients grew by51.1% and 48.8% respectively.The overall growth for FY2013 was predominantly driven by IES and A&E SBU, while we faced some slowdown inSAP business, which impacted the SBU's growth primarily during the second half of the year. We also experiencedcertain pressure in our largest client account - Cummins towards the end of the year.Our EBITDA margins for the year expanded by 182 bps to 16.3% in FY2013. We saw good improvement in theoperating prot margins of our IES and A&E SBU which have comparatively higher level margins than thecompany average. At the same time our SAP business slowdown impacted the EBITDA margin performance of theSBU, which also created pressure on the overall company level margins. However, we are putting in our effortstogether to improve the growth and operating margin performance of our SAP SBU. From a long term andsustainable perspective we want to achieve EBITDA margins of 18% at the company level with USD revenues of 1Billion by 2017. The key levers for margin improvement would be growth, operational efciency, employeepyramid improvement, change in the quality of revenues with more offshore based revenues and higher share ofIP led revenues.1.8 Information about the Subsidiaries :As on March 31, 2013 the Company had following subsidiaries:-1. KPIT Infosystems Inc. (KPIT US) was incorporated in 1998, in the US, for catering to the demand of US basedcustomers. The Company holds 100% of the share capital and voting power of KPIT US. For the year 2012-13,KPIT US earned revenues of Rs. 6,992.21 Million (previous year - Rs. 4,970.94 Million) and recorded a prot of Rs.134.91 Million (previous year - Rs. 134.91 Million). The above prot does not include translation gain of Rs.224.83 Million.2. KPIT Infosystems Limited (KPIT UK) was incorporated in 1996, in UK, for catering to the demand ofcustomers based out of UK & Europe. The Company holds 100% of the share capital and voting power of KPIT UK.For the year 2012-13, KPIT UK earned revenues of Rs. 982.89 Million (previous year - Rs. 1,070.03 Million) andrecorded a prot of Rs. 11.89 Million (previous year loss - Rs. 0.14 Million). The above prot does not includetranslation gain of Rs. 18.03 Million.3. KPIT Infosystems GmbH (KPIT Germany) was added as a step down subsidiary in 2005. KPIT Germany is a100% subsidiary of KPIT UK. This subsidiary is completely focused on huge automotive market in Germany andwas added to expand our customer base in this segment with a vision to become No. 1 global productengineering partner to the automotive industry. For the year 2012-13, KPIT Germany earned revenues of Rs.932.70 Million (previous year - Rs. 908.93 Million) and recorded a loss of Rs. 0.01 Million (previous year - Rs.37.71 Million). The above prot does not include translation gain of Rs. 14.47 Million. Towards the end of theyear 2012-13, KPIT Germany acquired 100% shares of ikv++ Technologies AG, a German company specializing inproviding products and solutions in the functional safety space to automotive industry. The transaction gotconsummated on the 1st of April, 2013.4. KPIT Infosystems France SAS (KPIT France) was formerly known as Pivolis. KPIT France is providing directpresence in France which is an important market in European region from KPIT's growth perspective. In theFinancial year 2012-13, KPIT France reported a prot of Rs. 21.15 Million (previous year loss - Rs. 3.97 Million)with revenues of Rs. 375.94 Million (previous year - Rs. 260.51 Million).5. Sparta Consulting Inc. (Sparta Inc.) was added as a step down subsidiary in 2009. Sparta Inc. is a leadingprovider of high end SAP solutions and is one of the fastest growing SAP consultancies in North America. Sparta| Page 8

Inc. reported a prot of Rs. 290.42 Million during the year ended March 31, 2013 (previous year - Rs. 111.14Million) on revenues of Rs. 5,560.59 Million (previous year - Rs. 4,089.51 Million).6. Sparta Infotech India Private Limited (Sparta India), is a wholly owned subsidiary of the Company. SpartaIndia was incorporated to cater Sparta's India based clientele. Sparta India reported a prot of Rs. 204.89 Millionduring the year ended March 31, 2013 (previous year - Rs. 130.61 Million) on revenues of Rs. 535.72 Million(previous year - Rs. 373.73 Million). The Board of Directors of the Company and that of Sparta India has alreadyapproved a scheme of amalgamation of Sparta India with the Company. The Company has led the applicationwith Bombay Stock Exchange and National Stock Exchange for seeking in-principle approval to the said schemeof amalgamation and the same will be led with the High Court shortly.7. CPG Solutions, LLC ('CPG') is a wholly owned subsidiary of KPIT US. CPG, an Oracle Gold Partner, is a focusedplayer in solutions for companies in Manufacturing, Supply Chain and Engineering space with over a decade ofspecialized consulting experience in this focused area. CPG reported a prot of Rs. 112.65 Million for the yearended March 31, 2013 (previous year - Rs. 102.84 Million) on revenues of Rs. 1,543.56 Million (previous year Rs.997.86 Million).8. KPIT (Shanghai) Software Technology Co., Ltd. (KPIT China) is a China based wholly owned subsidiary of theCompany incorporated on January 12, 2011. KPIT China has been formed for providing software developmentand consultancy to customers in China. During the nancial year 2012-2013, KPIT China reported a prot of Rs.2.88 Million (previous year - loss of Rs. 8.88 Million) on revenues of Rs. 80.10 Million (previous year - Rs. 3.87Million).9. SYSTIME Global Solutions Private Limited (SYSTIME) is one of the world's largest J D Edwards solutionprovider and an Oracle Platinum partner. During the year 2011-12, the Company acquired a majority stake inSYSTIME. During the year under review, the Company increased its shareholding in SYSTIME to 76%. Theobjective of the acquisition of SYSTIME was to make a foray in the ERP space and thereby leverage SYSTIME'sOracle relationship. J D Edwards is the leading ERP solution for certain Industry verticals includingmanufacturing, which is also the Company's largest vertical. As on March 31, 2013, SYSTIME had four subsidiaries(including step down subsidiaries). SYSTIME reported a consolidated prot of Rs. 336.29 Million during the periodended March 31, 2013 (previous period - Rs.51.66 Million) on revenues of Rs. 3,623.29 Million (previous period -Rs.688.05 Million). It is proposed to convert this into a public limited company shortly. In order to leverage onthe `KPIT' brand equity, steps have been initiated to change the name of Systime Global Solutions PrivateLimited as KPIT Global Solutions Limited. Systime ME FZE, a wholly owned subsidiary of SYSTIME, wasrechristened as KPIT Infosystems ME FZE during the year. SYSTIME, in turn, has four subsidiaries in US, Canada,Brazil and Middle East.10. KPIT Infosystems Netherlands B.V. (KPIT Netherlands) is a wholly owned subsidiary of the Company basedin the Netherlands and was incorporated on February 16, 2012.11. KPIT Infosystem (Brasil) Servicos De Technologia e Participacoes Ltda (KPIT Brazil) is a wholly ownedsubsidiary of the Company based in Brazil and incorporated on March 6, 2012.During the year, SolvCentral.com Inc, a subsidiary of KPIT Infosystems Inc, and In2Soft GmbH, a subsidiary ofKPIT Infosystems GmbH, got merged with their respective parent companies.1.9 Awards & Accolades:Kishor Patil, CEO & MD was named as a nalist for the Ernst & Young Entrepreneur of the Year (EOY) - India2012 award.We were awarded the 2012 Oracle Excellence Award for Specialized partner of the year- North America inthe Regional System Integrator/ Reseller Applications momentum category.We also received an honorable mention in the 2012 Oracle Excellence Award for Specialized Partner of theYear - North America in the SCM & Manufacturing Category.Sparta Consulting was positioned in the "Niche Players" Quadrant of the 2012 "Magic Quadrant for SAPImplementation Service Providers, North America" by Gartner.KPIT has been mentioned in Forbes list of 200 high performing Asia Pacic companies with revenues under a| Page 9

Billion.We won the prestigious Mahesh Modi Environmental Excellence award for Revolo. This award given by theAutomotive Research Association of India (ARAI) recognizes our commitment towards building sustainableautomotive solutions of tomorrow.KPIT was awarded EMC Transformers Award 2012 at the EMC Annual event for successful implementation ofinnovative solutions which helped in transforming internal IT functions.KPIT received EDGE 2012 award (Enterprise Driving Growth and Excellent through IT) in the category of "DataCentre and Networking" at ITEROP 2012, Mumbai for effective implementation of Unied computinginfrastructure.Pankaj Sathe was recognized as one of the '40 Most Talented HR Leaders in India' in the 'ET Now - Talent & HRLeadership' Awards at the 21st Edition of the World HRD Congress.1.10 Corporate Governance - Key PrinciplesThe Company philosophy is aimed at conducting business ethically and efciently in a transparent mannerApart from the mandatory board meetings there are various initiatives to keep the Board of directors fullyabreast of organizational information and policies, such as: Independent board members chair four committees, including Audit committee, Quality councilcommittee, Innovation council and HR & Compensation (Remuneration) committee. Annual three dayBoard offsite meeting to deliberate annual operating plans and set the direction for longrange plans.The Company has set-up an Audit Committee consisting of three Non- Executive Directors. The committeewas reconstituted on October 25, 2012 with Ms. Lila Poonawalla as the chairperson of this Committee. Thecommittees play a major role in improvement of internal controls, nancial reporting, risk management,statutory and internal auditor relationship and code of conduct. Its responsibilities include:Integrity of nancial reports.Enterprise Risk Management.Compliance with laws.Reviewing the function of Whistle-Blower Policy.Related party transactions.Creditor obligation defaults.Use of Company assets.Internal accounting controls.Review of utilization of funds raised through public, rights or preferential issue of shares.Other controls for efciency and economy.Financial reporting process:- Accounting policies- Judgments and estimates- Unusual transactions and adjustments- Disclosures and presentation- Companies view point on Auditors' remarks- Risk of nancial reporting- All nancial reports and their vehicles Recommending to the board, the appointment, re-appointment and, if required, the replacement or removalof the Statutory Auditor and the xation of audit fees. The Quality Council Committee enables the Board to focus on quality-related aspects and resolve customerissues proactively. This committee was reconstituted on October 25, 2012 and is chaired by an IndependentDirector, Ms. Lila Poonawalla. Its role and objectives are to suggest measures to enhance quality andproductivity and the means to optimize the use of the resources. Innovation Council lays down the innovation road-map for the Company considering the constantly evolvingtechnology and other trends and also guides the Company in monetizing the results of the innovation. Dr. R AMashelkar, an Independent Director, chairs the council.| Page 10

The Company has set-up a HR & Compensation (Remuneration) Committee. The committee was reconstituted onOctober 25, 202 and is chaired by an Independent Director, Mr. Amit Kalyani. Its responsibilities include:Compensation policiesCompensation of Executive and Non-Executive Directors and senior managementAttraction and retention of talentStock optionsSuccession planningLeadership DevelopmentOverseeing performance appraisal systemsEvaluation of Executive Director's performance andOther such matters as may be decided by the committee from time to time. The Company has also formed an Investors'/Shareholders' Grievance Committee -which was rechristened asthe Stakeholders' Relationship Committee to bring it in line with the proposals in the new Companies Bill. Mr.S. B. (Ravi) Pandit is the Chairman of the Committee and Mr. Kishor Patil is the member of the Committee.The role and objectives of the committee are as under: Oversee the share transfers, and other shareholder related issues like non-receipt of dividends, annualreports etc. Consider and resolve investors' grievances. Allotment of shares to option grantees of the Company who have exercised options under the ESOPschemes of the Company and to the Employee Welfare Trust of the Company for the benet of optiongrantees under the ESOP schemes of the Company.1.11 Enterprise Risk Management (ERM) Framework:The Company follows a quantitative framework for assessing the risks and mitigating them. The key risksmonitored by the ERM framework are:1. Customer relationship-related risks2. People-related risks (Talent attraction & retention and cost of human resources)3. Currency-related risks4. Business concentration risks5. Risk of dependence on linear revenues6. Risk of dependence on inorganic growth.More details on the Company's ERM framework have been given in the Company's annual report.| Page 11

2. Corporate Governance and Management practicesCorporate Governance practices are a quintessential part of the Company and we follow it in letter and spirit.The Company has been nurturing good Corporate Governance practices right from its inception. Over the yearsthe Company has built a value system to align itself with these practices.The Company believes that the Corporate Governance framework is to encourage optimum use of resources witha focus on transparency, responsibility, trust and accountability. It helps entities in realizing their corporateobjectives, protecting their stakeholders' rights, meeting legal requirements and demonstrating transparency inconducting business to a wider section of society and people at large. Good Corporate Governance thereforecontributes to a sustainable economic development of corporations by enhancing their performance andincreasing their access to outside world.2.1 Board composition:The composition of the Board is decided keeping in view the following criteria: Compliance with statutory and regulatory norms. Appropriate mix of Independent and non- independent directors Entrepreneurship Provide specialized knowledge in- Business strategy Global markets Technology and innovation- Financial Management- Accounting- Legal- Customer Relationship Management- Investment Banking - Human Resource Management " Experience of working in a rapidly growing company.The Company has a judicious mix of Executive, Non-Executive and Independent Directors. As on March 31, 2013the Board consisted of 6 Independent Directors, 3 Non-Executive Directors, a Non-Executive Chairman and 2Executive Directors.At KPIT, along with the criteria for composition of the Board, the Company has also laid down certain criteria forthe qualication of the Board members. There is a constant endeavor to align the qualications with the ongoingtrends in this arena. Before electing any new member, the Board ensures that the new member conforms to thequalication criteria laid down by the Company. The qualications prescribed by the Company are as follows: Specialized skills Knowledge of the business Knowledge of the industry Appropriate soft skills Independence attributes for independent directors Ability to devote necessary time Not on the board of directors of our competitors.The Independent Directors of the Company are chosen keeping in mind the denition of 'Independent Director' asdened in the Listing Agreement. Apart from this the Company has well dened touchstones for selecting theIndependent Directors. The Independent Directors are prominent and distinguished gures from the Industry andhave an astute knowledge of the industry and business.At KPIT we have renowned personalities as directors, who are doyens of their eld and are truly independent, byvirtue of their rich experience. They include:We have Dr. R. A. Mashelkar, who is deeply committed to the world of science and engineering, and has beenhugely instrumental in propagating a culture of innovation and balanced intellectual property rights regime forover a decade. Dr. Mashelkar is the President of Global Research Alliance, Chairman, National Innovation| Page 12

Foundation, Chairman - Marico Innovation Foundation, Chairman - Reliance Innovation Council and Chairman ofThermax Innovation Council. He was the third Indian engineer to have been elected as a Fellow of Royal Society(FRS), London and he was the rst Indian President of the Institute of Chemical Engineers, UK and the rst IndianForeign Fellow of Australian Technological Science and Engineering Academy (2008). Twenty-eight universitieshave honoured him with honorary doctorates, which include Universities of London, Salford, Pretoria, Wisconsinand Delhi. Dr. Mashelkar served as the Director General of Council of Scientic and Industrial Research (CSIR) ofGovernment of India. He was also the President of Indian National Science Academy (2005-2007). Dr. Mashelkarhas won over 50 awards and medals at national and international levels and was honoured by the President ofIndia with the Padma Shri (1991) and with the Padma Bhushan (2000), in recognition of his contribution to nationbuilding.Our Board has Ms. Lila Poonawalla, who was awarded the PadmaShri in 1989 in recognition for her exemplarycontribution to the world of engineering and Industry. Lila is currently a Director on the Board of Nobletek PLMSolutions, Blossom Brewery and Pragati Leadership. She has been on the governing body of organizations like theCII (Confederation of Indian Industries) and TIFAC (Technology Information Forecasting and Assessment Councilformed by the Government of India). She was a member of the Scientic Advisory board of the Central Cabinet(SAC-C) and Chairperson of the Herbal and Floriculture Taskforce of SAC-C. Actively involved in social initiatives,Lila is on the board of trustees of two Pune-based NGOs. In 1994, she started the 'Lila Poonawalla Foundation' topromote education amongwomen. She is the Chairperson of the Quality Council Committee and the AuditCommittee and a member of HR & Compensation (Remuneration) Committee of the Company.We also have Prof. Alberto Sangiovanni Vincentelli, who was a co-founder of Cadence and Synopsys, the twoleading companies in the area of Electronic Design Automation. He is the Chief Technology Adviser of Cadence.Prof. Alberto is a member of the Board of Directors of Cadence and chairs its Technology Committee. He was amember of the HP Strategic Technology Advisory Board. He is currently a member of the Science and TechnologyAdvisory Board of General Motors, as well as a member of the Technology Advisory Council of UnitedTechnologies Corporation. He is also a Professor with University of California, Berkeley, Department of ElectricalEngineering & Computer Sciences. Prof. Alberto is a member of the Quality Council Committee of the Company.Ms. Manisha Girotrais an independent director of the Company. Manisha holds a degree from St. Stephen'sCollege and received a gold medal for her Masters Degree from the Delhi School of Economics. Currently she isthe Chief Executive Ofcer of Moelis India and was most recently CEO and Country Head of UBS in Indiamanaging its investment bank, commercial bank, markets, equity research and wealth management divisions.Prior to her stint at UBS, Ms. Girotra was Head - North India of Barclays Bank. Ms. Girotra began her investmentbanking career in London in the corporate bank at ANZ Grindlays. She was honored as a Young Global Leader in2010 by the World Economic Forum and was named one of the "15 Women to Watch in Asia" by Forbes in 2008and one of the "50 Women to Watch" in the annual Wall Street Journal survey in 2007. Ms. Girotra has appearedin Business Today's 25 Most Powerful Women in Business in India for the past ve years. Ms. Manisha Girotra is amember of the Audit Committee of the Company.We also have the privilege of having Mr. Amit Kalyani on our board. He has received his Bachelors in MechanicalEngineering from Bucknell University, Pennsylvania, USA. He joined Kalyani Steels Limited in 1997 and wasdeputed to Carpenter Technology Corporation, USA for technical training and to oversee technology transfer tothe new joint venture viz. Kalyani Carpenter Special Steels Limited. On successful completion of the assignment,he returned to India to join Bharat Forge Limited, in 1998 as Vice - President & Chief Technology Ofcer. AmitKalyani is currently the Executive Director of Bharat Forge Ltd., the agship company of Kalyani Group. Amit isinvolved in Bharat Forge's strategic planning and global business development initiatives and contributessignicantly across functions such as manufacturing, marketing, exports and technology upgradation of BharatForge. At KPIT, Amit chairs the HR & Compensation (Remuneration) Committee of the Company.We also have on Board Mr. Sanjay Kukreja, the representative of ChrysCapital, a Private Equity fund. He joinedChrysCapital in April 2000. He manages the business services sector and has assumed additional responsibilitiesfor the manufacturing sector. Mr. Sanjay Kukreja graduated with a BA in economics from Delhi University andreceived an MBA from the Indian Institute of Management, Bangalore. Currently, he is Managing Director of Nuvo| Page 13

Chryscapital Advisors Pvt. Ltd.Directors on board representing our strategic partner Cummins are as follows:Mr. Anant Talaulicar holds a B.E. Mechanical degree from Mysore University, a M.S. degree from the University ofMichigan in Ann Arbor and a MBA from Tulane University, USA. He has worked for Cummins for 17 years in theU.S., in varied elds like Finance, Manufacturing, Product Management, Strategy, Marketing and GeneralManagement. He has led the USD 300 Million North & South American Commercial Power Generation business.Ms. Elizabeth Carey has been the Chief Technical Ofcer of Cummins Power Generation since 2003. Ms.Elizabeth is presently the Sponsor of the Power Generation Corporate Social Responsibility (CSR) where shedraws on her long personal history of volunteerism to guide Power Generation's CSR focus. Ms. Elizabeth is alsothe Sponsor of the Women's Afnity Group at Power Generation. Ms. Elizabeth started her engineering careerwith the Aerospace Corporation in California for eight years, followed by ve years with TRW Space and Defense.She joined Cummins Inc. in 1993 as the Director of Electronic Controls. Ms. Elizabeth has a B.S. in Mathematicsand B.S. in Statistics from the California Polytechnic State University, San Luis Obispo and completed MSrequirements in 1990 for Electrical Engineering - emphasis on controls from the California State University, LongBeach. Ms. Carey is a member of the HR & Compensation (Remuneration) Committee of the Company.In order to represent the Cummins representatives in their absence, these directors also have alternate directorsviz. Mr. Cariappa Chenanda and Mr. Dwayne Allen.Recently, the Board of Directors of the Company inducted Mr. BVR Subbu, an automotive industry expert andthought leader. Mr. BVR Subbu holds a post graduate degree in Economics from Jawaharlal Nehru University anda post graduate diploma from Indian Institute of Foreign Trade. He was the president of Hyundai India earlier. Hewas also extensively involved with Tata Group holding various responsibilities, including responsibilities in TataMotors' Light Commercial Vehicles and Multi Utility Vehiclesbusiness.We believe that the aforesaid directors, with such high caliber and experience, bring true independence in ourBoard. Their endless contribution in terms of expert guidance and vision has enabled the Company toconsistently perform better in all spheres of business and has been instrumental in laying down a concrete roadmap of progress, especially in the eld of Corporate Governance.The Board is chaired by Mr. S. B. (Ravi) Pandit who is a Non-executive director.Mr. S. B. (Ravi) Pandit is the founder of the Company and has been a Director on the Board of the Companysince its incorporation. He holds a MS (Management) degree from Sloan School of Management, MIT, andCambridge, USA. He possesses extensive experience of over three decades in the elds of IT, Corporate StrategyFormulation and Management Consulting. Mr. Ravi Pandit was an Audit Professional at Alexander Grant & Co.,USA, following which he became a partner at Kirtane & Pandit, Chartered Accountants (KPCA) from 1975-1990.Ravi is a Fellow member of the Institute of Chartered Accountants of India and an Associate member of theInstitute of Cost and Works Accountants of India. He was the President of Maharatta Chamber of Commerce,Industries and Agriculture during 2004-2006. At KPIT, he leads the team in formulating corporate strategy,performance goal setting, investor relations, strategic transactions, external communication and other Boardmatters. He also plays a strategic role in Community Initiatives and Corporate Governance. Mr. Ravi Pandit isalso a frequent speaker at various national and international seminars. Ravi is the Chairman of the ShareTransfer Committee and member of the Audit Committee, Stakeholders' Relationship Committee and of the HR &Compensation (Remuneration) Committee of the Company.The two Executive Directors of the Company are as follows:CEO & Managing DirectorMr. Kishor Patil is a Fellow member of the Institute of Chartered Accountants of India and an Associate memberof the Institute of Cost and Works Accountants of India. He has 25 years of experience in various areas likeInformation Systems and Design, Marketing, Organization Methods and Systems etc. He is a founder of the| Page 14

Company and is in-charge of the overall management of the Company. He is specically responsible for all dayto-dayoperational issues like planning and executing business, reviewing and guiding the country ofces,customer delivery units and support functions, and ensuring efcient and effective functioning of theorganization as a whole. As a promoter of the Company, Mr. Kishor Patil has provided strategic direction andspearheaded KPIT' foray into international markets, especially Europe & USA. He has been instrumental inbuilding strategic partnerships and a strong and prestigious customer base for the Company in a short span oftime. Mr. Kishor Patil is a member of the Stakeholders' Relationship Committee, Quality Council Committee andthe Share Transfer Committee.Whole-time DirectorMr. Sachin Tikekar is a founder of KPIT and has played various leadership roles over the years. Currently, he isassuming the role of President - Strategic Relationships & Business Transformation. Prior to assuming this role, hewas Chief of People Operations. Further, he has taken up the responsibilities as Chief Operating Ofcer of the USoperations of the Company, and was instrumental in building the Company's sales presence across US, Asia andEurope. He has previously worked with US Sprint and Strategic Positioning Group.Sachin has done his Masters inStrategic Management and International Finance from Temple University's Fox School of Business andManagement, Pennsylvania.2.2 Board Compensation:The compensation of the Board is determined in accordance with the following parameters:Legal considerations:This takes into account the maximum limit set out by the Companies Act, 1956 for remunerating Executive andNon-Executive Directors and is primarily based on the prots of the company for the nancial year.Best Practices:- Remuneration to Executive Directors consisting of a xed component and a performance based incentive.- Remuneration to Non-Executive Directors:Role of the Chairman of the Board in the Board's compensation:The role of the Chairman of the Board in determining the remuneration of the Board is manifold. It includes thefollowing:- Discussion with individual Board member on expectation setting.- Review of Company's operations with individual Board member before the formal meeting.- Recognition of Board members' contribution at the Board meeting- Recognition of Board members' contribution to the Company outside the Board meeting- Review against expectations on periodic basis- Annual Review of Board compensationThe compensation of the Board and Senior management of the Company is also linked to the organization'sperformance. The Commission payable to the Non - Executive Directors is based on the provisions in theCompanies Act, 1956 and it is also linked to the performance of the Company.Similarly compensation of the Senior Management consists of a xed salary Component and variable pay. Thevariable pay is dependent on the performance of the individual and that of the Company. In addition to theperformance of the individual, one of the additional factors in determining the pay to the Senior Management isthe Key Behavioral Attributes (KBA). The KBAs is a set of attributes, which an employee demonstrates while inperformance of his duties.2.3 Whistle Blower Policy:In an effort to demonstrate the highest standards of transparency, the Company has adopted the 'Whistle Blower| Page 15

Policy', which has established a mechanism for employees to express and report their concerns to themanagement about unethical behavior, fraud and violation of the code of conduct or ethics, in a fearlessmanner. This mechanism also provides for adequate safeguards against victimization of employees who avail ofthis mechanism and also provide direct access to the Chairman and members of the Audit Committee inexceptional cases. This policy has been uploaded on intranet of the Company for effective circulation andimplementation. The purpose of this policy is to establish procedures for (a) the receipt, retention andtreatment of complaints received by the Company regarding nancial statement disclosure issues, accounting,internal accounting controls, auditing matters or violations of the Company's Code of Business Conduct andEthics; and (b) the submission by employees (all KPIT managers and employees, including managers andemployees of its divisions, subsidiaries and other afliates worldwide, as well as agents and contractors workingon behalf of the Company, its subsidiaries and afliates) and Directors of the Company, on a condential andanonymous basis, of concerns regarding questionable nancial statement disclosure, accounting, auditingmatters or violations of the Company's Code of Business Conduct and Ethics. The purpose of this policy is also tostate clearly and unequivocally that the Company prohibits discrimination, harassment and/or retaliation againstany employee or Director who (i) reports complaints regarding nancial statement disclosure issues, accounting,internal accounting controls, auditing matters or violations of the Company's Code of Business Conduct andEthics; or (ii) provides information or otherwise assists in an investigation or proceeding regarding any conductwhich he or she reasonably believes to be a violation of employment or labour laws, securities laws, lawsregarding fraud or the commission or possible commission of a criminal offence. Everyone in the Company isresponsible for ensuring that the workplace is free from all forms of discrimination, harassment and retaliationprohibited by this policy. No employee or Director of the Company has the authority to engage in any conductprohibited by this policy.The efforts of the Company in the Corporate Governance initiatives have been well acknowledged by allstakeholders.| Page 16

3. Innovation @ KPIT3.1 Patents: FY 12-13: Break-up:Total patents led in FY 12-13: 7 patents- all led in India Complete Specication: 1 Provisional applications: 6Patent Details:Domain wise breakup of patents ledPatent Title: Automatic Pressure Management SystemApplication: ProvisionalBrief Description: For vehicles using fuels in gaseous state, we provide an automatic pressure managementsystem and more specically a self-controlled apparatus for maintaining the required pressure and controllingthe desired gaseous output of a chemical reaction, wherein one reactant is in a liquid state and one reactant isin a solid state.Patent Title: Image EnhancementApplication: ProvisionalBrief Description: Enhancing low light regions in images is important in order to improve the performance ofvision algorithms. We simulate a point light source in the dark regions of the image enhancing only the darkerregions in the image without affecting the other areas of the image, as if a light bulb were switched on in thedark region of the image.Patent Title: System and Method for Depth ImagingApplication: ProvisionalBrief Description: The existing methods for real time 3D/depth imaging, like LIDAR, stereo imaging, etc. utilizelasers, sensors, special equipments, multiple cameras, etc. for reconstruction of 3D images. This increases thehardware requirement and the processing complexity of the images. Our solution utilizes a single cameramounted on a rotating platform. The camera is pivotally rotating full circle at controlled angular speeds andcaptures images in its (Field of View) FoV. These images are then processed to provide 3D images.| Page 17

Patent Title: A System and Method for Performance CharacterizationApplication: ProvisionalBrief Description: There is a need to quantify the robustness, reliability and consistency of a software systemfor the benet of developers and software application users. We have developed a framework for theperformance analysis of a software system, customized by application. It provides output in the form ofperformance characterization curves which depict the variation in accuracy against different pre-denedfactors.Patent Title: Method and Apparatus for Enhancing Solar Cell OutputApplication: ProvisionalBrief Description: Existing solar system conversion efciency using the standard, economic photovoltaic cellsavailable in market is about 13% only. We provide a solar system that comprises of parabolic reectors, passivethermosiphons and in-situ annealing of the solar cells which provides improved conversion efciency and makesthe system highly durable and economic.Patent Title: Hydraulic oil monitoring for an off-road vehicleApplication: Complete SpecicationBrief Description: Hydraulic oil is a uid which is mainly used for powering hydraulic machinery. The hydraulicoils have tendency to degrade over the time or due to various reasons such as high temperature, fuel injectionrate etc. due to which it may fail to fully protect the engine once it degrades. The present invention discloses acontrol module to monitor on-line hydraulic oil degradation in the off-road vehicles. The control moduleestimates the hydraulic oil degradation based on hydraulic system dynamics and compares the estimateddegradation with a threshold value thereby generating an oil-change indicator.Patent Title: High Swirl Lean Burn Direct Injection EngineApplication: ProvisionalBrief Description: With increased turbocharger air pressures, effectiveness of swirl reduces considerably, thereby affecting air fuel mixing. Also with compressed air pressure and temperature of intake air increasesconsiderably. It is important to improve the swirl effectiveness to achieve better air fuel mixture and hencelower engine out emission. Helical grooves on piston bowl assist to increase swirl in piston bowl when pistonmoves to TDC during compression stroke. During combustion stroke high pressure air is injected just before endof compression stroke at suitable instance and second time at suitable instance after peak ring pressure isreached.3.2 Innovation Eco-System:The senior management from KPIT thoroughly evaluated various aspects of our innovation journey thus far andmade a presentation to the Board of Directors, putting forward ideas for strengthening some of our existingprocesses. This course of action was termed 'Innovation 2.0'. The process of innovation was broadly divided intothree major phases:1. Idea Generation2. Incubation3. Conversion into business1. Idea GenerationThere were many aspects to idea generation that were agreed upon in this phase. Some of them include: Creation of myIdea portal Encourage ideas from offshore and onsite teams alike| Page 18

Understand roadmaps and pain areas of our key customers and align ourselves to solving those Externalize: Connect with Indian Angels Network,etc., Focus on key areas: Connected cars and Mobility Vision : Passive and active Engines, BMS and peripherals Analytics Social Network Supply Chain management, CRM Engineering Process Management Reducing electronics, reducing wires, reducing sensors Energy - Decentralized energy generation Creation of Innovation Initiative Team (IIT) to assess ideas generated2. Incubation PhaseThis phase connects the phase of idea generation to the phase of formation of a business unit to take the idea tothe market. The important part of this phase is to get a handle, as quickly as possible, as to whether "a goodidea" can make "a good business". Some of the aspects of this phase include: Litmus test: Bounce select ideas with potential customers to judge value in them Follow lean process for project execution File for patents where applicable Award 'KPIT Patents' where solution cannot be patented, but is a solution with potential.3. Conversion into businessThis phase relates to creating business out of a proven idea. Some of the key aspects of this phase include: Handover projects to relevant practice where there is close alignment Create new practice if idea is useful, has large impact and doesn't t into current practice structure Create new roles for ensuring success of the project Bring in exibility into the system to increase speed of throughput3.3 Green Projects:1. RevoloRevolo is a plug-in parallel Hybrid solution that can be tted onto vehicle to convert it to a Hybrid electricvehicle. The product is made of sub-systems that include the battery pack, a motor, motor controller which arecontrolled by intelligent algorithms that manage engine variations andhelp reduce fuel cost and cut down on harmful greenhouse gas emissionsfrom IC engine powered vehicles.The Idea for Revolo was conceived in-house by a key employee in 2008.The management found the idea had a very strong value proposition,and was based on cutting edge technology. Moreover, it had thepotential tobenet the environment. Trusting the entrepreneurial ideawholeheartedly, the company invested in developing a workable prototype. Theinvestment quickly delivered results in the form of some key technologicalbreakthroughs that led to ling of number of patents. Currently over 14 patentshave been led through the technology developed for Revolo.Signies the Patents ledRevolo also had a key advantage of being in sync with the existing managementthought process. Dr. R.A. Mashelkar, Board member of KPIT propounded thephilosophy of "Gandhian Engineering" of inclusive innovation and deriving "Morefrom less for more", which was astrategic t withthe development of Revolo.Revolo, a low cost solution, will not only be affordable to thousands of individuals,it will also have a cumulative impact on curbing the insatiable demand for energyfrom fossil fuels. It will also mitigate the ill-effects of harmful green-house gases.| Page 19

4. Community contribution at KPIT4.1 Our Philosophy:We believe that besides helping the community, volunteering for CSR activities increases employee commitment,provides higher satisfaction and motivation, and improves team-work and leadership skills.Volunteer programs also help companies create a positive image in front of their customers, who respect abusiness's efforts to improve the community.When employees are engaged in community activities that leverage their professional skills, company nds themto be happier and better connected with their colleagues. Doing good work in the community is its own reward,but there are positives for business, too. In short, everyone benets from these efforts.KPIT has always been focused towards participating in CSR activities through active employee volunteering andwill continue to do so in the future.4.2 Focus Areas:"Never doubt that a small group of thoughtful, committed group can change the world. Indeed, it's the only thingthat ever has"- Margaret Mead1. EnvironmentAs responsible global corporate citizens, we believe that it is our duty to give our future generations a clean,green and sustainable world. KPIT's approach to being an environmentally friendly organization is founded on thebelief that the interests of our future generations and the society at large is best served by the efciency of ourbusiness operations. This in turn means that we are committed to protecting the environment along with theactive involvement of our stakeholders.2. EducationWe believe that through the medium of Education we can enable people to transform their own lives.Byparticipating in formal and non-formal education support programs, KPIT does its bit to empower people. Notonly do we actively participate, we also support education-related programs initiated by NGOs/institutions etc.3. TransportationAt KPIT, we strive to alleviate transportation problems by supporting various road safety and trafc relatedinitiatives.Some of the important initiatives that were undertaken in this year are as follows:4.3 Chhote Scientists: 400+ volunteers | 800 Kids from 20 schools:In an effort to make science practical and interesting, we launched an initiative called Chhote Scientists lastyear. This initiative bridges the gap between text book knowledge and real life application by taking a practicaloriented approach and thus making science fun to learn for children. Using frugally developed scientic toys, weteach various topics, like Electricity, Motion, Pressure, Energy and Magnetism & Electronics.The program has been running since the last 12 months, in and around Pune. It has so far covered 800 kids from20 participating schools.To conclude this year's Chhote Scientists program, a Science Exhibition was organized for all the kids who werecovered under this initiative. Student put their creative minds at work and produced nearly 400 innovativeprojects.Following are the topics on which projects were developed by the beneciary kids:1. Working models based on topics taught2. Ideas which solves current problems| Page 21

3. Survey projectsThe top 100 projects were selected and invited to an exhibition held at KPIT'Pune campus on 28th Feb'13(National Science Day) and the best ones were awarded prizes. The exhibition was inaugurated by Indian ScienceIcon Dr. Raghunath Mashelkar. He also reviewed the projects and gave his valuable feedback.Images from CHHOTTE SCIENTISTS initiativeTeaching Session by VolunteerStudents at SchoolDr. Mashelkar &Mr Ravi Panditinteracting with StudentsDr. Mashelkar demonstrating an ExperimentExhibition award winners| Page 22

4.4 Teaching Classes at Thayimane:Thayimane is a humanitarian institute for the orphans. There are 57 children fostered here. These children areorphans or have single parents who are not able to take care of them. At the institute these children are givenfree education from standard 1st to 2nd PUC level.As part of KPIT's Corporate Social Responsibility program, KPIT helped Thayimane children in transforming theirlives with formal and non-formal education. KPIT volunteers met Mr. Keshvamutrhy - director of Thayimane inJanuary 2013 & chalked out the plan based on the number of students in different classes and the medium ofstudy.Initially we formed a team of 15 teachers who were experts in subject areas like Mathematics, Science, Socialscience, Computer Science, Kannada, and English etc. However, within 2 months the strength of teachersdoubled. Our enthusiastic teachers visited Thayimane regularly during every weekend and taught the kids,helping them cover their entire syllabus in a short span of time.4.5 School kit Donation driveOne of the initiatives we participated in this year was the School Kit donation drive, where we donated about3128 kits to underprivileged children. KPIT has been supporting Seva Sahayog, the NGO that launched the“School Kit Donation Drive” for the past ve consecutive years. The aim of this program is to support thosechildren whose families cannot afford the basic thing for their children's education, such as books, school bagetc. So far we have donated over 9000 kits.4.6 Teach for IndiaTeach for India is a nationwide program, working towards eliminating educational inequity in India, recruitscollege graduates and young professionals to teach in low-income schools. We have been associated with thisprogram since the last four years, and have also sponsored a 'Fellow' since then.4.7 Janwani – an initiative for a better cityStarted in 2006 by MCCIA, this initiative aims to advocate and promote equitable and sustainable development.Janwani seeks to achieve its aim by following a participative, collaborative, analytical, creative and synergeticapproach to identify priority areas and bridge gaps in the developmental processThe initiative focusses on environment, trafc and transportation, heritage, energy, governance and citystructure. One of the initiative started by them is called the`zero garbage' concept whereby garbage disposaland management is localized in every ward by segregating 85% of the waste at source. This has beenimplemented in twenty prabhags of Pune.A proud citizen is likely to be more responsible and have a better civic sense. Janwani recognizes this and inorder to improve the civic standards, conducts heritage walks to enlighten residents and touristson the richheritage of the city. The organization also celebrates heritage week every year and has published a heritagepolicy.| Page 23

Apart from this, they have devised an accident reporting system and a trafc status report. They have created aPune Metropolitan Region Vision Document, which suggests short term and long term solutions to improvelivability indicators. On the governance front, they prepared budget analysis for the city corporation along witha manual for an outcome budget..KPIT has been one of the major sponsors of this initiative over the last three years and has contributed to it notonly nancially but also in terms of investment of time and other resources.4.8 Farm ponds: Conserving water through mass volunteering:Over a period of two centuries (between 1801 and 2002), India experienced 42 severe droughts, according to theIndian Space Research Organization. One of these, in 1979, cut food grain production by 20 percent; another, in1987, damaged 58.6 million hectares of cultivated land, affecting 285 million people.In the last decade (2002-2012) three major droughts hit the country, and in 2012 drought shaved off half apercentage point from the Asian giant's gross domestic product (GDP), according to a 2013 World Bank report.We had a similar situation in Maharashtra this year as well. Hence, in order to address this severe condition,KPIT, in association with the local village body from Bhadas village (Pune Maharashtra), reconstructed the watercheck dam in the village so that rain water can be efciently harvested.With the success of this pilot program & experience gained from this activity, KPIT recently initiated Farm Ponds,a water conservation initiative. It is a joint effort in association with NGO, Jnana Prabodhini, Pune.To give a brief history, eight to ten years ago, ponds were built by Jnana Prabodhini in nearby villages to storethe rain water during monsoons, with each pond being 400 Sq. m wide and 2m deep. Over the years, the pondsgot covered with loose soil and required rework.KPIT and Jnana Prabodhini conducted desilting farm ponds activity at various villages. To take up this reworkchallenge, 450 volunteers from 15 groups participated in the activity to ensure continuation of waterconservation and thus providing relief to farmers.Images from Farm Pond initiativeKPIT Volunteers Reconstructedthe Water Dam @ Bhadas VillageBeneciaries from Bhadas VillageKPIT Volunteers Working @ Kusgaon Vllage| Page 24

4.9 Environment Week 2012 @ Pune Ofce:Like every year, we observed Environment Week at KPIT from 4th June to 8th June 2012. This time, we not onlyinvited volunteers, we also asked them to come up with ideas for the activities to be executed during the week.We received 20+ nominations for volunteers and more than 40 unique ideas, which were then shortlisted afterdiscussions with the volunteers, FLM and Security team. Some of major activities included Mock Parliament, "Callof life" - a documentary screening by Manasi Patil on environmental issues; expert sessions on environmentrelated topics viz. "Owls - Our Friends: Superstition and Science" by Dr. Satish Pande and "A re-look at ourtransportation problems" by Mr. Ranjit Gadgil.The week came to an end with an entertaining, award winningmusical drama presentation by our own Theatre Group.Also contests like "Painting and Poster making" and "How Green Are You ?", and activities like EnvironmentalIssues Awareness, Tree plantation, News Paper donation and Paper Bags Sale, which ran for the whole week, keptthe momentum going and received a very good response and participation from the employees. We planted 30+trees within our premises and sold over 200 paper bags.Some ongoing, sustainable activities like partnering with Ela Foundation, tree plantation, documentaryscreening, expert sessions etc., are being planned as a takeaway from this week.Environment Week is celebrated annually at KPIT with much fervor and enthusiasm. Different events like treeplantation, presentations by renowned guest speakers and mock parliament sessions, stage plays, competitionsetc. are conducted to increase the level of awareness about the environment amongst employees. These eventsare actively supported by the top management. As a part of the environment week in FY-12, around 50 treeswere planted within the KPIT premises and 200 saplings were distributed to employees.4.10 Environment Week @ MAHAPE Ofce:This was the rst time when we celebrated the Environment Week at the MAHAPE ofce. The entire CSR teamwhole heartedly planned and executed the event. The following is the snippet of the activities for each of thedays:Day 0: Preparatory DayBefore the start of the week, all employees were asked to create posters on the theme of environment.Employees participated with great enthusiasm and provided posters that were displayed in the building.Day 1: Tree Plantation and Poster Painting by kids of employees:Around 15 kids participated in the event with age ranging from as young as 1.5 years to eldest 15 years. PTGPractice head, Advait Waghmare also participated in the event. We planted around 10 trees. After theplantation drive, all kids participated in a poster making event on the theme of environment. The posters wereput on display in the canteen area. All participants were awarded with saplings by Ramesh Subramanian.| Page 25

Day 2: Street PlayA street play was written and enacted by the CSR team on the subject of Environment. Over 125 peopleattended the event, including Anil Nashikkar and Deepak Kapoor, who were our special guests. Mr. Anil Nashikkarappreciated the effort and encouraged more participation from the employees for such initiatives.Day 3: Seminar on Waste ManagementThe seminar was designed and delivered by the CSR team member to provide General Awareness and Care forNature. It included documentary from rural India, insight into 3R strategy and waste management. It alsoshowcased a real life implementation of home built drip irrigation by SohamHatkar, JDE Consultant. The seminarwas witnessed by Ashwini Kuber as guest along with 40+ attendants.Day 4: Eco friendly MelaP.A.W.S, an NGO that works for animal care, showcased several eco-friendly items including organic t-shirts,bags, recycled papers, pens, etc. The sale not only helped promote eco-friendly products but also raised fundsfor the NGO.Day 5: Green DayThe exciting week came to an end with a Green Walk (where everyone took a walk around the campus) and aGreen drink (Amba - Panha) for all the employees.Another week-long activity called 'I love Nature' contest was also organized. This included a Photography andArticle contest on the theme of environment. With over 100 photograph entries and numerous articles, we choseve winners for the photography contest and one winner for the article contest. All the winner photos and thearticle were promoted via our social media.4.11Corporate Induction @ NGO:The objective behind this is to introduce every new joinee to KPIT's Community Contribution Value, cultivatingthe habit of giving back to the society from the get-go.The visit is arranged during “ARAMBH – Corporate Induction” program. Every batch of our new employees visitsthe NGO, Navkshitij – a home for mentally challenged adults. Similarly, our Bangalore ofce employees visit“THAYIMANE- a home for underprivileged children.Using technology and innovation, we wish to keep this momentum going and touch many more lives in thecoming years.| Page 26

5. Initiatives at KPIT CampusBeing an organization that provides IT Services, KPIT does not consume non-renewable resources nor does itgenerate process wastes and emissions on scales comparable to conventional manufacturing industries. However,we do acknowledge the impacts on the environment due to the nature of our business in terms of consumptionof resources like energy, water and other secondary resources and have therefore put in place robust processesand systems in order to identify, quantify and reduce such adverse effect son the environmentBeing an environment conscious company, which is also committedtowards ensuring the health and safety of our people, KPIT has adoptedthe best practices from ISO14001, in the area of environmentalmanagement, and from OHSAS18001, in the area of occupational healthand safety.The KPIT Campus Facility at Pune was built with an aim tocreate an environment that would foster creativity throughcollaboration. The campus is spread across a sprawling estate of 450,000sq.ft of land, which comprises of three buildings having a combinedseating capacity of 4000+ employees. The design of the campus is notonly an insignia of KPIT's commitment to energy efciency andsustainable development, but also embodies the spirit of our corporate values - boundarylessness, knowledgesharing and team work.5.1 KPIT Green Campus:The facility is built to facilitate optimum energy utilization, toprovide water efciency and a low life cycle cost of buildingmaintenance. The North sides of the buildingshavean extensiveusageof glass to allow entry of natural light, thus reducing the headload on the building.The glazing along the east and west sides of the building isintheform of Double Glazing with reective glasses and use ofmoedingtiles, which are dry cladded. Use of soft landscape on theexteriors and interiors reduce glare and radiation to a great extent.5.2 Power:In the current Indian scenario, conservation of Electrical Energy has become mandatory for two major reasons: Scarcity of power is resulting in load shedding in almost all states of India. This is not only inconveniencingpeople but is also adversely impacting the economy. India is currently the world's third largest country in terms of carbon dioxide emission. This is primarily due tothe fact that more than 60% of the power is still generated by burning coal.As responsible corporate citizens, KPIT has been undertaking various initiatives over the years to reduce energyconsumption.KWH Units per Person6.005.004.003.002.001.00-year 07-08 year 08-09 year09-10 year 10-11 year 11-12 year 12-13Series1Linear (Series1)| Page 27

Power consumption is primarily required for three major areas namely: Computers and Data Centers. Air conditioning Lighting & other utilities.Power consumption distributionLightingand otherUtilities21%HVAC38%Computersand datacenters41%Computers and Data Center: Since computers and Data centers consume 41 % of the total power requirement, anumber of steps were undertaken to reduce this gure. Some of the steps are: Server virtualization - Project specic servers, which consume more power were consolidated in a singlesetup of V-Block. Similarly, various desktop based servers placed in production were also migrated tovirtualization platform We undertook a PC shut down drive to curtail power consumption during non-working hours. We createdemployee awareness through mailers and posters, informing them to switch off their PCs when not in use.We achieved a success rate of over 90% with this drive. In addition, effective power management toolswere installed on all desktops.5.3 Project undertaken at KPIT for reduction in power consumption for Desktops:Name of the Project: VIRTUAL DESKTOP ENVIRONMENT WITH VBLOCK INFRASTRUCTURE PLATFORMSLike majority of business organizations globally, KPIT also relies on its internal IT implementations to makeprocesses more efcient, increase automation and also deploy IT to make collaboration across geographieseasier. We have deployed the most advanced technologies for our processes. These deployments are scalable andfuture ready to support changing work styles, information security criteria and the changing usage patterns ofcomputing devices.Environmental ChallengesThe organization faces the following operational and environmental challenges: Power Consumption: Power consumption increases in equal proportion to the number of employees.Therefore, there is a constant need to control the consumption with energy efcient solutions. Space utilization: Standalone computers with existing technology are user specic and prevent optimumspace utilization and easy transferability Consumption of Natural Resources: Present computers need to be replaced every 5 years due to advancementin technology thus increasing consumption of natural resources. Disposal of E waste: Disposal of old computers every 5 years results in an increase in E-waste generation.Operational Challenges As a fast growing organization, KPIT constantly requires efcient and scalable IT infrastructure. Our existing solutions were reaching the end of their life cycle and were experiencing performance issueswhich required the internal IT staff to spend most of its time on system administration and troubleshooting.Solution:Considering the challenges, KPIT decided to shift from conventional desktop technology to Virtual DesktopInterface (VDI). Following operational aspects were considered while implementing the VDI solution: Deliver on-demand services to users Increase IT efciency Simplify management| Page 28

Ensure software complianceThough KPIT was already evaluating a virtualization solution that was deployed in a limited environment, it hadnot explored the transitioning of core ERP processes onto the virtualized environment, but had transitioned onlythe less critical ones.Taking a step further toward optimizing energy requirement and consumption, KPIT decided to transition thecritical processes onto the virtualized platform as well.Solution and technology Deployed Vblock Infrastructure Platforms VMware View virtual desktop infrastructure (VDI) Thin clientFollowing Environmental Returns were achieved:1. Electrical energy savings: More than 60% reduction inEnergy Consumption as compared to conventionalcomputers, was achieved by moving to the Vblock platform with VDI. The Cisco Unied Computing System, whichis included as part of the Vblock platform, delivers high-memory capacity to support a large number of virtualmachines on each blade server, thus reducing the amount of physical equipment which requires to be poweredand cooled. Also at the user end, the desktop computers which consumes around approximately 150 Watts ofelectricity, were replaced with very small devices called thin clients that consume just 30 watts. Total energysavings are approximately 3,00,000 units per year amounting to 375 MT of CO2 emission.2. Reduction in E-waste: We achieved a ninety percent reduction in e-waste by increasing IT HardwareRefreshment Cycle for desktops, laptops & workstations.The life expectancy for these kinds of hardware is roughly around ve years due to the high resourcerequirement, capacity & performance demands as a result of newer operating systems, and application software& tools.3. The thin client on the other hand has a life expectancy of more than eight years. During this period it does notrequire any upgradation or replacement as all the resources such as computing power, memory & disk space areaccessed through VDI setup hosted in the datacenter. The overall reduction of E-waste considering ten years for1200 thin clients is as follows:Conventional PC disposal twice in 2640 nos @ 14.7 kg 38.8 MT E- waste10 years cycle with 10% additional (1200 PCs after everyhardware requirement5 years)Thin clients disposal after 8 years 1200 nos @ 1.88 Kg 2.25 MT E- wasteSavings in E-Waste36.5 MT E -waste4. Reduced IT Asset Ratio from 1.20:1 to 1.10:1: In a VDI environment, multiple users can access their accountsusing a single machine without compromising the security of the system. Before deploying the virtual desktopenvironment, the asset-to-employee ratio was 1.20:1, meaning that much of the IT infrastructure was beingunderused and thus consuming more natural resources. After the deployment of the Vblock platform with VDI,the asset ratio has been reduced to 1.10:1 thereby reducing the consumption of computer hardware by 10%.5. Workplace Utilization increased by 10%: The VDI helped in improving the utilization and exibility of ITassets. Users can access their desktop, applications, and data from any location, without compromising thesecurity of the system. Also employees can connect to corporate resources using any of the personal devices likeiPads, Windows & Android based Mobiles. This has led to optimal utilization of workplace, helping in saving10200 sq.ft of space.| Page 29

5.4 Air Conditioning:This is the second largest power consumer (38%). Major investments were carried out on AC infrastructure foradopting the energy efcient VRF technology. The VRF technology, which facilitates cooling and controls,resulted in considerable savings vis-a-vis a conventional central AC system. The Pune facility won the EmersonCup GOLD Award for the Lowest Energy Consumption in India and South East Asian Countries.Apart from the basic infrastructure various operational initiatives were undertaken to reduce the consumptionsuch as: Grouping of ACs w.r.t to project functioning schedules. Close monitoring of AC system during various seasons, by operating the system w.r.t ambient temperaturewhich resulted in approximately 30% reduction in electrical consumption. Optimized fresh air intake, which also reduces the heat load on the air conditioning system.5.5 Lighting:Apart from using natural lighting, various steps were undertaken to reduce requirement of power consumptionfor articial lighting, such as: Replacement of all lights with CFL, energy efcient T5 ttings or LED lights. Motion sensors installed to automatically switch off lights whenever not in use.5.6 Waste Air Cogeneration and Solar panels for Alternate Clean Energy:Waste Air Cogeneration system utilizes the exhaust air from the kitchen exhaust blowers and converts it intohybrid energy with 2500 W Photo Voltaic solar panel to generate power. Stored energy is used for lighting oftoilets and staircases. This has resulted in generating 600 units per month and net saving of 1200 units.Solar Hot Water: Solar panels used for generating hot water generation for cafeteria and gymnasium. Variouscollectors generate around 6000 litres of hot water.Water:Water is not required for any operations per say, but is still the second largest natural resource consumed byKPIT. Therefore, we set up a sewage treatment plan to reduce fresh water consumption, which treats about 70%of water and is used for gardening purposes.Apart from recycling of water, a number of other initiatives are also undertaken to reduce consumption of freshwater such as: Installing drip irrigation system for internal gardens. Maintaining optimum pressure within water lines to reduce water wastage Regulating water ow at all the outlets Practicing Dry Toilet Concept at almost all the toilets. Arresting leakages in pipelines and taps Engaging and educating employees through awareness drives| Page 30

Water consumption in Cu Mtr per monthYear 11-12 Year 12-13April 6746 4723May 6341 4630June 5165 4394July 4792 4417Aug 5438 4093Sept 5466 5489Oct 5926 4306Nov 6209 4044Dec 5268 3855Jan 5057 4142Feb 4783 3766Mar 4764 35765.7 Waste Management at KPIT Campus800070006000500040003000200010000AprilMayJuneJulyAugSeptOctNovDecJanFebMarYear 11-12 Year 12-13Linear (Year 11-12) Linear (Year 12-13)Being an IT services company, there are no signicant primary emissions or process wastes. Our wastegeneration is limited and restricted primarily to municipal solid waste (MSW). Other wastes include e-waste anda small proportion of waste like lead-acid batteries, electrical waste, waste lube oil, etc. Our wastemanagement practices seek to reduce the environmental impact of this limited waste to the maximum extentpossible by reduction in generation and segregation at the source etc.The different methods of disposal for each category of waste are summarized below: Bio-degradable food and garden waste - Vermicomposting Recyclable waste such as paper, plastic, card paper, steel, other metals etc. are sent for recycling throughauthorized scrap dealers Other mixed dry waste - Sent to authorized scrap dealers or municipal disposal. Hazardous Waste and E-waste - like Waste lube oil, UPS batteries and other E-waste generated in theorganization is disposed through government authorized recycles Printer and toner cartridges - Sent back to the manufacturer under product take-back arrangementBio-degradable (Food and Garden) Waste:Disposal of Biodegradable waste was a major concern for KPIT as it wouldgenerate a lot of methane gas if dumped in the open. Hence, a vermicompostingplant with a capacity of up to 175 kg was commissioned in KPIT in 2011. Thevermicomposting plant helps in consuming the entire food and garden wastegenerated in the organization on a daily basis. The vermicompost thus generatedis used in the gardens as manure.We have managed to reduce food waste by 4% through continuous employeeawareness.18000Biodegradable Waste (InKgs)17000160001645715889BiodegradableWaste (In Kgs)150002011 -12 2012 -13| Page 31

Municipal Solid and Recyclable Waste:KPIT ensures that the solid waste is segregated at the point of generation. Waste bins placed at strategicplaces, and continuous employee awareness through oor walks, posters and digital communication has helpedus reduce municipal solid waste by around 3% in the year 2012-13. Similarly, recyclable waste is also sent to anauthorized vendor for recycling. A major contributor to recyclable waste is the use of paper in the organization.KPIT has taken some effective steps to reduce paper and other ofce consumables consumption which are:a. Strict policy on issue of papers to employeesb. Stopped the supply of notepads to employeesc. Use of both sides of paper as rough padsd. Stationary supply to employees kept to bare minimum only as per requirements.e. Reduction of printers in the ofce.f. Purchase of Stationary consumables and other ofce consumables on the imprest system.The above steps have not only helped KPIT achieve signicant savings in consumption of paper but have alsoreduced the generation of municipal waste and recyclable waste by around 23%.120001150011000Municipal Solid Waste(In Kgs)11672113902011-12 2012-13Municipal SolidWaste (In Kgs)300002000010000Recycled Solid Waste(In Kgs)019264121302011-12 2012- 13Recycled SolidWaste (In Kgs)Sewage Treatment Plant: We installed and commissioned a STP plant having a capacity of 125,000 litres, whichnow helps in treating and recycling sewage water. The stored recycled water is used for gardening purposes.E-waste Management:The E-waste generated at KPIT includes defunct computers, monitors, servers, etc.and specic electronic and electrical items. Management of E-waste is as per KPIT'sE-waste Management policy which complies with the Government of India's E-waste(Management and Handling) Rules, 2011.In FY 2012, 1012 computers were disposed through government authorizedhandlers/ recyclers. In addition, 142 computers were donated to charitableinstitutions.Hazardous Wastes:Hazardous wastes are disposed through MoEF - authorized agencies as per guidelines of theMinistry of Environment and Forests (MoEF) for Hazardous Waste Handling and Management.Additionally, all the used printer cartridges are sent back to the manufacturer under "PlanetHP Take Back Program" to ensure proper recycling.5.8 Environment Awareness Campaigns:An e-learning module on environmental awareness has been made available on the employee portal for all ouremployees. The module is designed to create awareness on key environmental issues, and initiatives undertakenby the organization and the employee role in these initiatives. Various environmental awareness campaigns areplanned and carried out throughout the year for employee engagement.5.9 Occupational Health & Safety:KPIT has always considered its employees as the most valuable asset of the organization. Towards this end, KPITconstantly undertakes initiatives to ensure the safety and well-being of its employees at workplace.| Page 32

Employee Transport and SafetyKPIT strongly believes that the safety and security of it semployees is intrinsic to its core values.Some of the measures taken are as follows: Mandatory Alcohol Tests are carried out for all drivers at the time of departure. Annual Medical check-up mandatory for all cab drivers. Security escorts are provided for lady employees traveling between 2000 hrs to 0600 hrs, who ensure they arepicked up the last and dropped rst. If a cab departing after 2000 hrs has a lady passenger, the vehicle is tracked and monitored continuously. Periodic training sessions are planned for all cab drivers on topics regarding safety, rst aid, trafc disciplineetc. Incident reporting, root cause analysis, Corrective Action Preventive Action (CAPA) for all major and minorincidents. Do's and Don'ts, Emergency Contact Help line mandatory on all the vehicles. Only cabs that are up to ve years old (on road) are used for employee commute. Use of seat belts and helmets within the premises has been made mandatory.External Faculty Visits & Lectures on Health and SafetyA Health Care Center has been set up at KPIT that offers all its employees free medical consultation within thepremises. We have a general physician, dietician, gynecologist and counselor visiting on a regular basis. Inaddition, KPIT also organizes sessions by external faculty in different areas of health and tness.In FY-13, we organized sessions on: Dental Health and Treatments Available Today" was organized by Dr. Sonali Khandekar, Orthodontist andDr. Neha Sankpal, General Dental Surgeon. Dengue" was conducted by Dr. Sachin Wankhede. Homeopathy - an alternative medical system". Lecture on "Cervical Cancer"by Dr. Jyotsna Angom. Workplace Safety and Environmental Protection" conducted by an NGO Ranjai Group. Workshop for female Employees on self-defense. Bone Mineral Density camp.Employee Awareness Drive @ KPITEOHS team organizes plans and executes various programs, events, awareness and such. KPIT tracks incidentsthrough the incident management sheet, which has been developed in-house. High risk, medium risk, low riskand near miss incidents are captured in the sheet upon which CAPA is performed for each incident. All incidentsare reported to workplacesafety@kpit.comSome of the initiatives undertaken for employee safety and awareness are: Awareness posters and e-mails Work place exercises Health and Safety Education through Floor Walks Evacuation Drills and First Aid training| Page 33

Newsletters E-learning module on EOHS for all employees.Gymnasium facilityKPIT has a state-of-the-art gymnasium on campus with a dedicated instructor. A"Health History form" is duly lled and maintained by the instructor for eachemployee, after which he customizes their training schedule and monitors theirworkout sessions.Recreation facilityKPIT has a fully equipped recreation area & music room for its employees, which helps them unwind in their freetime. Various tournaments of indoor games like table tennis, carrom, pool, chess etc., are organizedperiodically. Music classes are also conducted by external experts. Sessions on meditation and yoga are also heldto benet employees.Health week @ KPITPROPEL 2012 was a health week organized across all the ofces of KPIT around the globe.Mr. Sachin Tikekar,Whole-time Director,addressing employees duringinaugural ceremony ofPROPEL 2012The underlying intent of the event was to educate employees with lifestyle changes they should practice toavoid various health risks to which they are prone to and encourage them towards a healthy lifestyle.| Page 34

Mr. Kishor Patil, CEO &MD, KPIT,sharing his experiences duringinaugural ceremony of PROPEL 2012.The inaugural ceremonywas followed by abrisk walk insidethe KPIT Premises.Tie-ups with various health care institutions like hospitals, gymnasiums, yoga centers and organic food vendorswho offer their products and services at concessional rates are organized from time to time.The underlying intent of the event was to educate employees about how by making a few lifestyle changes theycould avoid various health risks they might be prone to.| Page 35

6. Employee Engagement at KPITEmployees who are engaged with their company are usually more productive. We at KPIT always strive to createtwo way communication channels with our employees that foster open and transparent communication. KPITprovides an open culture where we enable and encourage free exchange of thoughts amongst employees.We have designed and implemented a framework to make sure that we are able to stay in constant touch withour employees and address their concerns as identied in various forums. Under this framework, we identiedvarious vertical with the help of which we make sure employees are connected and benetted by being a part ofour growth story. Various synchronous communication channels have been established in which the message fromtop management is percolated down to employees at every level. This forum also addresses questions fromemployees, thereby creating a collective sense of involvement and ownership.6.1 Employee Communication:The following channels have been established to foster employee connect: Bi-Annual Connect: Group CEO addresses entire organization, talking about various developments on thecompany front and the road ahead. Leaders Club Meeting: Company MD addresses top 100 employees on strategic approach towards businessand improving overall productivity. The Ground Zero: Middle management gives business updates to enlighten employees at junior grades. Employees learn about new developments and plans at the organization level. This is an interactive sessionand thus employees geta chance to ask questions and seek relevant information. Business Updates: Quarterly mailer from group CEO on business development and on things in thepipeline. Plain speak: Monthly mailer from Managing Director on business development with respect to overall company and various SBUs. KPIT Blog : Bloggers from KPIT regularly share their views through this platformFollowing channels have been established to enable employees to give feedback and raise their concerns: One on one connect, 30 - 90 - 180 days connect - specially designed for new joiners, skip meetings, variousdiscussion forums (Delivery Manager's forum, Project Manager-Biz HR forum, employee grievancemechanisms, and exit interviews are some other mechanisms used to collect feedback and employeepulse. Employee feedback is solicited through Annual survey called "Pulse". Buddy program was launched in 2007 - this helps our incumbents to understand the KPIT culture and valuesystem, and get accustomed to the KPIT family with ease.6.2 Employee Recreation:At KPIT, following recreational activities are organized at regular intervals: Music & Meditation: A meditation session is conducted by external professionals with the aid of music. Drum Circle: A drum circle or a rhythm circle is a popular form of music therapy, where people sit in acircle and create spontaneous music on a variety of drums and percussion instruments. Various cultural events : We organize various events where employees are encouraged to showcase theirinterests and hobbies. We have different clubs such as cerebral club, photography club, nature club, trekking club to name afew. People are free to join as per their inclination and interest. Resonance: Every year we organize family day in KPIT, wherein all our employees and their families areinvited for a social gathering and dinner. This event also includes some in-house performances by ouremployees. We launched "SWE - Society for Women engineers" at KPIT recently, in the hope to benet our womenemployees.| Page 36

Under Health and safety, following are some of our programs: Health Talks: Sessions anchored by eminent doctors on health-related topics to enlighten employees onhealth issues. Free Check-up Camps: Various free check-up camps are organized throughout the year. A detailed training for our women employees on self-defence is conducted regularly. We also organize a week long programs on health awareness across all our ofces worldwide to encourageemployees to lead a healthier lifestyle. Anti-Sexual Harassment Policy: The policy allows employee to report sexual harassment in the workplace.The cases are heard and resolved by an unbiased group. Whistle blower policy: We encourage our employees to report any unethical behavior. They are informedabout this policy during "Arambh" - our two day Induction Program.6.3 Labour Practices Strategy and Management Approach:Identifying the right talent and empowering them to face business challenges are essential elements ofsustainable business growth and success. Our People are our strength. We believe that they are reservoirs ofabundant capabilities. At KPIT we strive to create a vibrant and empowering environment that inspires improvedperformance. We believe that happy and energized employees are most productive and are thus committed todevoting time and attention in creating environments that foster mutual trust and bonding.6.4 Employment and compensation:KPIT has a high lydiverse workforce, comprising of skilled talent pool from all religions, nationalities andeducational backgrounds. Our regular employees amount to 93%, while 7% are subcontractors. Importantly, 20%of our employees are women. We select our employees based on merit and the competencies they possess, anddo not discriminate on any grounds. We follow the underlying principles stated in the "Code of Conduct" in letterand spirit.Full-time KPIT employees avail of many welfare benets. Below are some of those: Cashless hospitalization benets (as per company guidelines) Group Personal Accident Insurance ESOPs - to select few Leave encasements In-house doctors, counselors, dieticians Transportation Canteen facilities Gymnasium with instructor Concierge facilities Helpdesk facilities, Assistance in nding accommodation Assistance in paying house deposits Stress Management Program On premise Music room equipped with musical instruments On premise recreation facilities Seminars, nancial Reimbursement for external certications aligned with business Maternity leave for adoption Paternity leave6.5 Performance Appraisal:Our performance management process is used as a tool to formally assess the performance of employees tosupport their development needs. We provide necessary training to supervisors to carry out performanceassessment effectively. The training program is named "Effective Performance Dialogue". Performance appraisalsare conducted for all the eligible employees biannually. Promotions and career progression is based on merit andcompetencies of individuals. Training needs are also decided based on the Performance appraisal system.| Page 37

6.6 Rewards and Recognition:We honour our best and the brightest employees whose big and small contributions are paving the way for thefuture growth of the Company. As an organization we nurture unique people practices that foster recognition atboth individual and team level for which we use a multi-pronged approach.Cheers! - Through this we recognize individual and team contributions in various areas such as customerdelight, going beyond the call of duty, exceptional contribution in any sphere, coaching and mentoring teammembers, displaying all round performance, displaying excellent team work etc. The highlight of our Cheers!Program is that every employee is free to nominate peers, superiors, subordinates and also them selves forthese awards. The entire process is very transparent. Celebrating High CSAT - This is a unique program to recognize the team that has achieved customer delight.This motivates our employees to equip themselves with required competencies and stay ahead ofcompetition.We also create platforms wherein our colleagues who have demonstrated excellence in various spheres get tointeract with the leadership team members in an informal set up. These achievers are also given organizationwidevisibility through company newslettersWe also identify brand ambassadors within the company who are given visibilityat various internal and externalforums like: Aarambh: This is a two day long induction program for the new joinees, where we showcase our brandambassadors as role models. PACE : Our brand ambassadors get to connect with students from different colleges during the eventsplanned for PACE (Program for Academic Collaboration and Engagement)- Training and Development: They get to take some of the important sessions for new joinees. They arealso given preference for external training programs, seminars, and conferences etc.- Interaction with existing and prospective clients during visits through presentations, demos etc.6.7 Talent Acquisition :KPIT continues to grow across various geographies with our hiring teams in India and overseas managing thetalent acquisition activity. We select people depending on whether they are in line with our core values anddisplay the key behavioral attributes.We believe in being an equal opportunity employer and our selection at all levels is based on merit. Our hiringteams look at each resource with a view to selecting the right talent with the best t to the role, and look atinternal training and development needs to build gaps that we nd in potential hires.Our resourcing function has evolved through a number of processes and systems to look at how we can bestutilize all internal resources, through job rotation, reskilling and career planning. This ensures that maximumopportunity is given to our people to move to new roles and make advances in their career as per their interestand performance.Our key recruitment channels include: Refer Program - Employee Referral program Internal Job Postings KPIT web site Hiring Partners Job sites Partnerships with educational institutions - PACE program Social media like Facebook, LinkedIn Other relevant recruitment ChannelsThe channel mix and recruitment mix of new hires (Laterals versus Campus trainees) is an important parameter| Page 38

of our recruitment strategy.As the majority of the hiring happens through our planned fresher intake, our PACE initiative (Program forAcademic Connect and Engagement) works with select colleges to ensure we get the right talent to join us.Through PACE, we have launched a series of interactions at select colleges to train, develop and equip younggraduates with the necessary skill to be a part of KPIT. This happens through activities like Guest Lectures,Seminars, Workshops, Industrial Visits, Faculty Development Programs, and Sponsorship Projects, helping themgain practical insights & industry Exposure. Our SME & Senior Technical fellows also contribute towards review ofcourse curriculum /syllabi wherever possible, to make it as industry friendly as possible; in turn helping hireindustry-ready resources.Talent Acquisition trendsGeo wise headcount distribution90%80%82%70%60%50%40%30%20%10%0%14%3% 1% 1% 0%India USA Europe South America APAC Middle EastTier 3, 15%City tier wise trainee hiringTier 1, 36%Tier 2, 49%| Page 39

7. The growth path ahead:We want to become a USD 1 Billion company by 2017 with operating margins at 18%. We will achieve this byhaving: Best in class practices- Strengthen our practice base in the areas of automotive embedded, SAP & Oracle. Niche Vertical Focus- Focus on three core vertical of automotive & transportation, manufacturing and Energy& Utilities and deepen customer engagement within these vertical. Key Geography presence- Expand our presence in emerging markets along with the mature markets of US &Europe. Non-linear growth- Innovation has been one of the core values of the company and we would continueinvesting in R&D to increase the share of IP based revenues. Inorganic growth- Acquisitions have been an integral part of our growth's strategy and we would continueexploring such inorganic opportunities to attain technology leadership, domain expertise and access to thegrowth markets.Our core organizational values and the growth drivers mentioned above will support and lead us on this path ofbecoming a billion dollar company.| Page 40