The Directors are pleased to present the Twentieth Annual Report
 together with the Audited Accounts of the Company for the Financial
 Year ended March 31, 2011.
 
 Performance of the Company
 
 Particulars                   Standalone         Consolidated
                               2010-2011            2010-2011
 
                           USD          Rs.       USD          Rs.
                          Million     Million   Million     Million
 
 Total Sales and Income    117.96    5,385.55    224.07   10,230.14
 
 Total Expenses             92.37    4,217.22    190.73    8,708.06
 
 PBDIT                      25.59    1,168.33     33.34    1,522.08
 
 Profit/(Loss) before Tax 
 (PBT)                      17.29      789.43     24.15    1,102.58
 
 Profit/(Loss) after Tax 
 (PAT)                      15.22      694.88     20.72      945.82
 
 Profit Available for 
 appropriation              15.22      694.88     20.72      945.82
 
 
 Result of Operations
 
 There was a turnaround in the fiscal 2010-2011 for the IT industry and
 the economy at large and the Company has witnessed the effects of the
 same. With an improvement in the Revenue growth over the last fiscal
 the Company has progressed substantially as reported herein below.
 
 Total consolidated revenue for the fiscal year 2010-11 (FY11) was Rs.
 10,230.14 Million. Gross Profit and Earnings before interest, tax,
 depreciation and amortization (EBITDA) are Rs. 3,630.80 Million and Rs.
 1,522.08 Million, respectively. Gross profit margin stands at 36% of
 the revenue. Net profit after tax grew by 10.32% to Rs. 945.82 Million.
 
 The revenues for the year on a consolidated basis in USD terms are USD
 224.07 Million as against USD 153.76 Million during the previous year.
 Average realization rate was Rs. 45.66 per US Dollar.
 
 Standalone revenue for the fiscal year 2010-11 (FY11) was Rs. 5,385.55
 Million. Gross profit stands at Rs. 2,033.59 Million. Net profit after
 tax decreased by 11.42% to Rs. 694.88 Million.
 
 Transfer to Reserves
 
 Your Directors propose to transfer Rs. 70 Million to the General
 Reserve.  An amount of Rs. 594.10 Million is proposed to be retained in
 the Profit & Loss Account.
 
 Your Directors propose to transfer an amount of Rs. 10 Million towards
 KPIT Cummins Infosystems Limited Community Foundation Reserve.  This
 Reserve would be utilized for various community benefit schemes as may
 be approved by the Management.
 
 Your Directors propose to transfer an amount of Rs. 100 Million towards
 KPIT Cummins Technology Fund. This fund would be utilized to drive high
 end innovative technology initiatives for promoting green growth and
 energy conservation, which will successively benefit the Company.
 
 Your Directors propose to transfer an amount of Rs. 100 Million towards
 KPIT Employees’ Welfare Fund. This Fund would be utilized to promote
 welfare of its employees in various forms such as Medical, Education,
 Housing, Holiday homes, Recreation facilities, Activities related to
 Sports, Music Research, Artistic Pursuits etc.
 
 Dividend
 
 The Directors are pleased to recommend a dividend @ 35% (Rs. 0.70) per
 equity share of face value of Rs. 2/- each on the paid-up equity share
 capital of the Company.
 
 Share Capital
 
 Warhol Limited (Warhol) (an affiliate of ChrysCapital) is a Mauritius
 based, Foreign Institutional Investor. Warhol was issued 77,58,621
 equity shares on preferential basis for an aggregate consideration of
 Rs. 112 crores, in terms of the Special Resolution passed by the
 shareholders of the Company in the Extra-Ordinary General Meeting held
 on February 8, 2011. The shares were issued at a price of Rs. 145/- .
 The proceeds of the issue will be utilized for bona fide business
 purposes and for funding the growth and operations of the Company
 and/or its subsidiaries, to meet the working capital and capital
 expenditure requirements of the Company/subsidiaries and for investment
 in subsidiaries and joint ventures. The shares were allotted to Warhol
 on February 17, 2011. Warhol currently holds approximately 8.83% of the
 paid up share capital of the Company.
 
 The Company allotted 1,581,753 equity shares of Rs. 2/- each, to the
 employees under the ESOP schemes in the financial year 2010-11.
 
 The outstanding issued, subscribed and paid-up capital of the Company
 as on March 31, 2011 is Rs. 175,726,830 consisting of 87,863,415 equity
 shares of Rs. 2/- each.
 
 Manpower Strength
 
 The Company had 6,514 employees as on March 31, 2011. During the year
 there was a net addition of 1,596 employees, which increased the
 employee strength by 32% over the previous year.
 
 CRISIL Ratings
 
 CRISIL has confirmed the financial credit rating of AA-/ stable for the
 revised bank limits of Cash Credit and Term Loan facilities and P1+ for
 Bank Guarantee & Letter of Credit, for the Company.
 
 Quality
 
 The Company is highly committed to International standards raised by
 the Industry. The Company has been awarded ISO 9001:2008 (Quality
 Management Systems), ISO 27001:2005 (Information Security Management
 Systems), ISO 20000:2005 (Information Technology Service Management)
 and BS25999:2007 (Business Continuity Management) certificates by TUV
 Nord Cert GmbH for providing Software Development, Product Engineering,
 Product Support and Enabling Services.
 
 Institutional Holding
 
 As on March 31, 2011, the Institutional Holding in the Company was
 28.70% of the listed capital. This excludes the following
 
 (i) approximately 8.88% held by Warhol Limited, (ii) approximately
 0.67% held by International Finance Corporation, (iii) approximately
 1.68% held by Cargill Mauritius Limited (CML). Including the
 aforementioned three shareholders, total institutional holding as on
 March 31, 2011 stood at 39.93%.
 
 Information about the Subsidiary Companies
 
 As on March 31, 2011 the Company had nine operational subsidiaries:
 
 1.  KPIT Infosystems Inc. (KPIT US) was incorporated in 1998, in the
 US, for catering to the demand of US based customers. The Company holds
 100% of the share capital and voting power of KPIT US. KPIT US earned
 revenues of Rs. 3,763.04 Million (previous year Rs. 3,483.74 Million)
 and recorded a loss of Rs. 32.16 Million (previous year profit of Rs.
 12.60 Million) ended on March 31, 2011. The loss above does not include
 translation loss of Rs. 32.97 Million.
 
 2.  KPIT Infosystems Limited (KPIT UK) was incorporated in 1996, in UK,
 for catering to the demand of customers based out of UK & Europe. The
 Company holds 100% of the share capital and voting power of KPIT UK.
 During the year, KPIT UK has earned revenues of Rs. 788.33 Million
 (previous year Rs. 872.60 Million) and registered a loss of Rs. 17.04
 Million (previous year loss of Rs. 6.64 Million). The loss above does
 not include translation loss of Rs. 19.39 Million.
 
 3.  KPIT Infosystems GmbH (KPIT Germany) was added as a step down
 subsidiary in 2005. KPIT Germany is a 100% subsidiary of KPIT UK. This
 subsidiary is completely focused on huge automotive market in Germany
 to expand our customer base in this segment with a vision to become No.
 1 global product engineering partner to the automotive industry. KPIT
 Germany reported a profit of Rs. 16.36 Million for the year ended March
 31, 2011 (previous year a loss of Rs. 18.04 Million) on revenues of Rs.
 555.45 Million (previous year Rs. 503.44 Million).
 
 4.  KPIT Infosystems Inc. [a.k.a. SolvCentral.com Inc.] (SolvCentral),
 based in US was added as a step down subsidiary in 2005 when KPIT US
 acquired 90% of its shares. SolvCentral is a 100% subsidiary of KPIT
 US. SolvCentral is focused in the Business Intelligence (BI) space in
 the US market. SolvCentral reported a loss of Rs. 27.17 Million during
 the year ended March 31, 2011 (previous year loss of Rs. 0.66 Million)
 with revenues of Rs. 74.84 Million (previous year Rs. 128.90 Million).
 
 5.  KPIT Infosystems France SAS (KPIT France) was formerly known as
 Pivolis. KPIT France has provided direct presence in France which is an
 important market in European region from KPIT’s growth perspective. In
 the Financial year 2010-11 KPIT France reported a profit of Rs. 1.22
 Million during the year (Previous year a profit of Rs. 6.13 Million)
 with revenues of Rs. 325.99 Million (previous year Rs. 341.97 Million).
 
 6.  Sparta Consulting Inc. (Sparta Inc.) was added as a step down
 subsidiary in 2009, when KPIT US acquired 100% of its shares.  Sparta
 Inc. is a leading provider of high end SAP solutions and is one of the
 fastest growing SAP consultancies in North America.  Sparta Inc.
 (consolidated) reported a profit of Rs. 234.20 Million during the year
 ended March 31, 2011 (previous period profit of Rs. 29.85 Million) on
 revenues of Rs. 2,691.72 Million (previous period Rs. 578.70 Million).
 
 7.  Sparta Infotech India Private Limited (Sparta India), was a
 
 subsidiary of Sparta Inc. Consequent upon the acquisition of 100%
 shares of Sparta Inc., by KPIT US, Sparta India is now a subsidiary of
 KPIT US. Sparta India was incorporated to cater Sparta’s India based
 clientele. Sparta India reported a profit of Rs. 111.22 Million during
 the year ended March 31, 2011 (previous period profit of Rs. 3.46
 Million) on revenues of Rs. 304.73 Million (previous period Rs. 50.29
 Million).
 
 8.  In2Soft GmbH (In2Soft) is based in Munich, Germany, whose 74% share
 capital was acquired by KPIT Germany on October 1, 2010.  The fixed
 consideration payable for acquisition of ln2Soft is Euro 2.5 Million.
 In2Soft is an expert in diagnostics and telematics for the automotive
 industry. In2Soft develops the OBU software for the tolling systems in
 Germany, Europe and world- wide and provides with VisualODX, a modern
 and complete tool set for vehicle diagnostics. The objective of the
 acquisition was to have productized solutions for global automotive
 customers and to have an onsite German presence to potentially serve
 strategic automotive customers in Germany. ln2Soft reported a profit of
 Rs. 7.33 Million during the period ended March 31, 2011 on revenues of
 Rs. 99.19 Million. (ln2softs figures of revenue and profit have been
 taken into consideration for post acquisition period i.e.  after
 October 1, 2010 till March 31, 2011).
 
 9.  CPG Solutions, LLC (CPG’) is based in Florida, USA. KPIT US, the
 Company’s wholly owned subsidiary in USA, acquired 100% shares in CPG.
 CPG became wholly owned subsidiary of KPIT US with effect from October
 1, 2010. The total consideration payable for acquisition of CPG is USD
 13.2 Million. CPG, an Oracle Gold Partner, is a focused player in
 solutions for companies in Manufacturing, Supply Chain and Engineering
 space with over a decade of specialized consulting experience in this
 focused area.  The acquisition of CPG will strengthen the Company’s
 strategic position as preferred Oracle partner for manufacturing
 companies and is designed to complement the Company’s strengths in
 global ERP roll outs, implementation and support and maintenance
 services. CPG reported a profit of Rs. 46.61 Million during the period
 ended March 31, 2011 on revenues of Rs. 337.21 Million. (CPGs figures
 of revenue and profit have been taken into consideration for post
 acquisition period i.e. after October 1, 2010 till March 31, 2011).
 
 Companies ceasing to be subsidiaries:
 
 KPIT Infosystems Central Europe Sp. Z.o.o. (KPIT Poland’) and KPIT
 Cummins Global Business Solutions Limited (KPIT GBS’): The Hon’ble
 High Court of Judicature at Mumbai passed the merger order and approved
 the Scheme of amalgamation of KPIT Infosystems Central Europe Sp.
 Z.o.o., Poland (KPIT Poland) and KPIT Cummins Global Business
 Solutions Limited (KPIT GBS’) with the Company on January 28, 2011.
 The effective date of merger of KPIT Poland and KPIT GBS with the
 Company was March 1, 2011.
 
 The operations of KPIT Poland were not commercially viable to run as a
 separate company, since its major customer had merged with another
 company. Hence it was decided to merge the same with the Company and
 close KPIT Poland’s operations as per the Polish laws.
 
 KPIT GBS was engaged in BPO activity and achieved its operational
 breakeven in FY10. Consolidation of the operations of KPIT GBS with the
 Company was aimed at improving operational efficiencies.
 
 Particulars required as per Section 212 of the Companies Act, 1956
 
 As per Section 212 of the Companies Act, 1956, a holding Company is
 required to attach the Directors Report, Balance Sheet and Profit and
 Loss Account of all the subsidiaries. However the Government of India
 vide General Circular No: 2 /2011 has given a general exemption to the
 companies from attaching the annual reports of subsidiaries provided
 certain conditions are fulfilled. Accordingly, this annual report does
 not contain the financial statements of the subsidiaries. Statement
 pursuant to Section 212 of the Companies Act, 1956, is given elsewhere
 in this annual report. The Company will make available the audited
 annual accounts and related detailed information of the subsidiary
 companies, where applicable, upon request by any member of the Company.
 The Company will also upload the accounts of the individual
 subsidiaries on its official website. These documents will also be
 available for inspection during business hours at our registered
 office.
 
 Directors
 
 Pursuant to Article 72 of the Articles of Association of the Company
 read with Section 256 of the Companies Act, 1956, Dr. R. A. Mashelkar,
 Mr. Bruce Carver and Ms. Elizabeth Carey retire by rotation at the
 ensuing Annual General Meeting and, being eligible, offer themselves
 for re-appointment.
 
 Mr. Girish Wardadkar, President and Executive Director resigned from
 the directorship of the Company with effect from April 25, 2011 after a
 tenure of 6 years with the Company. Mr. Girish Wardadkar has been
 instrumental in establishing strong systems with a focus on improving
 quality and productivity. He has also contributed significantly in
 building reporting and control systems. The Board places on record its
 sincere appreciation for his tremendous contribution towards the growth
 and success of the Company over the years.
 
 Mr. Deepak Malik resigned from the directorship of the Company with
 effect from April 25, 2011. The Company has immensely benefitted from
 the expert professional guidance of Mr. Deepak Malik. The Board places
 on record its sincere appreciation for all the help and guidance
 provided by him.
 
 Auditors
 
 The Statutory Auditors, M/s. Deloitte Haskins & Sells, Chartered
 Accountants, retire at the ensuing Annual General Meeting and have
 confirmed their eligibility and willingness to accept the office, if
 re- appointed.
 
 Corporate Governance
 
 A separate section on Corporate Governance with a detailed compliance
 report thereon is annexed to this annual report. The Auditors
 Certificate in respect of compliance with the provisions concerning
 Corporate Governance, as required by Clause 49 of the Listing
 Agreement, is also annexed.
 
 Management Discussion and Analysis
 
 A detailed review of the operations, performance and future outlook of
 the Company and its business is given in the Management Discussion and
 Analysis Report, which forms a part of this Report.
 
 Responsibility Statement of the Board of Directors
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors
 confirm that:
 
 i) in the preparation of the accounts for the financial year ended
 March 31, 2011, the applicable accounting standards have been followed
 and there has been no material departure;
 
 ii) the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that were reasonable
 and prudent so as to give true and fair view of the state of affairs of
 the Company at the end of the said financial year and of the profit of
 the Company for the said financial year;
 
 iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of Companies Act, 1956 for safeguarding the assets of the
 Company and for preventing and detecting fraud and other
 irregularities;
 
 iv) the Directors have prepared the accounts for the year ended March
 31, 2011 on a going concern’ basis.
 
 Particulars of Employees
 
 As required under the provisions of Section 217(2A) of the Companies
 Act, 1956 read with the Companies (Particulars of Employees) Rules,
 1975 as amended, a statement showing the names and other particulars of
 employees forms a part of this report. However, having regard to the
 provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
 
 excluding the aforesaid statement is being sent to all the members of
 the Company. Any member interested in obtaining a copy of this
 statement may write to the Company Secretary at the registered office
 of the Company.
 
 Employees Stock Option Plan (ESOP)
 
 Information relating to stock option programme of the Company is
 provided in the Annexure I of this report. The information is being
 provided in compliance with Clause 12 of the Disclosure in the
 Directors’ Report of SEBI (Employees Stock Option Scheme and Employees
 Stock Purchase Scheme) Guidelines, 1999.
 
 Fixed Deposits
 
 The Company has not accepted any deposits and, as such, no amount of
 principal or interest was outstanding on the date of the Balance Sheet.
 
 Information under Section 217(1)(e) of the Companies Act, 1956 read
 with the Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988.
 
 Conservation of Energy - Our Company’s primary business being Software
 services, our operations are conducted with energy conservation as a
 focus area. The Company has taken various initiatives for optimum
 utilization and conservation of resources. Some of the initiatives
 taken by the Company are as follows:
 
 1.  Energy Conservation measures:
 
 The facility at Hinjawadi Pune reflects KPITs commitment to energy
 efficiency and Green Growth”. The features incorporated in building
 design are as follows:
 
 a.  Buildings are clad with Clay Tiles, which prevent the ingress of
 heat inside the building, thus reducing the heat load and consequently,
 lessen load on AC.
 
 b.  Facility is built in such a way wherein we make maximum use of
 natural light thus saving energy. Internal gardens make the facility
 cooler which helps in reducing dependency on AC.
 
 c.  Internal lighting is integrated with occupancy sensors which
 reduces the energy consumption.
 
 d.  AC system installed is of VRF technology which facilitates in the
 control of local cooling thus resulting in considerable saving
 vis-a-vis a conventional central AC system. The facility has won the
 Emerson Cup GOLD Award for the Lowest Energy Consumption in India and
 South East Asian Countries.
 
 e.  Installation of Ozonized air purification system has considerably
 reduced load on AC system.
 
 2.  Two Six Sigma Green Belt projects completed on minimizing wastage
 in energy consumption for Pune Facility which has resulted in 15%
 savings.
 
 3.  Various steps have been undertaken to utilize the energy in an
 optimum manner like:
 
 a.  All lights replaced with CFL;
 
 b.  Lift lights replaced with LEDs;
 
 c.  Correction done to capacitor bank to achieve 1.0 power factor to
 minimize the power losses;
 
 d.  Shutting down UPS at night and on weekends;
 
 e.  Defined AC working hours and temperatures to suit seasonal changes;
 
 f.  Optimization of LUX level in working areas by removing extra
 lights;
 
 g.  Changing over to LED lamp projectors.
 
 4. PC Shut Down Drive undertaken to shut down PCs during non working
 hours resulting into considerable reduction in energy consumption.
 
 Water Conservation measures:
 
 1.  Hydro pneumatic system of water supply installed there by ensuring
 minimum wastage of water.
 
 2.  Recycled water generated through Sewage treatment plant used for
 gardening purpose.
 
 Environment Improvement initiatives:
 
 1.  Tree plantation: Initiated within and outside the premises.
 
 2.  Vermi Compost Plant: A vermi compost plant has been set up for
 treating the organic waste, which generates organic manure.
 
 3.  Employee Transport: Various steps taken in employee transport to
 reduce fuel consumption such as:
 
 a.  Control on unscheduled cab requirements thereby ensuring optimum
 seat utilization.
 
 b.  Use of buses in lieu of cabs.
 
 Research and Development (R & D) Activities -
 
 The Company has been laying thrust on Research & Development activities
 for the past few years. The Company has formed its own R&D center
 called Center for Research in Engineering Sciences and Technology’ or
 CREST. A separate section on R&D activities undertaken by the Company,
 forms a part of this report.
 
 Technology Absorption - The Company is constantly upgrading its
 technological excellence through its Infrastructure, Technology and
 Services (ITS) function. The Company has started building partnerships
 with leading technology vendors like Microsoft, SAP, Oracle, HP, IBM
 and VMware. Through these partnerships the Company has the advantage to
 create and build technical solutions for its customers and for its own
 consumption. The Company focuses on using the technology for its own
 use as well as creating showcase for customers.
 
 Foreign Exchange Earnings and Outgo - The Company focuses on exports
 and undertakes all possible efforts to expand its presence in the
 export markets. Total foreign exchange earnings during the year have
 been Rs. 4,632.95 Million (previous year Rs. 3,714.09 Million) and foreign
 exchange outgo has been Rs. 633.55 Million (previous year Rs. 613.96
 Million).
 
 Awards/Recognition
 
 - KPIT Cummins was awarded the Economic Times Zigwheels Automotive
 Idea of the Year Award’ for 2010, for its intelligent plug-in parallel
 hybrid solution, REVOLO.
 
 - NASSCOM has awarded the Promising Innovation of the Year, 2011’
 Award to KPIT Cummins for REVOLO. This award is an acknowledgement of
 KPIT’s commitment to fostering automotive technology innovation.
 
 - KPIT Cummins’ REVOLO was also awarded Best Electronic Product of the
 Year 2011’ at Indian Semiconductor Association Technovation event. This
 award completes the hat-trick for REVOLO.
 
 - KPIT Cummins has also won the global Cummins Chairman’s Quality
 Award’ in Six-Sigma which has the top most recognition for Six Sigma in
 the Cummins family.
 
 - Our Chairman & Group CEO, Mr. Ravi Pandit was recently felicitated
 with Vocational Excellence Award’ of the Rotary Club of Pune, for his
 vision and excellence in the field of profession and business. He
 received the award from noted scientist and innovation evangelist, Dr.
 Raghunath Mashelkar.
 
 - Mr. Anil Patwardhan, our CFO was honored with the CFO in Information
 Technology Sector’ Award by the Institute of Chartered Accountants of
 India (ICAI) for exceptional performance and achievements as CFO in the
 Information Technology category for 2010.
 
 - KPIT Cummins’ REVOLO won a special recognition award for exceptional
 leadership in catalyzing consumer adoption of sustainable solutions, at
 the India Carbon Outlook’s Parivartan Sustainability Leadership Awards,
 March 2011.
 
 - KPIT Cummins’ REVOLO has been selected as a winner in the
 knowledge@Wharton Innovation tournament in the Sustainable implemented
 Solution’ category, April 2011.
 
 Acknowledgments
 
 Your Directors take this opportunity to thank all the members and
 investors of the Company for their continued support.
 
 Your Directors hereby place on record their appreciation for the
 co-operation and support received from all the customers, vendors,
 financial institutions including State Bank of India, International
 Finance Corporation, HDFC Bank Ltd., The Hongkong and Shanghai Banking
 Corporation Ltd., Citibank N.A., Axis Bank Ltd., BNP Paribas, Standard
 Chartered Bank, ICICI Bank Ltd., DBS Bank Ltd. and Kotak Mahindra Bank
 Ltd. and the Registrars and Share Transfer Agent viz.  Link Intime
 India Pvt. Ltd. and also thank all the employees of the Company for
 their valuable contribution in the growth of the Company.
 
 We also thank the Governments of United States of America, United
 Kingdom, Germany, France, Poland, Japan, Singapore, South Korea, South
 Africa and China. We further thank all the constituents of the
 Government of India, particularly Ministry of Communication and
 Information Technology, the Software Technology Parks of India, Pune
 and Bengaluru, the Department of Central Excise & Customs, Maharashtra
 Industrial Development Corporation, National Association of Software
 and Service Companies, Stock Exchanges (where our shares are listed),
 Securities and Exchange Board of India, Registrar of Companies, Pune,
 Ministry of Corporate Affairs, Reserve Bank of India, the State
 Governments, and other government agencies, and the Media and Press for
 their support during the year and look forward to their continued
 support in the future.
 
 
 
 
                                   By Order of the Board of Directors 
                                 For KPIT Cummins Infosystems Limited
 
 
                                                  S. B. (Ravi) Pandit
                                                 Chairman & Group CEO
 
 
 
 Pune, April 25, 2011