Directors Report of Persistent Systems Ltd.

Mar 31, 2025

Your Directors are pleased to present the Thirty-fifth Annual Report of your Company along with the Audited Financial
Statements for the Financial Year ended March 31, 2025.

A. Business Update

Persistent is Re(AI)magining the World with market-leading solutions and innovations. Powered by your Company’s
commitment to collaborate with clients for growth, your Company has concluded another successful year with $1.4 Billion
in annual revenue, positioning Persistent as the AI ecosystem partner of choice across geographies and industries. As your
Company celebrates its 35^th year, we extend our sincere thanks to its employees, clients, partners, and shareowners for their
continued trust and confidence in our ability to create significant value and achieve mutual success.

Despite challenging macroeconomic conditions, your Company continued to make remarkable strides and build on the
unique heritage in product engineering and AI. This year, your Company achieved $1,409 Billion in revenue, an 18.8% year-
on-year growth in US$ terms. This marks 20 quarters of sequential growth, outpacing the performance of other major service
providers in India. The EBIT margin for FY25 came in at 14.7%, compared to 14.4% for FY24, and the profit after tax for the
full year came in at 11.7%. Your Company announced a final dividend of INR 15 per share, marking our 15 years since its listing
on the National Stock Exchange of India Limited and BSE Limited. This translates into a total dividend of INR 35 per share for
FY25, which marks 35 years since the Company began this incredible journey. In addition, your Company’s compound annual
growth rate (CAGR) is 17.4% since ts Inital Public Offering (IPO) in April 2010, and 25.6% over the last four years (FY21-FY25),
outperforming the majority of your Company’s peers.

Your Company’s global team has expanded to more than 24,500 employees across 19 countries.

Your Company continues to transform its operations with new AI solutions and innovations, which provide high degrees of
agility and resiliency to respond to changing market dynamics. Your Company is persistently Re(AI)magining with its clients
and partners, helping them in their transformation journey.

Despite the Company’s ongoing achievements, it continuously propels itself to search for new innovations as a way to remain
differentiated and competitive in the market. With the proliferation of AI, clients continue to rely on your Company as their
trusted AI partner, with a commitment to developing solutions that unlock value, drive growth, and instil operational resiliency.

Your Company’s AI strategy is proceeding with clients on several fronts, with a particular focus on sub-verticals within its
primary industries of BFSI, Healthcare and Life Sciences, and Software / Hi-Tech:

• Your Company is collaborating with leading tech firms and Hyperscalers partners such as Microsoft Azure, AWS, Google
Cloud, and Salesforce to engineer scalable platforms, utilising our unique Generative AI-enabled platform, SASVA, to
accelerate software and application development. To date, your Company has filed for 35 patents for SASVA in areas such
as backlog prioritisation, LLM-driven security simulations, and dynamic data pipeline orchestration.

• Your Company is leveraging AI agents to transform clients’ outdated backend processes into AI-driven workflows, utilizing
its unique platforms such as GenAI Hub for new GenAI-powered applications.

• Your Company unveiled iAURA 2.0, the latest version of our AI-enabled data transformation platform, as customers look for
ways to leverage their vast amounts of structured and unstructured data for powerful data-driven decision-making.

• Your Company has made key strategic acquisitions with Starfish Associates and Arrka to bring AI-driven enhancements to
contact centre transformation, unified communications, and data privacy.

• Your Company is focusing on bringing AI solutions into fast-growing sub-verticals, such as intelligent operations for
insurance, AI-driven payments platforms in banking, and enhanced member experiences in healthcare.

• Your Company is also using ongoing AI investments to pivot clients to outcome-driven business models, with a focus on
accelerating value, growth, and time-to-market for new products and services.

These strategic moves have occurred in parallel with the continued expansion of your Company’s Hyperscalers partnerships. In
collaboration with Microsoft, your Company launched new AI-powered offerings, including ContractAssIst, an AI-driven contract
management solution, and a GenAI-powered Population Health Management (PHM) solution. Your Company entered into a
long-term Strategic Partnership Agreement with Google Cloud to expand its reach across the US, India, the UK, and Australia, with
a focus on Google Cloud’s AI platforms. As an AWS Premier Tier Services Partner, your Company continue to build on its multi¬
year Strategic Collaboration. Agreement to accelerate the development and adoption of GenAI solutions utilising platforms such
as Amazon Bedrock. Building on its relationship with Salesforce, your Company has successfully enabled its team members to
achieve more than 1,000 Salesforce AI Associate Certifications, bringing its total certifications to more than 10,500. This milestone
showcases its team’s deep expertise and proficiency in Salesforce technologies, particularly in AI-driven solutions.

Your Company matches these investments with continued AI training through Persistent University, ensuring it provides provide AI
talent at scale for its clients’ transformation initiatives.

Third-party analysts and market observers are acknowledging your Company’s innovation and success. Your Company was
identified for the second consecutive year as a Challenger in the Gartner Magic Quadrant for Public Cloud Transformation Services
and awarded the 2024 ISG Star of Excellence for Superior Customer Experience. Your Company received additional accolades from
ISG, including Star of Excellence awards in the categories of Most Adaptable Partner, Universal Information Technology Outsourcing,
and for Outstanding Service in the Americas Region. As your Company continues its European investments, it received top rankings
for client satisfaction in innovation in the European IT outsourcing study by Whitelane Research. Your Company was also recognised
in the prestigious Economic Times Human Capital Awards 2025 across multiple categories for its excellence in employee practices.

Furthermore, your Company remains committed to achieving success through various Environmental, Social, and Governance
(ESG) activities. Since February 2025, your Company has achieved 100% renewable energy sourcing for all its owned locations
in Pune, Nagpur, and Goa through solar rooftops, wind energy and green tariffs. Your Company is included in the top 10% of
S&P Global 2025 Sustainability Yearbook for its responsible business practices and long-term ESG impact. Your Company was
recognised at the Institute of Chartered Accountants of India (ICAI) Sustainability Reporting Awards 2023-24, highlighting its
dedication to transparent ESG practices. Finally, your Company was featured on the Nasdaq MarketSite Tower in New York’s
Times Square for winning awards at the the Institute of Company Secretaries of India (ICSI) Business Business Responsibility and
Sustainability Awards and the National Awards for Excellence in Corporate Governance.

By remaining focused on innovation and client success, your Company remains committed to Re(AI)magining the World by
collaborating with enterprises as they harness the power of AI. As your Company continues to build on its product engineering
heritage to drive new AI advancements, your Company remains confident in its ability to deliver lasting value for all of its
stakeholders.

B. Financial Section

Financial Results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2025, are as under:

% Change

(Amount in INR Million except (based on

(Amount in USD Million except EPS, Book Value and Market amounts in
EPS and Book Value) Value per share) INR)

Particulars	2024-25	2023-24	2024-25	2023-24
Revenue from Operations	1,390.65	1,185.99	119,387.17	98,215.87	21.56%
Earnings before interest, depreciation, amortisation and taxes	239.74	202.35	20,581.93	16,756.86	22.83%
Finance Cost''	7.82	5.64	671.29	467.27	43.66%
Depreciation and amortisation	35.75	37.36	3,069.10	3,093.73	-0.80%
Other incomes	16.09	15.46	1,381.54	1,280.20	7.92%
Tax expenses	49.17	42.76	4,221.47	3,541.15	19.21%
Net profit	163.09	132.04	14,001.61	10,934.91	28.05%
Transfer to general reserve	-	47.54	-	3,965.23	0.00%
Net worth#	738.57	593.69	63,125.46	49,513.46	27.49%
Earnings per share (EPS) (Basic)®	1.07	0.87	91.22	72.44	25.92%
Earnings per share (EPS) (Diluted)®	1.06	0.86	90.24	71.07	26.97%
Book value per equity share	4.74	3.85	405.46	321.41	26.15%
Market value per equity share as on March 31
BSE Limited	-	-	5,206.15	3,989.25	30.50%
National Stock Exchange of India Limited	-	-	5,290.55	3,984.55	32.78%

[Conversion Rate USD 1 = INR 85.85 for Profit and Loss items; USD 1 = INR 85.47 for Balance Sheet items
(Financial Year 2024-25) and USD 1 = INR 82.81 for Profit and Loss items; USD 1 = INR 83.40 for Balance Sheet items
(Financial Year 2023-24).]

@The Equity Shares of the Company have been sub-divided in a 1:2 ratio and the impact of the Sub-Division has been given to
EPS.

''Includes notional interest on lease liability FY 25: INR 254.23 Million (FY 24: INR 180.02 Million) recognised in accordance
with Ind AS-116 on Leases and notional interest on amounts due to selling Members INR 15.27 Million
(Previous year: INR 51.05 Million).

#Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase) and other comprehensive income are
considered for the purpose of computing Net Worth and Book Value per share.

The highlights of the financial performance on a standalone basis for the year ended March 31, 2025, are as under:

% Change

(Amount in (Amount in (based on

USD Million except INR Million except amounts in

EPS and Book Value) EPS and Book Value) INR)

Particulars	2024-25	2023-24	2024-25	2023-24
Revenue from Operations	1,366.11	786.62	117,280.21	65,142.17	80.04%
Earnings before interest, depreciation, amortisation, and taxes	188.23	160.77	16,159.25	13,313.91	21.37%
Finance Cost''	5.53	2.05	474.66	169.84	179.47%
Depreciation and amortisation	20.52	19.61	1,761.98	1,623.64	8.52%
Other income	21.06	19.86	1,808.25	1,644.86	9.93%
Tax expenses	48.68	39.95	4,179.45	3,308.64	26.32%
Net profit	134.55	119.02	11,551.41	9,856.65	17.19%
Transfer to general reserve	-	47.54	-	3,965.23	0.00%
Net worth#	698.96	572.98	59,740.08	47,786.51	25.01%
Earnings per share (EPS) (Basic)®	0.87	0.77	74.45	64.06	16.22%
Earnings per share (EPS) (Diluted)®	0.87	0.77	74.45	64.06	16.22%
Book value per equity share	4.48	3.72	383.32	310.20	19.07%

[Conversion Rate USD 1 = INR 85.85 for Profit and Loss items; USD 1 = INR 85.47 for Balance Sheet items
(Financial Year 2024-25) and USD 1 = INR 82.81 for Profit and Loss items; USD 1 = INR 83.40 for Balance Sheet items
(Financial Year 2023-24)]

@The Equity Shares of the Company have been sub-divided in a 1:2 ratio and the impact of the Sub-Division has been
given to EPS.

''Includes notional interest on lease liability FY 25: INR 218.69 Million (FY 24: INR 147,50 Million) recognised in accordance
with Ind AS-116 on Leases and notional interest

#Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase), and other comprehensive income are
considered for the purpose of computing Net Worth and Book Value per share.

Material Events Occurring after Balance Sheet Date

1. The Hon’ble National Company Law Tribunal, Mumbai (the ‘Hon’ble NCLT’) sanctioned the merger of M/s. Capiot Software
Private Limited (Wholly Owned Subsidiary - Transferor Company) into Persistent Systems Limited (Holding Company - Transferee
Company) by absorption through its order dated April 9, 2025. The Certified Copy of the said order has been received by your
Company on April 21, 2025, and filed with the Registrar of Companies (ROC), Pune on May 13, 2025.

2. The Board of Directors approved the proposal of merger of M/s. Arrka Infosec Private Limited (Wholly Owned Subsidiary) into
Persistent Systems Limited (Holding Company), subject to the receipt of necessary approvals in accordance with the provisions
of the Companies Act, 2013.

3. Consequent to the receipt of approval by the Members at the 34^th Annual General Meeting (AGM) held on July 16, 2024,

Mr. Praveen Kadle (DIN: 00016814) commenced his second term as the Independent Director of the Company for 5 (Five)
consecutive years effective from April 23, 2025, to April 22, 2030.

4. The Board has approved the issuance of 560,000 Equity Shares of INR 5 each to PSPL ESOP Management Trust (‘ESOP Trust’)
in its meeting held on January 22, 2025. Based on the authority given by the Board, the Stakeholders Relationship and ESG
Committee has inter-alia approved the allotment of 550,000 (Five Hundred Fifty Thousand only) Equity Shares of INR 5 (Five)
each at the allotment price of INR 316.30 per Equity Share, aggregating to the total consideration of INR 173.9650 Million to the
ESOP Trust on May 8, 2025.

5. Ms. Anuja Ramdasi, Head - Internal Audit of the Company upon changing her role and responsibilities due to internal

reorganization, decided to relinquish the position of Head - Internal Audit of the Company effective from the closure of business
hours on June 6, 2025 (IST). In view of the same, the Board of Directors, at its meeting held on June 6, 2025 approved the
appointment of M/s. Ernst & Young LLP, Chartered Accountants (LLP Identification No.: AAB-4343) as the Internal Auditors of
the Company for the term of 3 (Three) consecutive financial years effective from FY 2025-26 to FY 2027-2028 based on the
recommendation of the Audit Committee.

There were no other material changes and commitments affecting the financial position of your Company between end of the
Financial Year 2024-25 and the date of this report.

The following businesses are recommended to the Members for their approval at the ensuing 35^th Annual General Meeting of
the Company:

a. The Board of Directors appointed Mr. Vinit Teredesai (DIN: 10661577), Chief Financial Officer (CFO) of the Company, as an
Additional Director (Executive Member) of the Company to hold office with effect from April 24, 2025, till September 30, 2028,
subject to the approval of Members.

As the Chief Financial Officer of the Company, Mr. Teredesai is responsible for Corporate Finance, Treasury, Financial Reporting,
Taxation, Investor Relations, Risk Management and Administration.

Prior to joining the Company in May 2024, Mr. Teredesai has over 29 years of experience in the areas of corporate finance,
international and domestic taxation, and management accounting. He has worked with Mindtree as CFO, KPIT Technologies as
CFO and CIO and his most recent role was with LTIMindtree where he was the Chief Financial Officer of the merged entity post
the merger of L&T Infotech and Mindtree in 2022.

He is a qualified Chartered Accountant, Cost and Works Accountant, Certified Public Accountant (USA) and has also completed
his General Management from MIT Sloan School of Management, Cambridge MA focusing on Strategy, Innovation and
Technology.

Further details regarding Mr. Teredesai’s proposed appointment are included in the 35^th AGM Notice.

b. The current term of M/s. Walker Chandiok & Co LLP, Pune (Firm Registration No.: 001076N/N500013) existing Statutory
Auditors of the Company, will complete at the conclusion of the ensuing 35^th AGM of the Company. In view of the same, the
Board of Directors appointed M/s. B S R & Co. LLP, Chartered Accountants, Pune (FRN: 101248W/W-100022) as the Statutory
Auditors of the Company for the first term of 5 (Five) consecutive years effective from the conclusion of the ensuing 35^th AGM till
the conclusion of the 40^th AGM of the Company, subject to the approval of Members.

c. The Board of Directors appointed M/s. SVD & Associates, Practising Company Secretaries, Pune, bearing Peer Review Certificate
No. 6357/2025, as the Secretarial Auditors of the Company for the first term of 5 (Five) consecutive years effective from

FY 2025-26 to FY 2029-30, subject to the approval of Members.

d. The Board of Directors, at its meeting held on June 6, 2025, recommended the re-appointment of Dr. Anand Deshpande
(DIN: 00005721) as the Managing Director of the Company liable to retire by rotation, to hold office for a period of 5 (Five)
consecutive years i.e., up to the conclusion of the 40^th Annual General Meeting of the Company to be held on or before
September 30, 2030, subject to the approval of the Members.

e. The Board of Directors, at its meeting held on June 6, 2025, recommended the re-appointment of Mr. Sandeep Kalra

(DIN: 02506494) as an Executive Director of the Company liable to retire by rotation, to hold the office for 3 (Three) consecutive
years i.e., from October 1, 2025, till September 30, 2028, subject to the approval of the Members and the Central Government
of India.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013 (the ‘Act’), your Company has provided the Consolidated Financial Statements
as of March 31, 2025. Your Directors believe that the consolidated financial statements present a more comprehensive picture
as compared to the Standalone Financial Statements. The financial statements are available for inspection during business
hours at the Registered Office of your Company and the offices of the respective subsidiary companies. A statement showing
the financial highlights of the subsidiary companies is enclosed with the Consolidated Financial Statements.

The Annual Report of your Company does not contain full financial statements of the subsidiary companies; however, your
Company will make available the audited annual accounts and related information of the subsidiary companies electronically
in line with the Ministry of Corporate Affairs’ (MCA) Circular dated May 5, 2020, and its extensions from time to time upon

written request by any Member of your Company. The Standalone and Consolidated Financial Statements, along with relevant
documents and audited financial statements of the subsidiaries, are available on the Company’s website at https://www.
persistent.com/investors/financial-results-and-reports/financial-statement-of-subsidiary/

Consolidated Financial Statements

Consolidated Financial Statements of your Company and its subsidiaries as of March 31, 2025, are prepared in accordance
with the Indian Accounting Standard (Ind AS) - 110 on ‘Consolidated Financial Statements’ notified by the Ministry of
Corporate Affairs of India (MCA) and form part of this Annual Report.

Changes in the capital structure of your Company during the year

a. The Stakeholders Relationship and ESG Committee has inter-alia approved the allotment of 600,000 (Six Hundred Thousand
only) Equity Shares of INR 5 each at the allotment price of INR 643.50 per Equity Share to PSPL ESOP Management Trust

on July 10, 2024.

b. The Stakeholders Relationship and ESG Committee has inter-alia approved the allotment of 1,200,000 (One Million Two Hundred
Thousand Only) Equity Shares of INR 5 each at the allotment price of INR 1,216.50 per Equity Share to PSPL ESOP Management
Trust on September 6, 2024.

Auditors

Statutory Auditors

The Members of your Company at the 30^th Annual General Meeting (AGM) held on July 24, 2020, appointed M/s. Walker
Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) as the Statutory Auditors of your
Company to hold such office for a period of 5 (Five) years i.e., up to the conclusion of the 35^th AGM to be held in the calendar
year 2025 or before September 30, 2025.

Further, in terms of Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the
‘Listing Regulations’), M/s. Walker Chandiok & Co. LLP, Statutory Auditors of your Company have confirmed that they hold
a valid certificate issued by the ‘Peer Review Board’ of Institute of Chartered Accountants of India (ICAI) for these years and
have provided a copy of the said certificate to your Company for reference and records.

The Auditors’ Report for the FY 2024-25 does not contain any qualifications, observations, reservations, or adverse remarks.

Further, the Audit Committee and Board of Directors, in their meetings held in April 2025, have recommended the
appointment of M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 01248W/W-100022) as the Statutory
Auditors of the Company to hold office from the conclusion of the 35^th Annual General Meeting (‘AGM’) up to the conclusion
of the 40^th AGM of the Company to be held in the calendar year 2030, to the Members for their approval.

A detailed profile of M/s. B S R & Co. LLP is included in the 35^th AGM Notice along with the resolution for the consideration
of the Members. M/s. B S R & Co. LLP have confirmed that they hold a valid certificate issued by the ‘Peer Review Board’ of
the Institute of Chartered Accountants of India (ICAI) and have provided a copy of the said certificate to your Company for
reference and records.

Considering the rich experience and reputed clientele, and based on the recommendation of the Audit Committee, the Board
of Directors recommends the Resolution at Item No. 5 for the approval of the Members as an Ordinary Resolution.

Secretarial Auditors

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. SVD & Associates, Practicing Company
Secretaries, Pune as the Secretarial Auditors of your Company for the Financial Year 2024-25.

Accordingly, the Secretarial Auditors have given the report, which is annexed hereto as Annexure A. There are no
qualifications in the Secretarial Audit Report for FY 2024-25, however, the Secretarial Audit Report contains an observation
as follows:

a. Nature of observation noted:

Delayed submission of intimation about resignation of SMP of the listed entity through Corporate Announcement bearing
Ref. No. NSE & BSE / 2024-25 / 026 dated April 28, 2024.

b. Detailed Observation:

A disclosure under Regulation 30 of SEBI LODR pertaining to the resignation of Senior Management Personnel was
intimated with a delay to BSE and NSE (the Stock Exchanges) for which clarifications was sought by BSE vide their letter
dated April 29, 2024, which was duly replied by the Company. Subsequently, both the Stock exchanges have issued a
warning email asking the Company to take necessary steps to avoid such delays in the future.

c. Management Response:

In response to the clarification letter, the Company submitted the reason for the delay with a copy of the resignation
through the Corporate Announcement bearing Ref. No. NSE & BSE / 2024-25 / 026A on April 29, 2024. The Company
informed in the clarification that the delay in reporting was inadvertent and unintentional and the Company has taken
necessary steps to avoid such delays in the future.

Further, the Company disseminated the warning emails received from the Stock Exchanges through the Corporate
Announcement to both Stock Exchanges and also placed the same before the Board of Directors with the proposed
corrective steps as advised by the Stock Exchanges.

In terms of newly inserted Regulation 24A of the Listing Regulations, the appointment of M/s. SVD & Associates, Practising
Company Secretaries, Pune, to act as the Secretarial Auditors of the Company for the term of 5 (Five) consecutive years from
the financial year 2025-26 till 2029-30, has been recommended by the Audit Committee and the Board of Directors at their
meeting held in April 2025 to the Members for their approval.

Prior to the above, M/s. SVD & Associates were appointed as the Secretarial Auditors for three financial years, 2022-23,
2023-24, and 2024-25, respectively, in terms of the provisions of Section 204 of the Act. In terms of the aforesaid Listing
Regulations, any association of an individual / firm as the Secretarial Auditor of the listed entity before March 31, 2025, shall
not be considered for the purpose of calculating the tenure.

M/s. SVD & Associates hold a valid Certificate of Peer Review (bearing No. 6357/2025) as issued by the Institute of Company
Secretaries of India and has confirmed their eligibility to be appointed as the Secretarial Auditors for the term of 5 (Five)
consecutive years at such audit fee as provided in Item No. 9 of the 35^th AGM Notice.

Considering the rich professional experience, reputed clientele, and guidance on best secretarial practices to ensure
governance and based on the recommendation of the Audit Committee, the Board of Directors recommends the Resolution
at Item No. 9 of the 35^th AGM Notice for the approval of the Members as an Ordinary Resolution.

Reporting of Frauds by the Auditors

During the year under review, the Statutory Auditors have not reported to the Audit Committee, under Section 143(12) of the
Act, any instances of fraud committed against your Company by its officers or employees, the details of which would need to
be mentioned in the Board’s Report or directly to the Central Government under intimation to your Company.

Adequacy of the Internal Financial Controls

Your Board is responsible for establishing and maintaining adequate Internal Financial Control as per Section 134 of the Act.

Your Board has laid down policies and processes with respect to Internal Financial Controls and such Internal Financial
Controls were adequate and were operating effectively. The Internal Financial Controls covered the policies and procedures
adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company’s
policies, safeguarding of the assets of your Company, prevention, and detection of fraud and errors, accuracy and
completeness of accounting records and timely preparation of reliable financial information.

Internal Audit

The details of the internal audit team and its functions are given in the Management Discussion and Analysis Report forming
part of this Annual Report.

Disclosure about the Cost Audit

Maintenance of cost records and the requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act
are not applicable for the business activities carried out by your Company.

Particulars of Loans and Guarantees given and Investments made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements
provided in this Annual Report (Refer notes 5, 6, 10, 14, 17, and 33 of the Standalone Financial Statements).

Transfer to Reserves

During the year, the Company has not transferred any amount to the General Reserves.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Act read with the relevant Rules, your Company has not accepted any
fixed deposits during the year under report.

Liquidity

Your Company maintains adequate liquidity to meet the necessary strategic and growth objectives.

Your Company aims to balance between earning adequate returns on liquid assets and the need to cover financial and
business risks. As of March 31, 2025, your Company, on a standalone basis, had cash and cash equivalents (including
investments) amounting to INR 15,948.29 Million as against INR 14,300.66 Million as of March 31, 2024.

The details of cash and cash equivalents (including investments) are as follows:

(In INR Million)

Particulars	2025	2024
Investment in Mutual Funds at fair value	6,158.97	4,801.50
Fixed Deposits with scheduled banks	3,175.75	3,244.72
Bonds (quoted)	2,995.57	2,995.61
Cash and Bank balances	3,618.00	3,258.83
Total	15,948.29	14,300.66

The particulars of expenditure on Research and Development on an accrual basis are as follows:

(In INR Million)

Particulars	2025	2024
Capital expenditure	-	-
Revenue expenditure	210.62	269.48
Total research and development expenditure	210.62	269.48
As a percentage of total income	0.18%	0.40%

The particulars of foreign exchange earnings and outgo, based on actual inflows and outflows are as follows:

(In INR Million)

Particulars	2025	2024
Earnings	59,854.22	48,403.78
Outgo	18,927.15	8,548.03

Update on Fixed Deposits with IL&FS

Your Company has deposits of INR 430 Million with Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS
Financial Services Ltd. (referred to as ‘IL&FS Group’) as on March 31, 2025. These were due for maturity between January
2019 and June 2019. In view of the uncertainty prevailing with respect to the recovery of outstanding balances from IL&FS
Group, the Management has fully provided for these deposits along with interest accrued thereon till the date the deposits
had become doubtful of recovery.

During the year, the Company recovered INR 21.12 Million from the IL&FS Group, and the Management is hopeful of the
recovery of the balance amount with a time lag. The Company continues to monitor developments in the matter and is
committed to taking steps, including legal action, that may be necessary to ensure full recovery of the said deposits.

Related Party Transactions

The Policy to determine the materiality of related party transactions and dealing with related party transactions, as approved
by the Board of Directors, is available on your Company’s website at https://www.persistent.com/investors/corporate-
governance/related-partv-transactions-policv/

During the year under report, your Company did not enter into any material transaction with any party who is related to it as
per the Act. There were certain transactions entered into by your Company with its subsidiaries and other parties who are
related within the meaning of the Indian Accounting Standards i.e., Ind AS - 24. The attention of Members is drawn to the
disclosure of transactions with such related parties set out in Note No. 33 of the Standalone Financial Statements, forming
part of this Annual Report. The Board of Directors confirms that none of the transactions with any of the related parties were in
conflict with your Company’s interests. The list of Related Party Transactions entered into by your Company for the Financial
Year 2024-25 (on a consolidated basis) is available on https://www.persistent.com/investors/corporate-governance/related-
party-transactions-policy/

The related party transactions are entered into based on considerations of various business requirements, such as synergy in
operations, sectoral specialisation, and your Company’s long-term strategy for sectoral investments, optimisation of market
share, profitability, legal requirements, liquidity, and capital resources of subsidiaries.

All related party transactions are entered into on an arm’s length basis, are in the ordinary course of business, and are intended
to further your Company’s interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the
Companies (Accounts) Rules, 2014 is given in Annexure B in Form No. AOC-2 and the same forms part of this report.

C. Board and its Committees

Board Meetings

The details pertaining to the composition, terms of reference, and other details of the Board of Directors of your Company and
the meetings thereof held during the Financial Year 2024-25 are given in the Report on Corporate Governance forming part
of this Annual Report.

Directors and Key Managerial Personnel

a. During the year under report, Mr. Sunil Sapre, Executive Director (DIN: 06475949) relinquished his office as the Chief Financial
Officer with effect from the closure of business hours of May 15, 2024.

b. Subsequently, the Board of Directors of your Company appointed Mr. Vinit Teredesai as the Chief Financial Officer of the
Company with effect from the closure of business hours of May 15, 2024.

c. Ms. Roshini Bakshi retired as an Independent Director of the Company w.e.f. the conclusion of the 34^th AGM held on July
16, 2024 pursuant to completion of two terms on 5 (five) consecutive years.

d. During the year under report, the Members of your Company, in the 34^th AGM held on July 16, 2024, confirmed the appointment
of Ms. Anjali Joshi, USA (DIN: 10661577) as an Independent Director of your Company, not liable to retire by rotation, to hold
office for the first term of 5 (Five) consecutive years, i.e. from June 12, 2024, to June 11, 2029.

e. Pursuant to the approval of the Members in the 34^th AGM held on July 16, 2024, Mr. Sunil Sapre, Executive Director, was
reappointed as an Executive Director for a term of 3 (Three) months from October 1, 2024, to December 31, 2024, given his
superannuation.

Thereafter, Mr. Sapre ceased to be an Executive Director of the Company w.e.f. the closure of business hours of December
31, 2024. The Board expressed its appreciation for his valuable contribution to the Company’s growth journey.

Retirement by Rotation

In terms of Section 152(6) of the Act and Article 137 of the Articles of Association of your Company, Mr. Sandeep Kalra,
Pennsylvania, USA (DIN: 02506494), Executive Director is liable to retire by rotation at the ensuing AGM as he is the
Non-Independent Director who is holding office for the longest period among the Non-Independent Directors on the
current Board.

Mr. Kalra has confirmed his eligibility and willingness to accept the office of Director of your Company if confirmed by the
Members at the ensuing AGM.

The Board at its meeting held on June 6, 2025, discussed the same and approved the proposal of the Nomination and
Remuneration Committee (‘NRC’) for the reappointment of Mr. Kalra. In the opinion of your Directors, Mr. Kalra has the
requisite qualifications and experience, and therefore, your Directors recommend that the proposed resolution relating to
the reappointment of Mr. Kalra in the 35^th AGM Notice, be passed with the requisite majority.

Appointment of Directors since last AGM

1. Proposed reappointment of Dr. Anand Deshpande as a Managing Director (Executive Member), liable to retire by
rotation, to hold office for a period of 5 (Five) years i.e., up to the conclusion of the 40^th AGM of the Company to be held
on or before September 30, 2030

In terms of Section 196 of the Act, the Nomination and Remuneration Committee (‘NRC’) of the Board of Directors of the
Company at its meeting held on June 6, 2025, recommended the reappointment of Dr. Anand Deshpande (DIN: 00005721) as
the Managing Director (Executive Member) of the Company for a period of 5 (Five) years i.e., from the conclusion of the
35^th AGM up to the conclusion of the 40^th AGM of the Company to be held on or before September 30, 2030.

The Board at its meeting held on June 6, 2025, discussed and approved the proposal of the NRC for the reappointment of
Dr. Deshpande is the Founder of your Company and as part of the promoter group, owns 29.25% of the shares of your Company
as of March 31, 2025. In addition, your Board considered his expertise in the Software Industry, large-scale global operations,
strategy and planning, and business acumen of Dr. Deshpande while recommending his appointment.

Further details regarding the appointment of Dr. Deshpande forms part of the 35^th AGM Notice.

2. Proposed reappointment of Mr. Sandeep Kalra as an Executive Director, liable to retire by rotation, to hold the office for
3 (Three) consecutive years i.e., from October 1, 2025, till September 30, 2028, subject to the approval of the Members
at the ensuing AGM and the Central Government of India.

The Nomination and Remuneration Committee (‘NRC’) of the Board of Directors of the Company at its meeting held
on June 6, 2025, recommended the reappointment of Mr. Sandeep Kalra (DIN: 02506494) as the Executive Director
of the Company i.e., from October 1, 2025, till September 30, 2028, subject to the approval of the Members at the
ensuing AGM and the Central Government of India.

The Board at its meeting held on June 6, 2025, discussed and approved the proposal of the NRC for the reappointment of Mr.
Kalra. Your Board considered expertise in the Software Industry, large-scale global operations, strategy and planning, and business
acumen of Mr. Kalra while recommending his appointment. Further details regarding the appointment of Mr. Kalra forms part of
the 35^th AGM Notice.

3. Proposed appointment of Mr. Vinit Teredesai as an Additional Director (Executive Member), liable to retire by rotation, to hold
office with effect from April 24, 2025, to September 30, 2028.

The Nomination and Remuneration Committee (‘NRC’) of the Board of Directors of the Company at its meeting held on
April 23, 2025 (PDT) / April 24, 2025 (IST) recommended the appointment of Mr. Vinit Teredesai (DIN: 03293917) as an
Additional Director (Executive Member) of the Company with effect from April 24, 2025, to September 30, 2028.

The Board at its meeting held on April 24, 2025, discussed and approved the proposal of the NRC for the appointment of
Mr. Teredesai. Your Board considered expertise in the Corporate Finance, Treasury, Financial Reporting, Taxation, Investor
Relations, Risk Management and Administration, and business acumen of Mr. Teredesai while recommending his appointment.
Further details regarding the appointment of Mr. Teredesai forms part of the 35^th AGM Notice.

In the opinion of your Directors, Dr. Deshpande, Mr. Kalra and Mr. Teredesai have the requisite qualifications and experience
and therefore, your Directors recommend that the proposed resolutions relating to the appointment / re-appointments be
passed with the requisite majority. The candidates’ profiles forms part of this Annual Report and have also been provided in
the 35^th AGM Notice.

As on the date of this report, your Company has 7 (Seven) Non-Executive Members on the Board who are Independent
Directors. Pursuant to Regulation 17(1)(b) of the Listing Regulations, every listed company where the Chairperson is an
Executive Director shall have at least half of its total strength of the Board of Directors as Independent Directors. Your
Company complies with this requirement.

There is no inter-se relationship between the Directors except the following:

• Dr. Anand Deshpande, Chairman and Managing Director, Prof. Ajit Ranade, Independent Director and Mr. Arvind Goel,
Independent Director, are Directors of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA).

In terms of the Listing Regulations, your Company conducts the Familiarisation Programme for Independent Directors about
their roles, rights, and responsibilities in your Company, the nature of the industry in which your Company operates, the
business model of your Company, etc., through various initiatives. The details of the same can be found at:
https://www.persistent. com/investors/familiarisation-programme/

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet
the criteria of independence as prescribed under Section 149(6) of the Act along with the Rules framed thereunder and
Regulation 16 of the Listing Regulations.

Further, they have included their names in the databank of Independent Directors maintained with the Indian Institute of
Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of
Directors) Rules, 2014.

During the Financial Year 2024-25, 2 (Two) separate meetings, exclusively of the Independent Directors, were held on April 21,
2024 and October 21, 2024, in which the Independent Directors transacted the following businesses along with a few other
important strategic and policy-related matters:

1. Reviewed performance of the Executive Directors and Management of the Company

2. Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of
the Company

3. Discussed the strategic matters of the Company and the current state of the global IT industry

4. Discussed the business continuity plan in the organisation

Committees of the Board

The details of the powers, functions, composition, and meetings of all the Committees of the Board held during the year under
report are given in the Report on Corporate Governance forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference, and other details of the Audit Committee of the Board of
Directors of your Company and the meetings thereof held during the Financial Year are given in the Report on Corporate
Governance forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were
considered positively by the Board of Directors of your Company from time to time during the year under Report.

Nomination and Remuneration Committee

The details including the composition and terms of reference of the Nomination and Remuneration Committee (NRC) and the
meetings thereof held during the Financial Year and the Remuneration Policy of your Company and other matters provided in
Section 178(3) of the Act are given in the Report on Corporate Governance section forming part of this Annual Report.

Policy for the appointment of a new director on the Board

The Board of Directors decide the criteria for the appointment of a new Director on the Board from time to time, depending
on the dates of retirement of existing Directors and the strategic needs of your Company. The criteria include expertise
area, industry experience, professional background, association with other companies, and similar important parameters. It
is important to have alignment and balance on the Board. Efforts are made to ensure that there is diversity on the Board.

By design, every member of the Board represents a critical function of the Company, and when considering new members,
efforts are made to ensure that the new member has demonstrated operating a business function at a significantly greater
scale than your Company.

Once the criteria are determined, the Board directs the NRC to compile profiles of suitable candidates through networking,
industry associations and business connections. The NRC considers each and every profile based on the decided parameters
and shortlists the candidates.

The NRC Chair interacts with four to six shortlisted candidates and recommends at most three candidates for other Members
of the NRC to interact with.

Efforts are made to ensure that the Board has adequate diversity across various parameters such as expertise, nationality and
gender in terms of The Board Diversity Policy. The Board has decided that for new appointments, female candidates must be
considered and will be included in the pool of potential candidates.

The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on the Company’s
website, at https://www.persistent.com/wp-content/uploads/2023/05/Board-Diversitv-Policv.pdf

Once the NRC is convinced about a candidate’s competency, his / her business acumen, commitment towards his/her
association with your Company, disclosure of his / her interest in other entities and his/her availability for your Company on
various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration.
Generally, the Board accepts the recommendation by consensus.

The Policy for appointment of a new Director is also available on your Company’s website at https://www.persistent.com/wp-
content/uploads/2022/05/_Policy-for-appointment-of-a-new-director.pdf

The general terms and conditions of appointment of Independent Directors is available on the Company website at

https://www.persistent.com/investors/corporate-governance/other-disclosures/terms-and-conditions-of-appointment-of-

independent-directors/

Performance Evaluation of the Board, its Committees and Directors

Your Company conducts the annual performance evaluation of the Board, the Chairman, its various Committees, and the
Directors individually, including the Independent Directors. The performance evaluation is done by an external management
consultant who specialises in Board evaluations. The performance of the Board is evaluated by seeking inputs from all
the directors and senior management. The evaluation criteria include aspects such as the Board composition, structure,
effectiveness of board processes, information, and functioning, etc.

This year, our fourteenth evaluation was conducted in March and April 2025, and the findings were presented at the
April 2025 meetings of the Nomination and Remuneration Committee and the Board of Directors.

The details of the evaluation form part of the Report on Corporate Governance.

Employees’ Remuneration

The percentage increase in remuneration, ratio of remuneration of each Director and Key Managerial Personnel (KMP) (as required
under the Act) to the median of employees’ remuneration, and the details required under Section 197(12) of the Act read with Rule
5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure C to the Report.

The statement containing particulars of all the employees employed throughout the year and in receipt of remuneration of
INR 1.02 Crore or more per annum and employees employed for part of the year and in receipt of remuneration of
INR 8.5 lakh or more per month, as required under Section 197(12) of the Act read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. However, pursuant to the
first provision to Section 136 (1) of the Act, this report is being sent to the Members, excluding the aforesaid information. Any
Member interested in obtaining the said information may write to the Company Secretary at the Registered Office of the
Company and the said information is open for inspection at the Registered Office of the Company.

Employee Stock Option Plan

Over the years, your Company has implemented 13 (Thirteen) ESOP Schemes. These Schemes are being implemented as per the SEBI
Share Based Employee Benefits and Sweat Equity Regulations, 2021 (‘SEBI SBEB Regulations’), and as of March 31, 2025, 2 (Two)
schemes viz. ‘Persistent Employee Stock Option Scheme 2014’ (‘PESOS 2014’) and ‘Persistent Systems Limited-Employee Stock Option
Plan 2017’ (‘ESOP 2017’) are active.

The Members of your Company in the 31^st AGM and 33^rd AGM approved amendments in the ‘Persistent Employee Stock
Option Scheme 2014’ (‘PESOS 2014’) and ‘Persistent Systems Limited-Employee Stock Option Plan 2017’ (‘ESOP 2017’) and
increased the kitty available for grant of Stock Options. Further, through Postal Ballot Notice dated February 6, 2024, the
results of which were announced on March 11, 2024, the Members approved an amendment in the PESOS 2014 to add a time
period to the existing maximum cap on the Stock Options that could be granted to an individual employee of the Company
under PESOS 2014. Further, the Members also approved increasing the kitty available for grants under the PESOS 2014
Scheme in the 34^th AGM.

During the Financial Year 2024-25, the Company granted 1,862,610 options under PESOS 2014, and 115,800 options under
ESOP 2017 to the eligible employees.

As required under the SEBI SBEB Regulations, the Secretarial Auditor’s certificate confirming that the implementation of
share-based schemes is in accordance with these regulations will be made available at the AGM.

The disclosure pursuant to the SEBI SBEB Regulations is available on the website of the Company at https://www.persistent.
com/wp-content/uploads/2025/06/esop-details-2025.pdf

Corporate Social Responsibility

Your Company is committed to making a difference in the community that we all belong to. Your Company considers society
and the environment as important stakeholders of the Company.

Your Company has engaged with various non-profit organisations and has voluntarily donated 1% of the Company’s profit
for social causes since 1996 and increased that to 2% of the profit since 2013, in accordance with Section 135 of the
Companies Act, 2013.

To institutionalise and to further your Company’s CSR commitment, your Company formed a Public Charitable Trust-
persistent Foundation’ in the Financial Year 2008-09 and a Section 8 Company, Persistent India Foundation, in the Financial
Year 2024-25 (together referred to as ‘Foundations’). When the CSR provisions were first introduced in the Companies Act,
2013, your Directors formally requested the Foundation’s help to fulfil the Company’s CSR obligations.

Your Company acknowledges the contribution made by the Foundation in coordinating and ensuring that the CSR donations
made by your Company are being effectively deployed as proposed and have an impact on society. Volunteering by
employees of the Company is an important part of the Foundation’s mission. Your Company believes that when employees
contribute to the community, it makes them feel good, which in turn helps in their productivity.

The Foundation has defined primary focus areas to include Health, Education, Community Development, Wildlife and
Heritage Conservation.

During the year under report, the Foundations continued to create excitement among employees to participate in socially
relevant causes. With the cooperation of your Company’s employees, the Foundations have set up several well-defined
programmes and activities for the promotion of Health, Education, Community Development, and Wildlife and Heritage
Conservation. These activities are carried out through projects undertaken by the Foundations with the support of the
employees and through the Government authorities, reputed social organisations, and institutions.

The total CSR contribution of INR 217,78 Million, which is greater than the 2% of the profits calculated as per the Act, was
spent on various CSR initiatives through the Foundation during the Financial Year 2024-25.

A detailed Report on CSR activities of your Company under the provisions of the Act during the Financial Year 2024-25 is
annexed hereto as Annexure D.

A detailed Report on the activities of the Foundation forms part of this Report.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted a CSR Committee to help your Company frame, monitor, and
execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for
effective discharge of your Company’s social responsibility.

The Board of Directors of your Company has further approved the CSR Policy of your Company to provide a guideline for the
Company’s CSR activities.

The CSR Policy can be viewed on your Company’s website at https://www.persistent.com/investors/csr-at-persistent/

Your Company’s CSR Policy highlights that the need for contributing to the society is extensive and your Company can make
a significant impact by staying focused on a few areas through its social initiatives. The constitution of the CSR Committee is
provided in the Report on Corporate Governance section, forming part of this Annual Report.

Stakeholders Relationship and ESG Committee

The Stakeholders Relationship Committee was constituted on October 4, 2007.

Your Company believes that in today’s day and age, the definition of stakeholders must be extended beyond what
is traditionally considered as stakeholders. Accordingly, your Company has decided to adopt a broader definition of
stakeholders to explicitly include society, customers, partners, our employees and their families, the Members, vendors and
even the environment.

Your Company also aims to provide more focused and detailed efforts towards Environment, Social, Governance (ESG)
implementation. Considering the same, the Board, at its meeting held in January 2022, decided to assign the Stakeholders
Relationship Committee the additional responsibility of overseeing the ESG monitoring-related work at the Company.
Accordingly, the name of the Committee was amended to ‘Stakeholders Relationship and ESG Committee’.

A separate section on ESG at Persistent can be accessed at https://www.persistent.com/company-overview/environmental-
social-and-governance/ and the ESG Report for FY 2024-25 can be accessed at update link to: https://www.persistent.com/
wp-content/uploads/2025/06/esg-sustainability-report-2025.pdf

D. Equity and Related Information

Institutional Holding

As on March 31, 2025, the total institutional holding in your Company stood at 51.21% of the total share capital.

Dividend for the Financial Year 2024-25

The details of the Dividend for the Financial Years 2024-25 and 2023-24 are as follows:

Financial Year 2024-25 Financial Year 2023-24

Type of Dividend	Interim	Final*	Interim	Final
Month of declaration / recommendation	Jan-25	Apr-25	Jan-24	Apr-24
Date of Payment	February 9, 2025	To be scheduled upon Members Approval, if any	February 7, 2024	July 16, 2024
Amount of Dividend (In INR)	20 Per Equity Share of INR 5 each	15* Per Equity Share of INR 5 each	12 Per Equity Share of INR 10 each	10 Per Equity Share of INR 5 each
% of Dividend	400%	300%	120%	200%
Total Dividend (In INR Million)	3,117.00	2,337.75	2,461.60	1,540.50
Total Dividend Outflow for the year (In INR Million)		5,454.75		4,002.10

* The payment of the Final Dividend of INR 15 per Equity Share of INR 5 each is subject to the approval of the Members during the
35^th AGM of your Company. If approved at the AGM, the Dividend will be paid out of the profits of your Company for FY 2024-25.

Out of the interim dividend declared in January 2025, INR 11.54 Million remained unclaimed as of March 31, 2025.

The total unpaid dividend as on March 31, 2025 for the last 7 (Seven) years is INR 20.08 Million which is 0.12% of the total
declared dividend over these 7 (Seven) years.

The increase in the amount of unpaid dividend is primarily due to KYC non-completion by Members, which has resulted
in keeping the dividends in abeyance by the Company. Your Company is taking due efforts to encourage all Members to
complete their KYC in accordance with various circulars issued by the Statutory Authorities. The Company also processed
unpaid dividends from the last 7 years on a voluntary basis in March 2025. This resulted in INR 0.8 Million being paid to past
and present Members.

Your Company has a Dividend Distribution Policy, which is available on the Company website at

https://www.persistent.com/wp-content/uploads/2016/09/Dividend-Distribution-Policy.pdf As per the policy, the dividend
payout ratio shall be maintained up to 40% of the Consolidated Profit After Tax. Dividend Payout Ratio for this year, subject to
members approving the dividend, is 39%.

Pursuant to the Finance Act, 2020 (the ‘Act’ for this section), dividend income is taxable in the hands of Members and the
Members are requested to refer to the Finance Act, 2020 and amendments thereof.

As per the Act, your Company is expected to deposit 10% of the dividend to the Income Tax Department as TDS on
your behalf. Your Company has appointed M/s. MUFG Intime India Private Limited (formerly known as Link Intime India
Private Limited) (‘MUFG Intime’) to manage the share and dividend management process. They have created a facility
for online submission of Tax Exemption forms where the Members can submit their tax-exemption forms along with other
required documents.

The requisite form for claiming tax exemption can be downloaded from MUFG Intime’s website. The URL for the same is
as under: https://web.in.mpms.mufg.com/client-downloads.html -> On this page, select the General tab. All the forms are
available under the head “Form 15G / 15H / 10F”.

The aforementioned forms (duly completed and signed) are required to be uploaded on the URL mentioned below:
https://web.in.mpms.mufa.com/formsrea/submission-of-form-15a-15h.html -> On this page, the user shall be prompted to
select / share the following information to register their request.

1. Select the company (Dropdown)

2. Folio / DP-Client ID

3. PAN

4. Financial year (Dropdown)

5. Form selection

a. Document attachment — 1 (PAN)

b. Document attachment — 2 (Forms)

c. Document attachment — 3 (Any other supporting document)

Please note that the documents (duly completed and signed) should be uploaded on the website of MUFG Intime in order to
enable the Company to determine and deduct appropriate TDS / Withholding Tax.

Incomplete and / or unsigned forms and declarations will not be considered by the Company.

The Members may note that in case the tax on said interim / final dividend is deducted at a higher rate in absence of receipt
of the aforementioned details / documents, the option is available to the Members to file the return of income as per the
Income Tax Act, 1961 and claim an appropriate refund, if eligible.

Transfer of Unclaimed Dividend and Corresponding Shares to the Investor Education and Protection Fund (IEPF) Authority

During the year under report, your Company has transferred unclaimed and unpaid dividend of INR 68,496 relating to the
Final Dividend 2016-17 and an amount of 147,504 relating to the Interim Dividend 2017-18 to the IEPF Authority. Further, 1,670
corresponding Equity Shares on which the dividend was unclaimed for seven consecutive years have been transferred as per
the requirement of the IEPF Rules during FY 2024-25.

The Company made all due efforts to contact the Members with unclaimed / unpaid dividends through emails and letters
dispatched to registered addresses to enable them to claim the dividends that were liable to be transferred to IEPF.

Members are requested to update their Bank Account details, e-mail ID, Mobile Number, and KYC details with their
Depository Participants to receive all future communications and dividends, if any, declared by the Company in
electronic form.

The details are provided in the shareholder information section of this Annual Report and are also available on the website:
https://www.persistent.com/investors/unclaimed-dividend/

The Board has appointed Mr. Amit Atre, Company Secretary, as the Nodal Officer to ensure compliance with the IEPF rules.
His coordinates form part of the Report on Corporate Governance in this Annual Report.

E. ESG

ESG Environmental, Social, and Governance (ESG) practices are essential for companies to operate sustainably and
responsibly in today’s corporate environment. Your Company demonstrates its commitment to ESG through structured
governance and continuous improvement of its initiatives, ensuring alignment with business goals and stakeholder interests.

• ESG Framework Overview: ESG framework includes Board oversight, management responsibility, and a dedicated ESG
council that collaborates across various functions to achieve ESG goals.

• Board of Directors Role: The Board drives long-term sustainability strategies, approves ESG initiatives, and oversees
associated risks to align with the company’s business objectives.

• Stakeholder Relationship and ESG Committee: This Board Committee plays a vital role in implementing ESG vision and
initiatives, meeting biannually to address ESG goals and climate-related risks.

• Leadership Commitment: The Chief Operating Officer (COO) and Head of ESG are responsible for implementing ESG
policy, setting targets, and allocating resources for sustainability initiatives. The ESG Head collaborates with executive
leadership to integrate ESG principles into the organization’s strategy, operations, and culture.

• Compliance and Risk Management: The Chief Risk Officer (CRO) identifies ESG risks, ensuring they are integrated into the
overall Enterprise Risk Management (ERM) framework.

Our ESG Vision

Since 2022, Persistent supports the Ten Principles of the United Nations Global Compact (UNGC) on human rights, labour,
environment and anti-corruption. Your Company is committed to making the UNGC principles part of the Company’s
strategy, culture and day-to-day operations. The ESG framework adopted by your Company includes the following:

• Environmental Sustainability: Use technology solutions to reduce greenhouse gas emissions

• Diversity and Inclusion: Build an inclusive workplace and nurture diverse talent

• Social Responsibility: Commitment to positively impact society

• Corporate Governance: Good governance practices for responsible business and stakeholder value creation.

Environmental Sustainability: Addressing climate change and environmental sustainability is important, and your Company
believes in working with all stakeholders in this journey. Your Company is firmly dedicated to lowering and minimising the
environmental impact of our internal operations.

The focus is on four aspects:

• Reducing Greenhouse Gas (GHG) emissions and using energy from Renewable sources

• Improving the efficiency of energy, as well as water use and recycling

• Waste management that is sustainable and reduces waste to landfills

• Protecting biodiversity

Climate Action Goals: Your Company has taken short and long-term targets to reduce GHG emissions by aligning to the
Sustainable Development Goals (SDG) as follows:

• Achieve Carbon Neutrality for Scope 1 and Scope 2 every year

• To source 100% of electricity from renewable energy for all owned facilities by FY 2026

• Achieve Net-zero greenhouse gas emissions across the value chain by 2050

Through the adoption of clean technology solutions across the operations, your Company demonstrates a strong dedication
to reducing our environmental footprint and fostering a positive impact. By aligning the business strategies with sustainability
initiatives, the focus remains on shaping a brighter future for upcoming generations. Your Company has set targets and
has made commitments regarding water conservation, building resilience towards climate change, energy efficiency, and
emissions reduction, and we are proud to report significant progress towards these goals.

Your Company believes that conservation of energy is essential and as a responsible corporate citizen, your Company must
encourage all employees, vendors and other stakeholders to act on ensuring reduced usage of energy on a perpetual basis.

Your Company has deployed various energy saving devices and systems, which help in conserving energy and has resulted
in significant savings in energy costs. Your Company has made capital investments amounting to INR 74.32 Million during the
Financial Year 2024-25 to deploy energy saving devices.

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act, read with Rule 8 of the
Companies (Accounts) Rules, 2014.

Your Company has a dedicated team across India under the ESG and EHS function. The group implements projects to
continually enhance energy efficiency in our existing buildings, such as new technology retrofits, bringing in more efficient
equipment, etc. On an annual basis, the project proposals are reviewed by the management, and thereafter, a dedicated
budget is allotted for these projects. The learnings from these are utilised for efficient building architecture in new projects,
thereby resulting in the lowest Energy Performance Index (EPIs).

Key Initiatives Undertaken for Energy Conservation and Technology Absorption

Your Company is committed to its efforts to conserve energy and absorb technology in its daily operations. The particulars as
prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014
are provided in Annexure E which forms part of this report.

F. Other Disclosures

Corporate Governance

A separate Report on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations
and any other applicable law for the time being in force, forms an integral part of this Report.

A Compliance Certificate from the Practising Company Secretary regarding the compliance with the conditions of Corporate
Governance as stipulated in the Listing Regulations forms an integral part of this Annual Report.

Management Discussion and Analysis

The Report on Management Discussion and Analysis as stipulated under the Listing Regulations and other applicable laws
in force based on audited Consolidated Financial Statements for the Financial Year 2024-25 forms an integral part of this
Annual Report.

Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report (BRSR) and the Reasonable Assurance Report, as stipulated under
the Listing Regulations and other applicable laws in force, describing the initiatives taken by the Management from an
environmental, social, and governance perspective, forms an integral part of this Annual Report and is available at
https://www.persistent.com/wp-content/uploads/2025/06/business-responsibilitv-and-sustainabilitv-report-2025.pdf

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the
Financial Year 2024-25 forms an integral part of this Annual Report.

Vigil Mechanism (Whistleblower Policy)

The details of the vigil mechanism (whistleblower policy) are given in the Report on Corporate Governance forming part of
this Annual Report. Your Company has shared the policy on the website at Whistle Blower Policy I Persistent Systems

Whistleblower Helpline

Your Company encourages employees and others to raise concerns to the whistleblower helpline if they have any reason to
believe that any employee, or any other stakeholder may have engaged in inappropriate behaviour, misconduct that includes
violations or potential violations of law, regulation, rule, or breaches of your Company’s policy, standards, procedure, or the
Code of Conduct for Directors and Employees.

Your Company has established a 24/7 toll-free number in India and the Rest of the World to make it easy to report their
concerns. The callers can record their complaints, which are received directly by the Whistleblower Administrator, who is the
Chairperson of the Audit Committee. This is an automated system that safeguards the caller’s identity, and anonymity
is maintained.

Your Company prohibits retaliatory actions against anyone who raises concerns or questions in good faith or who participates
in a subsequent investigation of such concerns.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Harassment Policy that is consistent with the requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the ‘Act’ for this section). All employees (permanent, contractual,
temporary and trainees) as well as the external parties who work with the Company for the official purposes are covered
under this policy.

Your Company has gone beyond the letter of the law and made this policy applicable to all employees, and not just female
employees, as stated in the law. Your Company follows this practice as part of equal employment opportunity, including
gender equality.

Your Company has constituted the Internal Complaints Committees (IC) across all Company locations in India and abroad
to consider and resolve all sexual harassment complaints reported to this Committee. The constitution of the IC is as per the
Act, and the Committee includes an external member with relevant experience at Indian locations. The Ethics Committee
at the global locations acts in the capacity of the Internal Complaints Committee where the local laws do not enforce the
constitution of such a Committee.

During the year under report, your Company received 4 (Four) complaints of sexual harassment under the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, as of March 31, 2025, there is 1 (One)
pending complaint of sexual harassment in your Company.

Disclosure under the Maternity Benefit Act, 1961

Your Company is compliant with the statutory provisions of the Maternity Benefit Act, 1961.

Secretarial Standards

The Institute of Company Secretaries of India (ICSI) issues Secretarial Standards. Your Company complies with Secretarial
Standards and guidelines issued by the ICSI to the extent applicable to the Company.

Other Certifications

The details about the other ISO and Partnership certifications for technical processes and systems are provided the Corporate
Governance Report and form an integral part of this report.

Information Security

Your Company maintains a mature Information Security Management System with Policies, Processes and Controls to minimise
Cyber Security Risks. The governance and management of security compliance and risk is reviewed periodically. Persistent
development centres are certified under ISO 27001, ISO 27017, ISO 27018, ISO 27701, ISO 22301, and SOC 2 Type II.

Your Company is focused on cyber resilience and provides all the necessary budgets needed to build robust cyber resilience.
Your Company’s Global IT and Information Security team has taken a holistic and comprehensive approach to address the
need to secure the employees’ laptops, the corporate network, and confidential data against inadvertent and malicious
attacks, including the customer-specific security requirements. Your Company’s cloud-first strategy is enabled by cloud
security measures spanning access management, cloud data security, ensuring privacy in the cloud, safeguarding cloud
workloads, effective monitoring and incident management of the cloud aligned to business-relevant outcomes.

Specific steps include allocation of secure laptops to every employee, installation of disk encryption, next-generation antivirus
solution, enhanced data leakage prevention solutions, implementation of Multi Factor Authentication, Secure and governed
internet access, and Zero Trust Model to ensure cyber resiliency. The emailing solution is equipped with advanced anti¬
phishing functionality, ensuring a secure communication channel through email.

Your Company has implemented a robust disaster recovery process with a well-articulated cyber resilience playbook.

The periodic Disaster Recovery drills ensure the availability of the critical services and the ability to recover business
operations as per the defined process. Your Company has a steadfast focus on spreading information security awareness
through mandatory information security awareness trainings as part of the joining process. This is followed by a periodic
refresher session and using enterprise-wide communication and collaboration platforms to keep users updated on evolving
cybersecurity risks. The training effectiveness is validated through periodic phishing simulations.

Your Company believes that security is an ongoing activity. As the Company evolves and expands its business, all stakeholders
can rest assured that the Company will continue to improve its security posture to ensure continuous compliance.

Subsidiary Companies, Associate Companies and Joint Ventures

During the year under Report, your Company restructured group entities as follows:

1. The Business Transfer Agreement has been executed for the transfer of the business of the UK Branch of the Company to
Persistent Systems UK Limited effective from April 1, 2024.

2. Persistent India Foundation was incorporated under Section 8 of the Companies Act, 2013 effective from May 1, 2024, as
a Wholly Owned Subsidiary (‘WOS’) of the Company.

3. Software Company International, LLC, USA (Step Down Subsidiary) has been dissolved effective from June 27, 2024.

4. The Hon’ble National Company Law Tribunal, Mumbai (‘NCLT’) has sanctioned the merger of M/s. Capiot Software
Private Limited (the Wholly Owned Subsidiary Transferor Company) into Persistent Systems Limited (the Holding
Company Transferee Company) through absorption, as per its Order dated April 9, 2025. The Company received the
Order on April 11, 2025. Further, the Company filed the Certified True Copy of the said order dated April 21, 2025, with the
Registrar of Companies, Pune (RoC) on May 13, 2025, for updating their records. The financial impact of this merger will
be reflected in the Company’s financial statements for the period following its submission to the RoC.

5. The Board of Directors of the Company at its meeting concluded on April 24, 2025 (IST), approved the proposal of

merger of M/s. Arrka Infosec Private Limited (WOS) into Persistent Systems Limited (the ‘Holding Company’), subject to
the receipt of necessary approvals in accordance with the provisions of the Companies Act, 2013.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of
the Company’s subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial
statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available
on the Company’s website at https://www.persistent.com/investors/

The Policy for determining material subsidiaries of your Company is available on your Company’s website at https://www.
persistent.com/investors/policv-on-material-subsidiarv/ According to the said Policy, Persistent Systems Inc., USA is the
material subsidiary of your Company.

Mergers and Acquisitions (M&A)

Persistent Systems Limited has a focused M&A program that is aimed at:

1. Acquiring differentiated technology capabilities in cloud, data and security.

2. Strengthening our domain expertise in Banking, Financial Services and Insurance (BFSI) and Healthcare and Lifesciences
(HLS) industry verticals and / or;

3. Expanding the Company’s customer base in Europe and delivery presence in Eastern Europe.

During the year ended March 31, 2025, your Company entered into definitive agreements to acquire:

a. Starfish Associates, LLC (‘Starfish’), a US-headquartered company that provides an automation platform to facilitate
seamless connection across a myriad of business applications and communication systems. The acquisition builds on the
Company’s existing engineering capabilities in the Unified Communications and Contact Centre, expanding its strong AI-
driven business transformation capabilities and expertise in driving operational excellence. The acquisition of Starfish was
completed on August 1, 2024.

b. Arrka Infosec Private Limited (‘Arrka’), a Pune-based company renowned for its data privacy expertise, a Data Privacy
Management platform and growing expertise in AI governance. This acquisition significantly advances the Company’s
AI-led, platform-driven services approach and strengthens its ability to provide comprehensive offerings in digital
governance, including data privacy, AI governance, and cybersecurity, among others. With Arrka’s expertise, your
Company will help clients accelerate their transformation journeys while ensuring ethical, responsible, and compliant AI.
The acquisition of Arrka was completed on October 28, 2024.

c. SoHo Dragon group of companies (‘SoHo’), a group with full-service Software Application Development Company
specializing in front office operations, corporate applications, hyper scaler technologies, data warehousing, and business
intelligence with entities in US, Lithuania & India. The acquisition of the select assets will help in consolidating the
relationship with a strategic and large customer of your Company in the BFSI domain. The acquisition of select assets from
SoHo Dragon Inc. was completed on November 16, 2024, the acquisition of select assets from Soho Dragon LT, UAB was
completed on March 13, 2025 and the acquisition of select assets from Soho Dragon Solutions India Private Limited was
completed on April 22, 2025.

Infrastructure

Your Company has adopted the hybrid working model. During the FY 2024-25, the total built-up capacity owned by your
Company in India and abroad was 135,980 m2 which is adequate for 11,000 employees. In addition, your Company hires
1,79,715 m² of space across various locations in India and 11,899 m² space outside India.

The details of owned facilities of your Company are as follows:

Location	Year of Acquisition/Completion	Total Built-up Area (m2)	Total Seating Capacity (Nos)
Pune
1. Bhageerath	2002	11,331	568
2. Aryabhata-Pingala	2007	33,300	2,615
3. Veda Complex, Hinjawadi	2012	45,825	3,246
4. Ramanujan, Hinjawadi	2023	14,021	1,150
5. Kapilvastu	1994	202	25

Location	Year of Acquisition/Completion	Total Built-up Area (m2)	Total Seating Capacity (Nos)
6. Panini	1998	926	100
Goa
Charak and Bhaskar	1997 and 2017, respectively	7,042	724
Nagpur
1. IT Tower	2003	3,707	265
2. Gargi and Maitreyi	2011	19,825	1,187
Grenoble, France	2000	929	50
Total		137,108	9,930

1. Along with your Company owned premises, your Company also operates from leased and managed facilities in Australia,
Canada, Costa Rica, France, Germany, India, Malaysia, Mexico, Poland, Sri Lanka, Switzerland, UK and USA in an area of
58,923 m2 adequate for 12,000 employees.

2. Your Company also owns two land parcels in Mihan SEZ, Nagpur and Hinjawadi.

Annual Return

In accordance with the Act, the annual return in the prescribed format (MGT-7) for the FY 2024-25 is available at
https://www.persistent.com/wp-content/uploads/2025/06/persistent-annual-report-2025.pdf

Other Matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions
on these items during the year under report:

1. Dr. Anand Deshpande, Chairman and Managing Director and Mr. Sunil Sapre, Executive Director (up to December 31,
2024) of your Company did not receive any remuneration or commission from any of the subsidiaries.

2. Mr. Sandeep Kalra, Executive Director and Chief Executive Officer received remuneration from Persistent Systems Inc.,
USA in addition to remuneration received from your Company. The total remuneration is disclosed in the Report on
Corporate Governance forming part of this report.

3. No significant or material orders were passed by the Regulators, Courts, or Tribunals impacting your Company’s going
concern status and operations in the future.

4. There are no applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at the
end of FY 2024-25, nor has the Company done any one-time settlement with any Bank or Financial Institution in India
or abroad.

Awards and Recognitions during the Financial Year 2024-25

Your Company received several prestigious awards and recognitions in various categories, such as
(1) Technology, (2) Corporate, and (3) People. Brief details of these awards are available on your Company’s website at
Awards and Recognitions I Persistent Systems Highlights of these are also available in the ‘Corporate Information’ section of
this Annual Report.

Directors’ Responsibility Statement

Your Directors state that:

1. In preparation for the annual accounts, the applicable Accounting Standards have been followed, and there is no material departure;

2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as of March 31,
2025, and of the profit of your Company for that year;

3. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities, if any;

4. The annual accounts have been prepared on a going concern basis;

5. Your Directors had laid down internal financial controls to be followed by your Company and that such internal financial
controls are adequate and were operating effectively;

6. Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems are adequate and operating effectively.

Future Outlook

Looking ahead at the new year, ongoing macroeconomic challenges are creating uncertainties that are impacting virtually
all enterprises in various vertical industries, especially those that rely on global supply chains and services. Nonetheless, your
Company enters FY26 and the 35^th year with confidence and optimism that the market-leading brand, unprecedented growth
trajectory, and unyielding commitment to client success will allow your Company to weather these challenges and maintain
its uniquely differentiated positioning as the AI ecosystem orchestrator of choice.

Your Company’s Re(AI)magining the World mission will be key to its ongoing success and future growth as your Company
continues to deliver AI, product engineering, and platform-based services to new and existing clients in verticals and
specialised sub-verticals. With AI investments anchoring our strategy, your Company remains focused on growth, financial
discipline, and customer-centricity to power its journey towards its stated aspiration of reaching $2 Billion in annualised
revenue in the next few years. As market and macroeconomic dynamics evolve, your Company will maintain a high level of
agility with a culture of operational efficiency and budgetary controls that engender strategic investments for new initiatives.

Global financial pressures are leading many companies to fundamentally rethink their business models, go-to-market
strategies, and capital expenditures. Companies also continue to display a strong willingness to invest in technology,
especially AI technologies and platforms, to unlock new growth opportunities, enable transformation, and drive value.

The market continues to be inundated with new AI providers and offerings, resulting in a more competitive market. This AI
proliferation is causing enterprises to stretch decision-making cycles, focus on risk mitigation, and demand value-based
outcomes for their AI investments. In addition, they are also reluctant to engage with providers with little or unproven
experience with AI as they look to guarantee short- and long-term investment returns.

Your Company is well-positioned to capitalise in this environment, given its 35-year heritage, its proven data, cloud, and AI
expertise, and its unmatched reputation as a trusted provider that delivers tangible IT and business results. Your Company’s
proprietary platform, SASVA, is revolutionising how clients think about AI-powered software development and how to enable
AI agents for streamlined workflows. iAURA, the data management platform, allows enterprises to leverage AI to optimise
data models and accelerate decision-making. GenAI Hub allows companies to accelerate the creation of AI experiences at
scale. Your Company’s offerings are continuously enhanced by its partnerships with all the major hyperscalers and innovative
start-ups, with whom your Company jointly develops new AI-enabled solutions. Your Company is confident that its approach
strongly positions itself as an innovative AI partner for clients looking for a provider with a proven track record of driving
growth and value.

As your Company advances along with its growth trajectory, it remains firmly committed to equipping its global workforce
of more than 24,500 professionals with the skills and opportunities required to remain at the forefront of technological
innovation, enhancing the value your Company delivers to its clients. Your Company also continues to foster a diverse and
inclusive organisational culture that prioritises personal development, continuous learning, and a deep sense of social and
environmental responsibility. These commitments are integral to sustaining your Company’s long-term competitiveness and
driving stakeholder value.

As your Company concludes this chapter of its journey and prepare to navigate the opportunities and challenges that lie
ahead, your Company reffirms its steadfast commitment to its core values and to the pursuit of operational and strategic
excellence. Guided by a unified vision and an enduring focus on AI innovation, your Company is confident in its ability to
generate sustainable growth and deliver enduring value to its clients, partners, and stakeholders worldwide.

Acknowledgments and Appreciation

Your Board records the support and wise counsel received from the Government of India, particularly the Ministry of
Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce
and Industry, the Reserve Bank of India, and the Securities and Exchange Board of India throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa,
Mumbai, Ahmedabad, Indore, Bengaluru, Noida, Gurugram, Hyderabad, Jaipur, Chennai, Kolkata, Kochi, Visakhapatnam,
Special Economic Zone - Telangana, SEEPZ Special Economic Zone - Mumbai, Cochin Special Economic Zone, Central Tax

and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of
Foreign Trade, Ministry of Industries, Government of Maharashtra, Director of Industries, Inspector General of Registration,
Maharashtra Pollution Control Board, Goa Pollution Control Board, Central Pollution Control Board, Department of Shops
and Establishments, Department of Telecommunication, Ministry of Commerce and Industries, Ministry Of Electronics
and Information Technology, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of
Companies, Maharashtra, Pune, Goods and Service Tax Department, Infotech Corporation of Goa Limited, Goa Industrial
Development Corporation, Madhya Pradesh State Electronics Development Corporation Ltd., National Stock Exchange
of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Local
Municipal Corporations and Gram Panchayats where Company operates, Maharashtra State Electricity Distribution Company
Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation,
Maharashtra Industrial Development Corporation, Karnataka Industrial Development Corporation, BSNL and Internet
Service Providers, District Administration and State Police departments, Export Promotion Councils, Maharashtra Airport
Development Corporation Limited, and Development Commissioner, MIHAN (SEZ).

Your Board also extends its sincere thanks to M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors; M/s.
Joshi Apte & Co., Chartered Accountants, Tax Auditors; M/s. SVD & Associates, Company Secretaries, Secretarial Auditors,
Trustees of Persistent Foundation and Directors of Persistent India Foundation, a wing of Ernst & Young LLP, providers of
Compliance Manager Tool and WyattPrism, ESG Consultants for their services to your Company.

Your Board also extends its thanks to Axis Bank, Banco Nacional - Costa Rica, Banco Nacionalde Mexico S. A., Bank of Baroda,
Bank of India, Bank of Tokyo-Mitsubishi, Barclays Bank, BNP Paribas, Canara Bank, Citibank NA, Deutsche Bank, First National
Bank, HDFC Bank, Hongkong, and Shanghai Banking Corporation, Silicon Valley Bank, Union Bank of India, Wells Fargo Bank,
Zurcher Kantonal Bank, DBS Bank, State Bank of India, ICICI Bank Limited, Saraswat Co-operative Bank, Kotak Mahindra Bank,
OCBC Bank, PNC Bank and their officials for extending excellent support in all banking-related activities.

Your Board records its deep appreciation for the committed services of your Company’s employees and partners at all levels.

Your Board thanks Members for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels
of your Company. Their hard work, solidarity, cooperation, and support made consistent growth possible.

For and on behalf of the Board of Directors

Anand Deshpande, Ph.D.

Chairman and Managing Director

Pune, June 6, 2025 DIN: 00005721

---

Mar 31, 2024

Note: All the numbers of Equity Shares mentioned in this Report are pre-Sub-Division of the Equity Shares of the Company i.e., before the Record Date (April 1, 2024), unless stated otherwise.

Your Directors are pleased to present the Thirty-Fourth Annual Report of your Company along with the Audited Financial Statements for the Financial Year ended March 31, 2024.

Business Update

FY24 was yet another transformative year for Persistent with over $1 billion in annual revenue. We have showcased unparalleled resilience and innovation in this year globally. This has propelled us to the forefront of technology advancements and client-driven solutions. Your Board extends its heartfelt thanks to the clients, partners, employees, and shareholders for their continued trust and confidence in our journey to create significant value and achieve shared success.

Despite facing some of the most challenging market conditions in recent history, we have made remarkable strides in our growth journey. This year, we achieved $1.186 billion in revenue with 14.5% year-on-year growth, marking 16 sequential quarters of growth. This performance significantly outpaces other major service providers globally and positions us strongly in our chosen markets. This year, we announced a total dividend of ?52 per share compared to ?50 per share in FY23. This dividend amount per share does not take into account the stock split which came into effect on April 1, 2024. Additionally, our inclusion in the MSCI India Index, S&P BSE 100, and S&P BSE SENSEX Next 50 underscores our growing prominence in the capital markets.

Our global team, spanning across 20 countries, has expanded to over 23,800 employees, enhancing our capacity to support our clients’ needs to stay competitive and grow, even in volatile and uncertain markets. This expansion is complemented by fortified leadership, strengthened operations, and enhanced budgetary discipline, enabling us to respond adeptly to dynamic industry and macroeconomic challenges.

Despite these achievements, we remain keenly aware of the need to continuously innovate and differentiate ourselves in the market on an ongoing basis. As challenging conditions persist, our clients rely on our industry expertise and robust product solutions to optimise operations, unlock value, and drive growth.

This year, we solidified our position as a leading AI provider of choice, launching a comprehensive range of AI and GenAI solutions designed to accelerate software development, create unique customer experiences, and boost organisational productivity. An illustrative list of frameworks and platforms that we launched are:

\ ExtenSURE.AI: Our GenAI-powered end-to-end framework that reimagines modern product engineering.

\ SASVA™: An AI-powered platform that revolutionises the software engineering lifecycle through automation and optimisation.

\ Persistent iAURA: A suite of data solutions leveraging AI and machine learning to enable data-driven decision-making for enterprises.

Our storied heritage across Product engineering and Custom Software Development complemented by our deep data, analytics, and cloud capabilities have been brought to bear in developing these innovative AI solutions and frameworks.

We are actively engaging with clients on AI proof-of-concepts (PoCs) and pilots across various industry verticals. Based on the success of these PoCs, many clients are in discussions with us to scale these trials to production.

In parallel, we expanded our partnerships with leading hyperscalers, like Amazon Web Services (AWS), to accelerate GenAI innovation and achieved Premier Tier Partner status within the AWS Partner Network. Our many strategic collaborations extend to enhancing our Salesforce capabilities, launching new initiatives with Microsoft through the VIVA platform and strengthening our Google Cloud partnership with new GenAI solutions. To be able to provide AI talent at scale, we’ve embarked on extensive internal AI training delivered through our very own Persistent University for over 16,000 employees, further boosting our capability to innovate and deliver to our customers’ most complex technology challenges.

Our commitment to innovation and excellence has been recognised by industry analysts and thought leaders. This year, we were named as a Challenger in the Gartner Magic Quadrant for Public Cloud Transformation Services and named as a GenAI Leader by HFS Research. Additionally, Persistent was honoured as the “Most Promising Company of the Year”

at CNBC-TV18’s India Business Leader Awards (IBLA), recognising our consistent ability to deliver sustained impact for global clients. Our Founder and Chairman, Dr. Anand Deshpande received “EY Entrepreneur of the year 2023” award for his visionary leadership. Our CEO and Executive Director, Mr. Sandeep Kalra was honoured with the “Best CEO award in IT and ITES Category” by Business Today for his commitment to excellence, prowess to envision industry trends and passion for innovation. We also received multiple accolades from ISG for overall excellence and Everest Group for our leadership in next-gen IT services talent.

Furthermore, Persistent was acknowledged for its continued leadership in Environmental, Social, and Governance (ESG) activities and was named as one of India’s leading listed ESG entities 2024 by Dun & Bradstreet. We are happy on the progress we are making towards achieving carbon neutrality for Scope 1 and Scope 2 emissions, and 100% renewable energy sourcing for our owned facilities in India, by the middle of FY25.

With a resilient business model and a vision geared towards the future, Persistent remains dedicated to delivering operational efficiency, financial discipline, and sustainable growth. As we navigate through challenging economic and market conditions, we are well-poised to leverage our global strengths to continue creating value for all stakeholders.

A. Financial Section

Financial Results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2024, are as under:

Â	(Amount in USD Million except EPS and Book Value)		(Amount in ? Million except EPS, Book Value and Market Value per share)		% Change (based on amounts in ?)
Particulars	2023-24	2022-23	2023-24	2022-23
Revenue from Operations	1,185.99	1,037.88	98,215.87	83,505.92	17.62%
Earnings before interest, depreciation, amortisation and taxes	202.35	185.12	16,756.86	14,894.70	12.50%
Finance Cost*	5.64	5.88	467.27	473.40	-1.29%
Depreciation and amortisation	37.36	33.79	3,093.73	2,718.95	13.78%
Other incomes	15.46	8.78	1,280.20	706.17	81.29%
Tax expenses	42.76	39.74	3,541.15	3,197.59	10.74%
Net profit	132.04	114.48	10,934.91	9,210.93	18.72%
Transfer to general reserve	47.54	38.51	3,965.23	3,164.51	25.30%
Net worth#	593.69	481.78	49,513.46	39,588.11	25.07%
Earnings per share (EPS) (Basic)@	0.87	0.77	72.44	61.87	17.08%
Earnings per share (EPS) (Diluted)@	0.86	0.75	71.07	60.26	17.94%
Book value per equity share	3.85	3.15	321.41	259.00	24.10%
Market value per equity share as on March 31	Â	Â	Â	Â
BSE Limited	-	-	3,989.25	4,609.20	73.10%
National Stock Exchange of India Limited	-	-	3,984.55	4,609.50	72.88%

[Conversion Rate USD 1 = INR 82.81 for Profit and Loss items; USD 1 = INR 83.40 for Balance Sheet items (Financial Year 2023-24) and USD 1 = INR 80.46 for Profit and Loss items; USD 1 = INR 82.17 for Balance Sheet items (Financial Year 2022-23).]

@ The Equity Shares of the Company have been Sub-Divided in a 1:2 ratio and the impact of the Sub-Division has been given to EPS.

*    Includes notional interest on lease liability FY24: INR 180.02 Million (FY23: INR 137.86 Million) recognised in accordance with Ind AS -116 on Leases and notional interest on amounts due to selling shareholders INR 51.05 Million (Previous year: INR 112.76 Million).

#    Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase) and other comprehensive income are considered for the purpose of computing Net Worth and Book Value per share.

The highlights of the financial performance on a standalone basis for the year ended March 31, 2024, are as under:

Â	(Amount in USD Million except EPS and Book Value)		(Amount in ? Million except EPS and Book Value)		% Change (based on amounts in ?)
Particulars	2023-24	2022-23	2023-24	2022-23
Revenue from Operations	786.62	636.05	65,142.17	51,175.53	27.29%
Earnings before interest, depreciation, amortisation and taxes	160.77	139.70	13,313.91	11,239.85	18.45%
Finance Cost*	2.05	1.63	169.84	130.97	29.68%
Depreciation and amortisation	19.61	16.72	1,623.64	1,344.87	20.73%
Other income	19.86	9.18	1,644.86	738.71	122.67%
Tax expenses	39.95	32.21	3,308.64	2,591.44	27.68%
Net profit	119.02	98.33	9,856.65	7,911.28	24.59%
Transfer to general reserve	47.54	38.51	3,965.23	3,164.51	25.30%
Net worth#	572.98	479.69	47,786.51	39,416.50	21.23%
Earnings per share (EPS) (Basic)@	0.77	0.65	64.06	51.76	23.76%
Earnings per share (EPS) (Diluted)@	0.77	0.65	64.06	51.76	23.76%
Book value per equity share	3.72	3.14	310.20	257.88	20.29%

[Conversion Rate USD 1 = INR 82.81 for Profit and Loss items; USD 1 = INR 83.40 for Balance Sheet items (Financial Year 2023-24) and USD 1 = INR 80.46 for Profit and Loss items; USD 1 = INR 82.17 for Balance Sheet items (Financial Year 2022-23).]

@ The Equity Shares of the Company have been Sub-Divided in a 1:2 ratio and the impact of the Sub-Division has been given to EPS.

*    Includes notional interest on lease liability FY22: INR 147.50 Million (FY 23: INR 119.73 Million) recognised in accordance with Ind AS - 116 on Leases and notional interest.

#    Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase), and other comprehensive income are considered for the purpose of computing Net Worth and Book Value per share.

Material Events Occurring after Balance Sheet Date

a. The Board of Directors of your Company, at its meeting held on Saturday, January 20, 2024, approved a proposal for

Sub-Division / Split of every 1 (One) Equity Share of INR 10/- (INR Ten Only) each into 2 (Two) Equity Shares of INR 5/- (INR Five Only) each and the consequent amendment to the Memorandum of Association of the Company subject to the approval of Members of the Company.

The Members approved the resolution with special majority on March 11, 2024. The Scrutinisers appointed for conducting the Postal Ballot process in a fair and transparent manner issued a Scrutiniser’s Report on March 11, 2024, confirming that the SubDivision / Split was approved by 99.86% of the Members. On March 13, 2024, the Board of Directors of your Company, fixed the Record Date for the Sub-Division / Split as April 1, 2024 and the Face Value of the Equity Shares of your Company changed from INR 10/- (INR Ten Only) to INR 5/- (INR Five Only) w.e.f. April 1, 2024. The necessary effect to adjust the number of Equity Shares in the Demat Accounts of the Members was also completed on April 2, 2024.

The capital structure of the Company pre and post the Sub-Division is as follows:

Particulars	Pre-Split	Post-Split	Pre-Split	Post-Split
Type of Share Capital	Authorised Equity Share Capital		Issued, Subscribed and
Â	Â	Â	Paid-up Equity Share Capital
No. of Equity Shares	200,000,000	400,000,000	77,025,000	154,050,000
Face Value (in INR)	10	5	10	5
Total Share Capital (in INR)	2,000,000,000	2,000,000,000	770,250,000	770,250,000

b. The Board of Directors of your Company at its meeting held on Wednesday, March 13, 2024, approved the formation of a Wholly Owned Subsidiary Company under Section 8 of the Companies Act, 2013 (the ‘Act’). Accordingly, a Section 8 Company by the name of ‘Persistent India Foundation’ was incorporated on May 1, 2024.

c. Mr. Sunil Sapre, Executive Director and Chief Financial Officer, through his letter dated May 15, 2024, informed the Board of Directors of your Company that in view of his upcoming superannuation and per the CFO Succession Plan of the Company, he wishes to relinquish the position of Chief Financial Officer (‘CFO’) effective from the closure of business hours on May 15,

2024 (1ST). He further confirmed that there were no material reasons for his relinquishment as the CFO other than the reason mentioned above. The Board expressed its appreciation for his valuable contribution to the Company’s growth journey.

Mr. Sapre further confirmed that he will continue to act as an Executive Director of the Company, in his letter and the Board took note of the same in its meeting held on May 15, 2024.

In light of Mr. Sapre’s relinquishment of the CFO office, the Board of Directors of your Company, in their meeting held on May 15, 2024, appointed Mr. Vinit Teredesai as the Chief Financial Officer and Key Managerial Person in terms of Section 203 of the Companies Act, 2013. Mr. Teredesai is a seasoned finance professional with over 28 years of experience in finance, accounting, auditing, taxation, fund raising, risk management, mergers and acquisitions, and corporate restructuring.

Mr. Teredesai is a qualified Chartered Accountant, Cost and Management Accountant, and a Certified Public Accountant in the United States. He has also completed a General Management programme from the Sloan School of Management at the Massachusetts Institute of Technology (MIT) focusing on strategy, innovation, and technology.

There were no other material changes and commitments affecting the financial position of your Company between the end of the Financial Year 2023-24 and the date of this report.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013 (the ‘Act’), your Company has provided the Consolidated Financial Statements as of March 31, 2024. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. The financial statements are available for inspection during business hours at the Registered Office of your Company and the offices of the respective subsidiary companies. A statement showing the financial highlights of the subsidiary companies is enclosed to the Consolidated Financial Statements.

The Annual Report of your Company does not contain full financial statements of the subsidiary companies; however, your Company will make available the audited annual accounts and related information of the subsidiary companies electronically in line with the Ministry of Corporate Affairs’ (MCA) Circular dated May 5, 2020, and its extensions from time to time upon written request by any Member of your Company.

Consolidated Financial Statements

Consolidated financial statements of your Company and its subsidiaries as of March 31, 2024, are prepared in accordance with the Indian Accounting Standard (Ind AS) - 110 on ‘Consolidated Financial Statements’ notified by the MCA and forms part of this Annual Report.

Changes in the capital structure of your Company during the year

a.    The Stakeholders Relationship and ESG Committee has inter-alia approved the allotment of 500,000 (Five Hundred Thousand only) Equity Shares of INR 10 each at the allotment price of INR 2,789 per Equity Share to PSPL ESOP Management Trust on April 6, 2023.

b.    The Stakeholders Relationship and ESG Committee has inter-alia approved the allotment of 100,000 (One Hundred Thousand Only) Equity Shares of INR 10 each at the allotment price of INR 2,133 per Equity Share to PSPL ESOP Management Trust on February 1, 2024.

c.    The Board of Directors of your Company, at its meeting held on Saturday, January 20, 2024, approved a proposal for Sub-Division / Split of 1 (One) Equity Share of INR 10/- (INR Ten Only) each into 2 (Two) Equity Shares of INR 5/- (INR Five Only) each and the consequent amendment to the Memorandum of Association of the Company which was approved by the Members of the Company through Postal Ballot on March 11, 2024.

Statutory Auditors

The Members of your Company at the 30^th Annual General Meeting (AGM) held on July 24, 2020, appointed M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) as the Statutory Auditors of your Company to hold such office for a period of 5 (Five) years i.e., up to the conclusion of the 35^th AGM to be held in the calendar year 2025 on or before September 30, 2025.

Further, in terms of Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’), M/s. Walker Chandiok & Co. LLP, Statutory Auditors of your Company have confirmed that they hold a valid certificate issued by the ‘Peer Review Board’ of Institute of Chartered Accountants of India (ICAI) and have provided a copy of the said certificate to your Company for reference and records.

The Auditors’ Report for the FY 2023-24 does not contain any qualification, reservation, or adverse remark, however, contains a remark as follows:

As stated in Note 53 of the accompanying standalone financial statements and based on our examination, which included

test checks, except for the instance mentioned below, the Company, in respect of financial year commencing on

April 1,2023, has used an accounting software for maintaining its books of account which has a feature of recording audit

trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded

in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being

tampered with, other than the consequential impact of the exception given below:

Nature of exception noted:

Instances of accounting software maintained by a third party where we are unable to comment on the audit trail feature. Details of Exception:

The accounting software (Oracle Fusion ERP) used for maintenance of books of accounts of the Company is operated by a third-party software service provider. In the absence of any information on existence of audit trail (edit logs) for any direct changes made at the database level in the ‘Independent Service Auditor’s Assurance Report on the Description of Controls, their Design and Operating Effectiveness’ (‘Type 2 report’ issued in accordance with ISAE 3402, Assurance Reports on Controls at a Service Organisation), we are unable to comment on whether audit trail feature with respect to the database of the said software was enabled and operated throughout the year.

The comments of the Board on the remark mentioned by the Statutory Auditors in the Audit Report are as follows:

“The Ministry of Corporate Affairs (MCA) has issued a notification (Companies (Accounts) Amendment Rules, 2021) which is effective from April 1,2023, states that every company which uses accounting software for maintaining its books of account shall use only the accounting software where there is a feature of recording audit trail of each and every transaction, and further creating an edit log of each change made to books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Group uses a SaaS based ERP as a primary accounting software for maintaining books of account, which has a feature of recording audit trail edit logs facility and that has been operative throughout the financial year for the transactions recorded in the software impacting books of account at application level.

The database of the accounting software is operated by a third-party software service provider. The ‘Independent Service Auditor’s Assurance Report on the Description of Controls, their Design and Operating Effectiveness’ (‘Type 2 report’ issued in accordance with ISAE 3402, Assurance Reports on Controls at a Service Organisation) includes suitability of the design and operating effectiveness of controls. However, the availability of audit trail (edit logs) is not covered in the said report.

In our view, the group’s ERP being a SaaS based software, the audit trail at the database level is not applicable.”

The Audit Report forms part of the financial statements which are a part of this Annual Report.

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. SVD and Associates, Practicing Company Secretaries, Pune as the Secretarial Auditors of your Company for the Financial Year 2023-24.

Accordingly, the Secretarial Auditors have given the report, which is annexed hereto as Annexure A. There are no qualifications / observations in the Secretarial Audit Report for FY 2023-24.

Reporting of Frauds by the Auditors

During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against your Company by its officers or employees, the details of which would need to be mentioned in the Board’s report or directly to the Central Government under intimation to your Company.

Adequacy of the Internal Financial Controls

Your Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

Your Board has laid down policies and processes with respect to internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company’s policies, safeguarding of the assets of your Company, prevention, and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Internal Audit

The details of the internal audit team and its functions are given in the Management Discussion and Analysis Report forming part of this Annual Report.

Disclosure about the Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by your Company.

Particulars of Loans and Guarantees Given and Investments Made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report (Refer notes 5, 6, 10, 14, 17, and 33 of the Standalone Financial Statements).

Transfer to Reserves

As per the policy of your Company on transfer of surplus profit to reserves, an amount of INR 3,942.66 Million has been transferred to the General Reserve and an amount of INR 1,696.69 Million will be retained in the Statement of Profit and Loss after payment of dividend. The balance in the Profit and Loss Account as of March 31, 2024, is INR 17,272.67 Million, and in the General Reserves is INR 25,854.48 Million.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Act read with the relevant Rules, your Company has not accepted any fixed deposits during the year under report.

Liquidity

Your Company maintains adequate liquidity to meet the necessary strategic and growth objectives.

Your Company aims to balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As of March 31, 2024, your Company, on a standalone basis, had cash and cash equivalents (including investments) amounting to INR 14,300.66 Million as against INR 11,352.08 Million as of March 31, 2023.

The details of cash and cash equivalents (including investments) are as follows:		(In T Million) Year ended on March 31
Particulars	2024	2023
Investment in Mutual Funds at fair value	4,801.50	2,814.11
Fixed Deposits with scheduled banks	3,244.72	4,215.93
Bonds (quoted)	2,995.61	3,085.59
Cash and Bank balances	3,258.83	1,236.45
Total	14,300.66	11,352.08
The particulars of expenditure on Research and Development on an accrual basis are as follows:		(In T Million) Year ended on March 31
Particulars	2024	2023
Capital expenditure	-	-
Revenue expenditure	269.48	140.63
Total research and development expenditure	269.48	140.63
As a percentage of total income	0.40%	0.27%
The particulars of foreign exchange earnings and outgo, based on actual inflows and outflows are		as follows: (In T Million) Year ended on March 31
Particulars	2024	2023
Earnings	48,403.78	34,921.08
Outgo	8,548.03	4,749.56

Update on Fixed Deposits with IL&FS

Your Company has deposits of INR 430 Million with Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as “IL&FS Group”) as on the balance sheet date. These were due for maturity between January 2019 and June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, the Management of your Company has fully provided for these deposits, along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag and continues to monitor developments in the matter.

Related Party Transactions

The Policy to determine the materiality of related party transactions and dealing with related party transactions, as approved by the Board of Directors, is available on your Company’s website at https://www.persistent.com/investors/corporate-governance/related-partv-transactions-policv/

During the year under report, your Company did not enter into any material transaction with any party who is related to it as per the Act. There were certain transactions entered into by your Company with its subsidiaries and other parties who are related within the meaning of the Indian Accounting Standard Ind AS - 24. The attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 33 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirms that none of the transactions with any of the related parties were in conflict with your Company’s interests. The list of Related Party Transactions entered into by your Company for the Financial Year 2023-24 (on a consolidated basis) is available on https://www.persistent.com/investors/corporate-governance/related-party-transactions-policy/

The related party transactions are entered into based on considerations of various business requirements, such as synergy in operations, sectoral specialisation, and your Company’s long-term strategy for sectoral investments, optimisation of market share, profitability, legal requirements, liquidity, and capital resources of subsidiaries.

All related party transactions are entered into on an arm’s length basis, are in the ordinary course of business, and are intended to further your Company’s interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Annexure B in Form No. AOC-2 and the same forms part of this report.

B. Board and its Committees

Board Meetings

The details pertaining to the composition, terms of reference, and other details of the Board of Directors of your Company and the meetings thereof held during the Financial Year 2023-24 are given in the Report on Corporate Governance forming part of this Annual Report.

Directors and Key Managerial Personnel

During the year under report, the Members of your Company in the 33^rd AGM confirmed the appointment of Prof. Ajit Ranade (DIN: 00918651) as an Independent Director of your Company, not liable to retire by rotation, to hold office for the first term of 5 (Five) consecutive years i.e. from June 6, 2023, to June 5, 2028.

Retirement of Prof. Deepak Phatak, Independent Director

On April 2, 2023, Prof. Deepak Phatak (DIN: 00046205), upon reaching the age of 75 years, decided to step down from the position of Independent Director of your Company. This is in accordance with your Company’s internal norms with respect to the age of Independent Directors. He had confirmed that there were no material reasons for his resignation.

The Board thanked Prof. Phatak for his contribution and wished him the best for his future endeavors.

Retirement by Rotation

In terms of Section 152(6) of the Act and Article 137 of the Articles of Association of your Company, Mr. Sunil Sapre

(DIN: 06475949), Executive Director is liable to retire by rotation at the ensuing AGM as he is the Non-Independent Director

who is holding office for the longest period among the Non-Independent Directors on the current Board.

Mr. Sapre has confirmed his eligibility and willingness to accept the office of Director of your Company if confirmed by the Members at the ensuing AGM. In the opinion of your Directors, Mr. Sapre has the requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the reappointment of Mr. Sapre till September 30, 2024, be passed with the requisite majority.

Appointment of Directors since last AGM

1\ Proposed appointment of Ms. Anjali Joshi as an Additional Director (Independent Member), not liable to retire by rotation, to hold office with effect from June 10, 2024, till June 9, 2029

The Nomination and Remuneration Committee (‘NRC’) of the Board of Directors of the Company at its meeting held on June 7, 2024 recommended the appointment of Ms. Anjali Joshi (DIN: 10661577) as an Additional Director (Independent Member) of the Company.

The Board at its meeting held on June 7, 2024, discussed the same and in-principal agreed to the proposal of the NRC for the appointment of Ms. Joshi, subject to the completion of certain necessary statutory requirements by Ms. Joshi. Your Board considered expertise in the Software Industry, large-scale global operations, strategy and planning, and business acumen of Ms. Joshi while recommending her appointment. She has since obtained a valid registration of the Independent Directors Databank.

The Board will consider and approve her appointment as an Additional Director (Independent Member) through a circular resolution once the Statutory Requirements are completed by Ms. Joshi. Further details will form part of the 34^th AGM notice.

2\ Proposed re-appointment of Mr. Praveen Kadle (DIN: 00016814) as an Independent Director of the Company, not liable to retire by rotation, to hold office for 5 (Five) consecutive years i.e. for a term up to April 22, 2025

The Nomination and Remuneration Committee (the ‘NRC’) of the Board of Directors at its meeting held on June 7, 2024, recommended the re-appointment of Mr. Praveen Kadle, Independent Director (DIN: 00016814) who will retire from the Board on April 22, 2025, for a second term of 5 (Five) years. The NRC evaluated the balance of skills, knowledge, and experience on the Board and recommended that Mr. Praveen Kadle shall be reappointed as an Independent Director for a further term of 5 (Five) years form April 23, 2025, till April 22, 2030, at the ensuing AGM in order to ensure a seamless continuation and stability on the Board.

In the opinion of the NRC, Mr. Kadle has requisite qualifications and experience. The Board will consider and approve his re-appointment through a circular resolution . Further details will form part of the 34^th AGM notice.

3\ Re-appointment of Mr. Sunil Sapre, Pune, India (DIN: 06475949) as an Executive Director of the Company liable to retire by rotation, to hold the office with effect from October 1, 2024, till December 31,2024.

Pursuant to the recommendation from the Nomination and Remuneration Committee, your Board recommends the re-appointment of Mr. Sunil Sapre as an Executive Director with effect from October 1, 2024, till December 31, 2024, i.e., till the date of Mr. Sapre’s superannuation, subject to the approval of the Members at the ensuing AGM. Your Board considered his expertise, wide industry experience and financial acumen for recommending his appointment. Pursuant to the provisions of the Act, he is liable to retire by rotation. Mr. Sapre has confirmed his eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing AGM.

In the opinion of your Directors, Mr. Sapre has requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the re-appointment of Mr. Sapre be passed with the requisite majority. Mr. Sapre’s profile forms part of this Annual Report and has also been provided in the 34^th AGM notice.

As on the date of this report, your Company has 7 (Seven) Non-Executive Members on the Board who are Independent Directors. Pursuant to Regulation 17(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’), every listed company where the Chairperson is an Executive Director shall have at least half of its total strength of the Board of Directors as Independent Directors. Your Company complies with this requirement.

There is no inter se relationship between the Directors except the following:

1\ Prof. Ranade, Independent Director of the Company, Director of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) where Dr. Anand Deshpande (Chairman and Managing Director of the Company) is the Vice President and Director, and Mr. Arvind Goel (Independent Director of the Company) is the Director.

2\ Dr. Deshpande is the Nominee of the Chancellor on the Board of Management of Gokhale Institute of Politics and Economics, where Dr. Ranade is a Vice-Chancellor.

In terms of the Listing Regulations, your Company conducts the Familiarisation Programme for Independent Directors about their roles, rights, and responsibilities in your Company, the nature of the industry in which your Company operates, business model of your Company, etc., through various initiatives. The details of the same can be found at: https://www.persistent.com/investors/familiarisation-programme/

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149(6) of the Act along with the Rules framed thereunder and Regulation 16 of the Listing Regulations.

Further, they have included their names in the databank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

During the Financial Year 2023-24, a separate meeting, exclusively of the Independent Directors was held on July 20, 2023, in which the Independent Directors transacted the following businesses along with a few other important strategic and policy-related matters:

1\ Reviewed performance of the Executive Directors and Management of the Company

2\ Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of the Company

3\ Discussed the strategic matters of the Company and current state of the global IT industry 4\ Discussed the business continuity plan in the organisation

Committees of the Board

The details of the powers, functions, composition, and meetings of all the Committees of the Board held during the year under report are given in the Report on Corporate Governance forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference, and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the Financial Year are given in the Report on Corporate Governance forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were considered positively by the Board of Directors of your Company from time to time during the year under Report.

Nomination and Remuneration Committee

The details including the composition and terms of reference of the Nomination and Remuneration Committee and the meetings thereof held during the Financial Year and the Remuneration Policy of your Company and other matters provided in Section 178(3) of the Act are given in the Report on Corporate Governance section forming part of this Annual Report.

The policy for the appointment of a new director on the Board is as follows:

The Board of Directors decide the criteria for the appointment of a new director on the Board from time to time depending on the dates of retirement of existing Directors and the strategic needs of your Company. The criteria include expertise area, industry experience, professional background, association with other companies, and similar important parameters.

Once the criteria are determined, the Board directs the Nomination and Remuneration Committee to compile profiles of suitable candidates through networking, industry associations and business connections. The Nomination and Remuneration Committee considers each and every profile on the decided parameters and shortlists the candidates.

Members of the Nomination and Remuneration Committee interact with at least two and at the most four potential candidates.

Efforts are made to ensure that the Board has adequate diversity across various parameters such as nationality and gender in terms of The Board Diversity Policy. The Board has decided that for every position of the Board, female candidates will also be considered.

The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on our website, at https://www.persistent.com/wp-content/uploads/2023/05/Board-Diversitv-Policv.pdf

Once the Committee is convinced about a candidate’s competency, his/her business acumen, commitment towards his/her association with your Company, disclosure of his/her interest in other entities and his/her availability for your Company on various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration. Generally, the Board accepts the recommendation by consensus.

The said Policy is also available on your Company’s website at https://www.persistent.com/wp-content/uploads/2022/05/ Policy-for-appointment-of-a-new-director.pdf

The general terms and conditions of appointment of Independent Directors is available on the Company website at

https://www.persistent.com/investors/corporate-governance/other-disclosures/terms-and-conditions-of-appointment-of-

independent-directors/

Performance Evaluation of the Board, its Committees and Directors

Your Company conducts the annual performance evaluation of the Board, the Chairman, its various Committees, and the Directors individually including the Independent Directors. The performance evaluation is done by an external management consultant who specialises in the Board evaluations. The performance of the Board is evaluated by seeking inputs from all the directors and senior management. The evaluation criteria include aspects such as the Board composition, structure, effectiveness of board processes, information, and functioning, etc.

This year, the evaluation was conducted in March and April 2024 and the findings of the evaluation were presented at the meetings of the Nomination and Remuneration Committee and the Board of Directors held in April 2024.

The details of the evaluation form part of the Report on Corporate Governance.

Employees’ Remuneration

The percentage increase in remuneration, ratio of remuneration of each Director and Key Managerial Personnel (KMP) (as required under the Act) to the median of employees’ remuneration, and the details required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure C to the Report.

The statement containing particulars of all the employees employed throughout the year and in receipt of remuneration of INR 1.02 Crore or more per annum and employees employed for part of the year and in receipt of remuneration of INR 8.5 lakh or more per month, as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. However, pursuant to first proviso to Section 136 (1) of the Act, this report is being sent to the Members excluding the aforesaid information. Any Member interested in obtaining the said information may write to the Company Secretary at the Registered Office of the Company and the said information is open for inspection at the Registered Office of the Company.

Employee Stock Option Plan

Your Company has 13 (Thirteen) ESOP Schemes as of March 31, 2024. These Schemes are being implemented as per the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘SEBI SBEB Regulations’), and as of March 31, 2024, 2 (Two) schemes viz. Persistent Employee Stock Option Scheme 2014 and Persistent Systems Limited — Employee Stock Option Plan 2017 are active.

The Members of your Company in the 31^st AGM and 33^rd AGM approved amendments in the ‘Persistent Employee Stock Option Scheme 2014’ (PESOS 2014) and ‘Persistent Systems Limited — Employee Stock Option Plan 2017’ (ESOP 2017) and increased the kitty available for grant of Stock Options. Further, through Postal Ballot Notice dated February 6, 2024, of which the results were announced on March 11, 2024, the Members approved an amendment in the PESOS 2014 to add a time period to the existing maximum cap on the Stock Options that could be granted to an individual employee of the Company under PESOS 2014.

In the Financial Year 2023-24, 343,200 options were granted under PESOS 2014, and 1,865,325 options were granted under ESOP 2017.

As required under the SEBI SBEB Regulations, the Secretarial Auditor’s certificate on the implementation of share-based schemes in accordance with these regulations will be made available at the AGM.

The disclosure pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://www.persistent.com/wp-content/uploads/2023/06/esop-details-2024.pdf

Corporate Social Responsibility

Your Company is committed to making a difference to the community that we are all part of. Your Company treats the society and the environment among the stakeholders of your Company.

Your Company has engaged with various non-profit organisations and has voluntarily donated 1% profit of the Company for social causes since 1996 and 2% of the profit since 2013, in accordance with Section 135 of the Companies Act, 2013.

To institutionalise and to further your Company’s CSR commitment, your Company formed a Public Charitable Trust — ‘Persistent Foundation’ in the Financial Year 2008-09. When the CSR provisions were first introduced in the Companies Act 2013, your Directors decided to formally request Persistent Foundation’s help to fulfil the Company’s CSR obligations.

Persistent Foundation (the ‘Foundation’) is celebrating its fifteenth year of establishment this year. During these 15 years, the Foundation has contributed to many projects spread across different geographies in association with well-known NGOs to reach out to large number of beneficiaries.

Your Company acknowledges the contribution made by the Foundation in coordinating and ensuring that the CSR donations made by your Company are being effectively deployed as proposed and have an impact on society. Volunteering by employees of the Company is an important part of the Foundation’s mission. Your Company believes that when employees contribute to the community it makes them feel good which in turn helps in their productivity.

Persistent Foundation’s main focus areas include Health, Education, Community Development and Wildlife and Heritage Conservation.

During the year under report, the Foundation was able to continue to create excitement among employees to participate in socially relevant causes. With the cooperation of the employees of your Company, the Foundation has set up several well-defined programmes and activities for the promotion of education, health, community development, and Wildlife and Heritage Conservation. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through the Government authorities, reputed social organisations, and institutions.

The total CSR contribution of INR 175.45 Million, which was 2% of the profits calculated as per the Act, was spent on various CSR initiatives through the Foundation during the Financial Year 2023-24.

A detailed Report on CSR activities of your Company under the provisions of the Act during the Financial Year 2023-24 is annexed hereto as Annexure D.

A detailed Report on the activities of the Foundation forms part of this Report.

Your Company is pleased to inform you that in addition to the above-mentioned Public Charitable Trust, your Company has incorporated a Wholly Owned Subsidiary Company under Section 8 of the Act by the name of ‘Persistent India Foundation’ on May 1, 2024, to carry out the CSR activities of the Persistent Group. Your Company believes that moving the CSR activities to a Section 8 Company will help with ease of compliance and streamlining activities.

Persistent India Foundation will work on the same focus areas as that of the Foundation.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted a CSR Committee to help your Company frame, monitor, and execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for effective discharge of your Company’s social responsibility.

The Board of Directors of your Company has further approved the CSR Policy of your Company to provide a guideline for the Company’s CSR activities.

The CSR Policy is uploaded on your Company’s website at https://www.persistent.com/investors/csr-at-persistent/

Your Company’s CSR Policy highlights that the need for contributing to the society is extensive and your Company can make a significant impact by staying focused on a few areas through its social initiatives.

The constitution of the CSR Committee is provided in the Report on Corporate Governance section forming part of this Annual Report.

Stakeholders Relationship and ESG Committee

The Stakeholders Relationship Committee was constituted on October 4, 2007.

Your Company believes that in today’s day and age, the definition of the stakeholders must be extended beyond what is traditionally considered as stakeholders. Accordingly, your Company has decided to adopt a broader definition of stakeholders to explicitly include society, customers, partners, our employees, the shareholders, vendors and even the environment.

Your Company also aims to provide more focused and detailed efforts toward ESG implementation. Considering the same, the Board, at its meeting held in January 2022, decided to assign the Stakeholders Relationship Committee the additional responsibility of overseeing the ESG monitoring-related work at the company. Accordingly, the name of the Committee was amended to ‘Stakeholders Relationship and ESG Committee’.

A separate section on ESG at Persistent can be accessed at Environmental, Social and Governance Report I Persistent Systems and the ESG Report for FY 2023-24 can be accessed at https://www.persistent.com/wp-content/ uploads/2024/06/esg-sustainability-report-2024.pdf

C. Equity and Related Information

Listing with the Stock Exchanges

The Equity Shares of your Company are listed on BSE Limited (BSE) (Scrip Code: 533179) and the National Stock Exchange of India Limited (NSE) (Symbol: PERSISTENT) since April 6, 2010. Listing fees for the Financial Year 2023-24 have been paid to both BSE and NSE.

The ISIN of your Company has changed to INE262H01021 upon the Sub-Division of the Equity Shares of the Company w.e.f. March 28, 2024, and the Equity Shares with Face Value of INR 5/- per share can be viewed under the new ISIN.

Institutional Holding

As on March 31, 2024, the total institutional holding in your Company stood at 50.84% of the total share capital.

Dividend for the Financial Year 2023-24

The details of the Dividend for the Financial Year 2023-24 and 2022-23 are as follows:

Type of Dividend	Financial Year 2023-24			Financial Year 2022-23
	Interim	Final1	Interim	Final	Special
Month of declaration/recommendation	Jan-24	Apr-24	Jan-23	Apr-23	Apr-23
Date of Payment	February 7,	To be decided	February 6,	July 24,	July 24,
Â	2024	upon	2023	2023	2023
Â	Â	Shareholders	Â	Â	Â
Â	Â	Approval	Â	Â	Â
Amount of Dividend (In T)	32 Per Equity	101 Per Equity	28 Per Equity	12 Per Equity	10 Per Equity
Â	Share of	Share of	Share of	Share of INR	Share of INR
Â	INR 10 each	INR 5 each	INR 10 each	10 each	10 each
% of Dividend	320%	200%	280%	120%	100%
Total Dividend (In T Million)	2,461.60	1,540.50	2,139.90	923.10	769.25
Total Dividend Outflow for the year (In ? Million)	4,002.10		Â	3,832.25	Â
Payout Ratio	Â	Â	36.60%	Â	41.61%

The aforementioned forms (duly completed and signed) are required to be uploaded on the URL mentioned below: https://liiplweb.linkintime.co.in/formsreg/submission-of-form-15g-15h.html -¥ On this page, the user shall be prompted to select / share the following information to register their request.

1\ Select the company (Dropdown)

2\ Folio/DP-Client ID 3\ PAN

4\ Financial year (Dropdown)

5\ Form selection

a.    Document attachment — 1 (PAN)

b.    Document attachment — 2 (Forms)

c.    Document attachment — 3 (Any other supporting document)

Please note that the documents (duly completed and signed) should be uploaded on the website of Link Intime in order to enable the Company to determine and deduct appropriate TDS/Withholding Tax.

Incomplete and/or unsigned forms and declarations will not be considered by the Company.

The Members may note that in case the tax on said interim/final dividend is deducted at a higher rate in absence of receipt of the aforementioned details/documents, the option is available to the Members to file the return of income as per the Income Tax Act, 1961 and claim an appropriate refund, if eligible.

Transfer of Unclaimed Dividend and Corresponding Shares to the IEPF Authority

During the year under report, your Company has transferred the unclaimed and unpaid dividend of INR 271,449 to the IEPF Authority. Further, 1,315 (2,630 post-split) corresponding shares on which the dividend was unclaimed for seven consecutive years have been transferred as per the requirement of the IEPF Rules.

Further, your Company also gave the necessary effect of the Sub-Division / Split on the Equity Shares which have been transferred to IEPF on April 10, 2024.

The details are provided in the shareholder information section of this Annual Report and are also available on the website: https://www.persistent.com/investors/unclaimed-dividend/

The Board has appointed Mr. Amit Atre, Company Secretary, as the Nodal Officer to ensure compliance with the IEPF rules. His coordinates form part of the Corporate Governance Report in this Annual Report.

D. ESG

Your Company’s commitment to ESG outlines your company-wide approach to integrating Environmental, Social, and Governance (ESG) considerations into the business activities. Your Compay is dedicated to working with the people, clients, partners, and communities to build a more equitable, sustainable, and healthier world through the application of technology and engineering.

Our ESG Vision

Since 2022, Persistent supports the Ten Principles of the United Nations Global Compact (UNGC) on human rights, labour, environment and anti-corruption. We express our commitment to making the UNGC principles part of the strategy, culture and day-to-day operations of our company. Our ESG framework includes the following:

Environmental Sustainability: Use technology solutions to reduce greenhouse gas emissions.

Diversity and Inclusion: Build an inclusive workplace and nurture diverse talent.

Social Responsibility: Commitment to positively impact society.

Corporate Governance: Good governance practices for responsible business and stakeholder value creation.

Environmental Sustainability: We and our stakeholders face both challenges and opportunities from climate change and environmental sustainability. We are firmly dedicated to lowering and minimising the environmental impact of our internal operations.

Our focus will be on four aspects:

\ Reducing Greenhouse Gas (GHG) emissions and using energy from Renewable sources \ Improving the efficiency of water use and recycling \ Waste management that is sustainable and reduces waste to landfill \ Protecting biodiversity

We will achieve this through the following:

\ Setting clear and ambitious goals that are based on sound scientific principles

\ Establishing strong governance through alignment of our business strategies with sustainability agenda \ Using best-in class solutions and technologies available to reduce GHG emissions from own and value chain operations \ Reducing the consumption of fossil-fuel based energy by transitioning to renewable & green energy

Priorities and Targets:

Your Company has taken short and long-term targets to reduce GHG emissions by aligning to Sustainable Development Goals (SDG) which are as follows:

\ Achieve Carbon Neutrality for Scope 1 and Scope 2 by FY 2026 \    100% electricity sourced from renewable energy by FY 2026

\ Reduce 30% emissions (Scope 3) from our global operations by FY 2028

\ Net-zero GHG emissions by FY 2050 will be achieved by:-Science based targets (SBTi) commitment

-    Sourcing 100% renewable energy

-    Using technology solutions

-    Carbon offsetting

Through the adoption of clean technology solutions across our operations, your Compay demonstrates a strong dedication to reducing our environmental footprint and fostering a positive impact. By aligning the business strategies with sustainability initiatives, the focus remains on shaping a brighter future for upcoming generations. Your Company sets targets and made commitments regarding water conservation, building resilience towards climate change, energy efficiency, and emissions reduction, and we are proud to report significant progress towards their achievement.

Your Company has published its ESG/Sustainability Report for the FY 2023-24 and the same is available on your Company’s website at https://www.persistent.com/wp-content/uploads/2024/06/esg-sustainability-report-2024.pdf The same is also available at your Company’s ESG webpage at: https://www.persistent.com/company-overview/environmental-social-and-governance/

Some of the activities carried out by your Company are reiterated below:

Your Company believes that conservation of energy is essential and as a responsible corporate citizen, your Company must encourage all employees, vendors and other stakeholders to act on ensuring reduced usage of energy on a perpetual basis.

Your Company has deployed various energy saving devices and systems, which help in conserving energy and has resulted in significant savings in energy costs. Your Company has made capital investments amounting to INR 54.12 Million during the Financial Year 2023-24.

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

Your Company has a dedicated team across India under the ESG and EHS function. The group implements projects to continually enhance energy efficiency in our existing buildings, such as new technology retrofits, bringing in more efficient equipment etc. On an annual basis, the project proposals are reviewed by the management and thereafter, a dedicated budget is allotted for these projects. The learnings from these are utilised for efficient design of the building architecture in new projects, thereby resulting in some of the lowest energy intensities (EPIs) in the industry.

Your Company is working on various initiatives to reduce the footprint as follows:

Green Building Initiatives

\ Your Company uses 100% eco-certified furniture. All the furniture including sofas, chairs, tables, etc. are BIFMA certified all upcoming projects.

\ Two buildings, “Bhageerath” and “Ramanujan” facilities from Pune, are IGBC Platinum-certified buildings.

\ Our two buildings from Pune viz. “Bhageerath” has a BEE 2 Star & “Aryabhatta-Pingala” has a BEE 3 Star rating.

\ Optimum usage of daylight: 55% of the total regularly occupied areas achieve natural daylight of 300 lux or more.

\ Your Company strives to procure materials locally within a radial distance of 500km. This helps to reduce the transportation distance and effective fuel consumption resulting in minimising the overall Carbon emission.

\ Low VOC Emitting Materials: Use of low VOC Paints and adhesives, CRI Green Label plus certified carpets, and green plywood which is Green Pro certified.

\ Double wall brickwork construction reduces AC Load.

\ Use of crushed sand instead of river sand.

\ Use of fly ash bricks instead of clay bricks.

\ Use of double Glass Unit with low ‘E’ glass for windows and facades.

\ Double glass partition for meeting rooms.

\ Material Acoustic Performance: As recommended, we have installed acoustic ceiling materials, double glass partitions for meeting rooms, CRI green label plus certified partitions, cavity system with glass wool insulation for the partitions.

Green Initiative

Enhancing Corporate Wellness through Indoor Plants

In today’s world, where corporate offices are increasingly adopting sustainable practices, your Company takes pride in its commitment to environmental responsibility and employee well-being. As part of our ongoing green initiative, we have transformed our offices into a thriving oasis of nature by incorporating over 15,000 indoor plants. This visionary project not only aligns with our sustainability goals but also fosters a healthier and more productive workplace.

Energy Efficiency Initiatives:

Energy efficiency initiatives are the initiatives to reduce energy requirements without impacting the performance of operations, eliminate energy waste, and use high energy efficiency technology equipment. Energy efficiency brings a variety of benefits: reducing greenhouse gas emissions, reducing demand for energy imports, and lowering our costs.

HVAC Retrofit

\ Replaced existing ACs based on R-22 with energy efficient inverter-based ACs with environment-friendly R-32 gas, resulting in a 15% reduction in electricity consumption

\ Replaced duct able AC units with energy-efficient inverter-based ACs, resulting in a 12% reduction in electricity consumption

\ Upgraded the chiller system with high-efficiency chiller systems at Bhageerath, Pune facility, reducing energy and water consumption. resulting in ~30 % reduction in electricity consumption

\ Replaced old chiller system with high-efficiency VRV System at the Charak-Bhaskar facilities in Goa (lesser energy and water consumption) resulting in energy saving of ~20 % in HVAC consumption

\ Controlled Ozone System: Integrated with air conditioning for energy saving & indoor air quality improvement resulting in energy saving of ~21 % in AHU power consumption

\ Cold aisle containment in the Data centre: Resulted in a saving of ~18% in HVAC Power consumption of the Data centre

Lighting Efficiency

\ Transitioned from CFLs to LED lamps - Replaced CFLs by LED lamps: 5,365 No’s of CFLs by LED lamps - indoor, outdoor & all common areas such as parking, lobbies, toilets etc. in our facilities i in the last FY, resulted in an energ saving of ~40 % in lighting power consumptions

\ Proactively controlled smart lighting and AC with sensors and timers / sequential timers / occupancy / motion sensors

Operational Efficiency

\ Energy-saving measures are taken right from the design stage, like double wall construction, low-e glass for facades and windows with double-glazed glass i.e., DGUs, maximum use of natural light and ventilation, underdeck insulation, etc.

\ Use of ASVG, AHF, and Automatic Power Factor Correction (APFC) units at all locations to ensure near unity PF and maintain the current harmonics of less than 5%.

\ Upgradation to high-efficiency modular online UPS systems to reduce losses & have flexibility for future growth. ~18% energy saving achieved

\ Use the thin client in place of CPU for training rooms and some of the projects

\    100% change over to laptops from desktops to reduce energy consumption and enable work from home, thus reducing

office occupancy and optimising power consumption on ACs and office network equipment

\ Active harmonic filter panel for automatic power factor and harmonics control in electrical system, to improve power quality and reduce losses

\ Regulated and optimised schedules for workings of lifts, vending machines, ventilation systems, water coolers, etc.

(Shut off at night / off working hours except bare minimum required)

\ Installed Variable Frequency Drives (VFDs) in fresh air and Air Handling Unit (AHU) systems for better control and adjustment, optimising energy consumption

\ Controlling and monitoring daily operations through building management system

\ Optimised running hours of air-conditioned systems: Temperature set points are altered based on working time, occupancy, and seasonal aspects. (e.g., In winter, night hrs., weekends etc.)

\ AC Discipline: No cool air leakages from each air-conditioned area

\ AC optimisation: In server rooms and data centres, we have optimised AC utilisation by removing unwanted heat loads, space optimisation, reorganising inlet and outflow, and wall insulation

\ Conference rooms and common area ACs are set to a minimum temperature of 24⁰ C

Renewable Energy

We maintain a dedicated focus on energy usage, with a strategic emphasis on sourcing renewable energy which entails sourcing

100% of its electricity from renewable energy sources by 2026. Presently we source renewable energy from Wind and Solar.

Through the adoption of renewable energy, Persistent not only reduces the carbon footprint but also contributes to the global

effort to combat climate change.

We have a dedicated team to undertake Green Initiatives and work on those projects.

a.    Persistent Onsite Rooftop Solar Plants - A total of 1.437 MWp have been installed, at Pune, Goa and Nagpur, India.

Total emissions reductions — 1356 tCO2e.

b.    Persistent Offsite Wind Mills: 2 windmills with capacity of 2.1 MW. We take wind generated units rebate in our electricity bills and the remaining generated units is converted to Renewable energy Certificates (REC) which is used for Carbon Neutrality. Total emissions reductions - 4798 tCO2e.

Carbon Reduction Initiatives

To achieve the goal of net-zero emissions by the end of 2050, Persistent focusing first on actual reductions across Scope

1, 2, and 3 emissions and then removing any remaining emissions through nature-based carbon removal offsets. The most

significant aspects relate to indirect emissions from Scope 2 electricity usage and Scope 3 emissions from purchased goods and services and business travel.

Persistent is not only committed to achieving the net zero goal, but we are also actively accelerating and scaling the actions to ensure we reach this target. Here’s how we are doing it:

\ Accelerating Actions: Persistent is fast-tracking carbon reduction initiatives. This includes speeding up the transition to renewable energy sources, implementing energy-efficient technologies at a faster pace, and expediting waste reduction efforts.

\ Scaling Actions: Persistent is scaling up successful initiatives across all levels of the organisation. If a particular strategy proves effective in one department or region, steps are being taken to implement the same company-wide.

\ Implementation of iREC and Carbon credit from Nature base project for residual energy consumption.

Net Zero Commitment

Persistent is committed to achieving Net Zero emissions globally by 2050. Persistent will do this through Net Zero Goal. Persistent is adopting a science-based approach to Net Zero emissions reduction target-setting.

Persistent’s short-term plan focuses on immediate actions and the long-term plan involves strategic initiatives. Together, these plans will guide us towards the goal of achieving net-zero emissions, contributing to a sustainable future.

Water Management initiatives

\ Prevention of overflow from overhead tanks using the auto-level control system

\ As the touchless water taps are installed with no batteries, the hazardous maintenance work of checking and replacing the batteries periodically is eliminated and hazardous waste generation is avoided.

\ Special nozzles / aerators were installed to reduce water flow at water taps

\ “No leaky tap” policy — leaky tap / pipe is repaired within 2 hours (immediately in cases)

\ Monitoring water meter readings twice every day to detect overuse / excessive leakage

\ STP output water is recycled for gardening at our Pune, Nagpur and Goa facilities, recycled water gets reused for gardening and flushing of toilets

\ Infrastructure and system installed for collection of natural underground spring water leakages / seepages and recycling it for non-drinking and gardening use to reduce consumption of treated water

\ Ground water recharging with rainwater harvesting system in Hinjewadi-Pune, Nagpur & Goa facility

\ Frequent awareness campaigns are run to encourage employees to save water in the office & at home

Waste Management

Since Persistent is an IT/ITES company, there is no raw and finished physical goods supply/distribution or linked manufacturing / transportation involved. Hence, recycling of material at our premises is largely not applicable.

The Waste Management initiatives are as follows

\ Disposal Bins for various types of scrap generated i.e., to collect dry waste (Civil debris, furniture waste, paper, cardboard, plastic, and glass etc.) and wet waste (organic waste). The collected dry waste was segregated and further sent to municipal waste collection. Wet waste is also collected separately and sent to municipal waste collection

\ E-waste & hazardous waste is handed over only to authorised agencies approved by the State Pollution Control Board. Employees are also encouraged to deposit their personal E-waste at all our company facilities for disposal, the same way

\ Started an initiative of refurbishing old end-of-life (EOL) laptops and donating them to needy NGOs/ educational institutes, thereby creating employment and achieving recycling rather than scrapping them as E-waste

\ Minimised plastic bags to almost zero and encouraged cloth or paper bags instead; Persistent organises “No Plastic Days” to promote awareness of using plastic

\ ‘ZERO PLATE WASTAGE’ week is observed twice a year and regular awareness is through mail and posters

\ Almost paperless office with all work done on email/ soft copies except where statutorily mandated or required by govt. rules / procedures

\ ‘Two-sided printing’ is set as the default printing mode to reduce paper consumption \ All waste papers are shredded and recycled through a vendor partner \ All garden waste is treated in compost pit to get organic fertiliser \ Dry garbage is collected on daily basis by “Swachh” an NGO appointed by PMC \ No Tobacco / No smoking policy in our entire organisation

\ Single use plastic water bottles banned plastic spoons / plates / crockery also banned EV charging stations

\ Introduced EV charging station at 2- 2-wheeler & 4-wheeler parking areas with a Centralised Monitoring System. This will help us to reduce the Carbon Footprint & encourage employees to use electric vehicles with no pollution & minimise environmental impact

\ Started using electric vehicles for employees’ commute from April 2024, with no pollution & to minimise environmental impact

Other Initiatives - Awareness Drives

Your Company is running an awareness drive among the employees towards sustainable living under the banner “Towards Sustainable Tomorrow” which includes energy monitoring and saving methods at home, promoting renewable energy at home / societies, composting, water saving and other initiatives.

Organisation-level declarations sustainability for stakeholders

\ Since FY22 we have published our efforts in ESG and achievements against our goal to all our external stakeholders by publishing externally assured ESG reports as per ISAE 3000 standards. The report is in accordance to Global Reporting Initiative (GRI Standards) 2021, Business Responsibility and Sustainability Reporting (BRSR) requirements of Security Exchange Board of India (SEBI). Sustainability Accounting Standard Board (SASB) standards, Task Force on Climate related Financial Disclosures (TCFD). Principles, and the material issues are also aligned with the United Nations Sustainable Development Goals (UNSDGs) ensuring transparency and accountability and forms the basis of our Communication on Progress (CoP) with the UN Global Compact (UNGC)

\ Your Company has participated in Carbon Disclosure Project (CDP) (https://www.cdp.net/en). This is a huge transparency initiative for all our stakeholders - investors, shareholders, customers, employees, vendors, etc

\ Your company has disclosed its ESG progress in S&P Global Corporate Sustainability Assessment (CSA) (https://portal.csa.spglobal.com) and now we are a proud participant of CSA

\ Persistent registered for IGBC & LEED programme for new upcoming facility & during the renovation of the building

\ Persistent “Bhageerath”, and “Ramanujan” Pune facility “IGBC PLATINUM” certified under the “Green Interiors” category

\ Won an award for the “Energy Conservation and Management Award” category at the MEDA Annual Awards 2023

\ We are one of the very few IT companies to have 1.437 MWp solar panels on almost all onsite rooftops and two offsite windmills with a capacity of 2.1 MW each

\ We partnered with “Grow Tree” to plant 1000+ trees on behalf of our Clients and Global recruitment partners

E. Other Disclosures

Corporate Governance

A separate Report on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations and any other applicable law for the time being in force form an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding the compliance of conditions of Corporate Governance as stipulated in the Listing Regulations forms an integral part of this Annual Report.

Management Discussion and Analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable laws for the time being in force based on audited consolidated financial statements for the Financial Year 2023-24 forms an integral part of this Annual Report.

Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social, and governance perspective form an integral part of this Annual Report and is available at https://www.persistent.com/wp-content/ uploads/2024/06/business-responsibilitv-and-sustainabilitv-report-2024.pdf.

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the Financial Year 2023-24 forms an integral part of this Annual Report.

Vigil Mechanism (Whistleblower Policy)

The details of the vigil mechanism (whistleblower policy) are given in the Report on Corporate Governance forming part of this Annual Report. Your Company has uploaded the policy on its website at Whistle Blower Policy I Persistent Systems

Whistleblower Helpline

Your Company expects its employees to raise concerns if they have any reason to believe that any employee, or any other stakeholder may have engaged in misconduct, which includes violations or potential violations of law, regulation, rule, or breaches of your Company’s policy, standards, procedure, or the Code of Conduct for Directors and Employees.

In the FY 2023-24, your Company has established a 24x7 toll-free number for their employees to report their concerns.

The callers can record their complaints which are received directly by the Whistleblower Administrator who is the Chairperson of the Audit Committee. This being an automated system safeguards the caller’s identity and anonymity is maintained.

Your Company prohibits retaliatory actions against anyone who raises concerns or questions in good faith, or who participates in a subsequent investigation of such concerns.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the ‘Act’ for this section). All employees (permanent, contractual, temporary and trainees) are covered under this policy.

Your Company has gone beyond the intention of the law and has made this policy applicable for all the employees unlike the contents of the law. Your Company follows this practice as a part of equal employment opportunity including the gender equality.

Your Company has constituted the Internal Complaints Committees (IC) across all Company locations in India and abroad to consider and resolve all sexual harassment complaints reported to this Committee. The constitution of the IC is as per the Act and the Committee includes an external member with relevant experience at India locations. The Ethics Committee at the global locations acts in the capacity of the Internal Complaints Committee where the local laws do not enforce the constitution of such a Committee.

During the year under report, your Company has not received any complaints of sexual harassment. Further, as of March 31, 2024, there were no pending complaints of sexual harassment in your Company.

Secretarial Standards

The Institute of Company Secretaries of India (ICSI) has issued the Secretarial Standards.

Your Company complies with Secretarial Standards and guidelines issued by the Institute of Company Secretaries of India (ICSI) to the extent applicable to your Company.

Other Certifications

The details about the other ISO certifications for technical processes and systems are provided in Annexure E to this Report and form an integral part of this report.

Information Security

Your Company maintains a mature Information Security Management System with Policies, Processes and Controls to minimise the Cyber Security Risks. The governance and management of security compliance and risk is reviewed periodically. Persistent development centres are certified under ISO 27001, ISO 27017, ISO 27018, ISO 27701, ISO 22301, and SOC 2 Type II.

Your Company is focused on cyber resilience and provides all the necessary budgets needed to build a robust cyber resilience. Your Company’s Global IT and Information Security team has taken a holistic and comprehensive approach to address the need to secure the employees’ laptops, the corporate network, and confidential data against inadvertent and malicious attacks, including the customer-specific security requirements. Your Company’s cloud first strategy is enabled by cloud security measures spanning access management, cloud data security, ensuring privacy in the cloud, safeguarding cloud workloads, effective monitoring and incident management of the cloud aligned to business-relevant outcomes.

Specific steps include allocation of secure laptops to every employee, installation of disk encryption, next generation antivirus solution, enhanced data leakage prevention solutions, implementation of Multi Factor Authentication, Secure and governed internet access, and Zero Trust Model to ensure cyber resiliency. The emailing solution is equipped with advance anti phishing functionality ensuring a secure channel of communication through email.

Your Company has implemented a robust disaster recovery process with a well-articulated cyber resilience playbook substantiated by robust Disaster Recovery. The periodic Disaster Recovery drills ensure the functionality and availability of the critical services. Your Company has a steadfast focus on spreading information security awareness through mandatory information security awareness trainings at joining followed by periodic refresher sessions and usage of enterprise-wide communication and collaboration platforms to keep users updated on evolving cybersecurity risks. The training effectiveness is validated through periodic phishing simulations.

Your Company believes that security is an ongoing activity, and as Persistent evolves and expand its business, all stakeholders can rest assured that Persistent will continue to improve its security posture to ensure continuous compliance.

Subsidiary Companies, Associate Companies and Joint Ventures

During the year under Report, your Company did not acquire any new entities, however, restructured group entities as follows:

1\ The Board of Persistent Systems Inc. USA (Wholly Owned Subsidiary) set up an entity in Poland by the name of Persistent Systems Poland sp. z o.o. (Step Down Subsidiary) on April 5, 2023.

2\ CAPIOT Software Pte. Limited, Singapore (Step Down Subsidiary) was struck off on April 6, 2023.

3\ SCI Fusion 360 LLC, USA, (Step Down Subsidiary) was dissolved with effective from May 31, 2023.

4\ Youperience Limited, UK (Step Down Subsidiary) was dissolved with effect from June 27, 2023.

5\ Youperience GmbH, (step down subsidiary) merged into Persistent Systems Germany, GmbH (Wholly Owned Subsidiary) with effect from August 21, 2023.

6\ Parx Consulting GmbH, (Step Down Subsidiary) merged into Persistent Systems Germany, GmbH (Wholly Owned Subsidiary) with effect from August 25, 2023.

7\ CAPIOT Software, Inc. (Step Down Subsidiary) has been dissolved effective from December 29, 2023, pursuant to the Certificate of Dissolution issued by the Secretary of the State of Delaware on January 16, 2024.

8\ Persistent Systems S.R.L, Italy (Step Down Subsidiary) has been dissolved and struck off from the Business Register with effect from February 26, 2024.

9\ The Equity Shares of Persistent Systems UK Limited (a Step-Down Subsidiary) were transferred from Aepona Group Limited, Ireland (a Step-Down Subsidiary) to Persistent Systems Limited resulting in a Wholly Owned Subsidiary (WOS) of the Company.

10\ The Company has incorporated a Company (Not for Profit) under Section 8 of the Companies Act, 2013 on May 1, 2024.

11\ The Equity Shares of Persistent Systems Australia Pty Ltd (SDS) were transferred from Capiot Software Inc. to Persistent Systems Inc. (WOS) of the Company.

12\ The Board of Directors of your Company at its meeting held on January 19, 2024, approved a Scheme of Merger of Capiot Software Private Limited (Wholly Owned Subsidiary) into Persistent Systems Limited (Holding Company). The Scheme of Merger was filed with the Hon’ble National Company Law Tribunal (the ‘NCLT’) on March 22, 2024, and the further directions from the NCLT are awaited.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company’s subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the Company’s website at https://www.persistent.com/investors/

The Policy for determining material subsidiaries of your Company is available on your Company’s website at https://www. persistent.com/investors/policv-on-material-subsidiarv/. According to the said Policy, Persistent Systems Inc., USA is the material subsidiary of your Company.

Infrastructure

Your Company has adopted the hybrid working model. During the FY 2023-24, the total built-up capacity owned by your Company in India and abroad was 134,363 m²Â which is adequate for 10,000+ employees.

The details of owned facilities of your Company are as follows:

Location	Year of Acquisition/Completion	Total Built-up Area (m2)	Total Seating Capacity (Nos)
Pune
1\ Bhageerath	2002	11,331	596
2\ Aryabhata-Pingala	2007	31,683	2,644
3\ Veda Complex, Hinjawadi	2012	45,825	3,197
4\ Ramanujan, Hinjawadi	2023	14,021	1,348
Goa
1\ Charak and Bhaskar	1997 and 2017, respectively	7,042	724
Nagpur
1\ IT Tower	2003	3,707	352
2\ Gargi and Maitreyi	2011	19,825	1,183
Grenoble, France	2000	929	50
Total	Â	134,363	10,094

Along with your Company owned premises, your Company also operates from leased and managed facilities in Australia, Canada, Costa Rica, France, Germany, India, Malaysia, Mexico, Poland, Scotland, Sri Lanka, Switzerland, UK and USA in an area of 45,635.73 m²Â adequate for 4000+ employees.

Annual Return

In accordance with the Act, the annual return in the prescribed format (MGT-7) for the FY 2023-24 is available at

https://www.persistent.com/wp-content/uploads/2024/06/annual-return-2024.pdf

Other Matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions

on these items during the year under report:

1\ Dr. Anand Deshpande, Chairman and Managing Director and Mr. Sunil Sapre, Executive Director of your Company did not receive any remuneration or commission from any of the subsidiaries.

2\ Mr. Sandeep Kalra, Executive Director and Chief Executive Officer received remuneration from Persistent Systems Inc., USA in addition to remuneration received from your Company.

3\ No significant or material orders were passed by the Regulators or Courts or Tribunals impacting your Company’s going concern status and operations in the future except the following matter that was concluded during FY 2023-24.

Update on the SEIS matter

In respect of the export incentives pertaining to previous periods amounting to INR 255.52 million, which have been refunded under protest with interest of INR 41.03 million, aggregating to INR 296.55 million, your Company had filed an application with Directorate General of Foreign Trade (DGFT). The Company believes that its services were eligible for the export incentives and the dispute is purely an interpretation issue given the highly technical nature.

With the intention of avoiding litigation and settling the dispute, your Company had applied before the Settlement Commission for settlement of the case and had offered to forego INR 296.55 million. Your Company had recognised a provision of INR 296.55 million for the quarter ended December 31, 2022, which was presented as an “exceptional item” in the statement of profit and loss for that year. During the year, the Settlement Commission has approved your Company’s application and has settled the liability of INR 296.55 million including interest. As the amount has already been provided for in full by your Company, no further adjustment is necessary in the results.

4\ There are no applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at the end of FY 2023-24, nor has the Company done any one-time settlement with any Bank or Financial Institution in India or abroad.

Awards and Recognitions during the Financial Year 2023-24

Your Company received several prestigious awards and recognitions in various categories, such as

(1) Technology, (2) Corporate, and (3) People. Brief details of these awards are uploaded to your Company’s website at

Awards and Recognitions I Persistent Systems.

Highlights of these are also available in the ‘Corporate Information’ section of this Annual Report.

Directors’ Responsibility Statement

Your Directors state that:

1\ In preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2\ Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as of March 31, 2024 and of the profit of your Company for that year;

3\ Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4\ The annual accounts have been prepared on a going concern basis;

5\ Your Directors had laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

6\ Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Future Outlook

As we plan for the year ahead, our inherent resilience continues to be a cornerstone in navigating the complex tapestry of macroeconomic challenges which include slower industry growth, tightening margins, elevated interest rates, and geopolitical uncertainties. We enter FY25 with cautious optimism, steadfast in our commitment to collaborate with our clients and spearhead innovative solutions that elevate our uniquely differentiated proposition. Our strategy is focused on two primary areas: growth and financial discipline while keeping the client at the centre of everything we do. We are dedicated to cultivating a culture of operational efficiency that enhances profitability, accelerates cash flow generation, and allows us to strategically reinvest in our growth initiatives. This commitment is coupled with rigorous budgetary discipline, ensuring our agility to respond to evolving market dynamics.

Despite the global economic landscape avoiding deep recessions and a slowdown in corporate layoffs, financial pressures continue to challenge many companies’ capacities to innovate and expand. This has led to a global contraction in tech spending, elongating decision-making cycles for IT investments and making the environment more competitive. In response, enterprises are prudently managing their capital expenditures while recognising that strategic investments in technology and innovation remain crucial for unlocking new business value and revenue streams. This is particularly evident in the growing investments in AI and GenAI solutions, where companies are proactively advancing strategies to leverage Al’s transformative potential. Persistent stands out as a strategic implementation partner, with our robust suite of AI frameworks and solutions, a future-ready approach, and a proficient AI-trained workforce ready to deliver impactful results for both existing clients and new prospects.

Our clientele, comprising some of the most renowned brands across diverse industry sectors, benefit from our unmatched technology and business expertise. We continuously integrate best practices and insights from our partnerships into our processes and offerings. Our ecosystem is strengthened by deepened relationships with all major hyperscalers and strategic alliances that enhance our capabilities in data management, advanced analytics, and cybersecurity. Additionally, we are collaborating with leading startups and industry pioneers to co-develop new intellectual property and products that drive client growth and reduce operational costs.

As we continue our growth journey, we remain dedicated to empowering our 23,800+ global workforce with the necessary skills and opportunities to stay at the forefront of technology advancements, thereby enriching our clients’ ventures. We are equally committed to nurturing a diverse and inclusive culture that supports personal growth, learning and development, and social and environmental responsibility.

The resilience built into our business model through years of strategic planning and investment prepares us to thrive in the upcoming fiscal challenges. Our track record as a trusted partner reassures our clients and prospects of our capability to guide them through financial complexities and market uncertainties. We are optimistic about maintaining our leadership in the market and continuing to deliver exceptional value to our investors, clients, employees, and partners as we forge ahead.

As we close this chapter of our journey and look forward to the opportunities and challenges in the coming year, we remain deeply committed to our core values and our pursuit of excellence. Together, with relentless drive and a unified vision, we will continue to innovate and lead, ensuring Persistent Systems not only meets but exceeds the expectations of our clients, partners, and communities worldwide. Thank you for your continued support and belief in our mission. We are excited about what lies ahead and are confident that our collective efforts will propel us towards greater heights.

Acknowledgments and Appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and Industry, the Reserve Bank of India and the Securities and Exchange Board of India throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur,

Goa, Mumbai, Ahmedabad, Indore, Bengaluru and Noida, Visakhapatnam Special Economic Zone - Telangana, SEEPZ Special Economic Zone - Mumbai, Cochin Special Economic Zone, Central Tax and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Ministry of Industries, Government of Maharashtra, Director of Industries, Inspector General of Registration, Maharashtra Pollution Control Board, Goa Pollution Control Board, Central Pollution Control Board, Department of Shops and Establishments, Department of Telecommunication, Ministry of Commerce and Industries, Ministry Of Electronics and Information Technology, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Goods and

Service Tax Department, Infotech Corporation of Goa Limited, Goa Industrial Development Corporation, Madhya Pradesh State Electronics Development Corporation Ltd., National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Local Municipal Corporations and Gram Panchayats where Company operates, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation, Maharashtra Industrial Development Corporation, Karnataka Industrial Development Corporation, BSNL and Internet Service Providers, District Administration and State Police departments, Export Promotion Councils, Maharashtra Airport Development Corporation Limited, and Development Commissioner, MIHAN (SEZ).

Your Board also extends its sincere thanks to M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors;

M/s. Joshi Apte & Co., Chartered Accountants, Tax Auditors; M/s. SVD and Associates, Company Secretaries, Secretarial Auditors; Trustees of Persistent Foundation; wing of Ernst & Young LLP, providers of Compliance Manager Tool and WyattPrism, ESG Consultants; for their services to your Company.

Your Board also extends its thanks to Axis Bank, Banco Nacional - Costa Rica, Banco Nacionalde Mexico S. A., Bank of Baroda, Bank of India, Bank of Tokyo-Mitsubishi, Barclays Bank, BNP Paribas, BNY Mellon Wealth Management, Canara Bank, Citibank NA, Common Wealth Bank, Deutsche Bank, First National Bank, HDFC Bank, Hongkong and Shanghai Banking Corporation, Silicon Valley Bank, Union Bank of India, VR-Bank Ismaning Hallbergmoos Neufahrn eG, Wells Fargo Bank, Zurcher Kantonal Bank and their officials for extending excellent support in all banking-related activities.

Your Board places on record its deep sense of appreciation for the committed services of all the employees and partners of your Company at all levels.

Your Board thanks Members for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels of your Company. The consistent growth was made possible by their hard work, solidarity, cooperation, and support.

1

The payment of the Final Dividend of INR 10 per Equity Share of INR 5 each is subject to your approval during the 34^th AGM of your Company. The Dividend will be paid out of the profits of your Company.

Out of the interim dividend declared in January 2024, INR 0.23 Million remained unclaimed as of March 31, 2024.

The total unpaid dividend as on March 31, 2024 for the last 7 (Seven) years is INR 2.97 Million which is 0.02% of the unclaimed dividend over these 7 (Seven) years.

Your Company has a Dividend Distribution Policy and the same has been uploaded on the website at https://www.persistent.com/wp-content/uploads/2016/09/Dividend-Distribution-Policy.pdf As per the policy, the dividend payout ratio shall be maintained up to 40% of the Consolidated Profit After Tax.

Pursuant to the Finance Act, 2020 (the ‘Act’ for this section), dividend income is taxable in the hands of shareholders and the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.

As per the Act, your Company is expected to deposit 10% of the dividend to the Income Tax Department as TDS on your behalf. Your Company has appointed M/s. Link Intime India Private Limited (‘Link Intime’) to manage the share and dividend management process. They have created a facility for online submission of Tax Exemption forms where the shareholders can submit their tax-exemption forms along with other required documents.

The requisite form for claiming tax exemption can be downloaded from Link Intime’s website. The URL for the same is as under: https://www.linkintime.co.in/client-downloads.html -¥ On this page, select the General tab. All the forms are available under the head “Form 15G / 15H / 10F”.

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Mar 31, 2023

Your Directors are pleased to present the Thirty-Third Annual Report of your Company along with the Audited Financial Statements for the Financial Year ended March 31, 2023.

Business Update

Reaching $1 billion in annualized revenue in FY23 is the culmination of a 33-year voyage for The Persistent Way, a reflection of our distinctive history, unique approach and differentiated delivery model that continues to earn trust from our clients around the world. We sincerely thank our customers, partners, employees and shareholders for joining us on this incredible journey.

We know that our targeted investments, focused acquisitions, intelligent capital expenditures and unmatched Digital Engineering leadership is what brought us to this moment. We understand that we must continue to reimagine our capabilities to differentiate ourselves, not just by saying things differently but also by doing them differently for our clients, partners and employees. We’re also moving quickly to take advantage of top-of-mind enterprise trends so our clients can leverage these technologies and our software engineering prowess to weather uncertain economic conditions and achieve additional growth.

Our current strategy revolves around helping clients take a hard look at their traditional approaches, prioritize focus areas, improve productivity and sustain competitive advantage. We enable this pragmatic approach with a keen focus on core areas and cost management through the reprioritization of non-core operations. With this reprioritization, many clients want to focus on emerging technologies such as AI, machine learning, cybersecurity and cloud computing, but lack the necessary talent and resources — which provides us additional opportunities to support our clients in these areas through our scalable software engineering capabilities.

During the last few years, we’ve laid the groundwork to prepare for the next stage of your Company’s growth journey. We have consistently grown for the last 12 quarters and have hired and nurtured necessary talent to respond to market demand, without any layoffs including during the pandemic. Our talent acquisition and development strategy through our awardwinning Persistent University has been consistently recognized as one of the best corporate learning programs. This focus on talent development led to a 23% YoY increase in our global workforce, which now stands at 22,750 across an expanded network of delivery centers in 21 countries.

Among all the technology trends that emerged during FY23, Generative AI quickly took center stage, and we quickly pivoted to focus on this technology, stay ahead of our competitors and stake out a leadership position. We established a dedicated task force to develop and test proof-of-concept solutions across verticals with an emphasis on cost, speed, security and privacy. We gained early access to Generative AI tools and innovation from major partners such as Microsoft, AWS, Google and Salesforce to develop digital assistants and workforce productivity tools for better user experiences.

Similarly, we started co-innovating with clients to craft customized Generative AI use cases to meet their requirements. We also rolled out a plan to educate our workforce — those using Generative AI and those creating Generative AI use cases - on utilizing the technology in their work, and provide guidance on the legal, security, regulatory and reputational risks associated with its use. All this activity forms a solid foundation on which we can build and accelerate our Generative AI solutions and market leadership going forward.

We also increased investments and co-innovation activity with our hyperscaler partners across a variety of technologies including cloud, cybersecurity, Intelligent Automation and AI. Working with AWS, we achieved Rising Star status in ISG Provider Lens™ Quadrant Reports for AWS Partner Ecosystem. We added 1,200 Google certifications among our staff in less than a year. We continued to build upon on 20-year product development and technology alliance with IBM. We announced a new expansive Microsoft partnership and a dedicated Microsoft VIVA practice to enhance employee experiences and leverage Generative AI. We were recognized as a top 10 Salesforce partner worldwide with 49% YoY Salesforce Certified headcount growth and 30% YoY increase in certifications. We added a deeper layer of domain expertise across BFSI, software and hi-tech, healthcare and all our target verticals with leaders who bring specialized industry knowledge to drive the digital transformations.

All these investments are driven by our mission to be disruptive innovators who bring clients business agility and maximize value creation and growth through enterprise modernization. We continue to be recognized for our commitment to client success and our strategic investments. Our solutions have been ranked as industry-leading by leading third-party analyst firms

such as Gartner, ISG, Zinnov and Everest Group. In fact, for the tenth consecutive year, we are a leader in the Zinnov Zones™ Engineering Research and Development Services ratings, and we were listed on the Constellation ShortList™ for Innovation Services and Engineering for the fifth consecutive year.

Your Company remains focused on its differentiated go-to-market strategy, operational excellence, partner ecosystem expansion and innovative technology breakthroughs. As we embark on this next evolutionary phase, we will play to our strengths as a scalable global company that challenges the status quo, delivers personalized care to clients, and continues to engineer success and deliver value for our all our stakeholders.

A. Financial Section

Financial Results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2023, are as under:

	(Amount in USD Million except EPS and Book Value)		(Amount in ? Million except EPS, Book Value and Market value per share)		% Change (based on amounts in ?)
Particulars	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	1,037.88	765.59	83,505.92	57,107.46	46.23%
Earnings before interest, depreciation, amortization and taxes	185.12	128.46	14,894.70	9,581.71	55.45%
Finance Cost*	5.88	1.59	473.40	118.35	300%
Depreciation and amortization	33.79	22.26	2,718.95	1,660.12	63.78%
Other income	8.78	19.30	706.17	1,439.55	-50.95
Tax expense	39.74	31.36	3,197.59	2,338.93	36.71%
Net profit	114.48	92.56	9,210.93	6,903.86	33.42%
Transfer to general reserve	38.51	36.78	3,164.51	2,743.46	15.35%
Net worth#	481.78	443.65	39,588.11	33,624.40	17.74%
Earnings per share (EPS) (Basic)	1.54	1.21	123.73	90.34	36.96%
Earnings per share (EPS) (Diluted)	1.50	1.21	120.52	90.34	33.41%
Book value per equity share	6.30	5.81	518.00	439.97	17.74%
Market value per equity share as on March 31
BSE Limited	-	-	4,609.20	4,770.65	-3.38%
National Stock Exchange of India Limited	-	-	4,609.50	4,765.30	-3.27%

[Conversion Rate USD 1 = ? 80.46 for Profit and Loss items; USD 1 = ? 82.17 for Balance Sheet items (Financial Year 2022-23) and USD 1 = ? 74.59 for Profit and Loss items; USD 1 = ? 75.79 for Balance Sheet items (Financial Year 2021-22)]

* Includes notional interest on lease liability FY23: ? 137.86 Million (FY22: ? 84.06 Million) recognized in accordance with IND AS - 116 on Leases and notional interest on amounts due to selling shareholders ? 112.76 Million (Previous year: 15.73)

# Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase) and other comprehensive income are considered for the purpose of computing Net Worth and Book Value per share.

The highlights of the financial performance on a standalone basis for the year ended March 31,				2023, are as under:
	(Amount in USD Million except EPS and Book Value)		(Amount in ? Million except EPS and Book Value)		% Change (based on amounts in ?)
Particulars	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	636.05	479.35	51,175.53	35,754.80	43.13%
Earnings before interest, depreciation, amortization and taxes	139.70	116.67	11,239.85	8,702.39	29.16%
Finance Cost*	1.63	0.92	130.97	68.78	90.42%
Depreciation and amortization	16.72	11.23	1,344.87	837.57	60.57%
Other income	9.18	17.76	738.71	1,324.57	-44.23%
Tax expense	32.21	30.33	2,591.44	2,261.95	14.57%
Net profit	98.33	91.95	7,911.28	6,858.66	15.35%
Transfer to general reserve	38.51	36.78	3,164.51	2,743.46	15.35%
Net worth#	479.69	437.91	39,416.50	33,188.85	18.76%
Earnings per share (EPS) (Basic)	1.29	1.20	103.52	89.74	15.36%
Earnings per share (EPS) (Diluted)	1.29	1.20	103.52	89.74	15.36%
Book value per equity share	6.28	5.73	515.75	434.27	18.76%

[Conversion Rate USD 1 = ? 80.46 for Profit and Loss items; USD 1 = ? 82.17 for Balance Sheet items (Financial Year 2022-23) and USD 1 = ? 74.59 for Profit and Loss items; USD 1 = ? 75.79 for Balance Sheet items (Financial Year 2021-22)]

* Includes notional interest on lease liability FY23: ? 119.73 Million (FY 22: ? 68.59 Million) recognized in accordance with IND AS - 116 on Leases and notional interest.

# Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase), and other comprehensive income are considered for the purpose of computing Net Worth and Book Value per share.

Material Events Occurring after Balance Sheet Date

The Board of Directors of your Company at its meeting held on Wednesday, March 22, 2023, approved the issuance of 500,000 (Five Hundred Thousand only) Equity Shares of T10 each to PSPL ESOP Management Trust (‘ESOP Trust’) at the allotment price of T 2,789 per Equity Share, aggregating to the total consideration of T 1,394.50 Million and the Board had authorized the Stakeholders Relationship and ESG Committee to allot the said Equity Shares to the ESOP Trust. The ESOP Trust made the payment of the consideration on April 5, 2023, and accordingly, 500,000 (Five Hundred Thousand only) Equity Shares of T 10 each were allotted to the ESOP Trust on April 6, 2023. Consequent to this, the paid-up share capital of your Company increased from 76.43 Million Equity Shares to 76.93 Million Equity Shares. The listing of 500,000 shares on the Stock Exchanges has been completed.

Persistent Systems Inc., USA (a wholly owned subsidiary of your Company) formed its wholly-owned subsidiary in Poland on April 5, 2023. The new entity is a step-down subsidiary of your Company.

CAPIOT Software Pte. Ltd., Singapore (a wholly owned subsidiary of CAPIOT Software Inc.) has been struck off w.e.f. April 6, 2023. Your Company is yet to receive the final official letter from the concerned authorities.

SCI Fusion 360, LLC (a wholly owned subsidiary of Persistent Systems Inc.) has been dissolved w.e.f. May 31, 2023.

There were no other material changes and commitments affecting the financial position of your Company between the end of the Financial Year 2022-23 and the date of this report.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013 (the ‘Act’), your Company has provided the Consolidated Financial Statements as on March 31, 2023. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These financial statements are available for inspection during business hours at the Registered Office of your Company and the respective subsidiary companies. A statement showing the financial highlights of the subsidiary companies is enclosed to the Consolidated Financial Statements.

The Annual Report of your Company does not contain full financial statements of the subsidiary companies, however, your Company will make available the audited annual accounts and related information of the subsidiary companies electronically in line with the Ministry of Corporate Affair (MCA) Circular dated May 5, 2020, and its extensions from time to time upon request by any Member of your Company.

Consolidated Financial Statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2023, are prepared in accordance with the Indian Accounting Standard (Ind AS) 110 on ‘Consolidated Financial Statements’ notified by the MCA and forms part of this Annual Report.

Auditors

Statutory Auditors

The Members of your Company at the 30^th Annual General Meeting (AGM) held on July 24, 2020, appointed M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) as the Statutory Auditors of your Company to hold such office for a period of 5 (Five) years i.e. up to the conclusion of the 35^th AGM to be held in the calendar year 2025; on or before September 30, 2025.

Further, in terms of Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’), the Statutory Auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Walker Chandiok & Co LLP have confirmed that they hold a valid certificate issued by the ‘Peer Review Board’ of ICAI and have provided a copy of the said certificate to your Company for reference and records.

The Auditors’ Report for the FY 2022-23 does not contain any qualification, reservation, or adverse remark. The Report is enclosed with the financial statements in this Annual Report.

Secretarial Auditors

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. SVD and Associates, Practicing Company Secretaries, as the Secretarial Auditors of your Company for the Financial Year 2022-23.

Accordingly, the Secretarial Auditor has given the report, which is annexed hereto as Annexure A. The comments of the Board on the observations of the Secretarial Auditor are as follows:

Audit Observation	Management Response
Disclosure of the appointment of Mr. Sandeep Kalra as Executive Director given to the stock exchange on June 7, 2022 does not include the affirmation about non-debarment required as per the SEBI instructions Letter to the Exchanges dated June 14, 2018 read with BSE circular no. LIST/COMP/14/2018-19 and NSE circular no. NSE/CML/2018/02 both dated June 20, 2018.	Your Company had inadvertently missed out on the affirmation about the non-debarment of Mr. Kalra while submitting the disclosure of his appointment to the Stock Exchanges. The management has set up a process to avoid such incidences in the future.

Reporting of Frauds by the Auditors

During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board’s report or directly to the Central Government under intimation to your Company.

Adequacy of the Internal Financial Controls

Your Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

Your Board has laid down policies and processes with respect to internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company’s policies, safeguarding of the assets of your Company, prevention, and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Internal Audit

The details of the internal audit team and its functions are given in the Management Discussion and Analysis Report forming part of this Annual Report.

Disclosure about the Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by your Company.

Particulars of Loans and Guarantees Given and Investments made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer notes 5, 6, 14, 17, 33 and 42 of the Standalone Financial Statements)

Transfer to Reserves

As per the policy of your Company on transfer of surplus profit to reserves, an amount of ? 3,164.51 Million has been transferred to the General Reserve and an amount of ? 1,750.42 Million will be retained in the Statement of Profit and Loss after payment of dividend. The balance in Profit and Loss Account as on March 31, 2023 is ? 15,575.98 Million and in the General Reserves is ? 20,824.26 Million.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Act read with the relevant Rules, your Company has not accepted any fixed deposits during the year under report.

Liquidity

Your Company continues to maintain adequate liquidity to meet the necessary strategic and growth objectives.

Your Company aims to balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2023, your Company, on a standalone basis, had cash and cash equivalents (including investments) amounting to ? 11,352.08 Million as against ? 14,667.67 Million as at March 31, 2022.

During the FY 22-23, your Company has liquidated major portion of investment to fund the MediaAgility acquisition and investment in property.

The details of cash and cash equivalents (including investments) are as follows:		(In ? Million) Year ended on March 31
Particulars	2023	2022
Investment in Mutual Funds at fair value	2,814.11	5,183.33
Fixed Deposits with scheduled banks	4,215.93	6,041.38
Bonds (quoted)	3,085.59	2,879.29
Cash and Bank balances	1,236.45	563.67
Total	11,352.08	14,667.67
The particulars of expenditure on Research and Development on an accrual basis are as follows:		(In ? Million) Year ended on March 31
Particulars	2023	2022
Capital expenditure	-	-
Revenue expenditure	178.59	136.72
Total research and development expenditure	178.59	136.72
As a percentage of total income	0.34%	0.37%

The particulars of foreign exchange earnings and outgo, based on actual inflows and outflows are		as follows:
		(In T Million) Year ended on March 31
Particulars	2023	2022
Earnings	34,921.08	34,272.85
Outgo	4,749.56	4,154.92

Update on Fixed Deposits with IL&FS

Your Company has deposits of T 430 Million with Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as “IL&FS Group”) as on the balance sheet date. These were due for maturity from January 2019 to June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, the Management of your Company has fully provided for these deposits, along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag. Your Company continues to monitor developments in the matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposits.

Related Party Transactions

The Policy to determine the materiality of related party transactions and dealing with related party transactions, as approved by the Board of Directors, is available on your Company’s website at https://www.persistent.com/investors/corporate-governance/related-partv-transactions-policv/

During the year under report, your Company did not enter into any material transaction with any party who is related to it as per the Act. There were certain transactions entered into by your Company with its subsidiaries and other parties who are related within the meaning of Indian Accounting Standard (Ind AS) 24. The attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 33 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirms that none of the transactions with any of the related parties were in conflict with your Company’s interests. The list of Related Party Transactions entered into by your Company for the Financial Year 2022-23 (on a consolidated basis) is available on https://www.persistent.com/investors/corporate-governance/related-party-transactions-policy/

The related party transactions are entered into based on considerations of various business requirements, such as synergy in operations, sectoral specialization, and your Company’s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity, and capital resources of subsidiaries.

All related party transactions are entered into on an arm’s length basis, are in the ordinary course of business, and are intended to further your Company’s interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure B in Form No. AOC-2 and the same form part of this report.

B. Board and its Committees

Board Meetings

The details pertaining to the composition, terms of reference, and other details of the Board of Directors of your Company and the meetings thereof held during the Financial Year 2022-23 are given in the Report on Corporate Governance forming part of this Annual Report.

Directors and Key Managerial Personnel

During the year under report, the Members of your Company in the 32^nd AGM confirmed the following:

a. Not to fill the vacancy caused by the retirement of Mr. Thomas Kendra, California, USA (DIN: 07406678), Non-Executive Non-Independent Director, who retired by rotation, but did not seek re-appointment.

b. Appointment of Ms. Avani Davda (DIN: 07504739) as an Independent Director of your Company, not liable to retire by rotation, to hold office for the first term of 5 (Five) consecutive years i.e. from December 28, 2021, to December 27, 2026.

c. Appointment of Mr. Arvind Goel (DIN: 02300813) as an Independent Director of your Company, not liable to retire by rotation, to hold office for the first term of 5 (Five) consecutive years i.e. from June 7, 2022, to June 6, 2027.

d. Appointment of Dr. Ambuj Goyal (DIN: 09631525) as an Independent Director of your Company, not liable to retire by rotation, to hold office for the first term of 5 (Five) consecutive years i.e. from June 7, 2022, to June 6, 2027.

e. Appointment of Mr. Dan’l Lewin (DIN: 09631526) as an Independent Director of your Company, not liable to retire by rotation, to hold office for the first term of 5 (Five) consecutive years i.e. from June 10, 2022, to June 9, 2027.

f. Re-appointment of Mr. Sandeep Kalra (DIN: 02506494) as an Executive Director of the Company liable to retire by rotation, to hold the office with effect from June 11, 2022, till September 30, 2025.

The Board is grateful to Mr. Kendra for his contribution to your Company.

Retirement of Mr. Pradeep Bhargava and Dr. Anant Jhingran, Independent Directors:

\ The re-appointment of Mr. Pradeep Bhargava, Independent Director (DIN: 00525234) for the second term was made at the 29^th AGM held in July 2019 for a period of 3 years for a term up to the conclusion of the 32^nd AGM. Accordingly, he retired at the conclusion of the 32^nd AGM held on July 19, 2022, on completing a ten-year term as a Director of your Company.

\ The re-appointment of Dr. Anant Jhingran, Independent Director (DIN: 05116722) for the second term was made on November 21, 2017, for a period of 5 years. Accordingly, he completed his term and retired on November 20, 2022.

The Board is grateful to Mr. Bhargava and Dr. Jhingran for their contribution to your Company.

Resignation of Mr. Guy Eiferman and Prof. Deepak Phatak, Independent Directors:

\ During the year under report, Mr. Guy Eiferman, Independent Director (DIN: 08101854) had resigned effective from July 19, 2022 due to his personal reasons. He had confirmed that there were no material reasons for his resignation.

\ Further, on April 2, 2023, Prof. Deepak Phatak (DIN: 00046205) upon reaching the age of 75 years, decided to step down from the position of Independent Director of your Company. This is in accordance with your Company’s internal norms w.r.t. the age of Independent Directors. He had confirmed that there were no material reasons for his resignation.

The Board noted and accepted these separations, thanked Mr. Eiferman and Prof. Phatak for their contribution to the Company, and wished them the best for their future endeavors.

Appointment of a Director since last AGM:

During the year under report and to date, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of your Company made the appointment of Dr. Ajit Ranade (DIN: 00918651) as an Additional Director (Independent Member). Dr. Ranade has been appointed as an Additional Director (Independent Member) of the Company to hold office for a term of 5 (Five) consecutive years i.e. from June 6, 2023 to June 5, 2028, subject to approval by the Members at the ensuing AGM.

Your Board considered expertise in large-scale global operations, strategy and planning, financial, treasury management, taxation expertise, and governance compliance of Dr. Ranade while recommending his appointment.

He has a valid registration of the MCA Databank of Independent Directors.

Dr. Ranade has confirmed his eligibility and willingness to accept the office of the Director of your Company if approved by the Members at the ensuing AGM. In the opinion of your Directors, he has the requisite qualifications and experience, and therefore, your Directors recommend that the proposed resolution relating to the appointment of Dr. Ranade be passed with the requisite majority. His profile forms part of this Annual Report and has also been provided in the Notice of the 33^rd AGM.

Retirement by Rotation:

In terms of Section 152(6) of the Act and Article 137 of the Articles of Association of your Company, Dr. Anand Deshpande (DIN: 00 005721), Chairman and Managing Director is liable to retire by rotation at the ensuing AGM as he is the Non-Independent Director who is holding office for the longest period among the Non-Independent Directors on the current Board.

Dr. Deshpande has confirmed his eligibility and willingness to accept the office of the Director of your Company if confirmed by the Members at the ensuing AGM. In the opinion of your Directors, Dr. Deshpande has the requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the reappointment of Dr. Deshpande be passed with the requisite majority.

At present, your Company has 7 (Seven) Non-Executive Members on the Board who are Independent Directors. Pursuant to Regulation 17(1)(b) of the Listing Regulations, every listed company shall have at least half of its total strength of the Board of Directors as Independent Directors where the Chairperson is an Executive Director. Your Company complies with this requirement.

There is no inter se relationship between the Directors except the following:

1\ Mr. Praveen Kadle, Independent Director of the Company was the Chairman, Non-Executive Non-Independent Director of Tata AutoComp Systems Limited where Mr. Arvind Goel, Independent Director of the Company is the Managing Director and Chief Executive Officer till January 28, 2023.

2\ Dr. Ranade is the Director of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) where Dr. Anand Deshpande (Chairman and Managing Director of the Company) is the Vice President and Director, and Mr. Arvind Goel (Independent Director of the Company) is the Director

3\ Dr. Deshpande is the Nominee of the Chancellor on the Board of Management of Gokhale Institute of Politics and Economics, where Dr. Ranade is a Vice-Chancellor.

In terms of the Listing Regulations, your Company conducts the Familiarization Program for Independent Directors about their roles, rights, and responsibilities in your Company, the nature of the industry in which your Company operates, business model of your Company, etc., through various initiatives. The details of the same can be found at: https://www.persistent. com/investors/familiarisation-programme/

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149(6) of the Act along with the Rules framed thereunder and Regulation 16 of the Listing Regulations.

Further, they have included their names in the databank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

During the Financial Year 2022-23, a separate meeting, exclusively of the Independent Directors was held on January 18, 2023, in which the Independent Directors transacted the following businesses along with few other important strategic and policy-related matters:

1\ Reviewed performance of the Executive Directors and Management of the Company

2\ Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of the Company

3\ Discussed the strategic matters of the Company and current state of the global IT industry 4\ Discussed the business continuity plan in the organization

Committees of the Board

The details of the powers, functions, composition, and meetings of all the Committees of the Board held during the year under report are given in the Report on Corporate Governance forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference, and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the Financial Year are given in the Report on Corporate Governance forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were considered positively by the Board of Directors of your Company from time to time during the year under Report.

Nomination and Remuneration Committee

The details including the composition and terms of reference of the Nomination and Remuneration Committee and the meetings thereof held during the Financial Year and the Remuneration Policy of your Company and other matters provided in Section 178(3) of the Act are given in the Report on Corporate Governance section forming part of this Annual Report.

The policy for the appointment of a new director on the Board is as follows:

The Board of Directors decide the criteria for the appointment of a new director on the Board from time to time depending on the dates of retirement of existing Directors and the strategic needs of the Company. The criteria includes expertise area, industry experience, professional background, association with other companies, and other important parameters.

Once the criteria is determined, the Board directs the Nomination and Remuneration Committee to compile profiles of suitable candidates through networking, industry associations and business connections. The Nomination and Remuneration Committee considers each and every profile on the decided parameters and shortlists the candidates. Shortlisted candidates are then interviewed personally or through tele-conference by the Members of this Committee.

Once the Committee is convinced about a candidate’s competency, his/her business acumen, commitment towards his/her association with your Company, disclosure of his/her interest in other entities and his/her availability for your Company on various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration. Generally, the Board accepts the recommendation by consensus.

The said Policy is also available on your Company’s website at https://www.persistent.com/wp-content/uploads/2022/05/ Policy-for-appointment-of-a-new-director.pdf

The general terms and conditions of appointment of Independent Directors is available on the Company website at

https://www.persistent.com/investors/corporate-governance/other-disclosures/terms-and-conditions-of-appointment-of-

independent-directors/

The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on our website, at https://www.persistent.com/wp-content/uploads/2023/05/Board-Diversitv-Policv.pdf

Performance Evaluation of the Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, the Chairman, its various Committees, and the Directors individually including Independent Directors. The performance evaluation was done by an external management consultant who specializes in Board evaluations. The performance of the Board was evaluated by seeking inputs from all the directors and senior management. The evaluation criteria include aspects such as the Board composition and structure, effectiveness of board processes, information, and functioning, etc. The evaluation was conducted in March and April 2023 and the findings of the evaluation were presented at the meetings of the Nomination and Remuneration Committee and the Board of Directors held in April 2023.

The details of the evaluation have been included in the Report on Corporate Governance Employees’ Remuneration

The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP)

(as required under the Companies Act, 2013) to the median of employees’ remuneration, and the list of top 10 employees in terms of remuneration drawn, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, form part of Annexure C to the Report. The statement containing particulars of employees employed throughout the year and in receipt of remuneration of ? 1.02 crore or more per annum and employees employed for part of the year and in receipt of remuneration of ? 8.5 lakh or more per month, as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this Report. Further, the Report is being sent to the Members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.

Employee Stock Option Plan

Your Company has 13 (Thirteen) ESOP Schemes as of March 31, 2023. These Schemes are being implemented as per the SEBI Regulations.

The Members of your Company in the 31^st AGM approved amendments in the ‘Persistent Employee Stock Option Scheme 2014’ (PESOS 2014) and ‘Persistent Systems Limited - Employee Stock Option Plan 2017’ (ESOP 2017) and increased the kitty available for grant of stock options.

In the Financial Year 2022-23, 334,600 options were granted under PESOS 2014 and 1,537,281 options were granted under ESOP 2017.

As required under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, Secretarial Auditor’s certificate on the implementation of share-based schemes in accordance with these regulations will be made available at the AGM.

The disclosure pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://www.persistent.com/wp-content/uploads/2023/06/esop-details-2023.pdf

Corporate Social Responsibility

Your Company formed a Public Charitable Trust — ‘Persistent Foundation’ in the Financial Year 2008-09 to institutionalize your Company’s CSR initiatives and to develop a systematic approach to administer your Company’s CSR obligations.

Persistent Foundation (the ‘Foundation’) is celebrating fifteenth year of establishment. During these 15 years, the Foundation has contributed to many projects spread across different geographies in association with well-known NGOs to reach out to large number of beneficiaries.

Your Company acknowledges the contribution made by the Foundation in coordinating and ensuring that the CSR donations made by your Company are being effectively deployed as proposed and have an impact on society.

During the year under report, the Foundation was able to continue to create excitement among employees to participate in socially relevant causes. With the cooperation of the employees of your Company, the Foundation has set up several well-defined programs and activities for the promotion of education, health, community development, and assistance in natural calamities. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through the Government authorities, reputed social organizations, and institutions.

In addition to contributing ? 117.50 Million to the Foundation, your Company made donations to various charitable institutions directly. Thus, during the year under report, your Company donated an amount totaling to ? 117.60 Million. Your Company has claimed a set off amounting to ? 23.39 Million against the excess CSR contribution made during the FY 2020-21 resultantly making the CSR contribution of the FY 2022-23 ? 140.99 Million i.e. 2% of the Average Net Profits of your Company made during three immediately preceding financial years.

Report on CSR activities of your Company under the provisions of the Act during the Financial Year 2022-23 is annexed hereto as Annexure D.

A detailed Report on the activities of the Foundation forms part of this Report.

Your Company is pleased to inform you that Persistent Systems Inc., USA a wholly-owned subsidiary of your Company has incorporated a Foundation in the USA, exclusively for conducting CSR Activities in the USA.

Persistent Foundation, USA will work on the same focus areas as that of Persistent Foundation, India.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted a CSR Committee to help your Company frame, monitor, and execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the Company’s social responsibility.

The Board of Directors of your Company has further approved the CSR Policy of your Company to provide a guideline for the Company’s CSR activities. The CSR Policy is uploaded on your Company’s website at https://www.persistent.com/investors/csr-at-persistent/

Your Company’s CSR Policy highlights that the need for contributing to the society is very large and your Company can make a more significant contribution by staying focused on a few areas through its social initiatives. During its April 2023 meeting, the Board of Directors of your Company considered the need to add one more focus area and accordingly, approved the addition of ‘Wildlife and Heritage Conservation’ as the 4^th focus area. Resultantly, the amended CSR policy recommends that your Company should encourage Persistent Foundation to contribute in the following four focus areas:

1\ Health 2\ Education

3\ Community Development 4\ Wildlife and Heritage Conservation

The constitution of the CSR Committee is provided in the Report on Corporate Governance section forming part of this Annual Report.

Stakeholders Relationship and ESG Committee

The Stakeholders Relationship Committee was constituted on October 4, 2007.

Your Company believes that in today’s day and age, the definition of the stakeholders must be extended beyond what is traditionally considered as stakeholders. Accordingly, your Company has decided to adopt a broader definition of stakeholders to explicitly include society, customers, partners, our employees, the shareholders, vendors and even the environment.

Your Company aims to provide more focused and detailed efforts toward ESG implementation. Considering the same, the Board at its meeting held in January 2022, decided to assign an additional responsibility of overlooking the ESG monitoring-related work at the Company to the Stakeholders Relationship Committee. Accordingly, the name of the Committee was amended to ‘Stakeholders Relationship and ESG Committee’.

A separate section on ESG at Persistent can be accessed at Environmental. Social and Governance Report I Persistent Systems

C. Equity and Related Information

Listing with the Stock Exchanges

The Equity Shares of your Company are listed on BSE Limited (BSE) (Scrip Code: 533179) and the National Stock Exchange of India Limited (NSE) (Symbol: PERSISTENT) since April 6, 2010. Listing fees for the Financial Year 2022-23 have been paid to both BSE and NSE.

Institutional Holding

As on March 31, 2023, the total institutional holding in your Company stood at 48.16% of the total share capital.

Dividend for the Financial Year 2022-23

The details of the Dividend for the Financial Year 2022-23 and 2021-22 are as follows:

	Financial Year 2022-23			Financial Year 2021-22
Type of Dividend	Interim	Final*	Special*	Interim	Final
Month of declaration/recommendation	Jan-23	Apr-23	Apr-23	Jan-22	Apr-22
Amount of Dividend Per Equity Share of T 10 each (In T)	28	12	10	20	11
% of Dividend	280%	120%	100%	200%	110%
Total Dividend (In T Million)	2,139.90	923.10	769.25	1,528.50	840.68
Total Dividend Outflow for the year (In ? Million)			3,832.25*		2,369.18
Payout Ratio			41.61%*		34.3%
Payout Ratio without Special Dividend			33.25%*		-
* To be paid on the increased Paid-up capital as on the Record Date, subject to approval by the Members at the ensuing AGM.

The payment of the Final Dividend of T 12 and Special Dividend of T 10 per Equity Share of T 10 each is subject to your approval during the 33^rd AGM of your Company. The Dividend will be paid out of the profits of your Company.

Out of the interim dividend declared in January 2023, T 0.35 Million remained unclaimed as of March 31, 2023.

Your Company has a Dividend Distribution Policy and the same has been uploaded on the website at https://www.persistent. com/wp-content/uploads/2016/09/Dividend-Distribution-Policy.pdf. As per the policy, the dividend payout ratio shall be maintained up to 40% of the Consolidated Profit After Tax.

However, given the achievement of $1 (One) Billion in revenues in the FY 2022-23, the Board of your Company decided to declare a one-time Special Dividend along with the Final Dividend. With the total Dividend being T 50 for FY 2022-23, it surpassed the current Dividend Distribution Policy of the Company i.e. pay out up to 40%. However, your Board treated this upside in the Payout Ratio as an exception on the background of the Special Dividend and hence decided not to revise the Dividend Distribution Policy. Therefore, the payment of Interim Dividend and Final Dividend for the Financial Year 2022-23 is in compliances with the Payout Ratio.

Pursuant to the Finance Act 2020, dividend income is taxable in the hands of shareholders and the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.

In this regard, your Company has availed the facility for online submission of Tax Exemption forms from M/s. Link Intime India Private Limited (‘Link Intime’) wherein the shareholders can submit their tax-exemption forms along with other required documents.

The requisite form for claiming tax exemption can be downloaded from Link Intime’s website. The URL for the same is as under: https://www.linkintime.co.in/client-downloads.html -e On this page, select the General tab. All the forms are available under the head “Form 15G/15H/10F”.

The aforementioned forms (duly completed and signed) are required to be uploaded on the URL mentioned below: https://linkintime.co.in/formsrea/submission-of-form-15a-15h.html -e On this page, the user shall be prompted to select/ share the following information to register their request.

1\ Select the company (Dropdown)

2\ Folio/DP-Client ID 3\ PAN

4\ Financial year (Dropdown) 5\ Form selection

a. Document attachment - 1 (PAN)

b. Document attachment - 2 (Forms)

c. Document attachment - 3 (Any other supporting document)

Please note that the documents (duly completed and signed) should be uploaded on the website of Link Intime in order to enable the Company to determine and deduct appropriate TDS/Withholding Tax.

Incomplete and/or unsigned forms and declarations will not be considered by the Company.

The Members may note that in case the tax on said interim/final dividend is deducted at a higher rate in absence of receipt of the aforementioned details/documents, the option is available to the Members to file the return of income as per the Income Tax Act, 1961 and claim an appropriate refund, if eligible.

Transfer of Unclaimed Dividend and corresponding shares to the IEPF Authority

During the year under report, your Company has transferred the unclaimed and unpaid dividend of T 293,370 to the IEPF Authority. Further, 897 corresponding shares on which the dividend was unclaimed for seven consecutive years have been transferred as per the requirement of the IEPF Rules.

Further, your Company also transferred 140 shares from the Shares Suspense account to IEPF.

The details are provided in the shareholder information section of this Annual Report and are also available on the website: https://www.persistent.com/investors/unclaimed-dividend/

The Board has appointed Mr. Amit Atre, Company Secretary, as the Nodal Officer to ensure compliance with the IEPF rules.

Shares Suspense Account

Your Company had opened an ‘Unclaimed Securities Suspense Account’ on behalf of the allottees who were entitled to the equity shares under the initial public offering. Some of the equity shares could not be transferred to the respective allottees due to technical reasons. 7 shareholders, who were allotted 20 shares each during IPO could not claim their shares due to the non-submission of required documents. Your Company sent periodic reminders requesting the shareholders to provide the required documents for credit of shares and the unclaimed dividend thereon to their demat and bank account, respectively. Your Company issued Bonus shares in a ratio of 1:1 in the year 2015. Pursuant to the same, the total holding of each shareholder increased to 40. The original 140 shares issued to the 7 shareholders during the IPO were transferred to IEPF upon completion of 7 years. Remaining 140 shares resulting from the Bonus Issue, were transferred to the IEPF in September 2022.

The current balance in the above-mentioned Suspense Account as on March 31, 2023 is NIL. The details are as follows:

S. No.	Particulars	Details
1\	The aggregate number of allottees whose shares are lying in the Account at the beginning of the Financial Year 2022-23	7 allottees
2\	The aggregate number of the outstanding equity shares in the Account at the beginning of the Financial Year 2022-23	140 Equity shares
3\	Number of allottees who approached issuer for transfer of shares from the Account during the Financial Year 2022-23	Nil
4\	Number of shares transferred from the Account during the Financial Year 2022-23	Nil
5\	Number of shares transferred to IEPF during the Financial Year 2022-23	140 Equity shares
6\	The aggregate number of allottees whose shares are lying in the Account at the end of the Financial Year 2022-23	Nil
7\	The aggregate number of outstanding equity shares in the Account at the end of the Financial Year 2022-23	Nil

D. ESG

We are dedicated to working with our people, clients, partners, and communities to build a more equitable, sustainable and healthier world through the application of technology and engineering.

We are strengthening our core with the belief in ‘One Persistent, One Family’ and fundamental values. We collaborate with both our internal and external stakeholders to leverage technology, thus engineering a more sustainable, and healthier world.

Your Company has published its ESG/Sustainability Report for the FY 2022-23 and the same is available on your Company’s website at https://www.persistent.com/wp-content/uploads/2023/06/esg-sustainability-report-2022-23.pdf

Some of the activities carried out by your Company are reiterated below:

Conservation of energy and technology absorption

Your Company believes that conservation of energy is essential and as a responsible corporate citizen, your Company must encourage all employees, vendors and other stakeholders to act on ensuring reduced usage of energy on a perpetual basis.

Your Company has procured various energy saving devices and systems, which help in conserving energy and has resulted in significant savings in energy costs. Your Company has made capital investments amounting to ? 36.96 Million during the Financial Year 2022-23.

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

Your Company has a dedicated team across India under the environmental /green initiatives group. The group implements projects to continually enhance energy efficiency in our existing buildings such as new technology retrofits, bringing in more efficient equipment etc. On an annual basis, the project proposals are reviewed by the management and thereafter a dedicated budget is allotted for these projects. The learnings from these are utilized for efficient design of the building architecture in new projects, thereby resulting in some of the lowest energy intensities (EPIs) in the industry.

Your Company is deeply conscious of the global target of keeping the temperature rise restricted to 1.5 deg C and is doing everything, it can to avert the irreversibility of global warming.

Your Company is working on various initiatives to reduce the footprint as follows:

Green Building Initiatives:

\ Adoption of Leadership in Energy and Environmental Design (LEED) Principles during the built and interior design stage.

\ 100% eco-certified furniture in new projects.

\ BEE 3 star rated/ Green Pro certified / Energy star appliances used.

\ Use of environmental friendly refrigerants.

\ 54% of occupied areas have natural daylight.

\ Procurement of materials within a 500km radial distance to minimize carbon emissions.

\ Use of low VOC paints, CRI Green Label Plus certified carpets, and Green Pro certified plywood to reduce VOC emissions.

\ Sustainable construction practices such as double wall brickwork and the use of crush sand and fly ash bricks.

\ Installation of double glass units with low ‘e’ glass for windows and facades, as well as double glass partitions for meeting rooms.

\ Optimized material acoustic performance using acoustic ceiling materials.

Energy Efficiency Activities:

HVAC Retrofit

\ Replaced existing air conditioning units with energy-efficient inverter-based ACs, resulting in a 15% reduction in electricity consumption

\ Replaced ductable AC units with energy efficient inverter-based ACs, resulting in 12% reduction in electricity consumption

\ Upgraded the chiller system with high-efficiency systems, reducing energy and water consumption Operational Efficiency

\ Regulated and optimized schedules for lifts, vending machines, ventilation systems, water coolers, and other equipment, minimizing unnecessary energy usage

\ Installed Variable Frequency Drives (VFDs) in fresh air, Air Handling Unit (AHU) systems for better control and adjustment, optimizing energy consumption

\ Controlling and monitoring daily operations through building management system Lighting Efficiency

\ Transitioned from CFLs to LED lamps

\ Smart lighting systems controlled by sensors and occupancy/motion sensors, optimizing energy usage

\ High-efficiency modular online UPS systems, resulting in approximately 18% energy saving for automatic power factor and harmonics control in the electrical system, to improve power quality and reduce losses

Renewable Energy Initiatives:

Carbon Offsets: As part of our three-pronged strategy towards carbon neutrality, having invested heavily in energy efficiency, and renewable energy, we have worked on carbon offset projects for offsetting emissions that were beyond Persistent’s control.

We have a dedicated team to undertake Green Initiatives and work on those projects

a. Rooftop Solar Plants -

Installed rooftop solar plants with a combined capacity of 2 MW, generating 19,04,900 kWh of renewable energy

b. Installed 2 windmills with capacity of 2.1 MW each generating 3,651,547 kWh together

Customer Experience, Operational Excellence on Green Activities

\ Employees feel proud of belonging to a green company and volunteer more for green initiatives like tree plantation, tree maintenance & society awareness related to sustainability

\ LED lighting has improved the ambiance and freshness of the workplace

\ Persistent has captured the impact due to their operations on GHG emissions and reviewed after every six months. Also, active efforts are taken to reduce the GHGs annually, details of which have been shared in earlier paragraphs, we are one of the rare IT companies certified for ISO 14064: 2018 (GHG Monitoring and Reduction) standard

\ Organization-level emission declared on CDP Portal (https://www.cdp.net/en). This is a huge transparency initiative for all our stakeholders - investors, shareholders, customers, employees, vendors, etc.

\ Organization-level ESG-related response submitted to S&P Global Corporate Sustainability Assessment(CSA) (https://portal.csa.spglobal.com) and now we are a proud participant of CSA

\ Ozonates improved indoor air quality and higher oxygen levels, clearly felt by inmates as well as visitors. We are the very few IT companies to have this feature installed in our AC systems

\ Periodic checking of indoor air quality to verify the various parameters in the workplace

\ We are one of the very few IT companies to have solar panels on almost all our rooftops and to own two 2.1 MW windmills

\ By incorporating efficient & reliable Solar PV Generation projects and two windmills we have added to financial performance aspects while meeting environmental and social dimensions

\ In addition, also installed Solar panels at Pune and Hyderabad Railway Stations and Tarachand Hospital Pune, Swaroop Vardhini, Pune, Matruseva Sangh, Nagpur, Saraswathi Vidya Mandir, Pune, Suhrud mandal, Pune under CSR activity

\ Energy and water conservation, the plastic-free campus is ingrained in day-to-day operations

\ We have involved employees in environmental awareness campaigns and actions under the banner “Towards Sustainable Tomorrow” which includes energy monitoring and saving methods at home, promoting renewable energy at home/ societies, composting, water saving, and other initiatives. The campaign is run by a voluntary group of women leaders named “Aspire”. Employees involved in tree plantation drives and also in community development and education-related projects through Persistent Foundation

\ Employees contribute regularly to Tree Plantation and other green initiatives \ Appreciation from NASSCOM for Green IT Initiatives in Pune city

\ Transport and travel operational efficiency and cost reduced due to optimization of business travel and local bus routes of employee transport, which also contributed to a substantial reduction of CO2e

\ Insistence on eco-friendly and high-efficiency products, is promoting vendors with such products

\ Our Corporate Office -“Bhageerath”, at Pis an “IGBC PLATINUM” certified under the “Green Interiors” category. We also have applied for similar IGBC and LEED certification of our new building ‘Ramanujan’ at Blue Ridge Township, Hinjawadi, Pune

E. Other Disclosures

Corporate Governance

A separate Report on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations and any other applicable law for the time being in force form an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding the compliance of conditions of Corporate Governance as stipulated in the Listing Regulations forms an integral part of this Annual Report.

Management Discussion and Analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable laws for the time being in force based on audited consolidated financial statements for the Financial Year 2022-23 forms an integral part of this Annual Report.

Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social, and governance perspective form an integral part of this Annual Report.

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the Financial Year 2022-23 forms an integral part of this Annual Report.

Vigil Mechanism (Whistleblower Policy)

The details of the vigil mechanism (whistleblower policy) are given in the Report on Corporate Governance forming part of this Annual Report. Your Company has uploaded the policy on its website at Whistle Blower Policy | Persistent Systems

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the ‘Act’ for this section). All employees (permanent, contractual, temporary and trainees) are covered under this policy.

Your Company has gone beyond the intention of the law and has made this policy applicable for both, aggrieved men and women employees unlike the contents of the law. Your Company follows this practice as a part of equal employment opportunity including the gender equality.

Your Company has constituted an Internal Complaints Committee(s) (ICC) across all Company locations in India and abroad to consider and resolve all sexual harassment complaints reported to this Committee. The constitution of the ICC is as per the Act and the Committee includes an external member from NGOs with relevant experience at India locations. The Ethics Committee at the global locations acts in the capacity of Internal Complaints Committee where the local laws over there do not enforce the constitution of such committee.

During the year under report, your Company has received (2) two complaints of sexual harassment and (1) one complaint of harassment of non-sexual nature which were immediately addressed and resolved by following the due process. As on March 31, 2023, there were no pending cases of sexual harassment in your Company.

Secretarial Standards

The Ministry of Corporate Affairs notified the Secretarial Standard on Meetings of the Board of Directors (SS-1), Secretarial Standard on General Meetings (SS-2), Secretarial Standard on Dividend (SS-3) and Secretarial Standard on Report of the Board of Directors (SS-4).

Your Company complies with Secretarial Standards and guidelines issued by the Institute of Company Secretaries of India (ICSI). Other Certifications

The details about the other ISO and Partnership certifications for technical processes and systems are provided in Annexure E to this Report and forms an integral part of this report.

Information Security

Your Company maintains a matured Information Security Management System with Policies, Processes and Controls to minimize the Cyber Security Risks. The governance and management of security compliance and risk is reviewed periodically. Persistent development centers are certified under ISO 27001, ISO 27017, ISO 27018, ISO 27701, ISO 22301, and SOC 2 Type II.

Your Company management is focused on cyber resilience and provides all the necessary budgets as needed to build a robust cyber resilience. Your Company’s Global IT and Information Security team has taken a holistic and comprehensive approach to address the need of securing the employees’ laptops, the corporate network and confidential data against inadvertent and malicious attacks, including the customer-specific security requirements.

Specific steps include allocation of secure laptops to every employee, installation of disk encryption, next generation antivirus solution, enhanced data leakage prevention solutions, implementation of Multi Factor Authentication, Secure and governed internet access, and Zero Trust Model to ensure cyber resiliency. The emailing solution is equipped with advance anti Phishing functionality ensuring a secure channel of communication through email.

Your Company has implemented a robust disaster recovery process with a well-articulated cyber resilience playbook substantiated by a cloud DR. The data backup is fully secure from any ransomware attack ensuring data availability when it is needed. The periodic DR drills ensure the functionality and availability of the critical services. Your Company has a dedicated focus on spreading information security awareness through mandatory trainings and periodic phishing simulations to assess the effectiveness of the trainings.

Your Company believes that security is an ongoing activity, and as Persistent evolves and expand its business, all stakeholders can rest assured that Persistent will continue to improve Its security posture to ensure continuous compliance.

Subsidiary Companies, Associate Companies and Joint Ventures

During the year under Report, your Company along with its wholly owned subsidiaries acquired the following entities:

1\ Persistent Systems Limited, India acquired 100% shares of MediaAgility India Private Limited on April 29, 2022.

2\ Persistent Systems Inc., USA, wholly-owned subsidiary of your Company acquired 100% shares of MediaAgility Inc., USA on May 4, 2022 and resultantly, acquired its subsidiaries in the UK, Mexico, and Singapore as well.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company’s subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the Company’s website at https://www.persistent.com/investors/

The Policy for determining material subsidiaries of your Company is available on your Company’s website at https://www. persistent.com/investors/policv-on-material-subsidiarv/. According to the said Policy, Persistent Systems Inc., USA is the material subsidiary of your Company.

Infrastructure

Your Company has adopted the hybrid working model. During the Financial Year 2022-23, the total built-up capacity owned by your Company in India and abroad was 128,368 m² which is adequate for 10,000 employees.

The details of owned facilities of your Company are as follows::

Location	Year of Acquisition/Completion	Total Built-up Area (m2)	Total Seating Capacity (Nos)
Pune
1\ Bhageerath	2002	12,170	596
2\ Aryabhata-Pingala	2007	31,680	2,644
3\ Veda Complex, Hinjawadi	2012	41,446	3,197
4\ Ramanujan, Hinjawadi	2023	14,021	1,348
Goa
1\ Charak	1997	3,280	313
2\ Bhaskar	2014	3,762	411
Nagpur
1\ IT Tower	2003	3,708	352
2\ Gargi and Maitreyi	2011	17,279	1,183
Grenoble, France	2000	1,022	50
Total		128,368	10,094

Along with your Company owned premises, your Company also operates from leased facilities in Australia, Canada, Costa Rica, France, Germany, India, Malaysia, Mexico, Poland, Scotland, Sri Lanka, Switzerland, UK and USA.

Annual Return

In accordance with the Companies Act, 2013, the annual return in the prescribed format (MGT-7) for the Financial Year 2022-23 is available at https://www.persistent.com/wp-content/uploads/2023/06/annual-return-2023.pdf

Other Matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

1\ Dr. Anand Deshpande, Chairman and Managing Director and Mr. Sunil Sapre, Executive Director and Chief Financial Officer of your Company have not received any remuneration or commission from any of the subsidiaries.

2\ Mr. Sandeep Kalra, Executive Director and Chief Executive Officer has received remuneration from Persistent Systems Inc., USA in addition to remuneration received from your Company.

3\ No significant or material orders were passed by the Regulators or Courts or Tribunals impacting your Company’s going concern status and operations in the future.

4\ There are no applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at the end of the financial year, nor has the Company done any one-time settlement with any Bank or Financial Institutions.

Awards and Recognitions during the Financial Year 2022-23

Your Company received several prestigious awards and recognitions in various categories such as (1) Technology,

(2) Corporate and (3) People. Brief details of these awards are uploaded on your Company’s website at Awards and Recognitions I Persistent Systems.

Highlights of these are also available in the ‘Corporate Information’ section of this Annual Report.

Directors’ Responsibility Statement Your Directors state that:

1\ In preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2\ Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2023 and of the profit of your Company for that year;

3\ Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4\ The annual accounts have been prepared on a going concern basis;

5\ Your Directors, had laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

6\ Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Future Outlook

Macroeconomic headwinds, global unrest and rising operational costs continue to impact companies’ ability to invest, innovate and grow. Many are experiencing declining revenues, lower margins, decreasing company valuations and substantial layoffs, and the current economic climate indicates that this instability will remain throughout the year.

With this economic uncertainty, business leaders are taking deliberate steps to streamline operations, control corporate spending and optimize product development. They also remain committed to making investments to accelerate innovation and uncover new avenues to revenue growth by reprioritizing product portfolios, enhancing go-to-market activities, entering new markets and vertical industries, accelerating product creation and capitalizing on major technology trends such as Generative AI, intelligent automation, cybersecurity and cloud. They’re looking to collaborate with a trusted partner that demonstrates a proven track record of generating customer growth and optimized service delivery that can help them achieve these goals and adapt to an everchanging market.

Given this challenging environment, we are well prepared and strongly positioned to help new and existing clients navigate these turbulent times and implement their tactical and strategic plans. During the last three years of our journey to $1 billion in annualized revenue, we have future-proofed and embedded resiliency into our organization, and we will continue to adjust our operations to ongoing economic, market and technology shifts.

Our clients are among the world’s premier brands across a wide array of vertical industries. We engage with leading experts in their respective fields and markets and continuously apply learnings from our various collaborations to our own operations and service delivery. We work in the most relevant areas of technology, utilizing and developing innovative products and solutions so our customers can endure and thrive. Our partner ecosystem continues to expand with hyperscaler partners, leading start-ups and dominant vertical industry players as we co-develop new IP and products that can generate growth and reduce costs for our customers.

As we enter the next phase of our growth journey, we will continue to enhance our 22,750 global workforce to remain at the forefront of technology trends and keep our clients ahead of future challenges. We will continue initiatives to diversify our talent mix and our onshore, nearshore and offshore presence to meet client demands, and expand our footprint in key markets in Europe and Asia Pacific while continuing our North America focus. We will focus on culture, diversity and learning and development in our workforce, while also maintaining our commitment to the highest standards of ethics, integrity and social responsibility.

We repeatedly demonstrate to our existing clients and new prospects that we’re a trusted growing partner with operational rigor that can provide guidance for turbulent times. We’re incredibly optimistic about our ability to propel our Digital Engineering leadership to new heights, beyond $1 billion in revenue, for the betterment of our clients, investors, employees and partners.

Acknowledgments and Appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and Industry, the Reserve Bank of India and the Securities and Exchange Board of India throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur,

Goa, Mumbai, Ahmedabad, Indore, Bengaluru and Noida, Visakhapatnam Special Economic Zone - Telangana, SEEPZ Special Economic Zone - Mumbai, Cochin Special Economic Zone, Central Tax and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Ministry of Industries, Government of Maharashtra, Director of Industries, Inspector General of Registration, Maharashtra Pollution Control Board, Goa Pollution Control Board, Central Pollution Control Board, Department of Shops and Establishments, Department of Telecommunication, Ministry of Commerce and Industries, Ministry Of Electronics and Information Technology, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Goods and Service Tax Department, Infotech Corporation of Goa Limited, Goa Industrial Development Corporation, Madhya Pradesh State Electronics Development Corporation Ltd., National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Local Municipal Corporations and Gram Panchayats where Company operates, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation, Maharashtra Industrial Development Corporation, Karnataka Industrial Development Corporation, BSNL and Internet Service Providers, District Administration and State Police departments, Export Promotion Councils, Maharashtra Airport Development Corporation Limited, Development Commissioner, MIHAN (SEZ).

Your Board also extends its sincere thanks to M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors;

M/s. Joshi Apte & Co., Chartered Accountants, Tax Auditors; M/s. SVD and Associates, Company Secretaries, Secretarial Auditors; Trustees of Persistent Foundation; wing of Ernst & Young LLP, providers of Compliance Manager Tool and AICL Communications Ltd, ESG Consultants; for their services to your Company.

Your Board also extends its thanks to Axis Bank, Banco Nacional - Costa Rica, Banco Nacionalde Mexico S. A.,

Bank of Baroda, Bank of India, Bank of Tokyo-Mitsubishi, Barclays Bank, BNP Paribas, BNY Mellon WealthManagement, Canara Bank, Citibank NA, CommonWealth Bank, Deutsche Bank, First National Bank, HDFC Bank, Hongkong and Shanghai Banking Corporation, Silicon Valley Bank, Union Bank of India, VR-Bank Ismaning Hallbergmoos Neufahrn eG, Wells Fargo Bank, Zurcher Kantonal Bank and their officials for extending excellent support in all banking-related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks Members for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels of your Company. The consistent growth was made possible by their hard work, solidarity, cooperation, and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande

Chairman and Managing Director

Mumbai, June 6, 2023 DIN:00 005721

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Mar 31, 2022

Your Directors are pleased to present the Thirty-Second Annual Report of your Company along with the Audited Financial

Statements for the Financial Year ended March 31, 2022.

Business Update

In FY21, we focused on resilience, relationships and reinvention. It was an acknowledgement of challenging times and our need to build on the foundation we had in place to grow the business.

Having successfully accomplished that transition, we were able to focus FY22 on truly unleashing the potential of all the critical components that drive our business — our clients, partners and employees, as well as the multitude of communities in which we operate.

This was reflected in our record-breaking year, delivering $765.59M in FY revenue with 9% sequential quarterly growth for all four quarters and 35.2% Y-o-Y growth. With a continued focus on operational excellence, we were also able to drive EBIT improvement, ending the year with a 56.1% growth Y-o-Y. These results translated to a staggering 143% shareholder return and a market capitalization of $4.3 Billion by Financial Year end.

We are proud to share that, based on this consistent top-and bottom-line growth, your Company was named — for the first time — to Forbes Asia’s “Best Under A Billion” 2021 list.

Your Company continues to be recognized across the industry for innovation, execution and leadership. For the ninth consecutive year, we were recognized as a leader in the Zinnov Zones™ Engineering Research and Development Services ratings. We also appeared on the Constellation Shortlist™ for Innovation Services and Engineering for the fourth consecutive year. Moreover, we augmented our five 2020 ISG Star of Excellence Awards with four more in 2021, spanning the categories of Analytics, Salesforce, Intelligent Automation and Manufacturing.

Your Company added more than 4,900 new team members during the year to support our growth, bringing the total number of employees globally to 18,599. This infusion of exceptional talent included four acquisitions that closed in the fiscal year.

We know our employees are the key to success in supporting our clients and partners — which is why we continue to invest in their wellbeing and look for ways to provide the best-in-class healthcare, training and other benefits expected from a progressive, global company. Our new Employee Stock Option Plan (ESOP), covers 80% of our employees worldwide.

Alongside our own expertise and technology, we continue to evolve our partner strategy to ensure that we are maximizing the value delivered to clients. To that end, your Company has prioritized the hyperscaler ecosystem across AWS, Google, IBM, Microsoft and Salesforce. We also bolstered our advanced cloud capabilities and partner relationships with five acquisitions during the year under Report and to date: Data Glove, SCI, Shree Partners, Sureline and MediaAgility. These strategic investments are in line with our long-term strategy to be on the cutting edge of cloud, security, data and AI/ML technologies, which we believe are still in their early days of business impact.

We have also fortified our leadership team. Recognizing the bench-strength required to sustain and nurture both innovation and growth, we welcomed Yogesh Patgaonkar as our new Chief People Officer and announced Persistent veteran Sameer Bendre as Chief of Operations, responsible for our ESG, Risk Management, Enterprise Information Systems, Administration and Internal Audit functions. In addition, we welcomed Merlyn Mathew as our new head of Delivery Excellence and Talent Management, and Larry Modder as Vice President of Sourcing Advisory, among others.

Your Company will remain focused on executing a differentiated go-to-market strategy, operational excellence, partner ecosystem expansion, talent acquisition and employee retention in years ahead. These five areas are all critical foundations for continued growth, and catalysts for unleashing our full potential.

	(Amount in USD Million except EPS and Book Value)		(Amount in ? Million except EPS and Book Value)		% Change (based on amounts in ?)
Particulars	2021-22	2020-21	2021-22	2020-21
Revenue from Operations	765.59	566.08	57,107.46	41,878.88	36.36%
Earnings before interest, depreciation, amortization and taxes	128.46	92.32	9,581.71	6,830.15	40.29%
Finance Cost*	1.59	0.78	118.35	57.94	104.26%
Depreciation and amortization	22.26	23.73	1,660.12	1,755.50	-5.43%
Other income	19.30	14.57	1,439.55	1077.72	33.57%
Tax expense	31.36	21.46	2,338.93	1,587.66	47.32%
Net profit	92.56	60.92	6,903.86	4,506.77	53.19%
Transfer to general reserve	36.78	27.31	2,743.46	2,020.34	35.79%
Net worth#	443.65	381.61	33,624.40	27,899.35	20.52%
Earnings per share (EPS) (Basic)	1.21	0.80	90.34	58.97	53.20%
Earnings per share (EPS) (Diluted)	1.21	0.80	90.34	58.97	53.20%
Book value per equity share	5.81	4.99	439.97	365.06	20.52%
Market value per equity share as on March 31
BSE Limited	-	-	4,770.65	1,918.75	148.63%
National Stock Exchange of India Limited	-	-	4,765.30	1,922.05	147.93%

[Conversion Rate USD 1 = ? 74.59 for Profit and Loss items; USD 1 = ? 75.79 for Balance Sheet items (Financial Year 2021-22) and USD 1 = ? 73.98 for Profit and Loss items; USD 1 = ? 73.11 for Balance Sheet items (Financial Year 2020-21)]

* Includes notional interest on lease liability FY22: ? 84.06 Million (FY21: ? 57.53 Million) recognized in accordance with IND AS - 116 on Leases and notional interest on amounts due to selling shareholders ? 15.73 Million (Previous year: Nil).

# Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase) and other comprehensive income are considered for the purpose of computing Net Worth and Book Value per share.

	(Amount in USD Million except EPS and Book Value)		(Amount in ? Million except EPS and Book Value)		% Change (based on amounts in ?)
Particulars	2021-22	2020-21	2021-22	2020-21
Revenue from Operations	479.35	335.17	35,754.80	24,796.08	44.20%
Earnings before interest, depreciation, amortization and taxes	116.67	82.58	8,702.39	6,109.04	42.45%
Finance Cost*	0.92	0.52	68.78	38.21	80.01%
Depreciation and amortization	11.23	7.66	837.57	566.79	47.77%
Other income	17.76	15.90	1,324.57	1,176.16	12.62%
Tax expense	30.33	22.02	2,261.95	1,629.34	38.83%
Net profit	91.95	68.27	6,858.66	5,050.86	35.79%
Transfer to general reserve	36.78	27.31	2,743.46	2,020.34	35.79%
Net worth#	437.91	378.27	33,188.85	27,655.24	20.01%
Earnings per share (EPS) (Basic)	1.20	0.89	89.74	66.09	35.78%
Earnings per share (EPS) (Diluted)	1.20	0.89	89.74	66.09	35.78%
Book value per equity share	5.73	4.95	434.27	361.86	20.01%

[Conversion Rate USD 1 = ? 74.59 for Profit and Loss items; USD 1 = ? 75.79 for Balance Sheet items (Financial Year 2021-22) and USD 1 = ? 73.98 for Profit and Loss items; USD 1 = ? 73.11 for Balance Sheet items (Financial Year 2020-21)]

* Includes notional interest on lease liability FY22: ? 68.59 Million (FY 21: ? 38.09 Million) recognized in accordance with IND AS - 116 on Leases and notional interest.

# Equity Share Capital, Reserves and Surplus (excluding Gain on bargain purchase) and other comprehensive income are considered for the purpose of computing Net Worth and Book Value per share.

Material Events Occurring after Balance Sheet Date

Your Company acquired MediaAgility India Private Limited on April 29, 2022. Further, Persistent Systems Inc, USA, wholly-owned subsidiary of your Company acquired MediaAgility Inc., USA, along with its affiliates in the UK, Mexico, and Singapore on May 4, 2022.

MediaAgility is a global cloud transformation services provider with deep expertise in building scalable, cloud-based solutions as a Google Cloud Premier Partner. It provides cloud-native application development and modernization, analytics and AI, cloud engineering, migrations, and managed services to its 35 enterprise service clients across the globe.

There were no other material changes and commitments affecting the financial position of your Company between the end of the Financial Year 2021-22 and the date of this report.

Particulars Required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013 (the ‘Act’), your Company has provided the Consolidated Financial Statements as on March 31, 2022. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These financial statements are available for inspection during business hours at the Registered Office of your Company and the respective subsidiary companies. A statement showing the financial highlights of the subsidiary companies is enclosed to the Consolidated Financial Statements.

The Annual Report of your Company does not contain full financial statements of the subsidiary companies, however, your Company will make available the audited annual accounts and related information of the subsidiary companies electronically in line with the Ministry of Corporate Affair (MCA) Circular dated May 5, 2020, and its extensions from time to time upon request by any Member of your Company.

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2022 are prepared in accordance with the Indian Accounting Standard (Ind AS) 110 on ‘Consolidated Financial Statements’ notified by the MCA and forms part of this Annual Report.

Auditors

Statutory Auditors

The Members of your Company at the 30^th Annual General Meeting (AGM) held on July 24, 2020, appointed M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) as the Statutory Auditors of your Company to hold such office for a period of 5 (Five) years i.e. up to the conclusion of the 35^th AGM to be held in the calendar year 2025; on or before September 30, 2025.

Further, in terms of the Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’), the Statutory Auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Walker Chandiok & Co LLP have confirmed that they hold a valid certificate issued by the ‘Peer Review Board’ of ICAI and have provided a copy of the said certificate to your Company for reference and records.

Secretarial Auditor

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. PVS and Associates, Practicing Company Secretary as the Secretarial Auditor of your Company for the Financial Year 2021-22.

Accordingly, the Secretarial Auditor has given the report, which is annexed hereto as Annexure A. The comments of the Board on the observations of the Secretarial Auditor are as follows:

Sr. No. Observations by the Secretarial Auditor	Comments by the Board
In terms of provisions of Regulation 6(2)	Item Nos. 6 and 7 of the Special Businesses from the Notice of the 2021 AGM was pertaining to
of SEBI (Share Based Employee Benefit)	seeking the approval of the Members for the amendments in the ‘Persistent Employee Stock Option
Regulations 2014 read with SEBI circular	Scheme 2014'' (“PESOS 2014”).
dated June 16, 2015, and pursuant provisions of Companies Act, 2013 to the extent applicable, the disclosure pertaining to determining the exercise price per option granted under PESOS 2014 mentioned in	In the Explanatory Statement of Notice of the AGM, the ‘Point No (f) of the Proposed amendment no. 3'' contains the information on determining the exercise price per option granted under PESOS 2014. The same was maintained in line with the earlier original disclosure made by the Company at the time of initial approval of the Members by way of Special Resolution dated July 26, 2014.
the notice of 31st Annual General Meeting,	The same was in due compliance with the prevailing provisions of the Companies Act, 2013 and
was not adequate. Further, the information	the then prevailing Securities and Exchange Board of India (Employee Stock Option Scheme and
regarding exercise price pertaining to	Employee Stock Purchase Scheme), Guidelines, 1999 (“SEBI ESOP Guidelines”) read with the
PESOS 2014 was provided by way of	prevailing Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
an addendum to the aforesaid notice of	2014 read with circulars issued thereunder (“SEBI SBEB Regulations”).
31st Annual General Meeting which was circulated on July 16, 2021.	However, with a view to enabling the Members to take an informed decision while exercising their voting rights, the Company considered it appropriate to issue clarification to the original disclosure on the Exercise price or pricing formula. This addendum was just to confirm the understanding of the Members since the information was already available in the public domain since 2014.
	The Addendum to the Notice was issued well before the commencement of e-voting for the AGM.

Sr. No.	Observations by the Secretarial Auditor	Comments by the Board
2\	In terms of provisions of Regulation 3(4)	The Trustees of the ESOP Trust are generally the senior executives of the Company and who have a
	of SEBI (Share Based Employee Benefits)	sound understanding about the ESOP domain.
	Regulations, 2014 and Regulation 3(4) of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021, the trustees of the ESOP Trust were acting as	Recently, the Company acquired some entities as a part of its long-term strategy and after the acquisition was complete, the Company appointed 2 (Two) trustees of the ESOP Trust on these acquired entities as Directors representing Persistent’s Management.
	the director of the subsidiary companies for	These two trustees were replaced by the ESOP Trust with other senior employees of the Company
	the period under review.	during FY 2021-22, and now, the Board of Trustees of the ESOP Trust is compliant with the Regulation 3(4) of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021.
		The Company will continue to strictly observe this compliance in the future.
3\	In terms of the provisions of Section	The Circular Resolutions passed by the Board and its Committees are always circulated to the
	175(2) of the Companies Act, 2013 read	Board/its committee as a part of its agenda of the ensuing meeting for its ratification/noting as the
	with Secretarial Standard - 1 issued by	case may be.
	the Institute of Company Secretaries of India, the extract of certain resolutions that were passed by circulation by the	Some of these resolutions were noted/ratified by the Board and its Committees in their ensuing meetings respectively with a mention in the minutes to that effect.
	Board of Directors of the Company and its	The Company will ensure to additionally attach the extract of such Circular Resolutions to the
	committee respectively were not a part of the minutes of the subsequent meeting.	minutes of the next meeting as full compliance in the future.
4\	In terms of provisions of the Foreign	In your Company, the grant and exercise of ESOPs is a continuous process. However, the Company
	Exchange Management Act, 1999, filing	is able to file only One (1) form at a time on the SMF FIRMS Portal of the Reserve Bank of India
	of certain forms viz. Form FC-GPR and	(‘RBI’), and the next form can be filed only after receiving approval from the RBI for the filed form.
	Form ESOP was pending as of March 31, 2022. Further, there was a delay in the filing of certain forms viz. Form FC-GPR	The above process is an automated process by RBI and the Company cannot file the pending forms with RBI through any other channel.
	and Form ESOP, out of which some forms	The Company has maintained a list of foreign employees who have exercised their ESOPs. As and
	were approved subject to payment of Late	when the current form of ESOP for grant/exercise is approved by RBI, the next form is filed for the
	Submission Fee including Compounding	next employee.
	wherever directed by Reserve Bank of India. Furthermore, the Compounding application(s) wherever directed by the Reserve Bank of India are pending to be	The Company has been experiencing procedural delays in approval from RBI. There have been no queries received from RBI’s end. The Company is making all efforts to obtain the approvals, however, unfortunately there has been continued delay.
	made as of the date of this report.	Though the Company has all these pending forms ready to be filed, it cannot be due to the SMF FIRMS Portal system where only 1 application is filed at a time till its disposal. Therefore, a long list of pending applications has been generated with the Company due to the above technical issue on the SMF FIRMS Portal.
		The Company is following up with the RBI officials through different modes of communications and joint representations with its peer companies as well as through the chamber of commerce for resolution on such pending forms due to procedural delays from RBI.
		The Company will strive to continue its efforts to be compliant in terms of these provisions.
5\	In terms of provisions of the Foreign	The Company has migrated its ERP System and the data transfer process from some of the modules
	Exchange Management Act, 1999, there	of the old system to the new ERP system has recently been completed.
	was a delay in the repatriation of dues receivable from some foreign subsidiaries,	As a part of this migration process, the transaction-level data was migrated in a phased manner.
	within the prescribed timeline.	As a cause, some of the data related to the receivables from its subsidiaries was made available in the
		new ERP system with a delay causing non-compliance for the Financial Year FY 2020-21.
		After identifying this default, the Company has taken strict action and all the receivables from the subsidiaries are now under the purview of the new ERP system and are monitored for timely repatriation.

Reporting of Frauds by Auditors

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor have reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board’s report.

Adequacy of Internal Financial Controls

Your Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

Your Board has laid down policies and processes with respect to internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company’s policies, safeguarding of the assets of your Company, prevention, and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Internal Audit

The details of the internal audit team and its functions are given in the Management Discussion and Analysis Report forming part of this Annual Report.

Disclosure of Cost Audit

Your Company had filed Form 23C for appointment of Cost Auditor relating to its activities of generating electricity from windmill turbine under the Companies (Cost Audit Report) Rules, 2011. However, based on another Circular dated November 30, 2011 issued by the MCA, maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act is not applicable for the business activities carried out by the Company.

Accordingly, your Company claimed exemptions from the requirement of the Cost Auditor for the said purposes and had written a letter dated December 19, 2012 to the MCA, Cost Audit Branch, for withdrawal of the appointment of the said Cost Auditor as well as cancellation of the Form 23C so filed. Reply to the said letter is awaited from the MCA.

Particulars of Loans and Guarantees Given and Investments Made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer notes 6, 7, 15, 16, 18, 34 and 43 of the Standalone Financial Statements)

Transfer to Reserves

As per the policy of your Company on transfer of surplus profit to reserves, an amount of ? 2,743.46 Million has been transferred to the General Reserve and an amount of ? 1,937.33 Million will be retained in the Statement of Profit and Loss after payment of dividend. The balance in Profit and Loss Account as on March 31, 2022 is ? 13,825.56 Million and in General Reserves is ? 17,376.65.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Act read with the relevant Rules, your Company has not accepted any fixed deposits during the year under report.

Liquidity

Your Company continues to maintain an adequate liquidity to meet the necessary strategic and growth objectives.

Your Company aims to balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2022, your Company, on an unconsolidated basis, had cash and cash equivalents (including investments) amounting to ? 14,667.67 Million as against ? 18,088.22 Million as at March 31, 2021.

The details of cash and cash equivalents (including investments) are as follows:		(In T Million)
Particulars	As on March 31, 2022	As on March 31, 2021
Investment in Mutual Funds at fair value	5,183.33	7,181.94
Fixed Deposits with scheduled banks	6,041.38	7,412.76
Bonds (quoted)	2,879.29	2,630.80
Cash and Bank balances	563.67	862.72
Total	14,667.67	18,088.22
The particulars of expenditure on Research and Development on an accrual basis are as follows:
		(In T Million) Year ended on March 31
Particulars	2022	2021
Capital expenditure	-	-
Revenue expenditure	136.72	196.72
Total research and development expenditure	136.72	196.72
As a percentage of total income	0.37%	0.76%
The above-mentioned expenditure refers to the expenditure on the Government approved Research		and Development projects.
The particulars of foreign exchange earnings and outgo, based on actual inflows and outflows are		as follows:
		(In T Million) Year ended on March 31
Particulars	2022	2021
Earnings	34,272.85	21,209.15
Outgo	4,154.92	3,770.79

Update on Fixed Deposits with IL&FS

Your Company has deposits of T 430 Million with Infrastructure Leasing & Financial Services Ltd. (IL&FS) and IL&FS Financial Services Ltd. (referred to as “IL&FS Group”) as on the balance sheet date. These were due for maturity from January 2019 to June 2019. In view of the uncertainty prevailing with respect to recovery of outstanding balances from IL&FS Group, Management of the your Company has fully provided for these deposits, along with interest accrued thereon till the date the deposits had become doubtful of recovery. The Management is hopeful of recovery though with a time lag. Your Company continues to monitor developments in the matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposits.

Related Party Transactions

The Policy to determine the materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors is available on your Company’s website at https://www.persistent.com/investors/corporate-governance/related-partv-transactions-policv/

During the year under report, your Company did not enter into any material transaction with any party who is related to it as per the Act. There were certain transactions entered into by your Company with its foreign subsidiaries and other parties who are related within the meaning of Indian Accounting Standard (Ind AS) 24. The attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 34 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirms that none of the transactions with any of the related parties were in conflict with your Company’s interests. The list of Related Party Transactions entered into by your Company for the Financial Year 2021-22 (on a consolidated basis) are available on https://www.persistent.com/investors/corporate-governance/related-party-transactions-policy/

The related party transactions are entered into based on considerations of various business requirements, such as synergy in operations, sectoral specialization and your Company’s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity, and capital resources of subsidiaries.

All related party transactions are entered into on an arm’s length basis, are in the ordinary course of business, and are intended to further your Company’s interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure B in Form No. AOC-2 and the same form an integral part of this report.

B. Board and its Committees

Board Meetings

The details pertaining to the composition, terms of reference, and other details of the Board of Directors of your Company and the meetings thereof held during the Financial Year 2021-22 are given in the Report on Corporate Governance forming part of this Annual Report.

Directors and Key Managerial Personnel

During the year under report, the Members of your Company at the 31^st AGM confirmed the re-appointment of Mr. Sunil Sapre (DIN: 06475949) as an Executive Director of the Company liable to retire by rotation, to hold the office with effect from January 27, 2021 till September 30, 2024.

During the year under report and to date, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of your Company made the following appointments:

a. Appointment of Ms. Avani Davda as an Additional Director (Independent Member):

Ms. Avani Davda (DIN: 07504739) has been appointed as an Additional Director (Independent Member) of the Company to hold office for the first term of 5 (Five) consecutive years i.e. from December 28, 2021 to December 27, 2026, subject to approval by the Members at the ensuing AGM.

Your Board considered expertise in large-scale global operations, strategy and planning, financial, treasury management, taxation expertise, and governance compliance of Ms. Davda while recommending her appointment.

She has a valid registration of the MCA Databank of Independent Directors.

Ms. Davda has confirmed her eligibility and willingness to accept the office of the Director of your Company if approved by the Members at the ensuing AGM. In the opinion of your Directors, Ms. Davda has the requisite qualifications and experience, and therefore, your Directors recommend that the proposed resolution relating to the appointment of Ms. Davda be passed with the requisite majority. Ms. Davda’s profile forms part of this Annual Report and has also been provided in the Notice of the 32^nd AGM.

b. Appointment of Mr. Arvind Goel as an Additional Director (Independent Member):

Mr. Arvind Goel (DIN: 02300813) has been appointed as an Additional Director (Independent Member) of the Company to hold office for the first term of 5 (Five) consecutive years i.e. from June 7, 2022 to June 6, 2027, subject to approval by the Members at the ensuing AGM.

Your Board considered expertise in large-scale business operations, strategy, governance, and business acumen of Mr. Goel while recommending his appointment.

He has a valid registration of the MCA Databank of Independent Directors.

Mr. Goel has confirmed his eligibility and willingness to accept the office of the Director of your Company if approved by the Members at the ensuing AGM. In the opinion of your Directors, Mr. Goel has the requisite qualifications and experience, and therefore, your Directors recommend that the proposed resolution relating to the appointment of Mr. Goel be passed with the requisite majority. Mr. Goel’s profile forms part of this Annual Report and has also been provided in the Notice of the 32^nd AGM.

c. Appointment of Dr. Ambuj Goyal as an Additional Director (Independent Member):

Dr. Ambuj Goyal (DIN: 09631525) has been appointed as an Additional Director (Independent Member) of the Company to hold office for the first term of 5 (Five) consecutive years i.e. from June 7, 2022 to June 6, 2027, subject to approval by the Members at the ensuing AGM.

Your Board considered expertise in the software industry, strategy, planning, and audit purview of Dr. Goyal while recommending his appointment.

He has a valid registration of the MCA Databank of Independent Directors.

Dr. Goyal has confirmed his eligibility and willingness to accept the office of the Director of your Company if approved by the Members at the ensuing AGM. In the opinion of your Directors, Dr. Goyal has the requisite qualifications and experience, and therefore, your Directors recommend that the proposed resolution relating to the appointment of Dr. Goyal be passed with the requisite majority. Dr. Goyal’s profile forms part of this Annual Report and has also been provided in the Notice of the 32^nd AGM.

d. Proposed appointment of Mr. Dan’l Lewin as an Additional Director (Independent Member):

The Nomination and Remuneration Committee (‘NRC’) of the Board of Directors of the Company at its meeting held on June 6, 2022 recommended the appointment of Mr. Dan’l Lewin (DIN: 09631526) as an Additional Director (Independent Member) of the Company.

The Board at its meeting held on June 7, 2022 discussed the same and in-principal agreed to the proposal of the NRC for the appointment of Mr. Lewin subject to the completion of certain necessary statutory requirements by Mr. Lewin.

Your Board considered expertise in the Software Industry, large-scale global operations, strategy and planning, and business acumen of Mr. Lewin while recommending his appointment.

He has a valid registration of the MCA Databank of Independent Directors.

The Board will consider and approve his appointment as an Additional Director (Independent Member) through a circular resolution once the Statutory Requirements are completed by Mr. Lewin.

Further details will form part of the 32^nd AGM notice.

e. Appointment of Mr. Sandeep Kalra as an Additional Director (Executive Member):

Mr. Sandeep Kalra (DIN: 02506494), Executive Director and Chief Executive Officer was appointed as the Executive Director of your Company for a period of 3 (Three) consecutive years with effect from June 11, 2019, till June 10, 2022. Accordingly, his term of appointment will end on June 10, 2022.

Your Board has appointed Mr. Kalra as an Additional Director (Executive Member) with effect from June 11, 2022 till September 30, 2025 subject to the approval by the Members at the ensuing AGM and that of the Central Government considering that he is the non-resident and being appointed as the Whole-Time Director of the Company. Pursuant to the provisions of the Act, he is liable to retire by rotation.

This is because in terms of Clause (e) of the Schedule V to the Act, a person who wishes to be appointed as the Whole Time Director of a listed company needs to be a Resident of India i.e. a person who has been staying in India for a continuous period of not less than twelve months immediately preceding the date of his appointment as a managerial person and who has come to stay in India for taking up an employment in India; or for carrying on a business or vacation in India.

Further, a person being a non-resident in India and getting appointed as the Whole Time Director may travel to India only after obtaining an Employment Visa from the concerned Indian Mission abroad.

Since Mr. Kalra is a non-resident and the Board of Directors have considered the same while recommending his appointment as the Executive Director of the Company, the Company will seek approval from the Central Government for claiming an exemption from the above requirement as per Schedule V to the Act subject to the approval of the Members at the ensuing AGM.

Your Board considered Mr. Kalra’s current term’s contribution, expertise, wide industry experience, and business acumen for recommending him for re-appointment.

The Members may note that, Mr. Kalra’s proposed remuneration (including LTI) is comparable to the remuneration being paid to the CEOs or equivalent positioned executives of peer companies. It is a regular practice of the NRC to review the annual increments of all KMPs and Senior Management Personnel on an annual basis and to keep them in line with the peer companies.

Mr. Kalra has confirmed his eligibility and willingness to accept the office of the Director of your Company if confirmed by the Members at the ensuing AGM. In the opinion of your Directors, Mr. Kalra has the requisite qualifications and experience, and therefore, your Directors recommend that the proposed resolution relating to the appointment of Mr. Kalra be passed with the requisite majority. Mr. Kalra’s profile forms part of this Annual Report and has also been provided in the Notice of the 32^nd AGM.

Retirement by Rotation:

In terms of Section 152(6) of the Act and Article 137 of the Articles of Association of your Company, Mr. Thomas Kendra (DIN: 07406678), Non-Executive Non-Independent Director is liable to retire by rotation at the ensuing AGM as he is the Non-Independent Director who is holding office for the longest period among the Non-Independent Directors on the current Board.

Mr. Kendra through a letter dated June 7, 2022, has intimated that, considering the increase in workload for other commitments, he is unwilling to get re-appointed at the AGM. Mr. Kendra has mentioned that the unwillingness is due to his personal reasons and has confirmed that there are no material reasons for his unwillingness other than the reason mentioned above.

Mr. Kendra will retire from the Directorship effective from the end of the ensuing AGM scheduled to be held on July 19, 2022.

The Board has noted and accepted the decision of Mr. Kendra and thanked him for his contribution to the Company and wished him the best for his future endeavors. The Board has proposed not to fill up the vacancy caused due to Mr. Kendra’s retirement at the AGM.

Retirement of Mr. Pradeep Bhargava, Independent Director:

The re-appointment of Mr. Pradeep Bhargava, Independent Director (DIN: 00525234) for the second term was made at the 29^th AGM held in July 2019 for a period of 3 years for a term up to conclusion of the ensuing 32^nd AGM. Accordingly, he will retire at the conclusion of the ensuing 32^nd AGM.

Resignation of Mr. Guy Eiferman, Independent Director:

Mr. Guy Eiferman, Independent Director (DIN: 08101854) of the Company through a letter dated June 7, 2022, has tendered his resignation effective from the end of the ensuing AGM scheduled to be held on July 19, 2022.

In his above-mentioned communication, he has also informed that the resignation is due to his personal reasons and has confirmed that there are no material reasons for his resignation other than the reason mentioned above.

The Board has noted and accepted the resignation, thanked Mr. Eiferman for his contribution to the Company and wished him the best for his future endeavors.

Remembering Mr. Prakash Telang and Mr. Sanjay Bhattacharyya, Past Directors of your Company:

During the year, we lost two former Directors of the Company. Mr. Prakash Telang passed away in December 2021 and Mr. Sanjay Bhattacharyya passed away in January 2022.

Mr. Telang was an Independent Director of the Company from August 2010 until July 2020, while Mr. Bhattacharyya was the Director from May 2011 until June 2019. Both Mr. Telang and Mr. Bhattacharyya joined the Company as Directors soon after our IPO and contributed to defining the strategy and good governance practices for the Company. We are grateful for their contribution to the Company. Even after their retirement, they continued to be available to the Company and we will miss them.

Your Company offers heartfelt condolences to the members of their family.

At present, your Company has 9 (Nine) Non-Executive Directors who are Independent Directors. Pursuant to Regulation 17(1)(b) of the Listing Regulations, every listed company shall have at least half of its total strength of the Board of Directors as Independent Directors where the Chairperson is an Executive Director. Your Company complies with this requirement.

There is no inter se relationship between the Directors. Except, Mr. Praveen Kadle, Independent Director of the Company is the Chairman, Non-Executive Non-Independent Director of Tata AutoComp Systems Limited where Mr. Arvind Goel, Independent Director of the company is the Managing Director and Chief Executive Officer.

In terms of the Listing Regulations, your Company conducts the Familiarization Program for Independent Directors about their roles, rights, and responsibilities in your Company, the nature of the industry in which your Company operates, business model of your Company, etc., through various initiatives. The details of the same can be found at: https://www.persistent. com/investors/familiarisation-programme/

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149(6) of the Act along with the Rules framed thereunder and Regulation 16 of the Listing Regulations.

Further, they have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

During the Financial Year 2021-22, separate meetings, exclusively of the Independent Directors were held on April 30, 2021 and January 21, 2022, in which the Independent Directors have transacted the following businesses along with few other important strategic and policy-related matters:

1\ Reviewed performance of the Executive Directors and Management of the Company

2\ Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of the Company

3\ Discussed the strategic matters of the Company and current state of the global IT industry

4\ Discussed the role of the Executive Management in the recent COVID-19 outbreak and business continuity plan in the organization

Committees of the Board

The details of the powers, functions, composition, and meetings of all the Committees of the Board held during the year under report are given in the Report on Corporate Governance forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference, and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the Financial Year are given in the Report on Corporate Governance forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were considered positively by the Board of Directors of your Company from time to time during the year under Report.

Nomination and Remuneration Committee

The details including the composition and terms of reference of the Nomination and Remuneration Committee and the meetings thereof held during the Financial Year and the Remuneration Policy of the Company and other matters provided in Section 178(3) of the Act are given in the Report on Corporate Governance section forming part of this Annual Report.

The policy for the appointment of a new director on the Board is as follows:

The Board of Directors decide the criteria for the appointment of a new director on the Board from time to time depending on the dates of retirement of existing Directors and the strategic needs of the Company. The criteria includes expertise area, industry experience, professional background, association with other companies, and other important parameters.

Once the criteria is determined, the Board directs the Nomination and Remuneration Committee to compile profiles of suitable candidates through networking, industry associations and business connections. The Nomination and Remuneration Committee considers each and every profile on the decided parameters and shortlists the candidates. Shortlisted candidates are then interviewed personally or through tele-conference by the Members of this Committee.

Once the Committee is convinced about a candidate’s competency, his/her business acumen, commitment towards his/her association with your Company, disclosure of his/her interest in other entities and his/her availability for your Company on various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration. Generally, the Board accepts the recommendation by consensus.

The said Policy is also available on your Company’s website at Policy-for-appointment-of-a-new-director.pdf (persistent.com) Performance Evaluation of the Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, the Chairman, its various Committees and the Directors individually including Independent Directors. The performance evaluation was done by an external management consultant who specializes in Board evaluations. The performance of the Board was evaluated by seeking inputs from all the directors and senior management. The evaluation criteria includes aspects such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The evaluation was conducted in March and April 2022 and the findings of the evaluation were presented at the meetings of the Nomination and Remuneration Committee and the Board of Directors held in April 2022.

The details of the evaluation have been included in the Corporate Governance Report.

Employees’ Remuneration

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided as Annexure C to the Report.

Employee Stock Option Plan

Your Company has 13 (Thirteen) ESOP Schemes as of March 31, 2022. These Schemes are being implemented as per the SEBI Regulations.

The Members of your Company in 31^st AGM approved amendments in the ‘Persistent Employee Stock Option Scheme 2014’ (PESOS 2014) and ‘Persistent Systems Limited - Employee Stock Option Plan 2017’(ESOP 2017).

In Financial Year 2021-22, 236,800 options were granted under PESOS 2014 and 1,679,229 options were granted under ESOP 2017.

As Required under the SEBI (Share Based Employee Benefits) Regulations, 2014, Secretarial Auditor’s certificate on the implementation of share-based schemes in accordance with these regulations will be made available at the AGM.

The disclosure pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://www.persistent.com/wp-content/uploads/2022/06/esop-details.pdf

Corporate Social Responsibility

Your Company formed a Public Charitable Trust — ‘Persistent Foundation’ in the Financial Year 2008-09 to institutionalize your Company’s CSR initiatives and to develop a systematic approach to administer your Company’s CSR obligations.

Last year, Persistent Foundation (the ‘Foundation’) celebrated its Thirteenth year of establishment. During these 13 years, the Foundation has contributed to many projects spread across different geographies in association with well-known NGOs to reach out to large number of beneficiaries.

Your Company acknowledges the contribution made by the Foundation in coordinating and ensuring that the CSR donations made by your Company are being effectively deployed as proposed and have an impact on the society.

During the year under report, the Foundation was able to continue to create excitement among employees to participate in socially relevant causes. With the cooperation of the employees of your Company, the Foundation has set up several well-defined programs and activities for the promotion of education, health, community development, and assistance in natural calamities. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through the Government authorities, reputed social organizations, and institutions.

In addition to contributing ? 115.35 Million to the Foundation, your Company made donations to various charitable institutions directly. Thus, during the year under report, your Company donated ? 115.53 Million i.e. more than 2% of the Average Net Profits of your Company made during three immediately preceding financial years which amounted to ? 110.24 Million.

Report on CSR activities of your Company under the provisions of the Act during the Financial Year 2021-22 is annexed hereto as Annexure D.

A detailed Report on the activities of the Foundation forms an integral part of this Report.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted the CSR Committee to help your Company frame, monitor, and execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the Company’s social responsibility.

The Board of Directors of your Company have further approved the CSR Policy of your Company to provide a guideline for the Company’s CSR activities. The CSR Policy is also uploaded on your Company’s website at https://www.persistent.com/ investors/csr-at-persistent/

The Company’s CSR Policy highlights that the need for contributing to the society is very large and your Company can make a more significant contribution by staying focused on few areas through its social initiatives. The CSR policy recommends that your Company should encourage Persistent Foundation to contribute in the following focus areas:

1\ Health 2\ Education

3\ Community Development 4\ Assistance in Natural Calamities

The constitution of the CSR Committee is provided in the Report on Corporate Governance section forming part of this Annual Report. Stakeholders Relationship and ESG Committee

The Stakeholders Relationship Committee was constituted on October 4, 2007.

Your Company believes that in today’s day and age, the definition of the stakeholders must be extended beyond what is traditionally considered as stakeholders. Accordingly, your Company has decided to adopt a broader definition of stakeholders to explicitly include the society, customers, partners, our employees, the shareholders, vendors and even the environment.

The Company aims to provide more focus and detailed efforts toward ESG implementation. Considering the same, the Board at its meeting held in January 2022, decided to assign an additional responsibility of overlooking the ESG monitoring-related work at the Company to the Stakeholders Relationship Committee. Accordingly, the name of the Committee has been amended to ‘Stakeholders Relationship and ESG Committee’.

C. Equity and Related Information

Listing with the Stock Exchanges

The Equity Shares of your Company are listed on BSE Limited (BSE) (Scrip Code: 533179) and the National Stock Exchange of India Limited (NSE) (Symbol: PERSISTENT) since April 6, 2010. Listing fees for the Financial Year 2021-22 have been paid to both BSE and NSE.

Institutional Holding

As on March 31, 2022, the total institutional holding in your Company stood at 46.78% of the total share capital.

The details of the Dividend for the Financial Year 2021-22 and 2020-21 are as follows: Financial Year 2021-22			Financial Year 2020-21
Type of Dividend	Interim	Final*	Interim	Final
Month of declaration/recommendation	Jan-22	Apr-22	Jan-21	Apr-21
Amount of Dividend Per Equity Share of T 10 each (In T)	20	11	14	6
% of Dividend	200%	110%	140%	60%
Total Dividend (In T Million)	1,528.50	840.68	1,069.95	458.55
Total Dividend Outflow for the year (In ? Million)		2,369.18*		1,528.50
Payout Ratio		34.3%*		33.9%

* Subject to approval by the Members at the ensuing AGM.

The payment of the final dividend of T 11 per equity share is subject to your approval during the 32^nd AGM of your Company. The Dividend will be paid out of the profits of your Company.

Out of the interim dividend declared in January 2022, T 0.34 Million remained unclaimed as of March 31, 2022.

Your Company has a Dividend Distribution Policy and the same has been uploaded on the website at https://www.persistent. com/wp-content/uploads/2016/09/Dividend-Distribution-Policy.pdf. As per the policy, the dividend payout ratio shall be maintained up to 40% of the Consolidated Profit After Tax. The above dividend is in compliance with the Dividend Distribution Policy of the Company.

Pursuant to the Finance Act 2020, dividend income is taxable in the hands of shareholders and the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.

In this regard, your Company has availed the facility for online submission of Tax Exemption forms from M/s. Link Intime India Private Limited (‘Link Intime’) wherein the shareholders can submit their tax-exemption forms along with other required documents.

The requisite form for claiming tax exemption can be downloaded from Link Intime’s website. The URL for the same is as under: https://www.linkintime.co.in/client-downloads.html -e On this page, select the General tab. All the forms are available under the head “Form 15G/15H/10F”.

The aforementioned forms (duly completed and signed) are required to be uploaded on the URL mentioned below: https://linkintime.co.in/formsreg/submission-of-form-15g-15h.html -e On this page, the user shall be prompted to select/ share the following information to register their request.

1\ Select the company (Dropdown)

2\ Folio/DP-Client ID 3\ PAN

4\ Financial year (Dropdown)

5\ Form selection

a. Document attachment - 1 (PAN)

b. Document attachment - 2 (Forms)

c. Document attachment - 3 (Any other supporting document)

Please note that the documents (duly completed and signed) should be uploaded on the website of Link Intime in order to enable the Company to determine and deduct appropriate TDS/Withholding Tax.

Incomplete and/or unsigned forms and declarations will not be considered by the Company.

The Members may note that in case the tax on said interim/final dividend is deducted at a higher rate in absence of receipt of the aforementioned details/documents, the option is available to the Members to file the return of income as per the Income Tax Act, 1961 and claim an appropriate refund, if eligible.

Transfer of Unclaimed Dividend and corresponding shares to the IEPF Authority

During the year under report, your Company has transferred the unclaimed and unpaid dividend of T 409,794 to the IEPF Authority. Further, 173 corresponding shares on which the dividend was unclaimed for seven consecutive years have been transferred as per the requirement of the IEPF Rules. The details are provided in the shareholder information section of this Annual Report and are also available on the website: https://www.persistent.com/investors/unclaimed-dividend/

The Board has appointed Mr. Amit Atre, Company Secretary, as the Nodal Officer to ensure compliance with the IEPF rules. Shares Suspense Account

Your Company operates an ‘Unclaimed Securities Suspense Account’ on behalf of the allottees who were entitled to the Equity Shares under the Initial Public Offering. Some of the Equity Shares could not be transferred to the respective allottees due to technical reasons. Such shares are held in ‘Unclaimed Securities Suspense Account’, to be transferred to allottees as and when they approach your Company. Your Company regularly uploads details of such unpaid/unclaimed shares on your Company’s website and on the website of the MCA as well.

The current balance in the above-mentioned Suspense Account as on March 31, 2022 is 140 Equity Shares owned by 7 allottees. The details of equity shares held in an ‘Unclaimed Securities Suspense Account’ are as follows:

S. No.	Particulars	Details
1\	The aggregate number of allottees whose shares are lying in the Account at the beginning of the Financial Year 2021-22	7 allottees
2\	The aggregate number of the outstanding equity shares in the Account at the beginning of the Financial Year 2021-22	140 Equity shares
3\	Number of allottees who approached issuer for transfer of shares from the Account during the Financial Year 2021-22	Nil
4\	Number of shares transferred from the Account during the Financial Year 2021-22	Nil
5\	The aggregate number of allottees whose shares are lying in the Account at the end of the Financial Year 2021-22	7 allottees
6\	The aggregate number of outstanding equity shares in the Account at the end of the Financial Year 2021-22	140 Equity shares

Note: Voting rights on the above-mentioned equity shares are kept frozen till the rightful owner of such equity shares claims these shares. Once the rightful owner claims these shares, the shares along with accumulated dividends will be transferred to the rightful owner.

Pursuant to Section 124(6) Act, all shares of the Company in respect of which dividends have remained unclaimed or unencashed for seven consecutive years or more, are required to be transferred by the Company to the IEPF.

Since these shares are lying in the Suspense Account for the past 7 years, they are liable to be transferred to the IEPF in the month of August 2022, unless otherwise claimed by the respective shareholders before that day.

D. ESG

The ESG journey is an evolving process. There cannot be a hard stop or final destination. Instead our journey towards excellence is monitored and measured through our SMART Goals, which is represented as our ESG roadmap.

Our objective is to continue inspiring our internal and external stakeholders. Our ESG goals are ambitious, yet inspirational to many.

The Company has published its ESG/Sustainability Report for the FY 2021-22 and the same is available on your Company’s website at https://www.persistent.com/wp-content/uploads/2022/06/esg-sustainability-report-2021-22.pdf

Some of the activities carried out by your Company are reiterated below:

Conservation of energy and technology absorption

Your Company believes that conservation of energy is essential and as a responsible corporate citizen, your Company must encourage all employees, vendors and other stakeholders to act on ensuring reduced usage of energy on a perpetual basis.

Your Company has procured various energy saving devices and systems, which help in conserving energy and has resulted into a significant savings in the energy cost.

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

Carbon management and sustainable development provide business with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Thanks to the reduced travel, both because of local commuting and air travel, the carbon footprint this year is lower. Your Company continues to take various measures on energy saving and sustainability as follows:

Energy Efficiency Activities

1\ Upgradation of ACs:

\ ACs of 1000 TR capacity in a 2600 seating capacity building which were based on R-22 gas were replaced with energy efficient inverter based ACs with energy efficient & environment friendly R-410 gas system. (15 % reduction in electricity consumption of air conditioning)

\ Ductable ACs 80 TR which were based on R-22 gas were replaced with energy efficient inverter based ACs with environment friendly R-32 gas. (12 % reduction in electricity consumption of air conditioning)

2\ Replaced old chiller system in the corporate office building by a combination of high efficiency (lesser energy and water consumption) chiller system & by high efficiency VRV system.

3\ Regulated and optimized schedules for workings of Lifts, Vending machines, Ventilation systems, Water coolers etc. (Shut off at nights/off working hours except bare minimum required).

4\ AC Discipline: No cool air leakages from each air-conditioned area.

5\ AC optimization: In server rooms and data centers, we have optimized AC utilization by removing unwanted heat loads, space optimization, reorganizing inlet and out flow and wall insulation

6\ Optimized running hours of air-conditioned systems: Temperature set points are altered based on working time, occupancy, and seasonal aspects. (e.g., In winter, night hrs., weekends etc.)

7\ Conference rooms and common area ACs are set to minimum temperature of 240° C.

8\ Ozone system: Integrated with air conditioning for energy saving and indoor air quality improvement resulted in energy saving of ~21 %.

9\ Cold aisle containment in Data Centre: Resulted in a saving of ~18% Power consumption of Data Centre AC.

10\ VFDs installed for all fresh air AHU systems.

11\ Energy saving measures are taken right from design stage like double wall construction, low-e glass for facades and windows with DGUs, maximum use of natural light and ventilation, underdeck insulation, etc.

12\ Replaced CFLs by LED lamps: A total of 9,365 CFL based light fittings replaced by LED lamps - indoor, outdoor and all common areas such as parking, lobbies, toilets etc. in our facilities.

13\ Proactively controlled smart lighting with sensors and timers /sequential timers/occupancy/motion sensors.

14\ Upgradation to high efficiency modular online UPS systems to reduce losses & have flexibility for future growth. ~18% energy saving achieved.

15\ Usage of thin client in place of CPU for training rooms and some of the projects.

16\ 100% change over to laptops from desktops to reduce the energy consumption and also enabling work from home, thus reducing occupancy in our office and thereby, optimizing power consumption on ACs and office network equipment

17\ Active harmonic filter panel for automatic power factor and harmonics control in electrical system, to improve power quality and reduce losses.

Renewable Energy Initiatives, Water Management and Waste Management Initiatives of the Company for the FY 2021-22 are

given in the Business Responsibility Report forming part of this Annual Report.

Customer Experience, Operational Excellence on Green Activities

1\ Employees feel proud belonging to a green Company and volunteer for green initiatives like tree plantation, tree maintenance & society awareness related to sustainability.

2\ LED lighting has improved the ambiance and freshness of the workplace.

3\ Your Company has captured the impact due to their operations on GHG emissions and reviewed after every six months. Also, active efforts are taken to reduce the GHGs annually, details of which have been shared in earlier paragraphs, we are one of rare IT companies certified for ISO 14064: 2018 (GHG Monitoring and Reduction) standard.

4\ Organization level emission declared on CDP Portal (https://www.cdp.net/en). This is a huge transparency initiative for all our stakeholders - investors, shareholders, customers, employees, vendors, etc.

5\ Ozonates improved indoor air quality and higher oxygen levels, clearly felt by inmates as well as visitors. We are amongst the very few IT companies to have this feature installed in our AC systems.

6\ Periodic checking of indoor air quality to verify the various parameters in the workplace.

7\ Your Company is one of the very few IT companies to have solar panels on almost all rooftops and to own two 2.1 MW windmills.

8\ By incorporating efficient and reliable Solar PV Generation projects and two windmills, we have added to financial performance aspects while meeting environmental and social dimensions.

9\ In addition, we also installed Solar panels at Pune and Hyderabad Railway Stations and at Tarachand Hospital Pune under CSR activity.

10\ Energy and water conservation, plastic-free campus is ingrained in day-to-day operations.

11\ We have involved employees in environmental awareness campaigns and actions under the banner “Towards Sustainable Tomorrow” which includes energy monitoring and saving methods at home, promoting renewable energy at home/ societies, composting, water saving and such other initiatives. The campaign is run by a voluntary group of women leaders named “Aspire”. Employees involved in tree plantation drives and also in community development and education-related projects through Persistent Foundation.

12\ Employees contributing regularly for Tree Plantation and other green initiatives.

13\ Appreciation from NASSCOM for Green IT Initiatives in Pune city.

14\ Transport and travel operational efficiency and cost reduced due to optimization of business travel & local bus routes of employee transport, also contributed to substantial reduction of CO2e.

15\ Insistence on eco-friendly & high efficiency products, is promoting vendors with such products.

E. Other Disclosures

Corporate Governance

A separate Report on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations

and any other applicable law for the time being in force form an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding the compliance of conditions of Corporate

Governance as stipulated in the Listing Regulations forms an integral part of this Annual Report.

Management Discussion and Analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable laws for the time being in force based on audited consolidated financial statements for the Financial Year 2021-22 forms an integral part of this Annual Report.

Business Responsibility Report

Report on Business Responsibility as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social, and governance perspective form an integral part of this Annual Report.

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the Financial Year 2021-22 forms an integral part of this Annual Report.

Vigil Mechanism (Whistleblower Policy)

The details of the vigil mechanism (whistleblower policy) are given in the Report on Corporate Governance forming part of this Annual Report. Your Company has uploaded the policy on its website at https://www.persistent.com/investors/corporate-governance/ethical-practices-at-persistent-svstems/whistle-blower-policv/

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the ‘Act’ for this section). All employees (permanent, contractual, temporary and trainees) are covered under this policy.

Your Company has constituted an Internal Complaints Committee(s) (ICC) across all Company locations in India and abroad to consider and resolve all sexual harassment complaints reported to this Committee. The constitution of the ICC is as per the Act and the Committee includes an external member from NGOs with relevant experience at India locations. The Ethics Committee at the global locations acts in the capacity of Internal Complaints Committee where the local laws over there do not enforce the constitution of such committee.

During the year under report, your Company has received four complaints of sexual harassment and one complaint of harassment of non-sexual nature which were immediately disposed by following due process. As on March 31, 2022, there were no pending cases of sexual harassment in your Company.

Secretarial Standards

The Ministry of Corporate Affairs notified the Secretarial Standard on Meetings of the Board of Directors (SS- 1), Secretarial Standard on General Meetings (SS-2), Secretarial Standard on Dividend (SS-3) and Secretarial Standard on Report of the Board of Directors (SS-4).

The Company complies with Secretarial Standards and guidelines issued by the Institute of Company Secretaries of India (ICSI). Other Certifications

The details about the other ISO and Partnership certifications for technical processes and systems are provided in Annexure E to this Report and forms an integral part of this report.

Information Security

Your Company maintains a matured Information Security Management System with Policies, Processes and Controls to minimize the Cyber Security Risks. The governance and management of security compliance and risk is reviewed periodically.

Amid the pandemic and complete lockdown across cities where your Company’s offices are located, most employees are required to work from their respective homes. This unprecedented situation has increased the security risks due to the expansion of the security perimeter from office premises to individual homes.

Your Company’s internal team has taken a holistic and comprehensive approach to address the need of securing the employees’ laptops, their smartphones, the corporate network and the confidential data against inadvertent and malicious attacks, including the customer-specific security requirements. Specific steps include allocation of laptops to every employee, installation of disk encryption and next generation antivirus solution, enhanced data leakage prevention solutions covering laptops and cloud assets, implementation of Multi Factor Authentication and security controls on personal smartphones.

The team has also provisioned critical data backup, improved incoming email scanning and enhanced the security and network monitoring solutions. Periodic external security assessments and proactive security drills help us stay vigilant to security threats. Mandatory annual employee awareness training to reinforce the security imperatives is key to keeping your Company safe.

Subsidiary Companies, Associate Companies and Joint Ventures

During the year under Report your Company along with its wholly owned subsidiaries acquired the following entities:

1\ Persistent Systems Inc., USA, wholly-owned subsidiary of your Company acquired 100% shares of Software Corporation International, USA and its affiliate Fusion360 LLC, USA on October 5, 2021.

2\ Persistent Systems Germany GmbH, Germany, wholly-owned subsidiary of your Company acquired 100% shares of Data Glove IT Solutions Limitada, Costa Rica, USA on March 1, 2022.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company’s subsidiaries in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the Company’s website at https://www.persistent.com/investors/

The Policy for determining material subsidiaries of your Company is available on your Company’s website at https://www. persistent.com/investors/policv-on-material-subsidiarv/. According to the said Policy, Persistent Systems Inc., USA is the material subsidiary of your Company.

Infrastructure

During the Financial Year 2021-22, the total built-up capacity owned by your Company in India and abroad was 129,499 m² which is adequate for 10,000 employees.

The details of owned facilities of your Company are as follows:

Location	Year of Acquisition/Completion	Total Built-up Area (m2)	Total Seating Capacity (Nos)
Pune
1\ Kapilvastu	1994	202	35
2\ Panini	1998	929	80
3\ Bhageerath	2002	12,170	596
4\ Aryabhata - Pingala	2007	31,680	2,644
5\ Hinjawadi	2012	41,446	3,197
6\ Hinjawadi - The Lofts	2021	14,021	1,350
(will be ready for use by
end of H1FY23)
Goa
1\ Charak	1997	3,280	313
2\ Bhaskar	2014	3,762	411
Nagpur
1\ IT Tower	2003	3,708	352
2\ Gargi and Maitreyi	2011	17,279	1,183
Grenoble, France	2000	1,022	50
Total		129,499	10,211

Along with the Company owned premises, your Company also operates from leased facilities in Canada, France, Germany, India, Malaysia, Mexico, Scotland, Sri Lanka, Switzerland, USA and UK.

During the Financial Year 2020-21 and 2021-22, due to the pandemic, the majority of employees were given an option to work from home and only the employees working in essential categories such as Administration and Information Technology were mandated to attend the office in person.

Annual Return

In accordance with the Companies Act, 2013, the annual return in the prescribed format (MGT-7) for the Financial Year 2021-22 is available at https://www.persistent.com/wp-content/uploads/2022/06/annual-return-2022.pdf

Other Matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

1\ Dr. Anand Deshpande, Chairman and Managing Director and Mr. Sunil Sapre, Executive Director and Chief Financial Officer of your Company have not received any remuneration or commission from any of the subsidiaries.

2\ Mr. Sandeep Kalra, Executive Director and Chief Executive Officer has received remuneration from Persistent Systems Inc., USA in addition to remuneration received from your Company.

3\ No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company’s operations in the future.

Awards and Recognitions during the Financial Year 2021-22 Technology

1\ Recognized as Top 15 Sourcing Standout for Managed Services in the Q1 2022 ISG Global Index™ “Booming 15” category for 9 consecutive quarters

2\ Recognized as leader in Zinnov Zones 2021 Hyper Intelligent Automation Services

3\ Appeared on the Constellation ShortlistTM for Innovation Services and Engineering for the 4^th year in a row 4\ Named Partner of the Year in Americas for the “Creation and Delivery of Exceptional Solutions” for 3^rd year in a row 5\ Won top positions in Zinnov Zones Engineering Research and Development Services 2021 ratings for the 9^th consecutive year 6\ Won four ISG Star of Excellence Awards™ in 2021 for best-in-class CX

7\ ISG Digital Case Study Awards™ recognized Persistent in partnership with LungLife AI for its AI and ML algorithms that help in accelerating cancer detection

8\ Recognized as a Leader in ISG Provider Lens™ Archetype Report on Next Generation Cloud Services

9\ Recognized as a Star Performer in Everest Group Software Product Engineering Services PEAK Matrix® Assessment 2021

10\ Recognized as one of the Top 15 Engineering Services Providers of 2022 by Everest Peak Matrix®

Corporate

1\ Won ‘Energy Conservation and Management’ award in the 16^th Maharashtra Energy Conservation and Management Competition 2020-21 by Maharashtra Energy Development Agency

2\ Named in Forbes Asia’s 200 “Best Under A Billion” 2021 list

3\ Persistent Mexico received the Jalisco badge for good labor practices fand full compliance with labor regulations 4\ Won Dun & Bradstreet Corporate Award in ESG Performance (Services) category

5\ Won first place in ‘Excellence in Sustainability’ and first runner-up in “Emergency Preparedness & Business Continuity” at Inventicon Awards

People

1\ Received ‘Recognition Award’ among 200 companies in India by iNFHRA, which is an industry body and

member-based organization representing the Infrastructure, Facility Management, Human Resource, and Realty Industry in India. Held annually, these award applications undergo rigorous scrutiny by juries from specific industries from all over India. Received 5^th Consecutive iNFHRA award in “Ecological sustainability” in April 2021

2\ Received a special recognition for excellence in Learning and Development at the SHRM HR Excellence Awards 2021

3\ Won the prestigious TISS LeapVault CLO Award for the Best Corporate University, Best Games Based Learning Program, Best Quality Management, Best Improvement Training Program 2021

4\ Received Bronze Award for “Excellence in Team Building Engagement” from ETHRWorld

5\ Our Learning and Development team won Training APEX Awards 2022

Directors’ Responsibility Statement

Your Directors state that:

1\ In preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2\ Your Directors have selected such accounting policies and applied them consistently and made judgments and

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2022 and of the profit of your Company for that year;

3\ Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4\ The annual accounts have been prepared on a going concern basis;

5\ Your Directors, had laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

6\ Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Future Outlook

As we exit FY22 and look ahead, the global economy is faced with new uncertainties and complexities growing out of a multitude of macroeconomic forces worldwide. These dynamics are forcing our clients to reevaluate their digital priorities and rethink their IT and R&D spend. Much like we did at the onset of the pandemic, we are looking at this as an opportunity to proactively support our clients as they seek to extract more value from their investments and optimize components of their product engineering or digital transformation agendas.

Today, virtually every experience in people’s lives is software-driven and cloud-enabled — especially the experience of business. In this environment, our differentiated Digital Engineering expertise and trusted delivery will be essential to our clients’ successes. We continue to strengthen our Digital Engineering expertise through a training academy dedicated to just that, and our recent investments in expertise across hyperscalers and micro verticals like payments have already shown success. We will continue to identify new areas of investment required for this new digital reality, ensuring that we maximize returns on all fronts while anticipating and meeting the ever-changing needs of our clients.

Over many years, we have worked hard to future-proof our organization so that we can more effectively navigate not only the always-evolving technology landscape, but also the uncertainty and complexity of the macroeconomic environment. Ultimately, we have made the right investments in acquiring newer capabilities and cultivating strong leadership to build a truly resilient organization.

We are optimistic about your Company’s future and know that we have only begun to unleash the full potential of Persistent.

Acknowledgments and Appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and Industry, the Reserve Bank of India and the Securities and Exchange Board of India throughout the Financial Year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Mumbai, and Noida, Visakhapatnam Special Economic Zone - Andhra Pradesh, SEEPZ Special Economic Zone - Mumbai, Cochin Special Economic Zone, Central Tax and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Industry Ministry of GoM, Director of Industries, Inspector General of Registration, Maharashtra Pollution Control Board, Central Pollution Control Board, Department of Shops and Establishments, Department of Telecommunication, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Goods and Service Tax Department, Infotech Corporation of Goa Limited, Goa Industrial Development Corporation, National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Local Municipal Corporations and Gram Panchayats where Company operates, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation, Maharashtra Industrial Development Corporation, Bengaluru Municipal Corporation, Karnataka Industrial Development Corporation, BSNL and Internet Service Providers,

District Administration and State Police departments, Export Promotion Councils, Maharashtra Airport Development Corporation, Development Commissioner, MIHAN (SEZ).

Your Board also extends its sincere thanks to M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors;

M/s. Joshi Apte & Co., Chartered Accountants, Tax Auditors; M/s. PVS and Associates, Company Secretaries, Secretarial Auditors; Trustees of Persistent Foundation; wing of Ernst & Young LLP, providers of Compliance Manager Tool and investor relations services and related advisory; and KPMG International Limited, ESG Consultants; for their services to your Company.

Your Board also extends its thanks to ABSA Capital Bank, Axis Bank, Banco Nacional - Costa Rica, Banco Nacional de Mexico S. A., Bank of Baroda, Bank of India, Bank of Tokyo-Mitsubishi, Barclays Bank, BNP Paribas, BNY Mellon Wealth Management, Canara Bank, Citibank NA, Commonwealth Bank, Deutsche Bank, First National Bank, HDFC Bank, Hongkong and Shanghai Banking Corporation, Silicon Valley Bank, Union Bank of India, VR-Bank Ismaning Hallbergmoos Neufahrn eG,

Wells Fargo Bank, Zurcher Kantonal Bank and their officials for extending excellent support in all banking-related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks the investors and shareholders for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels of your Company. The consistent growth was made possible by their hard work, solidarity, cooperation, and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande

Chairman and Managing Director

Pune, June 7, 2022 DIN:00 005721

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Mar 31, 2019

Report of the Directors

The Directors are pleased to present the Twenty-Ninth Annual Report of your Company along with the Audited Financial Statements for the financial year ended March 31, 2019.

This financial year has been a year of transition for your Company. The growth this year was challenging, and your Company ended the year with revenues of US$ 480.97 Million which was 2.2% growth over the previous year.

Despite the growth challenges, your Directors believe that your Company is in a strong position to capitalize on the opportunities that are available in the market. Some of the new programs that were initiated during the year took longer to stabilize and they are expected to provide results in subsequent years.

New Leadership Team

During the year under report, Mr. Christopher O’Connor joined the Persistent Group as the Chief Executive Officer (‘CEO’) with effect from February 25, 2019. Mr. O’Connor has worked in different leadership roles for IBM for more than 30 years. He was the General Manager of the IBM IOT business and has been a Persistent customer for nearly 10 years. Mr. O’Connor is based in the United States and his joining your Company is an important step helping your Company become more global and multi-national. United States is your Company’s largest market and having a CEO in closer proximity to the customers, should help your Company to strengthen the relationship with customers.

Mr. Mark Simpson took over as the President of the IBM Alliance Unit from April 1, 2019. Mr. Simpson joined the Persistent Group three years back after a long career at IBM. Col. Jitendra Gokhale (Veteran) took over as the Head of the Accelerite Unit in April 2019.

Mr. Sandeep Kalra joined as the President of the Technology Services Unit with effect from May 1, 2019. Mr. Kalra joins your Company from Harman Connected, a Samsung Company where he was running a similar services business.

Growth and Solutions

During the year under report, your Company set up a team to focus on next generation growth of the Company. The charter of the Growth and Solutions team is to track and invest to ensure that your Company is seen as a thought leader in the market. With an aspiration to build domain based and business centric capabilities, growth and solutions teams were set up for 3 (three) industry segments: (i) banking, insurance and financial services; (ii) life sciences and healthcare; and (iii) industrial and engineering. Technology continues to be the strength for your Company and 4 (four) technology centric growth and solutions teams were set up to focus on (i) cloud technologies (ii) data and machine learning (iii) security and (iv) internet of things. 2 (two) process-centric teams were established with a focus on product engineering services and partnerships with an emphasis on Salesforce which is your Company’s largest partner

The growth and solutions team have started to demonstrate thought leadership in their areas and the work done by these teams will help your Company differentiate and establish leadership in the market.

Sales Velocity

Your Company has been helping customers in their journey of digital transformation by integrating data from different data sources and using machine learning to help customers with actionable insights. Your Company decided to apply these principles to the sales process and established the sales velocity team. The charter of the sales velocity team is to provide salespersons of your Company acurated and enriched list of potential leads that can help them engage with our existing customers and new prospects. The sales velocity team has built a software machine to bring together customer data from the various sources such as news feeds, activities on LinkedIn and interactions that individuals in the Company have with the potential prospects. This data is combined with data that is present in the customer relationship management system which your Company has deployed on Salesforce. The software machine can provide salespersons curated leads that can help the salesperson be “smart” about chasing new customers.

Reseller Business

During the year under report, your Company decided to build a reseller team to be a direct reseller of select IBM products. Your Company believes that by selling products directly to customers is a first step to becoming a value-added reseller and have better control of the sales channels for our products. To get this started, a new team was set up in Europe. Your Company plans to expand the scope of this team to sell other products beyond IBM and geographically extend beyond Europe to the US and to India.

Partnerships

Your Company believes in establishing partnerships with leaders in the market. Your Company has had a strong relationship with Salesforce over the years. The acquisition of Parx in the previous year has helped your Company establish a good Salesforce presence in the European region. IBM continues to be a strong partner and the reseller relationship will further strengthen this.

During the year under report, your Company established new partnerships with Snowflake and with Ping Identity and continued to strengthen partnerships with Appian, Blue Prism and Out Systems.

With the strong trend to cloud computing, your Company encouraged employees to get certifications and established a strong partnership with Amazon AWS and Microsoft Azure.

Partnership with Partners Healthcare

Your Company believes that the healthcare, especially in the US, is set for disruption and your Company could play an important role in this disruption. To establish credibility in the market, your Company decided to partner with the team at Partners Healthcare which comprises of medical experts from Massachusetts General Hospital, Brigham and Women’s Hospital, Dana Farber Cancer Center and Harvard Medical School.

During the year under report, at the 10^th annual Connected Health Conference, Partners HealthCare announced in partnership with your Company the formation of a new center of excellence viz., ‘Partners HealthCare Pivot Labs’ that aims to disrupt the delivery of healthcare to enhance the patient experience, improve clinical outcomes and control costs.

Together, Partners HealthCare and your Company are challenging conventional thinking to shift the focus to making healthcare to fit the patient, as opposed to the current model of fitting the patient into the healthcare system. With digital tools and a unique understanding of the healthcare consumer, Partners Pivot Labs will make care delivery more convenient, accessible and consumer-centric by thinking about the patient holistically. Partners Pivot Labs will openly collaborate with others in the healthcare industry like pharmaceutical companies, medical device manufacturers, medical technology companies, payers and providers to accelerate ideas through the entire development lifecycle, from ideation, prototyping and validation to enterprise-wide deployment in a clinical environment

Acquisitions and Investments

During the year under report, your Company invested in Cazena, Inc. Cazena is founded by ex-Netezza executives and provide fully managed data lake services. Your Company also acquired Herald Technologies Inc. which has a product that was created to transform the data overload swamping healthcare professionals into clear and actionable insights.

Certifications

During the year under report, Pune and Nagpur centers of your Company were successfully assessed for CMMI (Dev - V1.3) at Maturity Level 5 covering “Technology Service Unit for Software Development, Maintenance and Testing projects”. This certification will help your Company qualify for the Government projects.

Life At Persistent - FY 2018-19

Life At Persistent has become a central theme for your Company’s employee engagement and development related work. One Persistent, Careers At Persistent and My Life At Persistent are the three specific focus areas for Life At Persistent.

One Persistent: Establishing Harmony Within Diversity

Your Company’s Core Values are important and continue to guide all employees in their day-to-day work and help them make decisions when under pressure. To help employees get a better perspective of core values at Persistent, your Company shared a video series with messages and practical tips from the Board of Directors and the Management team. To keep core values at the top of the mind, your Company presented table-top artefacts themed around core values to the leaders located at all our global centers.

During the year under report, the leadership team of your Company conducted nearly 4,800 Connect Meetings with employees in small groups to share core values, corporate messages and to get a pulse of the needs of the employees.

These activities have had a positive impact as ‘Frank - the Employee Engagement Survey’ reflected an increase in participation as well as an improved overall positive perception towards employees’ work experience at your Company.

Oneness through sharing and caring continued during the year under report. Celebrations and acknowledging good contributions of the employees has a positive impact. Your Company saw an increase in celebrations across all centers and organized special celebrations to mark the 15-years’ completion of many employees at Persistent Group.

Your Company conducted quarterly chats for the employees after quarterly results to discuss your Company’s performance for the quarter and plans for the next quarter. Dr. Anand Deshpande, Chairman and Managing Director, Presidents and other senior employees interacted with employees through this forum.

Careers At Persistent: From A We-Enterprise To A Me-Enterprise

Your Company believes that individuals are responsible for their own careers and also believes in doing all what it takes to help individuals meet their career aspirations and goals. Your Company believes that diversity is important, and every individual is unique, and this individual uniqueness must be encouraged and preserved. To provide every individual a choice and options, your Company offered many different programs tailored for specific groups and their requirements.

To help employees with their career development, your Company has established the SARA (Self-Assessment, Reflection and Achievement) framework. This framework helps employees to plan their individual career and manage their aspirations.

Employees were encouraged to participate in various existing and new initiatives such as Career Development Tools (Online assessments), Career Guidance Council (by leaders @ Persistent), Career Coaching Service (by certified career coaches), Design Your Career Program (based on Design Thinking approach), CaPro Program (for Career Progression @ Persistent), Persistent Toastmasters Club (in association with Toastmasters International) and Gotten Program (for building the culture of ownership) which were organized throughout the year

As many as 114 project / team-specific Experiential Programs were organized and more than 2,500 employees participated throughout the year. Business-relevant and people-centric takeaways, which would catalyze employee development while helping them align to the business goals was the focus of these experiential programs. Your Company’s Experiential Program 2.0 (2-hour model of in-house experiential programs) was adjudged as the First Runner up at the CII National HR Circle Competition 2018.

Your Company launched a leadership development program “Navigate to Value” to enable sales leaders in the US acquire deeper understanding of client buying approach, framing client value, solution selling and strengthening client facing presence. Financial Acumen for Sustainable Growth was introduced by your Company to enhance the ability of non-finance leaders to make financially intelligent decisions.

Your Company continued to organize its flagship program - Leadership Enablement at Persistent (LE@P). This six-months’ program has helped mid-level high potential managers to develop a well-rounded understanding of Persistent, customers, positioning and offerings. This year, your Company also launched an exclusive LE@P batch for your global employees.

After a successful implementation of the Aspire Program last year - A program focused on developing Women Leaders - your Company’s Women Forum (Prerana) in association with the women leaders of Aspire launched another unique Program named DISHA. The pilot program was conducted across various Pune locations. The goal was to create a women’s network to provide women mentorship for career Development in addition to Inspiration, Support, Happiness and Appreciation.

Along with such initiatives, many technical events and sessions such as Agile Day, My Career Story series were organized during the year under report.

Semicolons, the annual global hackathon for charity was organized in February 2019. This year more than 600 employees in 47 teams participated across all global locations. 11 employees who made significant technical contribution during FY 2018-19 were recognized by the CTO office during the semicolons event.

In order to encourage employees to explore internal job opportunities, your Company conducted an extensive campaign to promote Persistent’s internal jobs portal (iJobs).

Employees received feedback about their work through improved Performance and Health Management System (PHMS).

My Life At Persistent: Not Just Products; Helping People Build Their Lives

Work Life @ Persistent is not just about doing serious things. We work hard and we play hard! During the year under report, more than 250 Beyond Work Initiatives (BWIs) were organized at your Company’s Centers. Every quarter, more than 3,000 employees participated in BWIs. With an intent to cater to varied interest areas of employees, the initiatives were of different types such as art, fun, family connect, children-special initiatives, festival celebrations, knowledge-sharing etc. An initiative named ‘Bring Your Kids to Office’ was especially popular among employees and their kids, as kids got a chance to spend an entire day in their parent’s office. Where feasible, beyond work initiatives were open to family members of the employees.

Pulse, your Company’s annual event was very popular and was celebrated at all centers. Various wellness events were organized during Pulse.

Many Beyond Work Initiatives were organized in collaboration with Persistent Foundation, your Company’s CSR Arm and the support from employees and community was excellent. During the year under report, as many as 26 Green Persistent Initiatives were organized at various offices of Persistent. These initiatives were organized under 4 (four) broad-level themes of Environment Conservation: Pollution control, Conservation of energy, Conservation of Trees and Waste Management. Overall, 750 employees participated in these initiatives and contributed their bit to the environment.

As part of the Wellness Program in your Company, various initiatives such as Wellness Wednesday (a series of wellness tips shared every Wednesday), Annual Health Check-up (more than 75% employees participated), Wellness Workshops (Yoga, Zumba, Functional Training), etc. were organized.

Persistent Run, your Company’s flagship event had more than 4,500 enthusiastic runners participating. Your Company’s Wellness Experts helped employees overcome their stress and ailments, whereas the Trekking Community continued the monthly treks and organized 3 (Three) Himalayan treks. Your Company takes pride in mentioning that Persistent employees were successful in scaling the summit.

On International Yoga Day, employees across various Centers did 15,000 Sun Salutations.

Anand vs Anand Chess Event

Your Company had the honour of hosting Grand Master and former World Chess Champion Mr. Viswanathan Anand (Vishy) in a fire side chat event with Dr. Anand Deshpande, Chairman and Managing Director of your Company. In an hour-long conversation, Dr. Deshpande and Vishy had a highly engaging conversation discussing similarities between chess and business. How preparation is the key to success and how that preparation helps in better decision making. The interview is available on YouTube at https://youtu.be/uSIHi7APakA

Life At Persistent in financial year 2019-20

Looking ahead to financial year 2019-20, your Company will continue to strengthen the program. This year, Life at Persistent has a theme of ‘Sustainability and Vibrancy’ and will focus on ‘Developing a Culture of Ownership.’

Talent Additions during the Year

Your Company continues to attract high caliber quality talent in the industry. During the financial year 2018-19, your Company recruited 3,596 employees on a consolidated basis consisting of regular employees, trainees/interns, consultants, business consultants, contract consultants consisting of technical and non-technical professionals.

As on March 31, 2019, your Company employed 9,962 professionals (including trainees and associates) on a consolidated basis spread across 18 countries. Your Company employed 8,691 in main-stream technical positions. Of these 5,242 were graduates, 1,896 post-graduates and 28 Ph.D.s. The distribution of overseas employees now constitutes 14.93% of the total work force.

Team Persistent is 10,000

In April 2019, your Company achieved an important landmark when the overall headcount of your Company crossed 10,000 for the first time. This number includes all full-time employees and temporary staff across all global locations which is spread across the regions as follows: India - 8,490; America (incl. Canada, USA and Mexico) - 1,100; Europe - 250; other APAC region - 160.

Your Company recruits fresh talent from various engineering colleges in India. During the year under report, your Company added a batch of 1,001 new graduates through campus recruitment. Your Company strongly believes in nurturing ‘Industry -Academia’ partnerships and has many programs such as BE project mentoring, Persistent Day, Internship for college students. Persistent Computing Institute (PCI) conducted programs in cutting edge technology for students that were very popular.

The attrition rate during the year under report was 16.70% which was more than the attrition rate of 14.70% for the previous year.

Continuous Learning and Skill Enablement

In line with a focus on continuous learning and self-development, Persistent University is driving ongoing skills development, thus ensuring that employees are ready for the future. The University serves as a one-stop learning destination with offerings to enhance technical skills, business communication, management and behavioral skills. Multiple learning methodologies are offered such as in-class trainings, remote trainings, blended trainings, Massive Online Courses, self-learning and assessments for internal certification. Employees can choose from a variety of courses along with combination of learning methodologies as per their Individual Learning Plan (ILP). Every employee’s ILP is in line with the Company, project and individual aspirations.

Training details

Your Company covered 70% of employees through at least one training this year, and 43% employees underwent digital technology trainings. Your Company trained about 284 campus hires in the Entry Level Training Program (ELTP).

The total investment for In-Class training was around 1,500 person months and totaling to 9,886 enrollments. Self-learning investment on In-house knowledge center course enrollments was around 2,000 person months.

Total enrollments for internal certifications, either after In-Class training or self-learning were 27,810.

Your Company encourages learning and knowledge enhancements via various means. During the year under report, your Company launched the following initiatives focusing on Digital Technologies:

- Designed and launched ORBIT digital technology program exclusively for the senior managers and leaders in the organization, around 200 attended this program.

- Continued with the Digital Technothon initiative, where employees work on digital technologies (IoT, Machine learning, Block Chain, Dev Ops, AWS, MEAN Stack, full stack). They build and exhibit end-to-end mini projects. 11 such projects were displayed after the campus hires.

- Launched ‘Pledge to Learn’ initiative where employees pledge proactively to learn digital technologies for future readiness. More than 1,600 employees pledged and underwent digital technology trainings.

Technology Predictions for 2019

The CTO group in your Company publishes a Technology Predictions Guide at the beginning of the calendar year 2019. The excerpts from this year’s guide are as follows:

In 2019, one thing is certain - there will be no slow-down in the software transformation journey for organizations across the world, nor in the pace of technology disruptions. To navigate through these rough waters, business leaders will need to have one eye firmly fixed on the horizon, in order to exploit future trends before they can upturn the organization. In this article, we explore the 6 (six) technologies that will turn the tide for organizations this year, while outlining broad guidelines on how to leverage them and sail into the new age, full steam ahead.

1. Data & Analytics

From “must have” to “must deliver value”

Decision-making platforms built on data lakes are no longer enough to generate business value. Enterprises will have to embrace data value governance that covers the entire analytics value chain, from data and insights, to people and processes. Moreover, data governance will have to be integrated with overall business strategy and aligned to a data-driven business model. In the near future, we foresee Machine Learning (e.g. self-service data preparation platforms) and Natural Language Processing (conversational analytics) accelerating the data-driven decision-making process.

2. Artificial Intelligence & Machine Learning ML is all set to excel in 2019

Machine Learning is already an intrinsic part of enterprise automation roadmaps. AI democratization is on the horizon, spurred by an increase in ML solutions, rising demand for data science talent, and increasing complexity of algorithms. Large platform players (think Amazon, Google) will prove instrumental in the explosion of ML models. 2019 will train its spotlight on NLP and text analytics, along with deeper explorations into deep learning. Enterprises should look past chatbots and incorporate NLP in every aspect of customer experience, while evaluating explainable aspects of algorithms for better adoption of black box models. Also, remember to keep a sharp eye on regulatory frameworks.

3. Human-Machine Interaction

AR will soon become ER - Everyday Reality

While Human Machine Interaction technologies - including augmented reality (AR), virtual reality (VR), and chatbots - are yet to find mainstream adoption, they are slowly gaining traction in the enterprise. Adoption barriers will further dissolve with advancements in software engines, AR/VR devices, and democratization of content creation. So how can enterprises leverage HMI? Smartphones are a smart conduit for AR applications - consider using them to create a customer outreach strategy. Secondly, ramp up productivity with AR/VR applications that assist human resources employed in diagnostics and repairs. Also, using safe, cost-effective AR/VR applications to simulate dangerous physical world scenarios can give you an edge over competitors, especially during training programs and demonstrations.

4. Internet of Things (IOT)

Security is still top priority

Security remains the dominant success factor in IoT deployments, and architectural shifts are in the air, along with an increasing number of IoT devices. Edge Computing will be the new center of focus, while blockchain and newer network connectivity standards will impact IoT over the long term. Security will improve as the industry learns from more complex deployments, with remote upgradation of IoT devices becoming indispensable, and compliance with GDPR becoming non-negotiable. To succeed, adopt an edge-first approach and ensure clarity of expected business outcomes and technology roadmaps before embarking on IoT projects.

5. Identity, Access & Security Zero trust is still the hero in 2019

In today’s age of highly fluid enterprise network boundaries, good sense dictates to ‘never trust, always verify’. In the near future, automation and managed security services will gain wide traction, while self-sovereign decentralized identities will set the stage for a collaborative ecosystem.

To move towards a zero-trust enterprise, focus on omni-channel security, backed by machine-intelligence- driven monitoring tools and an automated framework. Want to leverage users’ data in business analysis and transactions? Ensure user consent first. To further tighten security measures, create a cohesive data security and privacy plan to comply with global data privacy regulations.

6. Blockchain

Hype-time over, prime-time begins

In 2019, multiple enterprise blockchain pilots will move into production, egged on by the launch of robust production grade platforms. Expect blockchain to mature into a viable self-sovereign identity solution and public blockchains like Bitcoin and Ethereum to rise stronger from the ashes, with layer-2 network solutions. Blockstack - a new global blockchain platform for decentralized apps (dApps) - will also usher in exciting new changes. Our recommendation for enterprises? Blockchain value creation demands a business strategy shift and alliance formation - hold a boardroom conversation first before jumping the gun to a technology conversation.

Publications during the financial year 2018-19

- ”ATD’s Foundations of Talent Development: Launching, Leveraging and Leading your Organization’s TD Effort” book by Elaine Biech: Persistent University Success Story by Shubhangi Kelkar

- https://www.amazon.com/ATDs-Foundations-Talent-Development-Organizations-ebook/dp/B07H5MHNYS/ref=reader_auth_ dp

- Real Face Detection and Recognition: The Live Experiment , Mar 2018, International Journal of Computer Applications(IJCA), Authors: Shailesh Wadhankar, Priya Singh, Soumyakant Sahoo

- Smart Fleet Management System Using IoT, Computer Vision, Cloud Computing and Machine Learning Technologies, Presented in 5^th I2C IEEE international Conference March 2019, accepted in IEEE Xplore for publication, Authors: Priya Singh, Milind Suryawanshi, Darshana Tak

- Performance Characterization of Hyperledger Fabric, Arati Baliga, Nitesh Solanki, Shubham Verekar, Amol Pednekar, Pandurang Kamat and Siddhartha Chatterjee, in the First Crypto Valley Conference on Blockchain Technology (CVCBT) June 2018, Zug, Switzerland. (pdf).

- Performance Evaluation of the Quorum Platform, Arati Baliga, I Subhod, Pandurang Kamat and Siddhartha Chatterjee, July 2018, published on Arxiv.org (pdf).

S.No. Title and Authors	Focus Areas	Journal
1. Maniyadath B, Chattopadhyay T, Verma S, Kumari S, Kulkarni P, Banerjee K, Lazarus A, Kokane SS, Shetty T, Anamika K, Kolthur-Seetharam U (2019). Loss of Hepatic Oscillatory Fed microRNAs Abrogates Refed Transition and Causes Liver Dysfunctions.	Life Sciences	Cell Reports
2. Kumar P, Panigrahi P, Johnson J, Weber WJ, Mehta S, Sajulga R, Easterly C, Crooker BA, Heydarian M, Anamika K, Griffin TJ, Jagtap PD (2019). QuanTP: A Software Resource for Quantitative Proteo-Transcriptomic Comparative Data Analysis and Informatics.	Life Sciences	J Proteome Res.

Conferences

- Co-organizer for a workshop with PCCM and IISER Pune on “Multi-Omics Studies in Cancer Learnings from The Cancer Genome Atlas (TCGA)” in September 2019

- Attended and presented “Multi-omics Data Integration Reveals miRNA-mediated Gene Regulation in Triple-Negative Breast Cancer” at Cell Symposium:TCGA Legacy, Washington DC, Sep 27-29, 2018

Smart India Hackathon

Your Company continued to play an active leadership role in organizing the third edition of Smart India Hackathon. This year’s event was larger and in addition to the 18 Government ministries, problems were shared by 96 industry collaborators. This year, more than 32,000 teams submitted ideas for the software edition and more than 20,000 teams submitted ideas for the hardware edition.

A 36-hour hackathon for the software edition was held on March 2 and 3, 2019 with more than 8,000 students participating in 48 centers across India. The software edition was a grand success and the Hon’ble Prime Minister, Mr. Narendra Modi inspired participants during a live interaction via video conferencing. The hardware edition will be held in July 2019.

Project Manav

Your Company was instrumental for setting up the Manav project which was recently funded for three years by the Department of Biotechnology (DBT) and co-funded by your Company. The project is in partnership with the two leading biological science institutes in Pune - National Centre for Cell Science (NCCS) and Indian Institutes of Science Education and Research (IISER).

The Manav project aims to create a structured, comprehensive and integrated knowledge base of the human body by collecting in one place macro-level and micro-level information about the human body from scientific literature and public databases.

The project will work with thousands of students in colleges and young professionals and provide a common gamified platform to encourage participants to read, review, collaborate and annotate published scientific articles. The students contributing to this initiative will get exposure to diverse research articles in biological and medical sciences. Your Company will be providing its expertise in life sciences, big data management, platform development for capturing data, data analytics and visualization for successful execution of Manav.

Pradeep Bhargava, Independent Director was elected as the President of MCCIA

Mr. Pradeep Bhargava who is an Independent Director of your Company was elected as the President of the Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) for a two-year term from October 2018 to September 2020. MCCIA is the local chamber of commerce in the Pune region. Various reputed companies are members of the chamber and it is a matter of pride that Mr. Bhargava who is representing your Company at the Chamber is the elected President of this prestigious organization.

ACM India Corporate Sponsorship

Your Company has signed up as the platinum sponsor for ACM India. This sponsorship will help your Company to get visibility and branding in the technology community which is essential for attracting the best of talent to your Company.

The Association for Computing Machinery (ACM) is an international learned society for computing. It was founded in 1947 and is the world’s largest scientific and educational computing society. Your Company has been a supporter of the ACM and has helped establish ACM in India. The ACM India headquarters works out of the offices of your Company. Dr. Hemant Pande who is a former employee of your Company joined the ACM as the Executive Director and has set up this Corporate Sponsorship program.

Financial Results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2019 are as under:

Particulars	Amount in USD Million except EPS and Book Value		Amount in Rs. Million except EPS and Book Value		% Change (based on the amounts in Rs.)
	2018-19	2017-18	2018-19	2017-18
Revenue from Operations	480.97	470.55	33,659.41	30,337.03	10.95 %
Earnings before interest, depreciation, amortization and taxes	79.49	72.70	5,562.40	4,687.26	18.67 %
Finance Cost	0.04	0.01	3.05	0.79	286.08 %
Depreciation and amortization	22.47	24.58	1,572.51	1,584.87	(0.78) %
Other income	12.53	18.47	876.55	1,191.01	(26.40) %
Tax expense	19.24	16.47	1,346.60	1,061.73	26.83 %
Net profit	50.25	50.11	3,516.79	3,230.88	8.85 %
Transfer to general reserve	18.01	21.23	1,260.03	1,368.47	(7.92) %
Net worth*	338.51	326.00	23,394.09	21,245.60	10.11 %
Earnings per share (EPS) (Basic)	0.63	0.63	43.99	40.39	8.91 %
Earnings per share (EPS) (Diluted)	0.63	0.63	43.99	40.39	8.91 %
Book value per equity share	4.28	4.08	295.68	265.90	11.20 %

[Conversion Rate USD 1 = Rs. 69.98 for Profit and Loss items; USD 1 = Rs. 69.11 for Balance Sheet items (financial year 2018-19) and USD 1= Rs. 64.47 for Profit and Loss items; USD 1 = Rs. 65.17 for Balance Sheet items (financial year 2017-18)].

*Net worth = Equity Share Capital Reserves and Surplus (excluding Gain on bargain purchase) Other Comprehensive Income

The highlights of the financial performance on an unconsolidated basis for the year ended March 31, 2019 are as under:

Particulars	Amount in USD Million except EPS and Book Value		Amount in Rs. Million except EPS and Book Value		% Change (based on the amounts in Rs. )
	2018-19	2017-18	2018-19	2017-18
Revenue from Operations	280.06	268.77	19,598.67	17,327.49	13.11 %
Earnings before interest, depreciation, amortization and taxes	54.38	59.16	3,805.21	3,813.77	(0.22) %
Finance Cost	0.01	0.01	0.51	0.62	(17.74)%
Depreciation and amortization	6.56	8.34	458.84	537.81	(14.68)%
Other income	14.83	19.80	1,037.90	1,276.82	(18.71)%
Tax expense	17.63	17.54	1,233.68	1,130.99	9.08 %
Net profit	45.01	53.07	3,150.08	3,421.17	(7.92) %
Transfer to general reserve	18.01	21.23	1,260.03	1,368.47	(7.92) %
Net worth*	321.40	315.05	22,211.90	20,532.04	8.18 %
Earnings per share (EPS) (Basic)	0.56	0.66	39.40	42.76	(7.86) %
Earnings per share (EPS) (Diluted)	0.56	0.66	39.40	42.76	(7.86) %
Book value per equity share	4.06	3.94	280.74	256.65	9.39 %

[Conversion Rate USD 1 = Rs. 69.98 for Profit and Loss items; USD 1 = Rs. 69.11 for Balance Sheet items (financial year 2018-19) and USD 1= Rs. 64.47 for Profit and Loss items; USD 1 = Rs. 65.17 for Balance Sheet items (financial year 2017-18)].

*Net worth = Equity Share Capital Reserves and Surplus Other Comprehensive Income

Material Events Occurring after Balance Sheet Date

There were no material changes and commitments affecting the financial position of your Company between the end of the financial year and the date of this report.

Buyback of Equity Share of your Company

The Board of Directors of your Company, at its meeting held in January 2019, approved the buyback of the Company’s fully paid-up equity shares of the face value of Rs. 10 each from its shareholders (excluding promoters, promoter group and persons who are in control of the Company), via the “open market” route through the stock exchanges, for a total amount not exceeding Rs. 2,250 Million, and at a price not exceeding Rs. 750 per Equity Share.

The indicative maximum number of Equity Shares bought back at the above maximum price would be 3,000,000. If the Equity Shares are bought back at a price below the Maximum Buyback Price of Rs. 750, the actual number of equity shares bought back could exceed the above indicative Maximum Buyback quantity but will always be subject to the Maximum Buyback Size.

Status of the Buyback as on the report date

The buyback commenced on February 8, 2019. The details regarding the number of shares bought back on a monthly basis are as follows:

Sr. No.	Month	No. of Equity Shares bought back	Consideration Paid (In Rs.)	% of Maximum Buyback Size	Avg. Price (In Rs.)
1.	February 2019	368,851	234,137,303.25	10.41	634.77
2.	March 2019	512,247	337,264,931.01	14.99	658.40
3.	April 2019	1,449,015	913,981,595.74	40.62	630.76
4.	May 2019	695,000	423,177,301.10	18.81	608.89
5.	Up to June 11, 2019	240,000	144,489,590.50	6.42	602.04
	Total	3,265,113	2,053,050,721.60	91.25	628.70

In terms of the SEBI Buyback Regulations, the Equity Shares bought back during the month are required to be extinguished within 15 days of the succeeding month. Accordingly, the shares purchased up to May 31, 2019 i.e. 3,025,113 were extinguished on June 7, 2019.

Consequently, the paid-up capital of the Company as at June 11, 2019 has been reduced from Rs. 800,000,000 (Pre-Buyback) to Rs. 769,748,870 comprising of 76,974,887 Equity Shares of Rs. 10 each.

The Buyback will be open till August 7, 2019 or reaching maximum buyback size, whichever is earlier.

Liquidity

Your Company continues to maintain adequate amount of liquidity to meet its strategic and growth objectives. Your Company aims to maintain a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2019, your Company, on an unconsolidated basis, had cash and cash equivalents (including investments) amounting to Rs. 13,109.31 Million as against Rs. 10,768.92 Million as at March 31, 2018. The details of cash and cash equivalents (including investments) are as below:

(In Rs. Million)

Particulars	As at As at March 31, 2019 March 31, 2018
Investment in Mutual Funds at fair value	5,270.44 7,573.80
Fixed Deposits with scheduled banks	4,687.90 747.03
Deposit with Financial Institutions (Net)	497.50 1,030.35
Bonds (quoted)	2,088.35 1,112.47
Cash and Bank balances	565.12 305.27
Total	13,109.31 10,768.92

Update on Fixed Deposits with IL&FS

One of the investments in your Company’s treasury portfolio, is in the form of fixed deposits with Infrastructure Leasing and Financial Services Limited (IL&FS) and IL&FS Financial Services Limited (IL&FS Group) to the extent of Rs. 430 Million. These were due for maturity from January 2019 to June 2019. In August 2018, credit rating agency significantly downgraded IL&FS group’s rating. In view of the uncertainty about the liquidity crisis at IL&FS, it is likely to take considerable time to ascertain the value of the assets held by various entities in IL&FS Group as against the total outstanding debts of the group. In the above circumstances, the management of your Company was of the view that the provision for impairment of the deposits needs to be made in the books of accounts. Hence, a provision of INR 182.50 Million i.e. 42.4% of the total investment in IL&FS has been made as on March 31, 2019. Your Company continues to monitor developments in this matter and is committed to take steps including legal action that may be necessary to ensure full recovery of the said deposit.

Dividend for the financial year 2018-19

The details of the Dividend for the financial year 2017-18 and 2018-19 are as follows:

	Financial Year 2018-19		Financial Year 2017-18
Type of Dividend	Interim	Final (Recommended)	Interim	Final
Month of Declaration	January 2019	July 2019	January 2018	July 2018
Amount of Dividend Per Equity Share of Rs. 10 each (In Rs.)	8	3	7	3
% of Dividend	80%	30%	70%	30%
Total Dividend (Amt. in Rs. Million)	640.00	230.921	560.00	240.00
Dividend Distribution Tax) (Amt. in Rs. Million)	117.23	47.47*	101.37	20.18
Total Outflow (Including Dividend Distribution Tax) (Amount in Rs. Million)	757.23	278.39*	661.37	260.07
Total Dividend Outflow for the year(Amt. in ‘ Million)		1,035.62*	921.53

* The outflow is being considered based on the outstanding capital (Rs. 769,748,870 comprising of 76,974,887 Equity Shares of Rs. 10 each) after considering the shares bought back till May 31, 2019 and which were extinguished till the date of this report.

The payment of final dividend of Rs. 3 per share is subject to your approval during the 29^th Annual General Meeting (AGM) of your Company. The Dividend will be paid out of profits of your Company.

Out of the interim dividend declared in January 2019, Rs. 0.17 Million remained unclaimed as on March 31, 2019.

The Company has Dividend Distribution Policy and the same has been uploaded on the website at ‘https://www.persistent.com/ wp-content/uploads/2016/09/Dividend-Distribution-Policy.pdf’

The above dividend is in compliance with the Dividend Distribution Policy of the Company.

Transfer to reserves

As per the policy of the Company on transfer of surplus profit to reserves, an amount of Rs. 1,260.03 Million has been transferred to the General Reserve and an amount of Rs. 744.00 Million will be retained in the Statement of Profit and Loss after payment of dividend and tax thereon. The balance in Profit and Loss Account as on March 31, 2019 is Rs. 9,735.72 Million.

Fixed Deposits

In terms of Sections 73 and 74 of the Companies Act, 2013 (the ‘Act’) read with the relevant Rules, your Company has not accepted any fixed deposits during the year under report.

Infrastructure

During the financial year 2018-19, the total built-up capacity owned by your Company in India and abroad was 115,478 m² which is adequate for 8,800 employees.

The details of owned facilities of your Company are as follows:

Location	Year of Acquisition /Completion	Total Built-up Area (m2)	Total Seating Capacity
Pune
Kapilvastu	1994	202	35
Panini	1998	929	80
Bhageerath	2002	12,170	586
Aryabhata - Pingala	2007	31,680	2,618
Hinjawadi	2012	41,446	3,173
Goa
Charak	1997*	3,280	309
Bhaskar	2014	3,762	411
Nagpur
IT Tower	2003	3,708	352
Gargi and Maitreyi	2011	17,279	1,263
Grenoble, France	20002	1,022	50
Total		115,478	8,877

* Company started to occupy this premises from October 2005 onwards.

** Company acquired this premises in August 2011 as part of acquisition of the Grenoble team.

Along with the Company owned premises, your Company also operates from leased facilities at Canada, India, Israel, Ireland, Malaysia, Mexico, Scotland, Sri Lanka, USA and UK.

Awards and recognitions during the financial year 2018-19

During the financial year 2018-19, your Company continued its tradition of winning various awards and getting new recognitions. Your Company was a proud recipient of the following awards during the year under report:

Awards

1. First Runner up in National HR Circle Competition, 2018 amongst 16 organizations under Employee Engagement and Relations category (Large services companies)

2. Recognized for having used marketing communications effectively in attracting talent, retaining talent, developing talent and in retention policy

3. First prize for the Wellness and Wellbeing Award category at the Future of HR Summit and Awards, 2018

4. Nagpur Best Employer Brand Awards for using effective marketing communications in talent management

5. ’India’s Coding Power HouseRs. 3 consecutive year 2014 - 16 Among top 5 in 2018

6. ’Best Corporate University’ Award from TISS - LEAPVAULT 2018

7. ’Best Virtual Learning Program’Award from TISS - LEAPVAULT 2018

8. ’Training Top 125 (T125) 2018 Award (International) from Training magazine

9. ’Golden Peacock National Training Award 2019’ from the Institute of Directors, New Delhi

10. Dr. Anand Deshpande, Founder, Chairman and Managing Director received Life Time Achievement Award from the Pune Chapter of the TiE, The Indus Entrepreneur is a global organization of entrepreneurs

11. The Infrastructure, Facility, Human Resources & Realty Association (iNFHRA) has awarded Xcellence award for Ecological Sustainability to Mr. Sanjay Chaudhari, Senior Manager - Administration

Recognition

1. Tilak Maharashtra University conferred Honarary D. Litt. to Dr. Anand Deshpande, Founder, Chairman and Managing Director.

2. Your Company congratulates Mr. Pradeep Bhargava, Independent Director who is representing your Company at Mahratta Chamber of Commerce Industries and Agriculture, Pune (MCCIA) and has been elected as the President for a two-years term. He assumed charge during the 84^th Annual General Meeting on September 25, 2018.

3. Your Company has seconded Dr. Abhay Jere, Head - Persistent Labs to the Ministry of Human Resource Development, Government of India for a period of three years. Dr. Jere has been appointed as the Chief Innovation Officer (CIO) to systematically foster the culture of Innovation amongst all Higher Education Institutions (HEIs). Dr. Jere’s primary mandate is to create national policy frameworks and programs for nurturing innovation ecosystem and to help the Ministry design various initiatives to encourage, inspire and nurture young students by exposing them to new ideas and processes resulting in innovative activities in their formative years.

Auditors

Appointment of statutory auditors

The Members of your Company at the 24^th AGM held on July 26, 2014, appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) and M/s. Joshi Apte & Co., Chartered Accountants (Firm Registration No. 104370W) as the Joint Statutory Auditors of your Company to hold such office till the conclusion of the AGM in the calendar year 2019 and 2017, respectively.

Pursuant to such appointment, M/s. Joshi Apte & Co., Chartered Accountants retired at the conclusion of the 27^th AGM held on July 20, 2017. Thereafter, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants have been the sole Statutory Auditors of your Company.

The Audit Committee of the Board has taken a conservative view and recommended appointment of M/s. Deloitte Haskins & Sells LLP in their second term for a period of 2 (two) years i.e. from the ensuing 29^th AGM up to the conclusion of the AGM to be held on or before September 30, 2021, which will be subject to the approval of the Members of the Company.

Accordingly, your Directors at its meeting held on June 11, 2019, considered recommendation of the Audit Committee favourably and have further recommended to the Members for an appointment of M/s. Deloitte Haskins & Sells LLP as the Statutory Auditors of your Company for a period of 2 (two) years i.e. from the ensuing 29^th AGM up to the conclusion of the AGM to be held on or before September 30, 2021.

Further, in terms of the Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’), the Statutory Auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Deloitte Haskins & Sells LLP has confirmed that they hold a valid certificate issued by ‘Peer Review Board’ of ICAI. They have also conveyed their eligibility and willingness to act as the Statutory Auditors of the Company.

Secretarial Audit Report

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. SKO & Associates, Practicing Company Secretaries as the Secretarial Auditors of your Company for the financial year 2018-19.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as Annexure A. The comments of the Board on the observations of the Secretarial Auditors are as follows:

Sr. No.	Observations by the Secretarial Auditors	Comments by the Board
1.	There was a delay of one day in intimating to the Stock Exchanges about loss of share certificate.	The Company received the e-mail intimation after business hours. Post receipt, the Company verified the details with the Registrar and Transfer Agent before intimating the same to the Stock Exchanges. In this process, the evaluation delayed by 1 (one) day, and the Company could not meet the compliance within prescribed time. The Company has taken sufficient precautions not to repeat such instances in future.
2.	Pursuant to Regulation 47(2) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Company has not provided link of the website where further details are available in certain newspaper advertisements.	Though, the Company mentioned the website address along with its name and address details in all its newspaper advertisements, a specific mention of the Company’s website address was missing in one of the public advertisements for declaring quarterly results. The Company took cognizance of the same and started providing the link separately in its newspaper advertisements at prescribed place in the quarterly advertisements.
3.	The Company filed form for appointment of Whole Time Director with the Registrar of Companies, beyond prescribed time. The said form has been approved by Registrar of Companies.	The delay was due to inadvertence. The Company has taken sufficient precautions not to repeat such instances in future.

4. The Company filed Form IEPF 1 and IEPF 4 with the Registrar of Companies, beyond prescribed time.

The Company has been prompt in filing Form IEPF 1 and IEPF 4 with the Ministry of Corporate Affairs (MCA), within prescribed time. In FY 2010-11, to ensure the security of dividend amount and to transfer it to the rightful owners, the Company opened a separate Bank Account to credit the unclaimed dividend amount out of Final Dividend of FY 2009-10 with respect to unclaimed 600 Equity Shares from its IPO in 2010. Due to oversight, the Company did not transfer Rs. 300 from the above Bank Account at the time of transferring the unpaid amount from the Final Dividend of FY 2009-10. After recognizing, the Company took steps in this regard to transfer the abovementioned Rs. 300 to the IEPF Bank Account and has completed the transfer of funds on October 17, 2018. As per Section 124(3) of Companies Act, 2013, the Company has paid an interest of Rs. 42 @ 12% p.a. on Rs. 300 and has transferred an aggregate amount of Rs. 342 (Rupees Three Hundred and Forty-Two only) to the IEPF Account. After completing the above additional transfer to the IEPF Authorities, the Company immediately filed Form IEPF 1 and IEPF 4 and complied with the requirements.

5. Under the Foreign Exchange Management Act, 1999, there was delay in two cases for submission of Forms ODI relating to reporting of certain events in case of step-down subsidiaries.

The Company was following practice of reporting events in case of stepdown subsidiaries through Annual Performance Reports (APRs) every year. The said APRs include financial and structural updates regarding the step-down subsidiaries; and the same is taken on record by the Reserve Bank of India from time to time. However, during the year, the Company received a guidance from the subject matter expert to submit Form ODI separately for the events (equity/loan/guarantee) in case of stepdown subsidiaries. Accordingly, the Company filed Forms ODI relating to reporting of certain events (equity/guarantee) in case of stepdown subsidiaries which was beyond prescribed time. Henceforth, the Company will follow the above process to submit Form ODI separately for the events (equity/loan/ guarantee) in case of stepdown subsidiaries.

Board and Corporate Governance

Board Meetings

The details pertaining to the composition, terms of reference and other details of the Board of Directors of your Company and the meetings thereof held during the financial year 2018-19 are given in the Report on Corporate Governance section forming part of this Annual Report.

Directors and Key Managerial Personnel

During the period from April 1, 2019 till the date of this report, the Board has appointed the following Directors:

a. Mr. Christopher O’Connor as an Additional Director (Executive Director) with effect from April 27, 2019 for a term of 3 years i.e. up to April 26, 2022. He has also been also appointed as the Chief Executive Officer of your Company.

b. Mr. Sandeep Kalra as an Additional Director (Executive Director) with effect from June 11, 2019 for a term of 3 years i.e. up to June 10, 2022. He has also been appointed as the President-Technology Services Unit of your Company.

In terms of Clause (e) of the Schedule V to the Act, a person who wishes to be appointed as the Executive Director of a company needs to be a Resident of India.

Further, a person being a non-resident in India and getting appointed as the Executive Director may travel to India only after obtaining an Employment Visa from the concerned Indian Embassy/Commission abroad.

Since Mr. O’Connor and Mr. Kalra are non-residents and the Board of Directors has considered the same while recommending their appointment as the Executive Director of the Company, the Company will seek an approval from the Central Government for claiming an exemption from the above requirement as per the Schedule V to the Act subject to the approval of the Members at the ensuing AGM.

The appointment of 5 (Five) Independent Directors (Ms. Roshini Bakshi, Mr. Pradeep Bhargava, Mr. Sanjay Bhattacharyya, Mr. Prakash Telang and Mr. Kiran Umrootkar) was made at the 24^th AGM held on July 24, 2014 for a period of 5 (Five) consecutive years for a term up to conclusion of the ensuing 29^th AGM.

The Board of Directors of your Company at its meeting held on June 11, 2019 considered total tenure of the Independent Directors in the Company for their reappointment. They also considered their contribution in the first term, expertise, wide industry experience and business connects for recommending them for the re-appointment for the next term. Pursuant to the provisions of the Act, they are not liable to retire by rotation.

Accordingly, the Board recommended reappointment of the following Independent Directors at the ensuing AGM as follows:

Sr. No.	Name of the Independent Director	Recommended term of appointment
1.	Ms. Roshini Bakshi	5 Years
2.	Mr. Pradeep Bhargava	3 Years
3.	Mr. Prakash Telang	1 Year
4.	Mr. Kiran Umrootkar	1 Year

The above 4 (Four) directors have confirmed their eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing AGM. In the opinion of your Directors, the above 4 (four) Directors have requisite qualifications and experience and therefore, your Directors recommend that the proposed resolutions relating to the re-appointment of above 4 (Four) directors be passed with the requisite majority.

Mr. Sanjay Bhattacharyya, Independent Director expressed his unwillingness for re-appointment for the next term due to personal reasons. The Board of Directors of your Company respected his decision and accordingly, has not recommended his appointment for the next term. The Board sincerely appreciates the contribution by Mr. Bhattacharyya during his tenure with your Company and wishes him all the best for his future endeavours.

In terms of Section 152(6) of the Act and Article 116 of the Articles of Association of your Company, Dr. Anand Deshpande, Chairman and Managing Director is liable to retire by rotation at the 29^th AGM as he is Executive and Non Independent Director who is holding office for the longest period among the Non-Independent Directors on the board.

Dr. Deshpande has confirmed his eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing AGM. In the opinion of your Directors, Dr. Deshpande has requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the reappointment of Dr. Deshpande be passed with the requisite majority.

At present, your Company has 13 (Thirteen) Directors out of which 8 (Eight) are Non-Executive Directors who are Independent Directors. Pursuant to the Regulation 17(1)(b) of the Listing Regulations, every listed company shall have at least half of its total strength of the Board of Directors as Independent Directors where Chairman is an Executive Director. Your Company complies with this requirement.

In terms of the Listing Regulations, your Company conducts the Familiarization Program for Independent Directors about their roles, rights, and responsibilities in your Company, nature of the industry in which your Company operates, business model of your Company, applicable laws, amendments and the effects there of etc., through various initiatives. The details of the same can be found at: https://www.persistent.com/investors/familiarisation-programme/

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149 of the Act and Reg. 16(1)(b) of the Listing Regulations.

Separate meeting of the Independent Directors has been held during the financial year 2018-19 in which the Independent Directors have transacted the following business:

1. Reviewed performance of the Management of the Company;

2. Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of the Company;

3. Discussed the strategic matters of the Company and current state of the global IT industry; and

4. Reviewed performance of Non-Independent Directors

Committees of the Board

The details of the powers, functions, composition and meetings of all the Committees of the Board held during the year under report are given in the Report on Corporate Governance forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were accepted by the Board of Directors of your Company from time to time during the year under Report.

Compensation and Remuneration Committee

The Compensation and Remuneration Committee of the Board was constituted on April 23, 2004. In terms of the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘SEBI ESOP Guidelines’), your Company re-constituted the Compensation and Remuneration Committee for the administration and superintendence of the employee stock options schemes on October 4, 2007.

The Board of Directors at its meeting held in April 2014 named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Act. As regards the terms of the Compensation and Remuneration Committee of your Company, the same are in line with the statutory terms of the Nomination and Remuneration Committee.

The details including the composition and terms of reference of the Compensation and Remuneration Committee and the meetings thereof held during the financial year and the Remuneration Policy of the Company are given in the Report on Corporate Governance section forming part of this Annual Report.

Nomination and Governance Committee

The Board of Directors at its meeting held in April 2014 named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Act. As regards the terms of the Nomination and Governance Committee of your Company, the same are in line with the statutory terms of the Nomination and Remuneration Committee.

The details including the composition and terms of reference of the Nomination and Governance Committee of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

The policy for appointment of a new director on the Board is as follows:

The Board of Directors decides the criteria for the appointment of a new director on the Board from time to time. The criteria may include candidate’s expertise area, age, industry experience, professional background, association with other companies and such other things.

Once the criteria are determined, the Board directs the Nomination and Governance Committee to compile profiles of suitable candidates through networking, industry associations and business connects. The Nomination and Governance Committee considers each and every profile on the decided parameters and shortlists the candidates. Shortlisted candidates are then interviewed personally or through tele-conference by the Members of the Committee.

Once the Committee is convinced about a candidate’s competency, his/her business acumen, commitment towards his/ her association with your Company and his/her availability for your Company on various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration.

Employees’ remuneration

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure B of the Report.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are provided in the Annexure C of the Report.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company at the time of grant.

In line with the Ind AS 102 - “Share Based Payments”, your Company has computed the cost of equity-settled transactions by using the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period.

No employee stock options were granted during FY 2017-18 and FY 2018-19.

No new options were granted to the Independent Directors of your Company during the year under report. Shares held by Independent Directors and Non-Executive Non-Independent Directors as on March 31, 2019 are as under:

Name of the Director	Shares held (through exercise of vested stock options)	Shares held (through allotment under a pre IPO scheme)	Shares held (through market purchase / IPO)	Total Shares held
Ms. Roshini Bakshi	NIL	NIL	NIL	NIL
Mr. Pradeep Bhargava	13,600	NIL	NIL	13,600
Mr. Sanjay Bhattacharyya	14,000	NIL	NIL	14,000
Mr. Guy Eiferman	NIL	NIL	NIL	NIL
Dr. Anant Jhingran	NIL	NIL	NIL	NIL
Mr. Thomas Kendra	NIL	NIL	NIL	NIL
Prof. Deepak Phatak	NIL	NIL	NIL	NIL
Mr. Prakash Telang	14,000	NIL	4,000	18,000
Mr. Kiran Umrootkar	6,000	NIL	NIL	6,000

The Compensation and Remuneration Committee at its meetings held in January 2019 and April 2019, has approved RSUs to the Executive Directors of your Company which will be granted to them over the next 4 (four) years in a phased manner.

Of them, the details of grants already made to them between April 1, 2019 and the date of this report are as follows:

Name of the	No. of RSUs	Dates of		Criteria for vesting
Executive Director	Already granted	vesting	Time based	Performance based	Basis of vesting (For Performance based RSUs)
Mr. Christopher O’Connor	250,000	1-May-2019 to 30-Jun-2022	80%	20%	Based on Company Revenue Growth and EPS Growth
Mr. Sandeep Kalra	200,000	1-May-2020 to 31-May-2021	75%	25%	Based on TSU Revenue Growth and EPS Growth
Mr. Sunil Sapre	50,000	1-May-2020 to 31-May-2021	75%	25%	Based on Company Revenue Growth and EPS Growth

During the financial year 2018-19, pursuant to the resolutions passed by the Compensation and Remuneration Committee of the Board of Directors by way of circulation, employees including ex-employees exercised their stock options for shares which were already vested in their name. During this exercise, 560,732 (Five Hundred Sixty Thousand Seven Hundred and Thirty Two) i.e. 0.68% Equity shares of the total paid-up capital were transferred from PSPL ESOP Management Trust to these ESOP grantees at an aggregate value of Rs. 68.92 Million under various ESOP Schemes of your Company.

Your Company has 12 (Twelve) ESOP Schemes as on March 31, 2019 under which options were granted to various Independent Directors, employees of the Company and its subsidiaries, details of which are given elsewhere in this Annual Report.

Shares Suspense Account

Your Company had opened an ‘Unclaimed Securities Suspense Account’ on behalf of the allottees who were entitled to the Equity Shares under the initial public offering. Some of the Equity Shares could not be transferred to the respective allottees due to technical reasons. Such shares were held in ‘Unclaimed Securities Suspense Account’, to be transferred to allottees as and when they approach your Company. Your Company has been regularly uploading details of such unpaid/unclaimed shares on its website and on the website of the Ministry of Corporate Affairs as well.

During the year under report, out of 280, 140 unclaimed Equity Shares in the Suspense Account were transfered to the IEPF Suspense Account after following the due process. The other 140 Equity Shares are the bonus shares issued and alloted on March 12, 2015. This shares will be transferred to the IEPF Suspense Account as and when they become due for transfer.

The current balance in the above-mentioned Suspense Account as on March 31, 2019 is 140 Equity Shares owned by 7 allottees. The details of equity shares held in an ‘Unclaimed Securities Suspense Account’ are as follows:

Sr. No.	Particulars	Details
1.	Aggregate number of allottees in the Unclaimed Securities Suspense Account lying at the beginning of the financial year 2018-19	7 allottees
2.	Aggregate number of the outstanding Equity Shares in the Unclaimed Securities Suspense Account lying at the beginning of the financial year 2018-19	280 Equity Shares
3.	Number of allottees who approached issuer for transfer of shares from Unclaimed Securities Suspense Account during the financial year 2018-19	NIL
4.	Number of shares transferred from Unclaimed Securities Suspense Account during the financial year 2018-19 to the allottees	NIL
5.	Number of shares transferred from Unclaimed Securities Suspense Account during the financial year 2018-19 to the IEPF Suspense Account	140 Equity Shares
6.	Aggregate number of allottees in the Unclaimed Securities Suspense Account lying at the end of the financial year 2018-19	7 allottees
7.	Aggregate number of outstanding equity shares in the Unclaimed Securities Suspense Account lying at the end of the financial year 2018-19	140 Equity Shares

Note - Voting rights on the above-mentioned equity shares are kept frozen till the rightful owner of such equity shares claim these shares. Once the rightful owner claims these shares, the shares along with accumulated dividend will be transferred to the rightful owner.

Transfer of Unclaimed Dividend and corresponding shares to the IEPF Authority

During the year under report, the Company has transferred the unclaimed and unpaid dividend of Rs. 97,407 to the IEPF Authority. Further, 69 corresponding shares on which the dividend was unclaimed for seven consecutive years were transferred as per the requirement of the IEPF Rules. The details are provided in the shareholder information section of this Annual Report and also available on our website: https://www.persistent.com/investors/unclaimed-dividend/

Institutional Holding

As on March 31, 2019, the total institutional holding in your Company stood at 42.80% of the total share capital.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Act, your Company has provided the Consolidated Financial Statements as on March 31, 2019. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. A statement showing financial highlights of the subsidiary companies is enclosed to the consolidated financial statements.

The Annual Report of your Company, though does not contain full financial statements of the subsidiary companies, your Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of your Company.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2019 are prepared in accordance with the Indian Accounting Standard (Ind AS) 110 on ‘Consolidated Financial Statements’ notified by the Ministry of Corporate Affairs (MCA), and forms part of this Annual Report.

Subsidiary Companies, Associate Companies and Joint Ventures

The details of the subsidiaries and associate of your Company as on March 31, 2019 are as under:

(In Rs. Million)

Name of the Entity and Country of incorporation		Period of Establishment/ Acquisition	Total Income		Net Profit/(Loss)
	Status		For the year ended March 31, 2019	For the year ended March 31, 2018	For the year ended March 31, 2019	For the year ended March 31, 2018
Persistent Systems Inc., USA (PSI)	Wholly Owned Subsidiary	October 2001	19,754.37	17,329.58	(174.76)	(251.56)
Persistent Systems Pte. Ltd., Singapore (Co. Reg. No. 200706736G)	Wholly Owned Subsidiary	April 2007	145.87	307.00	11.80	15.17
Persistent Systems France S.A.S., France	Wholly Owned Subsidiary	April 2011	979.73	404.18	43.37	52.88
Persistent Systems Malaysia Sdn. Bhd., Malaysia	Wholly Owned Subsidiary	September 2013	473.35	408.90	123.41	71.59
Persistent Systems Germany GmbH, Germany	Wholly Owned Subsidiary	December 2016	54.51	1.45	(15.19)	(37.33)
Persistent Telecom Solutions Inc., USA	Step-down subsidiary (Wholly Owned Subsidiary of PSI)	January 2012	1,284.13	1,192.85	24.60	(78.96)
Akshat Corporation (dba R-Gen Solutions), USA (dissolved on December 21, 2018)	Step-down subsidiary (Wholly Owned Subsidiary of PSI)	July 2015*	13.36	112.50	(0.92)	8.56
Persistent Systems Israel Ltd., Israel	Step-down subsidiary (Wholly Owned Subsidiary of PSI)	February 2016	525.42	548.56	28.11	41.00
Persistent Systems Mexico S.A. de C.V., Mexico	Step-down subsidiary (Wholly Owned Subsidiary of PSI)	March 2016	215.62	176.75	(22.29)	0.62

Name of the Entity and Country of incorporation		Period of Establishment/ Acquisition	Total Income		Net Profit/(Loss)
	Status		For the year ended March 31, 2019	For the year ended March 31, 2018	For the year ended March 31, 2019	For the year ended March 31, 2018
Herald Technologies Inc., USA	Step-down subsidiary (Wholly Owned Subsidiary of PSI)	August 20183	0.07	NA	(10.29)	NA
Aepona Group Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Holdings Limited)	October 20154	5.84	-	(1,360.89)#	-
Valista Limited, Ireland (Under liquidation)	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Group Limited)	October 2015*	16.50	6.21	14.95	(7.84)
Aepona Limited, United Kingdom	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Group Limited)	October 2015*	397.34	524.56	(96.85)	(224.58)
Persistent Systems Lanka (Private) Limited, Sri LankaA	Step-down subsidiary (Wholly Owned Subsidiary of Valista Limited)	October 2015*	212.16	209.66	34.62	25.06
PARX Werk AG, Switzerland	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Germany GmbH)	August 2017*	518.74	334.80	15.00	(31.39)
PARX Consulting GmbH, Germany	Step-down subsidiary (Wholly Owned Subsidiary of PARX Werk AG)	August 2017*	473.52	315.82	(59.88)	0.12
KIisma e-Services Private Limited, India	Associate Company	March 2012

* Period of Establishment/ Acquisition mentioned above is the period in which the entities are acquired by your Company directly or through its subsidiaries.

** Acquired during FY 2018-19

# Includes provision for investment and inter corporate deposits given to its wholly owned subsidiary in the UK prior to its acquisition by Persistent group. Since the net worth of the subsidiary had eroded, the same is provided for. Being the inter company transaction, it is eliminated in the consolidated financial statments.

^A The Name of Aepona Software (Private) Limited has been changed to ‘Persistent Systems Lanka (Private) Limited’ with effect from May 19, 2017.

The Policy for determining material subsidiaries of your Company is available on your Company’s website at https://www.persistent.com/investors/policy-on-material-subsidiary/

Till the date of this report, your Company has established new branch offices at Santa Clara and North Carolina, USA. These branch offices will help your Company with respect in taxation, transfer pricing and business negotiations with direct customers of your Company.

Particulars of Loans and Guarantees given and Investments made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer notes 6, 7, 15, 16, 34 and 43 of the standalone financial statements)

Related Party Transactions

The Policy to determine materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors is available on your Company’s website at https://www.persistent.com/investors/related-party-transactions-policy/

During the year under report, your Company had not entered into any material transaction with any party who is related to it as per the Act. There were certain transactions entered into by your Company with its foreign subsidiaries and other parties who are related within the meaning of Indian Accounting Standard (Ind AS) 24. Attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 34 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirm that none of the transactions with any of related parties were in conflict with your Company’s interest. The list of Related Party Transactions entered by your Company for FY 2018-19 (on consolidated basis) are available on https://www.persistent.com/wp-content/uploads/2019/05/persistent-systems-rpt-march-31-2019.pdf

The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialization and your Company’s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries.

All related party transactions are entered into on an arm’s length basis, are in the ordinary course of business and are intended to further your Company’s interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure D in Form No. AOC-2 and the same forms an integral part of this report.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations and any other applicable law for the time being in force, forms an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in the Listing Regulations forms an integral part of this Annual Report.

Management Discussion and Analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable law for the time being in force based on audited, consolidated financial statements for the financial year 2018-19, forms an integral part of this Annual Report.

Business Responsibility Report

Report on Business Responsibility as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social and governance perspective, forms an integral part of this Annual Report.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy and has resulted into a significant savings in the energy cost.

Carbon management and sustainable development provide business with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving.

Your Company has reduced excessive illumination levels to standard levels in all common areas by using switching or delamping and aggressively controlled lighting with new sensor technologies. Like in the previous year, your Company has continued to maximize the use of energy efficient flat monitors, VRV air-conditioning systems, solar energy for usage of hot water, LED logo on buildings, LED lighting in all areas, installation of power management software for desktops, Watt Miser system in AHUs, Enpower Computer Management system and VFD Installation for Fresh Air AHU systems for conservation of energy.

Your Company has replaced all/ partly CFL fitting by efficient LED light fittings at its Bhageerath, Aryabhata- Pingala, Hinjawadi, SEZ-Hinjawadi, Goa (Bhaskar) and Nagpur facilities and have proposed to use the same in other facilities. Your Company has regulated working of lifts, coffee vending machines, ventilation systems and water coolers in its premises.

Your Company undertakes various initiatives to save energy - one of them is usage of solar energy

1. A 250 KW rooftop solar power plant was commissioned on the terrace of Aryabhata - Pingala facility on April 30, 2015 and it generated 174,751 units in the financial year 2018-19. Since commissioning of the plant, 701,641 units have been generated till March 31, 2019.

2. A 276 KW rooftop solar power plant was commissioned on the terrace of Hinjawadi facility in February 2018 and inaugurated on Gudipadwa, March 18, 2018 and it generated 429,795 units in the financial year 2018-19. Solar Plant is designed to generate 4.15 lakhs units/annum.

3. A 207 KW rooftop solar rooftop plant execution work has been started on the terrace of Gargi-Maitreyi in Nagpur. Expected completion date of this plant is June 30, 2019. Solar plant is designed to generate 2.70 Lakh unit/annum.

4. Installed the following solar power plants through CSR activity under community development and the MWH unit generated in financial year 2018-19:

- Pune Railway Station - 160 KW - 234,731 units p.a.

- Hyderabad Railway station - 229 KW - 305,550 units p.a.

- Tarachand Hospital, Pune - 64.5 KW - 72,853 units p.a.

Your Company has made efforts to ensure that there is no cool air leakage from its premises and has adopted measures to ensure optimum usage of air conditioners throughout its premises. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. The power consumption of air conditioning has been reduced by 18% since the cold aisle containment work has been completed in Data Center, Hinjawadi. VFD system has been installed for fresh air AHUs in air conditioning systems.

As a part of your Company’s Green Movement, two 2.1 MW windmills are operational at Dhule and Sangali District in Maharashtra, India. During the financial year 2018-19, Dhule windmill generated 4,839,123 units while Sangali windmill generated 2,898,593 units.

Your Company has installed Ozone based air conditioning systems at a few locations. Modifications have been made in Data Centre arrangement to reduce power consumption. Ground water is used for landscaping to reduce consumption of treated water. A Sewage Treatment Plant was installed at the Gargi-Maitreyi in Nagpur, Aryabhata-Pingala in Pune and Goa facilities of your Company and recycled water through these plants is used for gardening.

Your Company celebrated ‘No Plastic Days’ to promote awareness of using plastic and encourage employees to carry cloth or paper bags whenever possible. ‘Zero Plate Wastage Week’ was another event celebrated in all the Company facilities. All the waste papers are shredded and disposed to scrap at all facilities. E-waste and hazardous waste are to be handed over to authorized agency approved by the State Pollution Control Board. Your Company also encouraged all employees to bring their household e-waste in your Company to dispose it appropriately.

The Conservation of Trees campaign aims to spread awareness about tree conservation.

Employees are encouraged to

- Plant at least one sapling in their vicinity

- To date, Persistent has distributed more than 1,600 saplings.

- Reduce paper wastage and make prints only when necessary; Persistent organizes ‘No Printer Days’ to promote awareness.

‘Tree Plantation Drive’ including tree maintenance program for making Mother Earth greener was organized during the year under review.

National Commercial Energy Benchmarking Initiative was taken up with a goal to establish a framework to standardize energy data collection, baseline setting for ‘typical’ commercial buildings, energy performance target setting and monitoring, and use the information to improve energy efficiency in buildings. With reference to the data collected by the BEE to judge Energy Performance Index (EPI) and total energy consumption, your Company earned star ratings for its following facilities:

- Bhageerath, Pune: EPI 171 - Received 2-Star Rating.

- Aryabhata-Pingala, Pune: EPI 190 - Received 1-Star Rating.

All the facilities of your Company in India are certified by DNVGL for ISO 14001:2015 and are upgraded to Occupational Health and Safety Management System Standard by ISO 45001:2018 certifications after rectification audit (January 2019) and are now initiated. Best practices to preserve the environment/health and safety are undertaken by your Company even during constructing its various premises by using crush sand, fly ash bricks and double glass unit, use of gypsum and recycled wood to protect the environment.

Also, all the facilities of your Company in India are certified by AGS for ISO 14064-1:2006 Greenhouse gas inventory and achieved reduction of 6.87% against target of 3%.

It is your Company’s constant endeavor to conserve and save the environment and hence your Company has launched the Green Persistent Movement to support the same. As power cost constitutes an insignificant part of the total expenses, the financial impact of these measures is not material.

Other ISO Certifications

The details about the other ISO certifications for technical processes and systems are provided in the Annexure F to this Report and which forms an integral part of this report.

The particulars of expenditure on Research and Development on an accrual basis are as follows:

(In Rs. Million)

Particulars	Year ended on March 31
	2019	2018
Capital expenditure	0.46	-
Revenue expenditure	182.35	281.99
Total research and development expenditure	182.81	281.99
As a percentage of total income	0.89%	1.52%

The particulars of foreign exchange earnings and outgo based on actual inflows and outflows are as follows:

(In Rs. Million)

Particulars	Year ended on March 31
	2019	2018
Earnings	20,488.65	17,722.02
Outgo	6,281.03	4,858.47

Adequacy of Internal Financial Controls

The Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company’s policies, safeguarding of the assets of your Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Internal Audit

Your Company has an in-house internal audit team since 2005 and comprises of personnel with professional qualifications and certifications in audit and is rich on diversity. The audit team hones its skills through a robust knowledge management program to continuously assimilate the latest trends and skills in the domain and to retain the knowledge gained for future reference and dissemination.

The Head of Internal Audit team reports to the Chairman of the Audit Committee and is a permanent invitee to the quarterly meetings of the Audit Committee and the Risk Management Committee. Findings of the audits are presented to the Audit Committee at its quarterly meetings.

The function provides an independent, objective assurance and consulting services to value-add and improve Operations of Business Units. The audits carried out through-out the year, are based on an internal audit plan, which is reviewed and approved by the Audit Committee every quarter. In line with the industry practice and regulatory requirements, the internal audit function covers the areas such as review of Internal Financial Controls, Business and Financial operations including regulatory Compliances.

Reporting of frauds by Auditors

Durng the year under report, neither the Statutory Auditors nor the Secretarial Auditors as reported to the Audit Committee, under Section 143(12) of the Act, any instance of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the report of the Directors.

Directors’ responsibility statement

The Directors state that:

1. In the preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2019 and of the profit of your Company for that year;

3. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. The annual accounts have been prepared on a going concern basis;

5. Your Directors, had laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

6. Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return of your Company for the financial year ended on March 31, 2019 is provided as Annexure E to the Directors Report and forms an integral part of this Annual Report.

Vigil Mechanism (Whistle Blower Policy)

The details of the vigil mechanism (whistle blower policy) are given in the Report on Corporate Governance forming part of this Annual Report. Your Company has uploaded the policy on its website at https://www.persistent.com/ethical-practices-at-persistent-systems/whistle-blower-policy/

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the Financial Year 2018-19 forms an integral part of this Annual Report.

Project Fusion - New ERP System

During the year under report, your Company has implemented a New ERP System named as Fusion at all locations of your Company. This system is a complete transformation of ERP HCM and has key features such as full SaaS deployment, Integration with external systems, available on all endpoints, Industry best practices and Embedded Business Intelligence.

This system mainly covers functions viz., financials (Including Procurement, Travel, Asset Management), Project Portfolio Management (Services and Products), Enterprise Performance Management (including Cost and Revenue Budgeting), Human Capital Management. This modernized cloud platform provides additional opportunities to business, actionable in sights for business agility, cost efficiencies, improved user and customer experience, management of data and privacy risks.

This system implementation has been started in June 2018 and is proposed to be completed by June 2019.

The estimated life of the system is approx. 10 years from its implementation.

Performance Evaluation of the Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, its various committees, the Chairman of the Board and other directors individually. The performance of the Board was evaluated by the Board after seeking inputs from all the directors and senior management on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. This was conducted in March and April 2019 by an external management consultant and the findings of the evaluation were presented at the meeting of the Nomination and Governance Committee and the Board of Directors held in April 2019.

Qualitative comments received during the Board evaluation were as follows:

- The Board was very active in planning process. Also, in CEO selection and transition process, their suggestions were very valuable and appropriate.

- Board meetings were conducted in a very transparent and open environment, concerns conveyed without reservation and the Board has been forthright.

- The Board has evolved to become more diverse and complementary, coverage is excellent.

Previous year’s observations (For FY 2017-18) and actions taken are as follows:

Sr. No.	Observations	Actions taken
1.	Going forward, during evaluation process, the focus	It has been decided that henceforth the ranking or rating system
	may be given more on qualitative comments.	on evaluation questions be changed to qualitative comments and the same was implemented immediately thereafter.
2.	The Board members may share the best practices	An appeal was made to the Board members to share the best
	observed by them in other companies during the	practices observed by them in other companies during the
	relevant discussions.	relevant discussions. Accordingly, the Directors have started sharing the best practices observed by them in other companies.
Proposed actions based on current year’s observations:
Sr. No.	Observations	Actions proposed
1.	The Board may consider setting aside time in every meeting to discuss certain themes in depth - thinking
	big, developing the next generation of leaders, M&A, etc. This could be decided in advance or based on the issues at the time of the meeting.	The observations have been communicated to the Board and
		accordingly, necessary steps will be taken in due course.
2.	A program of Directors mentoring specific leaders may be introduced again.

Disclosure of Cost Audit

Your Company had filed Form 23C for appointment of Cost Auditor relating to its activities of generation of electricity from windmill turbine under the Companies (Cost Audit Report) Rules, 2011. However, based on another Circular dated November 30, 2011 issued by the Ministry of Corporate Affairs (MCA), your Company claimed exemptions from the requirement of the Cost Auditor for the said purposes and accordingly, had written a letter dated December 19, 2012 to MCA, Cost Audit Branch, for withdrawal of the appointment of the said Cost Auditor as well as cancellation of the Form 23C so filed. Reply to the said letter is awaited from the concerned office of the MCA.

Listing with the stock exchanges

The Equity Shares of your Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) since April 6, 2010. Listing fees for the financial year 2018-19 have been paid to both BSE and NSE.

Secretarial Standards

The Ministry of Corporate Affairs notified the Secretarial Standard on Meetings of the Board of Directors (SS-1), Secretarial Standard on General Meetings (SS-2), Secretarial Standard on Dividend (SS-3) and Secretarial Standard on ‘Report of the Board of Directors’ (SS-4). Your Company complies with the same.

Your Company will comply with the other Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) as and when they are made effective.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the ‘Act’). All employees (permanent, contractual, temporary and trainees) are covered under this policy.

Your Company has constituted an Internal Complaints Committee(s) (ICC) across all Company locations in India and abroad to consider and resolve all sexual harassment complaints reported to this Committee. The constitution of the ICC is as per the Act and the Committee includes an external member from NGOs with relevant experience at the India locations and half of the total members of the ICC are women. The Ethics Committee at the global locations, acts in the capacity of Internal Complaints Committee where the local law over there does not enforce constitution of such committee.

Investigation is conducted and the decisions made by the ICC at the respective location, and the senior women employee is the presiding officer over every case.

During the year under report, your Company has received one complaint of sexual harassment which was disposed during the year under the report. As on March 31, 2019, there were no pending cases of sexual harassment in your Company.

Corporate Social Responsibility

Your Company voluntarily started contributing to the CSR initiatives since 1995-96 i.e. much before the legislations made it compulsory for the corporates. Your Company used to donate 1% of its consolidated net profits till FY 2011-12 and 1.25% of its consolidated net profits till FY 2013-14. Thereafter, the Company is contributing 2% of the average net profit on unconsolidated basis of preceding three financial years.

To institutionalize the Company’s CSR initiatives and to develop a systematic approach to administer the process of grant of donations, your Company formed a Public Charitable Trust - ‘Persistent Foundation’ in the financial year 2008-09.

This year, Persistent Foundation is celebrating 10^th year of its establishment. During these 10 years, the Foundation has contributed to many projects spread across different geographies in association with well-known NGOs to reach out to large number of beneficiaries. The recently conducted impact assessment study has conferred effectiveness of projects being carried out by the Foundation for a society at large.

Your Company acknowledges the contribution given by the Foundation to the society and assures its support to the Foundation for its next journey.

During the year under report, Persistent Foundation (the ‘Foundation’) was able to create excitement among employees to participate in socially relevant causes. With cooperation of the employees of your Company, the Foundation has set up several well-defined programs and activities for the promotion of education, health and community development. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through the Government authorities, reputed social organizations and institutions.

In addition to contributing Rs. 70.51 Million to the Foundation, your Company made donations to various charitable institutions directly and incurred a cost of the technical contribution towards Stri Shakti Abhiyaan Project, an initiative of the NITI Aayog and coordinated by McKinsey, India. Thus, during the year under report, your Company donated Rs. 80.36 Million i.e. more than 2% of the Average Net Profits of your Company made during three immediately preceding financial years.

Report on CSR activities of your Company under the provisions of the Act during the financial year 2018-19 is annexed hereto as Annexure G and forms an integral part of this Annual Report.

Based on the profits of three financial years ending on March 31, 2019, the Committee recommended to the Board of Directors, the amount of Rs. 85.21 Million which is to be spent towards CSR activities as per Section 135 of the Act for the financial year 2019-20.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted the CSR Committee to help your Company frame, monitor and execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the Company’s social responsibility.

The Board of Directors of your Company has further approved the CSR Policy of your Company to provide a guideline for the Company’s CSR activities. The CSR Policy is also uploaded on your Company’s website at https://www.persistent.com/investors/csr-at-persistent/

The Company’s CSR Policy highlights that the need for contributing to the society is very large and your Company can make a more significant contribution by staying focused on few areas through its social initiatives. The CSR policy recommends that your Company should encourage Persistent Foundation to contribute in the following areas:

- Health

- Education

- Community Development

- Assistance in Natural Calamities

The constitution of the CSR Committee is provided elsewhere in the Annual Report.

Other matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

1. Neither the Managing Director nor the Executive Director of your Company receive any remuneration or commission from any of its subsidiaries.

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company’s operations in future.

Future Outlook

Even though the year under report has been challenging and a year of transition for your Company, the Directors are very optimistic about the progress made and the results that were observed towards the end of the year. The fundamentals of the Company are strong and stable.

Your Company has an impressive list of customers who are well-established in their fields. Customers are satisfied with the work done by the employees of your Company and are keen to extend the work they do with your Company. Your Company has established an excellent set of partnerships with the leading Companies and these partnerships have helped your Company establish credibility and leadership as customers are starting to transform their business by becoming software driven business.

The investments made by your Company in technology areas are spot on and your Company is working with and has added specialists who understand the business domain and they helped your Company to elevate the conversation to business value.

With a new team in place, the Directors expect that your Company will be on an improved growth trajectory and will be able to post industry leading growth rates in the next few years.

Acknowledgments and appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and Industry, the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Bengaluru, Visakhapatnam Special Economic Zone - Andhra Pradesh, SEEPZ Special Economic Zone - Mumbai, Cochin Special Economic Zone, Central Excise and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Director of Industries, Department of Shops and Establishments, Department of Telecommunication, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Goods and Service Tax Department, Infotech Corporation of Goa Limited, Goa Industrial Development Corporation, National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, local Municipal Corporations where Company operates, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation, Maharashtra Industrial Development Corporation, Bengaluru Municipal Corporation, Karnataka Industrial Development Corporation, BSNL and Mobile / Internet Service providers.

Your Board also extends its sincere thanks to M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Statutory Auditors, M/s. Joshi Apte & Co., Chartered Accountants, Tax Auditors and M/s. SKO and Associates, Company Secretaries, Secretarial Auditors for their services to your Company.

Your Board also extends its thanks to ABSA Capital Bank, Axis Bank, Bank of Baroda, Bank of India, Barclays Bank, Banco Nacional de Mexico S.A., Bank of Tokyo Mitsubishi, BNP Paribas, Chase Bank, Citibank NA, Deutsche Bank, HDFC Bank, Hongkong and Shanghai Banking Corporation, Silicon Valley Bank, State Bank of India, Standard Charted Bank, Syndicate Bank, Union Bank of India, Wells Fargo Bank and their officials for extending excellent support in all banking related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks the investors and shareholders for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by employees at all levels in your Company. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande

Chairman and Managing Director

Pune, June 11, 2019 DIN: 00005721

---

Mar 31, 2018

The Directors are pleased to present the Twenty-Eighth Annual Report of your Company along with the Audited Financial Statements for the Financial Year ended March 31, 2018.

Business Update

The last few years have been exciting as there have been amid significant technology shifts. Increased connectivity and bandwidth has shortened distances and changed the way we communicate - with each other, with computing devices and with things. Cloud computing technology has evolved and has made computing on demand possible. Moreover, cloud computing has evolved as a platform and provides programmers a higher level of abstraction making it much more efficient to write programs. Our appetite for data has continued to grow and big data technologies have evolved to make it possible for us to make sense of large volumes of data.

New and progressive businesses are taking advantage of technology shifts to disrupt incumbents. The need for change is universal. Businesses realize that in a fast-changing world, being nimble and agile is the only way to thrive. Evolving technology has made it possible to build systems that are dynamic, resilient and are able to adapt to changing business conditions. This is possible by designing software driven businesses!

Software driven businesses are inherently flexible and reconfigurable.

How does one build a software driven businessRs.

Building a software defined business requires establishing infrastructure and systems that provide decision makers the flexibility to change and respond to changing business conditions. Simplistically, such a system must focus on the following four ‘I’s:

1. Integration. Business must take advantage of data and signals that are available to make better decisions. This requires integration of data and signals from internal operational sources, IOT sources and external sources. Your Company specializes in bringing integrating data from multiple diverse sources.

2. Intelligence. Large amount of data that is available for decision making can be overwhelming. Thankfully, your Company has the expertise to leverage machine learning and artificial intelligence to make sense of the data that is available.

3. (Actionable) Insights. Decision makers and executives must have insights at their fingertips to respond to changing environment. Your Company has developed tools and technologies to provide decision makers the insights necessary to make decisions.

4. Incremental and iterative development. Being agile is essential to succeed in a changing environment. To respond to the changes, systems must be designed iteratively so that they can be deployed incrementally. Your Company has well-tuned processes termed Software 4.0 to help customers build and deploy software incrementally and iteratively.

A strong legacy of outsourced product development and product engineering services along with the focus on digital technologies places your Company favourably in guiding and piloting customers through this journey. While every business must become a software driven business, your Company has decided to focus on three Industry segments and four technology areas aligned with the business opportunities in the market.

Your Company has decided to focus on the following three industry segments:

1. Financial Services - The financial services industry is in the forefront of leveraging digital technology. Your Company is focused on building software to help banks and financial institutions and technology companies in the financial industry.

2. Healthcare and Life Sciences - With healthcare moving from treating a specific incident to taking care of the complete wellbeing of an individual, healthcare institutions are looking for solutions which are connected and responsive. Advances in new biology are being deployed in healthcare. Your Company has significant expertise in working with leading providers, payers and instrument companies that are defining the future of healthcare.

3. Industrial - Your Company builds products that help engineering, automotive, aerospace companies manage their continuous engineering lifecycle and development process.

Your Company has always invested in being at the forefront of new technology and has a legacy of working with and partnering with software product companies. This continues to be the focus as the customers of your Company evolve to changing technology environments. To better channel investments, your Company has decided to broadly focus in four technology areas:

1. Cloud Computing - Cloud computing technology has become mainstream and your Company is working with companies that are building the cloud infrastructure. Your Company is also investing in building tools and services to provide customers turnkey solutions to move and operate systems in the cloud.

2. Data, Artificial Intelligence and Machine Learning - Your Company has a tradition of working on database products. With a deep understanding of data, your Company continues to lead the way in building new AI and ML based solutions for its customers.

3. Identity Management and Security - In a world where every action user does is being tracked by different systems and applications, security of personal data is the most critical ask from every enterprise and user. Your Company continues to make its customers’ applications secure with its deep expertise of various identity management platforms from partners and its products like Neuro and Sentient.

4. Internet of Things - Connectivity of systems has grown exponentially, and people are looking beyond just the need to monitor and manage devices remotely. People are looking at innovative ways to monetize these connected devices. Your Company along with its partners continues to innovate in this space and help its customers as they foray into the connected world of devices.

Partnerships

Your Company believes that partnerships are essential to succeed in this dynamic world and works closely with leading platform providers. Your Company has established a 360-degree partnership with them, where in addition to product development work, your Company resells and deploys partner products for their customers. Your Company also has deployed these products internally.

Acquisitions

Your Company completed the acquisition of PARX - a platinum salesforce consulting company based in Switzerland and Germany. This acquisition deepens your Company’s Salesforce expertise and strengthens presence in DACH region and across Europe.

Smart India Hackathon 2018

Your Company in association with the Ministry of Human Resource Development (MHRD), All India Council for Technical Education (AICTE), Rambhau Mhalgi Prabhodini, National Informatics Centre (NIC), MyGov and i4C co-organized Smart India Hackathon 2018, this was the second year of organizing this event. The 36-hour Software Edition was held on March 30 and 31, 2018 where nearly 10,000 students participated. These students were short-listed from more than 110,000 students who submitted their proposals. The software edition was a grand success. The Hon’ble Prime Minister, Mr. Narendra Modi inspired the students during a live interaction through video conferencing. The hardware edition of the event is scheduled to start on June 18, 2018.

Team Persistent

Life at Persistent

Your company keeps its employees at the core and strives for their wellbeing with utmost sincerity. One such employee- centric program ‘Life at Persistent’ was launched a couple of years back. With focus on three programs - One Persistent, Careers At Persistent and My Life At Persistent, this program took a concrete shape in Financial Year 2017-18.

One Persistent: Establishing Harmony Within Diversity

With a belief that ‘Core Values of an organization is the most fundamental driver of its Oneness’, your Company launched a Video series and an Email series named ‘Monday Coffee’ intending to sensitize employees with Persistent’s Core Values. Thanks to the Directors and Leaders @ Persistent for their participation and guidance in driving this initiative.

It is important that every employee of Persistent believes that their opinions about their company, its policies and key decisions are heard and respected. With this view, your Company announced a theme-based monthly feedback series called ‘Speak-up’ among Persistent employees spread across the Globe and incorporated appropriate changes suggested by the employees. To provide an opportunity to employees for actively drive change, your Company has established a change management program named ‘ChangeMakers’. This program also helps us bring inclusivity to the policy making process and other important employee related decisions.

Your Company believes that Cultural Festivals play an important role in bringing people closer and in helping them understand each other’s way of approaching life. With this thought in mind, your Company celebrated many festivals at different centers of Persistent.

Careers At Persistent: From A We-Enterprise

To A Me-Enterprise

With an objective to motivate employees in pursuing their careers with passion, clarity and a sense of purpose, your Company launched a Career Development program called ‘SARA’ that stands for Self-Assessment, Reflection and Achievement. This program features various offerings such as Career Guidance Council, Career Development Tools, Individual Learning Plan and Career Coaching Service. Your Company encourages employees to make most of these services in the best interest of their own careers.

Career Development of Women employees is a very important aspect of Careers At Persistent pillar. Your Company envisions its women leaders to be the role models within the organization and across the industry. With this goal in mind, your Company has been driving a Women Forum named ‘Prerana’ (which means Inspiration) for last few years. The success of ‘Aspire’, Prerana’s signature Women Leadership Program has been the highlight of the Financial Year 2017-18.

Leadership Development and Succession Planning are key components of ensuring business continuity and business growth. In the Financial Year 2017-18, your Company successfully invested in developing the next generation leadership by driving programs like Business Leadership Programs (BLP), Leadership Enablement @ Persistent (LE@P), Ascent (Hi-potential Development Program) and ChangeMakers Program.

My Life At Persistent: Not Just Products; Helping People Build Their Lives

Work Life @ Persistent is not just about doing serious things. We work hard and equally we enjoy. Your Company’s Beyond Work Initiatives (BWIs) helped employees reduce stress and remain energized and productive at work. BWIs also helped employees maintain work-life-balance, connect better with their colleagues, and engage their family and friends with your Company.

Your Company envisions that every employee should be not only happy but also healthy and your Company aims to play an active role in building the culture of Wellness @ Persistent. With this Goal in mind, your Company launched a Wellness Program featuring initiatives like Wellness Communities, Wellness Challenges and Wellness Wednesday Series. Your Company celebrated and branded the Wellness theme even through its annual event - PULSE - and the employees wholeheartedly appreciated this change.

Along with the physical, emotional and mental wellbeing of an individual, their financial wellbeing is important, too. To help its employees handle the financial side maturely, your Company launched a Financial Awareness Program in association with various industry experts. The employees very well appreciated this program; so it has been decided to run the same at regular intervals.

Life at Persistent in FY 2018-19

If Financial Year 2017-18 was about creating an identity for Life at Persistent, the focus of Financial Year 2018-19 is to create sustainable impact of its initiatives. Your Company looks forward to institutionalize SARA; promote Oneness at team-level through Experiential Programs, at center-level through Beyond Work Initiatives and at organization-level through Core Values Series; and build a Healthy Persistent!

Talent Additions during the Year

Your Company continues to attract high caliber quality talent in the industry. During the Financial Year 2017-18, your Company recruited 1,966 employees on a consolidated basis consisting of regular employees, trainees / interns, consultants, business consultants, contract consultants consisting of (technical and non-technical) professionals.

As on March 31, 2018, your Company employed 8,976 professionals (including trainees and associates) on a consolidated basis spread across 18 countries. The technical strength was 7,873 employees which comprised among others, 4,592 graduates (Engineers and Technicians), 1,714 post graduates and 25 Ph.D.s. Your Company is going global and there was a significant increase in the distribution of overseas employees which now constitutes 16.49 % of the total work force as against 15.97% in the last year

Your Company recruits fresh talent from various engineering colleges in India. During the year under report, your Company added a batch of 173 new graduates through campus. Your Company strongly believes in nurturing ‘Industry - Academia’ partnerships and has many programs to engage with students such as BE project mentoring, Persistent Day, Internship and sessions through experts of Persistent Computing Institute (PCI).

The attrition rate during the year under report was 14.70% which was less than the attrition rate of 15.69% in the previous year

Continuous Learning and Skill Enablement

In line with a focus on continuously learning and self-development, Persistent University is driving ongoing skills development, thus ensuring that employees are ready for the future. It serves as a one-stop learning destination with offerings to enhance technical skills, business communication, management and behavioral skills. Multiple learning methodologies are offered such as in-class trainings, remote trainings, blended trainings, Massive Online Courses, self-learning and assessments for internal certification. Employees can choose from a variety of courses along with combination of learning methodologies as per their Individual Learning Plan (ILP). Every employee’s ILP is in line with the Company, project and individual aspirations.

Publications in peer-reviewed international journal (2017-2018)

1. Panigrahi P, Jere A, Anamika K. FusionHub: A unified web platform for annotation and visualization of gene fusion events in human cancer. PLoS One. 2018 May 1;13(5): e0196588.

2. Kanyal A, Rawat M, Gurung P, Choubey D, Anamika K, Karmodiya K. Genome-wide survey and phylogenetic analysis of histone acetyltransferases and histone deacetylases of Plasmodium falciparum. FEBS J. 2018 May;285(10): 1767-1782.

3. Subramanian I, Singh VK, Jere A. Elucidating mechanistic insights into drug action for atopic dermatitis: a systems biology approach. BMC Dermatol. 2018 Feb 7;18(1): 3.

4. Jha V, Singh G, Kumar S, Sonawane A, Jere A, Anamika K. CGDV: A Webtool for Circular Visualization of Genomics and Transcriptomics Data. BMC Genomics. 2017 Oct 24;18(1): 823.

5. Ubhe S, Rawat M, Verma S, Anamika K, Karmodiya K. Genome-wide identification of novel intergenic enhancer-like elements: implications in the regulation of transcription in Plasmodium falciparum. BMC Genomics. 2017 Aug 23;18(1): 656.

6. Deshpande AB, Anamika K, Jha V, Chidley HG, Oak PS, Kadoo NY, Pujari KH, Giri AP, Gupta VS. Sci Rep. 2017 Aug 18;7(1): 8711.

Conference papers

1. Title: Anomaly detection in IIoT: A case study using machine learning.

a. Authors: Aashis Tiwari, Gauri Shah

b. Conference : CODS-COMAD 2018, Goa (http://cods-comad.in/2018/index.html)

2. Paper name- ‘Facial Recognition, Expression Recognition, and Gender Identification’

a. Authors- Shraddha Mane, Gauri Shah

b. Conference- International Conference on Data Management, Analytics & Innovation (ICDMAI) 2018

c. Publication date- Received confirmation from Springer; paper is in the process of publication.

3. Performance Characterization of Hyperledger Fabric -

a. Authors : Arati Baliga, Nitesh Solanki, Shubham Verekar, Amol Pednekar, Pandurang Kamat, Siddhartha Chatterjee

b. Conference Crypto Valley Conference on Blockchain Technology, 2018

Whitepapers

1. Paper name- ‘Facial Analysis: Face Recognition, Expression Recognition, and Gender Identification’ a. Authors- Shraddha Mane, Gauri Shah

2. Paper - Transfer Learning

a. Author: Amogh Kamat Tarcar, Gauri Shah

3. Performance Evaluation of the Quorum Blockchain Platform

a. Authors: Arati Baliga, Subhod I, Pandurang Kamat and Siddhartha Chatterjee

Training details during the Financial Year 2017-18

Your Company covered 73% of its employees through at least one training this year, and 55% employees underwent digital technology trainings. Your Company trained about 138 campus hires in the Entry Level Training Program (ELTP).

The total investment for In-Class training was around 2,100 person months and totaling to 16,369 enrollments. Self-learning investment on In-house knowledge center course enrollments was around 2,500 person months.

Total enrollments for internal certifications, either after In-Class training or self-learning were 25,302.

Your Company encourages learning and knowledge enhancements via various means. During the year under report, your Company launched the following initiatives focusing on Digital Technologies:

- Designed and launched ORBIT digital technology program exclusively for the senior managers and leaders in the organization, around 200 attended this program.

- Continued with the Digital Technothon initiative, where employees work on digital technologies (IoT, Machine learning, Block Chain, Dev Ops, AWS, MEAN Stack, full stack). They build and exhibit end-to-end mini-projects. 11 such projects were displayed after the campus hires.

- Launched ‘Pledge to Learn’ initiative where employees pledge proactively to learn digital technologies for future readiness. Around 1,619 employees pledged and underwent through digital technology trainings.

Financial Results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2018 are as under:

Particulars	Amount in USD Million except EPS and Book Value		Amount in Rs. Million except EPS and Book Value		% Change (based on the amounts in Rs.)
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations	470.55	429.01	30,337.03	28,784.39	5.39%
Earnings before interest, depreciation, exceptional item and taxes	72.70	69.36	4,687.26	4,653.47	0.73%
Finance Cost	0.01	0.01	0.79	0.91	(13.19%)
Depreciation and amortization	24.58	22.21	1,584.87	1,490.17	6.35%
Exceptional item (Expense)	-	1.70	-	114.11	-
Other income	18.47	14.28	1,191.01	958.45	24.26%
Tax expense	16.47	14.79	1,061.73	992.08	7.02%
Net profit for the year	50.11	44.93	3,230.88	3,014.65	7.17%
Transfer to general reserve	21.23	17.53	1,368.47	1,176.12	16.35%
Net worth*	326.00	292.50	21,245.60	18,968.38	12.01%
Earnings per share (EPS) (Basic)	0.63	0.56	40.39	37.68	7.17%
Earnings per share (EPS) (Diluted)	0.63	0.56	40.39	37.68	7.17%
Book value per equity share	4.08	3.66	265.57	237.10	12.01%

[Conversion Rate USD 1 = Rs.64.47 for Profit and Loss items; USD 1 = Rs.65.17 for Balance Sheet items (Financial Year 2017-18) and USD 1 = Rs.67.09 for Profit and Loss items; USD 1 = Rs.64.85 for Balance Sheet items (Financial Year 2016-17)].

*Net worth = Equity Share Capital Reserves and Surplus (excluding Gain on bargain purchase) Other Comprehensive Income

The highlights of the financial performance on an unconsolidated basis for the year ended March 31, 2018 are as under:

Particulars	Amount in USD Million except EPS and Book Value		Amount in Rs. Million except EPS and Book Value		% Change (based on the amounts in Rs.)
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations	268.77	258.30	17,327.49	17,329.64	(0.01%)
Earnings before interest, depreciation and taxes	59.16	55.18	3,813.77	3,701.79	3.03%
Finance Cost	0.01	0.01	0.62	0.91	(31.87%)
Depreciation and amortization	8.34	9.09	537.81	609.68	(11.79%)
Other income	19.80	14.10	1,276.82	946.21	34.94%
Tax expense	17.54	16.35	1,130.99	1,097.09	3.09%
Net profit for the year	53.07	43.83	3,421.17	2,940.32	16.35%
Transfer to general reserve	21.23	17.53	1,368.47	1,176.12	16.35%
Net worth*	315.05	279.79	20,532.04	18,144.14	13.16%
Earnings per share (EPS) (Basic)	0.66	0.55	42.76	36.75	16.35%
Earnings per share (EPS) (Diluted)	0.66	0.55	42.76	36.75	16.35%
Book value per equity share	3.94	3.50	256.65	226.80	13.16%

[Conversion Rate USD 1 = Rs.64.47 for Profit and Loss items; USD 1 = Rs.65.17 for Balance Sheet items (Financial Year 2017-18) and USD 1 = Rs.67.09 for Profit and Loss items; USD 1 = Rs.64.85 for Balance Sheet items (Financial Year 2016-17)].

*Net worth = Equity Share Capital Reserves and Surplus Other Comprehensive Income

Material Events Occurring after Balance Sheet Date

There were no material changes and commitments affecting the financial position of your Company between the end of the Financial Year and the date of this report.

Liquidity

Your Company continues to maintain adequate amount of liquidity to meet its strategic and growth objectives. Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2018, your Company, on an unconsolidated basis, had cash and cash equivalents (including investments) amounting to Rs.10,768.92 Million as against Rs.8,159.98 Million as at March 31, 2017. The details of cash and cash equivalents (including investments) are as below:

(In Rs. Million)

Particulars	As at	As at
	March 31, 2018	March 31, 2017
Investment in Mutual Funds at fair Value	7,573.80	6,193.93
Fixed Deposits with scheduled banks	747.03	564.18
Deposit with Financial Institutions	1,030.35	435.00
Bonds (quoted)	1,112.47	517.04
Cash and Bank balances	305.27	449.83
Total	10,768.92	8,159.98

Dividend

In January 2018, your Directors declared the Interim Dividend of Rs.7 per share of face value of Rs.10 each on the paid-up equity share capital out of the net profits of your Company. Total outflow towards this interim dividend including dividend distribution tax amounted to Rs.661.37 Million.

The Board has further recommended a Final Dividend of Rs.3 per share for the Financial Year 2017-18. Total outflow on account of final dividend including dividend distribution tax would amount to Rs.20.07 Million. The payment of final dividend of Rs.3 per share is subject to your approval during the 28^th Annual General Meeting (AGM) of your Company. Thus, including the proposed final dividend, the total dividend recommended for the Financial Year 2017-18 would be Rs.10 per share as compared to Rs.9 per share in the Financial Year 2016-17.

Out of the interim dividend declared in January 2018, Rs.0.08 Million remained unclaimed as on March 31, 2018.

Transfer to reserves

Your Company proposes to transfer an amount of Rs.1,368.47 Million to the General Reserve and an amount of Rs.1,207.44 Million is proposed to be retained in the Statement of Profit and Loss after payment of dividend and tax thereon. The balance in Profit and Loss Account as on March 31, 2018 is Rs.8,991.72 Million.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Companies Act, 2013 (the ‘Act’) read with the relevant rules, your Company has not accepted any fixed deposits during the year under report.

Infrastructure

During the Financial Year 2017-18, the total built-up capacity owned by your Company in India and abroad was 115,478 m² which is adequate for 8,800 employees.

The details of owned facilities of your Company are as follows:

Location	Year of Acquisition /Completion	Total Built-up Area (m2)	Total Seating Capacity
Pune
Kapilvastu	1994	202	35
Panini	1998	929	80
Bhageerath	2002	12,170	586
Aryabhata - Pingala	2007	31,680	2,618
Hinjawadi	2012	41,446	3,173

Goa
Charak	1997*	3,280	309
Bhaskar	2014	3,762	411
Nagpur
IT Tower	2003	3,708	352
Gargi and Maitreyi	2011	17,279	1,263
Grenoble, France	2000**	1,022	50
Total		115,478	8,877

* Company started to occupy this premises from October 2005 onwards.

** Company acquired this premises in August 2011 as part of acquisition of the Grenoble team.

Along with the Company owned premises, your Company also operates from leased facilities at Pune (Qubix - SEZ), Bengaluru, Hyderabad, Kuala Lumpur (Malaysia), Santa Clara (US), Belfast (UK), Colombo (Sri Lanka), Guadalajara (Mexico), Rehovot (Israel), Dublin (Ireland), Ottawa (Canada), Edinburgh (Scotland) and Costa Mesa, Littleton, Raleigh, Seattle, Nashua in the US.

Awards and recognitions during the Financial Year 2017-18

During the Financial Year 2017-18, your Company continued its tradition of winning various awards and getting new recognitions. Your Company was a proud recipient of the following awards during the year:

1. Won ‘Platinum’ rating in ‘The Asset Corporate Awards 2017’ for Excellence in Governance, Corporate Social Responsibility & Investor Relations

2. League of American Communications Professionals (LACP), Florida, USA announced the Annual Report 2017 as the winner of -

i) ’Gold’ award for excellence within its Competition Class

ii) Ranked 27^th rank among Top 100 Communications Materials of 2017

3. ’PETA India Compassionate Science Award’ in February 2018 from international renowned agency PeTA (People for the Ethical Treatment of Animals India) for developing eSkIN, a genomics software which can help prevent countless animals from being used in cosmetics tests and which protects human health through a modern approach.

3. Best Corporate University’ Award from TISS - LEAPVAULT 2017

4. ’ATD BEST 2017’ Award (International) from Association for Talent Development

5. ’Training Top 125 (T125) 2018 Award (International) from Training magazine

6. ’Golden Peacock National Training Award 2018’ from Institute of Directors IOD.

7. Persistent Foundation awarded by Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) on September 7, 2017 for “Outstanding Initiatives under Corporate Social Responsibility for the Year 2016-17”

8. The Infrastructure, Facility, Human Resources & Realty Association (iNFHRA) has awarded the following awards:

i) Xcellence award for Ecological Sustainability to Mr. Sanjay Chaudhari, Senior Manager - Administration

ii) Xcellence award for innovation and technology to Mr. Nilesh Datar, Manager - Administration

Auditors

Appointment of statutory auditors

The Members of your Company at the 24^th AGM of your Company, held on July 26, 2014, appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) and M/s. Joshi Apte & Co., Chartered Accountants (Firm Registration No. 104370W) as the Joint Statutory Auditors of your Company to hold such office till the conclusion of the AGM in the calendar year 2019 and 2017, respectively.

Pursuant to such appointment, M/s. Joshi Apte & Co., Chartered Accountants retired at the conclusion of the 27^th AGM held on July 20, 2017.

Your Directors at their meeting held on April 23 and 24, 2018 recommended ratification of appointment of M/s. Deloitte Haskins & Sells LLP as the Statutory Auditors of your Company at the 28^th Annual General Meeting of your Company.

However, the requirement of ratification of appointment of Statutory Auditors in every Annual General Meeting has been omitted under the Companies (Amendment) Act, 2017 which is effective from May 7, 2018. Accordingly, the Board at its meeting held on June 7, 2018 has decided not to place the ratification before the Members of the Company at the 28^th Annual General Meeting.

Further, in terms of the Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing Regulations’), the statutory auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Deloitte Haskins & Sells LLP has confirmed that they hold a valid certificate issued by ‘Peer Review Board’ of ICAI and have provided a copy of the said certificate to your Company for reference and records.

Secretarial Audit Report

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. SKO & Associates, Practicing Company Secretaries as the Secretarial Auditors of your Company for the Financial Year 2017-18.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as Annexure A. The comments of the Board on the observations of the Secretarial Auditors are as follows:

Sr. No.	Observations by the Secretarial Auditors	Comments by the Board
1.	At a single instance, the Company filed the form under Section 179 of the Companies Act, 2013 with the Registrar of Companies, with a nominal delay. The said form has been approved by Registrar of Companies. As informed by the Company, the delay was due to inadvertence.	The delay was due to inadvertence. The Company has taken sufficient precautions not to repeat such instances in future.
2.	Under the Foreign Exchange Management Act, 1999, the Company has filed Annual Return on Foreign Liabilities and Assets (FLA return), with the Reserve Bank of India, beyond prescribed time. Subsequently, the Company received acknowledgement from the Reserve Bank of India. As informed by the Company, the delay was due to inadvertence.	The delay was due to inadvertence. The Company has taken sufficient precautions not to repeat such instances in future.
3.	Under section 7A of the Employees Provident Funds & Miscellaneous Provisions Act, 1952, an enquiry was closed in January 2018. The Company did not receive any adverse order as an outcome of this enquiry.	The Company will continue to ensure due compliance under the applicable laws.
4.	Under the Contract Labour (Regulation and Abolition) Act, 1970, the Company has taken on record details pertaining to PF, ESIC, MLWF and PT for selective contractors and for the rest of the contractors, their indemnity bond has been taken on record.	The Company verifies the required compliances of vendors based on nature of their engagement. a. The large vendors’ compliances are scrutinized in detail. b. The Company accepts indemnity bond from small vendors as their compliance confirmation. Additionally, sample audit is carried out for some of them on a periodic basis. This is in tune with the industry practice for verifying the vendor compliances.

Board and Corporate Governance Board Meetings

The details pertaining to the composition, terms of reference and other details of the Board of Directors of your Company and the meetings thereof held during the Financial Year 2017-18 are given in the Report on Corporate Governance section forming part of this Annual Report.

Directors and Key Managerial Personnel

During the year under report and till the date of this report, the following Directors were appointed on the Board:

1. Dr. Anant Jhingran was appointed as an Additional Director (Independent Member) with effect from November 21, 2017 for a term of 5 years i.e. up to November 20, 2022. This is his second stint as an Independent Director. Earlier, he was an Independent Director of your Company from November 10, 2011 to November 3, 2016 (~5 years);

2. Mr. Sunil Sapre, Chief Financial Officer was appointed as an Additional Director (Executive Member) with effect from January 27, 2018 for a term of 3 years i.e. up to January 26, 2021;

3. Prof. Deepak Phatak was appointed as an Additional Director (Independent Member) with effect from April 24, 2018 for a term of 5 years i.e. up to April 23, 2023;

4. Mr. Guy Eiferman was appointed as an Additional Director (Independent Member) with effect from April 24, 2018 for a term of 5 years i.e. up to April 23, 2023;

Also, during the year under report, Mr. Mritunjay Singh resigned from the Company as the Executive Director and President-Services w.e.f. November 24, 2017.

The appointment of 5 (Five) Independent Directors (Mrs. Roshini Bakshi, Mr. Pradeep Bhargava, Mr. Sanjay Bhattacharyya, Mr. Prakash Telang and Mr. Kiran Umrootkar) was made at the 24^th AGM held on July 24, 2014 for a period of 5 (Five) consecutive years for a term up to conclusion of the 29^th AGM to be held in the calendar year 2019. Pursuant to the provisions of the Act, they are not liable to retire by rotation.

The designation of Mr. Thomas Kendra was changed to Non-Executive, Non-Independent Director effective from April 1, 2017 and accordingly his appointment became liable to retire by rotation. Further, the appointment of Mr. Sunil Sapre as an Executive Director and Chief Financial Officer will be regularized at the 28^th AGM and he will be subject to retirement by rotation thereafter.

In terms of Section 152(6) of the Act and Article 137 of the Articles of Association of your Company, Mr. Thomas Kendra, Non-Executive Non-Independent Director is liable to retire by rotation at the 28^th AGM as he is the Non-Independent Director who is holding office for the longest period among the Non-Independent Directors on the board.

Mr. Kendra has confirmed his eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing AGM. In the opinion of your Directors, Mr. Kendra has requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the re-appointment of Mr. Kendra be passed.

At present, your Company has 8 (Eight) Non-Executive Directors who are Independent Directors. Pursuant to the Regulation 17(1)(b) of the Listing Regulations, every listed company shall have at least half of its total strength of the Board of Directors as Independent Directors where Chairman is an Executive Director. Your Company complies with this requirement.

In terms of the Listing Regulations, your Company conducts the Familiarization Program for Independent Directors about their roles, rights, responsibilities in your Company, nature of the industry in which your Company operates, business model of your Company, etc., through various initiatives. The details of the same can be found at: https://www.persistent.com/investors/familiarisation-programme/

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149 of the Act.

Separate meetings of the Independent Directors have been held 3 (Three) times during the Financial Year 2017-18 in which the Independent Directors have transacted the following business:

1. Reviewed the performance of the Management of the Company

2. Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of the Company

3. Discussed the strategic matters of the Company and current state of the global IT industry.

Committees of the Board

The composition of the committees of the Board is given elsewhere in this Annual Report. The details of the powers, functions, composition and meetings of all the Committees of the Board held during the year under report are given in the Report on Corporate Governance section forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the Financial Year are given in the Report on Corporate Governance section forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were accepted by the Board of Directors of your Company from time to time during the year under Report.

Compensation and Remuneration Committee

The Compensation and Remuneration Committee of the Board was constituted on April 23, 2004. In terms of the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘SEBI ESOP Guidelines’), your Company re-constituted the Compensation and Remuneration Committee for the administration and superintendence of the employee stock options schemes on October 4, 2007.

The Board of Directors at its meeting held in April 2014 named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Act. As regards the terms of the Compensation and Remuneration Committee of your Company, the same are in line with the statutory terms of the Nomination and Remuneration Committee.

The details including the composition and terms of reference of the Compensation and Remuneration Committee and the meetings thereof held during the Financial Year and the Remuneration Policy of the Company are given in the Report on Corporate Governance section forming part of this Annual Report.

Nomination and Governance Committee

The Board of Directors at its meeting held in April 2014 named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Act. As regards the terms of the Nomination and Governance Committee of your Company, the same are in line with the statutory terms of the Nomination and Remuneration Committee.

The details including the composition and terms of reference of the Nomination and Governance Committee of the Board of Directors of your Company and the meetings thereof held during the Financial Year are given in the Report on Corporate Governance section forming part of this Annual Report.

The policy for appointment of a new director on the Board is as follows:

The Board of Directors decides the criteria for the appointment of a new director on the Board from time to time. The criteria may include candidate’s expertise area, age, industry experience, professional background, association with other companies and such other things.

Once the criteria are determined, the Board directs the Nomination and Governance Committee to compile profiles of suitable candidates through networking, industry associations and business connects. The Nomination and Governance Committee considers each and every profile on the decided parameters and shortlists the candidates. Shortlisted candidates are then interviewed personally or through tele-conference by the Members of the Committee.

Once the Committee is convinced about a candidate’s competency, his/her business acumen, commitment towards his/her association with your Company and his/her availability for your Company on various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration.

Employees’ remuneration

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure B of the Directors’ Report.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure C.

During the year under report, no employee has been granted stock options.

In line with the Ind AS 102 - ‘Share Based Payments’, your Company has computed the cost of equity-settled transactions by using the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period.

Weighted average exercise prices and weighted average fair values of options:

The Binomial tree valuation model has been used for computing the weighted average fair value of the stock options granted during the Financial Year 2016-17 and 2017-18 considering the following inputs:

Particulars	March 31, 2018	March 31, 2017
		Scheme XII
Weighted average share price (Rs.)	NIL	700.50
Exercise Price (Rs.)	NIL	10
Expected Volatility (%)	NIL	51.00%
Life of the options granted (Vesting and exercise period)	NIL	2.5 Months
Dividend Yield (%)	NIL	1.00%
Average risk-free interest rate (%)	NIL	7.10%
Expected dividend rate (%)	NIL	60.00%

No new options were granted to the Independent Directors of your Company during the year under report. Shares held by Independent Directors and Non-Executive Non-Independent Directors as on March 31, 2018:

Name of the Director	Shares held (through exercise of vested stock options)	Shares held (through allotment under a pre IPO scheme)	Shares held (through market purchase / IPO)	Total Shares held
Ms. Roshini Bakshi	NIL	NIL	NIL	NIL
Mr. Pradeep Bhargava	13,600	NIL	NIL	13,600
Mr. Sanjay Bhattacharyya	14,000	NIL	NIL	14,000
Dr. Anant Jhingran	NIL	NIL	NIL	NIL
Mr. Thomas Kendra	NIL	NIL	NIL	NIL
Mr. Prakash Telang	14,000	NIL	4,000	18,000
Mr. Kiran Umrootkar	6,000	NIL	NIL	6,000

During the Financial Year 2017-18, pursuant to the resolutions passed by the Compensation and Remuneration Committee of the Board of Directors by way of circulation, Independent Directors, employees including ex-employees exercised their stock options for shares which were already vested in their name. During this exercise, 547,567(Five Hundred Forty-Seven Thousand Five Hundred Sixty Seven) i.e. 0.68%.

Equity shares of the total paid-up capital were transferred from PSPL ESOP Management Trust to the eligible employees including ex-employees at an aggregate value of Rs.64.07 Million under various ESOP Schemes of your Company.

Your Company has 12 (Twelve) ESOP Schemes as on March 31, 2018 under which options were granted to various Independent Directors, employees of the Company and its subsidiaries, details of which are given elsewhere in this Annual Report.

Shares Suspense Account

Your Company had opened an ‘Unclaimed Securities Suspense Account’ on behalf of the allottees who were entitled to the equity shares under the initial public offering. Some of the equity shares could not be transferred to the respective allottees due to technical reasons. Such shares were held in ‘Unclaimed Securities Suspense Account’, to be transferred to allottees as and when they approach your Company.

Your Company strived to ensure that the equity shares are credited to the demat account of the respective allottees. During the year under report, your Company voluntarily approached all the 10 (Ten) allottees for making the applications to your Company for claiming their unclaimed shares. In response, your Company received applications from 3 (Three) allottees for crediting the shares from the said Suspense Account to their respective accounts. The Equity Shares along with the Bonus Shares (announced in March 2015) were credited to their respective demat accounts.

The balance in the above-mentioned Suspense Account i.e. 280 Equity Shares owned by 7 allottees are lying in the said Account for more than 7 years. As per the provisions of Section 124(6) of the Act, all shares in respect of which dividend has not been claimed for seven consecutive years shall also to be transferred to the Investor Education and Protection Suspense Account and hence these shares are liable to be transferred to the ‘IEPF Suspense Account’ opened by the Company with the IEPF Authority.

The current balance in the above-mentioned Suspense Account as on March 31, 2018 is 280 Equity Shares owned by 7 allottees. The details of equity shares held in an ‘Unclaimed Securities Suspense Account’ are as follows:

Sr. No.	Particulars	Details
1.	Aggregate number of allottees in the Unclaimed Securities Suspense Account lying at the beginning of the Financial Year 2017-18	10 allottees
2.	Aggregate number of the outstanding equity shares in the Unclaimed Securities Suspense Account lying at the beginning of the Financial Year 2017-18	400 Equity shares
3.	Number of allottees who approached issuer for transfer of shares from Unclaimed Securities Suspense Account during the Financial Year 2017-18	3 allottees
4.	Number of shares transferred from Unclaimed Securities Suspense Account during the Financial Year 2017-18	120 Equity shares
5.	Aggregate number of allottees in the Unclaimed Securities Suspense Account lying at the end of the Financial Year 2017-18	7 allottees
6.	Aggregate number of outstanding equity shares in the Unclaimed Securities Suspense Account lying at the end of the Financial Year 2017-18	280 Equity shares*

* Note -

a. Voting rights on the above-mentioned equity shares are kept frozen till the rightful owner of such equity shares claim these shares.

b. Out of the 280 Equity Shares, 140 are due for transfer to IEPF Suspense Account. The Company has initiated the process for such transfer.

Institutional Holding

As on March 31, 2018, the total institutional holding in your Company stood at 40.61% of the total share capital.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Act, your Company has provided the Consolidated Financial Statements as on March 31, 2018. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is enclosed to the consolidated financial statements.

The Annual Report of your Company, though does not contain full financial statements of the subsidiary companies, your Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of your Company.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2018 are prepared in accordance with the Indian Accounting Standard (Ind AS) 110 on ‘Consolidated Financial Statements’ notified by the Ministry of Corporate Affair (MCA), and forms part of this Annual Report.

Subsidiary Companies, Associate Companies and Joint Ventures

The details of the subsidiaries and associates of your Company as on March 31, 2018 are as under:

(In Rs. Million)

Name of the Entity and Country of incorporation	Status	Period of Establishment/ Acquisition	Total Income		Net Profit/(Loss)
			For the year ended March 31, 2018	For the year ended March 31, 2017	For the year ended March 31, 2018	For the year ended March 31, 2017
Persistent Systems Inc., USA	Wholly Owned Subsidiary	October 2001	17,329.58	15,391.06	(251.56)	238.67
Persistent Systems Pte. Ltd., Singapore (Co. Reg. No. 200706736G)	Wholly Owned Subsidiary	April 2007	307.00	427.49	15.17	72.99
Persistent Systems France S.A.S., France	Wholly Owned Subsidiary	April 2011	404.18	388.33	52.88	11.55
Persistent Systems Malaysia Sdn. Bhd., Malaysia	Wholly Owned Subsidiary	September 2013	408.90	548.42	71.59	62.54
Persistent Systems Germany GmbH, Germany	Wholly Owned Subsidiary	December 2016	1.45		(37.33)	(0.66)
Persistent Telecom Solutions Inc., USA	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Inc.)	January 2012	1,192.85	1,437.51	(78.96)	(156.13)
Akshat Corporation (dba R-Gen Solutions), USA	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Inc.)	July 2015*	112.50	253.91	8.56	28.03
Persistent Systems Israel Ltd., Israel	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Inc.)	February 2016	548.56	448.65	41.00	32.38
Persistent Systems Mexico S.A. de C.V., Mexico	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Inc.)	March 2016	176.75	139.11	0.62	6.08
Aepona Holdings Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Inc.)	October 2015*
Aepona Group Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Holdings Limited)	October 2015*

Valista Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Group Limited)	October 20151	6.21	21.43	(7.84)	(421.08) #
Aepona Limited, United Kingdom	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Group Limited)	October 2015*	524.56	605.76	(224.58)	(178.21)
Persistent Systems Lanka (Private) Limited, Sri LankaA	Step-down subsidiary (Wholly Owned Subsidiary of Valista Limited)	October 2015*	209.66	260.43	25.06	22.77
Valista Inc. USA (Dissolved on June 28, 2016)	Step-down subsidiary (Wholly Owned Subsidiary of Valista Limited)	October 2015*	NA	0.93	NA	0.79
PARX Werk AG, Switzerland	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems Germany GmbH)	August 2017*	328.34	NA	(31.39)	NA
PARX Consulting GmbH, Germany	Step-down subsidiary (Wholly Owned Subsidiary of PARX Werk AG)	August 2017*	315.14	NA	0.12	NA
KIisma e-Services Private Limited, India	Associate Company	March 2012

* Period of Establishment/ Acquisition mentioned above is the period in which the entities are acquired by your Company directly or through its subsidiaries.

# Includes loss on dissolution of subsidiary Rs.409.06 Million

^ The Name of Aepona Software (Private) Limited has been changed to ‘Persistent Systems Lanka (Private) Limited’ with effect from May 19, 2017.

The Policy for determining material subsidiaries of your Company is available on your Company’s website at

https://www.persistent.com/investors/policy-on-material-subsidiary/

Particulars of Loans and Guarantees given and Investments made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer notes 6,7,15,16,34 and 43 of the standalone financial statements)

Related Party Transactions

The Policy to determine materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors is available on your Company’s website at https://www.persistent.com/investors/related-party-transactions-policy/

During the year under report, your Company had not entered into any material transaction with any party who is related to it as per the Act. There were certain transactions entered into by your Company with its foreign subsidiaries and other parties who are related within the meaning of Indian Accounting Standard (Ind AS) 24. Attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 34 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirms that none of the transactions with any of related parties were in conflict with your Company’s interest.

The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialisation and your Company’s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries.

All related party transactions are entered into on an arm’s length basis, are in the ordinary course of business and are intended to further your Company’s interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure D in Form No. AOC-2 and the same forms part of this report.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations and any other applicable law for the time being in force forms an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in the Listing Regulations forms part of this Annual Report.

Management Discussion and Analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable law for the time being in force based on audited, consolidated financial statements for the Financial Year 2017-18 forms part of this Annual Report.

Business Responsibility Report

Report on Business Responsibility as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social and governance perspective forms part of this Annual Report.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy and has resulted into a significant savings in the energy cost.

Carbon management and sustainable development provide business with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving.

Your Company has reduced excessive illumination levels to standard levels in all common areas by using switching or delamping and aggressively controlled lighting with new sensor technologies. Like in the previous year, your Company has continued to maximize the use of energy efficient flat monitors, VRV air-conditioning systems, solar energy for usage of hot water, LED logo on buildings, LED lighting in all areas, installation of power management software for desktops, WattMiser system in AHUs, En-power Computer Management system and VFD Installation for Fresh Air AHU systems for conservation of energy.

Your Company has replaced all/ partly CFL fitting by efficient LED light fittings at its Bhageerath, Aryabhata- Pingala, Hinjawadi, Goa (Bhaskar) and Nagpur facilities and have proposed to use the same in other facilities. Your Company has regulated working of lifts, vending machines, ventilation systems and water coolers in its premises.

Your Company undertakes various initiatives to save energy - one of them is usage of solar energy

1. A 250 KW rooftop solar power plant was commissioned on the terrace of Aryabhata - Pingala facility on April 30, 2015 and it generated 172,019 units in the Financial Year 2017-18. Since commissioning of the plant 526,890 units have been generated till March 31, 2018.

2. A 276 KW rooftop solar power plant was recently commissioned on the terrace of Hinjawadi facility in January/February 2018 and inaugurated on Gudhipadwa March 18, 2018 and it generated 40,240 units in the Financial Year 2017-18. Solar Plant is designed to generate 4.15 lakhs units/annum.

3. Installed following solar power plants through CSR activity under community development:

- Pune Railway Station - 160 KW

- Hyderabad Railway station - 229 KW

- Tarachand Hospital, Pune - 64.5 KW

Your Company has made efforts to ensure that there is no cool air leakage from its premises and has adopted measures to ensure optimum usage of air conditioners throughout its premises. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. The power consumption of air conditioning has been reduced by 18% since the cold aisle containment work has been completed in Data center, Hinjawadi. VFD system has been installed for fresh air AHUs in air-conditioning systems.

As a part of your Company’s Green Movement, two 2.1 MW windmills are operational at Dhule and Sangli Districts of Maharashtra. During the Financial Year 2017-18, Dhule windmill generated 4,034,400 units and Sangali windmill generated 2,473,338 units.

Your Company has installed Ozone based air conditioning systems at a few locations. Modifications have been made in Data Centre arrangement to reduce power consumption. Ground water is used for landscaping to reduce consumption of treated water. A Sewage Treatment Plant was installed at the Gargi-Maitreyi in Nagpur, Aryabhata-Pingala in Pune facilities of your Company and recycled water through these plants is used for gardening.

Your Company celebrated ‘No Plastic Days’ to promote awareness of using plastic and encourage employees to carry cloth or paper bags whenever possible. ‘Zero Plate Wastage Week’ was another event celebrated in all Company facilities. All the waste papers are shredded and disposed to scrap at all facilities. E-waste and hazards waste is to be handed over to authorized agency approved by the State Pollution Control Board. Your Company also encouraged all employees to bring their house hold e-waste in your Company to dispose it appropriately.

The Conservation of Trees campaign aims to spread awareness about tree conservation. Employees are encouraged to:

1. Plant at least one sapling in their vicinity - to date, Persistent has distributed more than 1,600 saplings.

2. Reduce paper wastage and make prints only when necessary; Persistent organizes ‘No Printer Days’ to promote awareness.

3. ’Tree Plantation Drive’ including tree maintenance programme for making Mother earth greener.

National commercial energy benchmarking initiative was taken up with a goal to establish a framework to standardize energy data collection, baseline setting for ‘typical’ commercial buildings, energy performance target setting and monitoring, and use the information to improve energy efficiency in buildings. With reference to the data collected by the BEE to judge Energy Performance Index (EPI) and total energy consumption, your Company earned star ratings for the following facilities. The details are as follows:

1. Bhageerath facility: EPI 171 - Received 2 Star Rating.

2. AR-PG facility: EPI 190 - Received 1 star Rating.

All the facilities of your Company in India are certified by DNVGL for ISO 14001:2004 and OHSAS 18001:2007, ISO 14064-1 certifications after surveillance audit (January 2018) and are now initiated for upgrading Occupational Health and Safety Management System Standard by ISO 45001:20018. Best practices to preserve the environment/health and safety are undertaken by your Company even during constructing its various premises by using crush sand, fly ash bricks and double glass unit, use of gypsum and recycled wood to protect the environment.

It is your Company’s constant endeavor to conserve and save the Environment and hence your Company has launched the Green Persistent Movement to support the same. As power cost constitutes an insignificant part of the total expenses, the financial impact of these measures is not material.

As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on Research and Development on accrual basis are as follows:

(In Rs. Million)

Particulars	Year ended on March 31
	2018	2017
Revenue expenditure	45.95	543.76
1 Total research and development expenditure	45.95	543.76
As a percentage of total income	0.25%	2.98%

The particulars of foreign exchange earnings and outgo based on actual inflows and outflows are as follows:

(In Rs. Million)

Particulars	Year ended on March 31
	2018	2017
Earnings	17,722.02	16,115.01
Outgo	4,858.47	5,402.11

Adequacy of Internal Financial Controls

The Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company’s policies, safeguarding of the assets of your Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Directors’ responsibility statement

The Directors state that:

1. I n the preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2018 and of the profit of your Company for that year;

3. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. The annual accounts have been prepared on a going concern basis;

5. Your Directors, had laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

6. Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return of your Company for the Financial Year ended on March 31, 2018 is provided as Annexure E to the Directors’ Report.

Vigil Mechanism (Whistle Blower Policy)

The details of the vigil mechanism (whistle blower policy) are given in the Report on Corporate Governance forming part of this Annual Report. Your Company has uploaded the policy on its website at https://www.persistent.com/ethical-practices-at-persistent-systems/whistle-blower-policy/

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the Financial Year 2017-18 forms part of this Annual Report.

Performance Evaluation of the Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, its various Committees and the Directors individually. The performance of the Board was evaluated by the Board after seeking inputs from all the directors and senior management on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. This was conducted in March and April 2018 by an external management consultant and the findings of the evaluation were presented at the meeting of the Nomination and Governance Committee and the Board of Directors held in April 2018.

Qualitative comments received during the Board evaluation were as follows:

- Board is being involved and briefed on all important issues. Very high levels of engagement were observed and the opinions of each other were respected.

- Board Meetings are conducted in a very transparent manner. Management is very accessible to the Board members.

- Board is balanced, mature and experienced.

- One of the best companies in CSR.

Previous year’s observations and actions taken:

Sr. No.	Observations	Action taken
1.	Balance of the Board could be improved by bringing in a US based expert	During the year under report, Dr. Anant Jhingran who is based out of US was appointed on the Board who is expert in Warehousing technology, search, e-commerce and Big Data. The Board also appointed Mr. Guy Eiferman who is expert in Healthcare and Life Sciences sector and Prof. Deepak Phatak who is an academician.
2.	Board could consider a strategic theme for the meeting from time to time	Managing Director provides presentation of strategies at every quarterly Board Meeting. These discussions help the Board for quality inputs on the business decisions.
3.	CSR initiatives of the Company could be informed to the Board members in greater detail	The Management has taken a note of this observation and has arranged interaction of the CSR team with the Board members at frequent intervals during the year. The same will be followed henceforth.

Proposed actions based on current year’s observations:

Sr. No.	Observations	Action taken
1.	Going forward, during evaluation process, the focus may be given more on qualitative comments	It has been decided that henceforth the ranking or rating system on evaluation questions be changed to qualitative comments.
2.	The Board members may share the best practices observed by them in other companies during the relevant discussions	An appeal has been made to the Board members to share the best practices observed by them in other companies during the relevant discussions.

Disclosure of Cost Audit

Your Company had filed Form 23C for appointment of Cost Auditor relating to its activities of generation of electricity from windmill turbine under the Companies (Cost Audit Report) Rules, 2011. However, based on another Circular dated November 30, 2011 issued by the Ministry of Corporate Affairs (MCA), your Company claimed exemptions from the requirement of the Cost Auditor for the said purposes and accordingly, had written a letter dated December 19, 2012 to MCA, Cost Audit Branch, for withdrawal of the appointment of the said Cost Auditor as well as cancellation of the Form 23C so filed. Reply to the said letter is awaited from the concerned office of the MCA.

Listing with the stock exchanges

The Equity Shares of your Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) since April 6, 2010. Listing fees for the Financial Year 2017-18 have been paid to both BSE and NSE.

Secretarial Standards

The Ministry of Corporate Affairs notified the Secretarial Standard on Meetings of the Board of Directors (SS-1), Secretarial Standard on General Meetings (SS-2) and Secretarial Standard on Dividend (SS-3). Your Company complies with the same.

Your Company will comply with the other Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) as and when they are made effective.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Sexual Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy. Internal Complaints Committee(s) (ICC) have been set up across all Company locations in India to redress complaints received regarding harassment, if any. The cases, if any reported to such Committee(s) are then investigated by the respective Committee members and the detailed report thereon is presented to the Board of Directors on a regular basis. During the year under report, your Company did not receive any case of sexual harassment and hence as on March 31, 2018, there were no pending cases of sexual harassment in your Company.

Corporate Social Responsibility

Your Company formed a Public Charitable Trust - ‘Persistent Foundation’ in the Financial Year 2008-09 to institutionalize the Company’s CSR initiatives and to develop a systematic approach to administer the process of grant of donations.

During the year under report, Persistent Foundation (the ‘Foundation’) was able to create excitement among employees to participate in socially relevant causes. With cooperation of the employees of your Company, the Foundation has set up several well-defined programs and activities for the promotion of education, health and community development. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through the Government authorities, reputed social organizations and institutions.

In addition to contributing Rs.66.61 Million to the Foundation, your Company made donations to various charitable institutions directly and incurred a cost of the technical contribution towards Stri Shakti Abhiyaan Project, an initiative of the NITI Aayog and coordinated by McKinsey, India. Thus, during the year under report, your Company donated Rs.74.46 Million i.e. more than 2% of the Average Net Profits of your Company made during three immediately preceding Financial Years.

Report on CSR activities of your Company under the provisions of the Act during the Financial Year 2017-18 is annexed hereto as Annexure F.

A detailed Report on the activities of the Foundation forms part of this Annual Report.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted the CSR Committee to help your Company frame, monitor and execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the Company’s social responsibility.

The Board of Directors of your Company has further approved the CSR Policy of your Company to provide a guideline for the Company’s CSR activities. The CSR Policy is also uploaded on your Company’s website at https://www.persistent.com/investors/csr-at-persistent/

The Company’s CSR Policy highlights that the need for contributing to the society is very large and your Company can make a more significant contribution by staying focused on few areas through its social initiatives. The CSR policy recommends that your Company should encourage Persistent Foundation to contribute in the following areas:

1. Health

2. Education

3. Community Development

4. Assistance in Natural Calamities

The constitution of the CSR Committee is provided elsewhere in the Annual Report.

Other matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

1. Neither the Managing Director nor the Executive Director of your Company receive any remuneration or commission from any of its subsidiaries.

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company’s operations in future.

Future Outlook

Your Company works closely with software product companies that are defining the technology roadmap for the future. Over the years, your Company has built agile capabilities to deliver products effectively. These skills are critical for all businesses as they transform to being software driven business. The strong technology foundation of your Company, the dedication of the team members and relationships with customers and partners are foundation for the future success of your Company.

Acknowledgments and appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and Industry, the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) throughout the Financial Year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Bengaluru, Visakhapatnam Special Economic Zone - Andhra Pradesh, SEEPZ Special Economic Zone - Mumbai, Cochin Special Economic Zone, Central Excise and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Director of Industries, Department of Shops and Establishments, Department of Telecommunication, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Goods and Service Tax Department, High Court of Judicature at Mumbai, ICGL Goa, Goa Industrial Development Corporation, National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Pune Municipal Corporation, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation, Maharashtra Industrial Development Corporation, Bengaluru Municipal Corporation, Karnataka Industrial Development Corporation, BSNL, Mobile / Internet Service providers.

Your Board also extends its thanks to ASBA Bank, Axis Bank, Bank of India, Barclays Bank, Banco Nacional de Mexico S.A., Bank of Tokyo Mitsubishi, BNP Paribas, Chase Bank, Citibank NA, HDFC Bank, Hongkong and Shanghai Banking Corporation, Silicon Valley Bank, State Bank of India, Syndicate Bank, Wells Fargo Bank and their officials for extending excellent support in all banking related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks the investors and shareholders for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels in your Company. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande

Chairman and Managing Director

Pune, June 7, 2018 DIN: 00005721

---

Mar 31, 2017

The Directors are pleased to present the Twenty-Seventh Annual Report of your Company along with the Audited Financial Statements for the financial year ended March 31, 2017.

The consolidated financial statements for the year ended March 31, 2017 have been prepared in accordance with Ind AS. Accordingly, all the financial information related to FY 2016-17 and FY 2015-16 is stated as per Ind AS in this report.

Business Update

Your Company has the heritage of working with software product companies which sets your Company well to be successful in the expanded market. The focus on data, digital and IoT is well aligned with market requirements and is helping your Company establish leadership.

New technology has had another effect - it takes less effort and less time to get the same things done. This has put pressure on the existing business model of your Company which has traditionally been based on billing on effort. Your Company had anticipated this shift and organized the business with a clear focus on digital transformation. At the beginning of last year, to align the organization with this strategy, your Company reorganized the business around 4 (four) key growth areas:

- Digital - focused on the “how" of digital by bringing together technology partner ecosystem, solutions and a unique architecture to enable enterprises with digital transformation

- Alliance - focused on the long-standing and multi-dimensional relationship between Persistent Systems and IBM

- Services - focused on services for software and product development including agile and experience design that are driven by the mainstream adoption of next generation technologies

- Accelerite - focused on products that includes business-critical infrastructure software for enterprises, telecom operators and the public sector

The results from this strategy are visible and the share of IP-led business and the business resulting out of digital transformation is more than half of your Company’s total revenue and is growing at a healthy rate. Your Company continues to be recognized as a thought leader by customers, partners and industry analysts. With strategy in place, your Company’s mantra for the year is focus, collaborate and execute.

Data, Digital and IoT

Digital and IoT, enabled by enterprise data integration define the building blocks for a software driven business. Your Company sees this as an important nexus of technologies for the future. With big data and machine learning, it is possible to build at scale, solutions that combine data from internal enterprise systems, external data sources and IoT sensors. With connected devices, these intelligent systems are completing the feedback loop by responding in real time. The ability to build an eco-system that can leverage these insights is helping create new business models that will monetize these investments.

In line with the market demand and the need to focus on IoT, your Company brought together market-facing IoT groups from the Alliance and Accelerite as one unit. This will strengthen the IoT offering by leveraging the IP, solutions and device and sensor partnerships across a wider set of platform partners.

IBM Watson IoT Alliance

Your Company successfully completed the integration of teams acquired from IBM, as part of the agreement entered into with IBM during last financial year, to support and extend the IBM Continuous Lifecycle Management and Continuous Engineering product suite. New sites were established in Guadalajara, Mexico; Rehovot, Israel; Ottawa, Canada and Edinburgh, Scotland during the year.

The product suite had good growth during the year and the roadmap is helping set the benchmark for continuous engineering. Partnership with IBM is helping generate leads and your Company is setting up a center in IBM’s Watson IoT World Headquarters in Munich, Germany enabling better access to IoT Customers.

Partnerships

Your Company continues to invest in partnerships, building solutions and accelerators, as well as in frameworks for enterprises to become software-driven. Your Company’s strategy to build platform based solutions has seen very good growth in the Sales force and Appian business. Your Company is now a platinum consulting partner for Sales force. Continuing the focus on platform based approach, your Company has partnered with Google Cloud Platform, Amazon Web Services, Dell Boomi and this should result in good growth in business in the coming year.

Your Company has signed a strategic collaboration with Partners Healthcare to develop a new industry-wide open-source platform to bring digital transformation to clinical care. This four-year collaboration will bring together the world class clinicians and researchers at Partners HealthCare with your Company’s innovative healthcare technology and product engineering expertise. The co-developed digital platform will be based on SMART (open, standards-based technology platform) along with FHIR (Fast Healthcare Interoperability Resources). The platform will enable provider systems across the country to rapidly and cost effectively deploy industry-leading best practices in clinical care across their ecosystems.

Your Company has partnered with USAA, a financial services provider that serves members of the US military and their families. USAA has been an innovator in securing authentication and financial transactions through a process that extends beyond user passwords and security questions. The development and intellectual property rights granted to your Company stem from innovations that USAA uses to identify and verify members, while also protecting their privacy. Through this agreement, your Company will extend these technologies and address a growing market opportunity for digital security products and solutions in the financial services industry. Your Company will focus on authentication and security solutions based on concepts such as micro-trust, risk-aware, contextual and personalized, in conjunction with technologies related to biometrics, risk modeling and dynamic proofing.

Acquisitions

Your Company completed the acquisition of PRM Cloud Solutions, one of Australia''s leading Salesforce partner and cloud application development firms. Your Company also completed the acquisition of GenWi, a Bay area based startup, focused on building digital solutions. Both these acquisitions augment the capabilities of the Digital Unit.

VLDB and Smart India Hackathon 2017

Your Company hosted the 42^nd International Conference on Very Large Databases (VLDB) in Delhi in September 2016. The conference is a premier research conference in the database area and was a stellar success. There were more than 900 participants from 39 countries who will cherish their experience of attending the conference and visiting India for the rest of their lives.

Your Company was one of the organizers of Smart India Hackathon 2017, a 36 hours non-stop digital product development competition, initiated by All India Council for Technical Education (AICTE) under the aegis of the Ministry of Human Resource Development (MHRD). For the final 36-hour hackathon, 1,250 teams, 10,000 participants worked in 26 locations across the country on more than 600 problems shared by 29 ministries. Prime Minister, Shri. Narendra Modi also addressed the students as part of this event.

Financial Results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2017 are as under:

Particulars	(Amount in USD Million except EPS and Book Value)		(Amount in Rs. Million except EPS and Book Value)		% Change (based on the
	2016-17	2015-16	2016-17	2015-16	amounts in )
Revenue from Operations	429.01	351.65	28,784.39	23,123.31	24.48
Earnings before interest, depreciation and amortization, exceptional item and taxes	69.36	59.54	4,653.47	3,915.08	18.86
Finance Cost	0.01	0.01	0.91	0.92	(1.09)
Depreciation and amortization	22.21	15.06	1,490.17	990.13	50.50
Exceptional item (Expense)	1.70	-	114.11	-
Other income	14.28	11.75	958.45	772.88	24.01
Provision for income tax	14.79	14.05	992.08	923.92	7.38
Net profit for the year	44.93	42.17	3,014.65	2,772.99	8.71
Transfer to general reserve	17.53	16.15	1,176.12	1,061.84	10.76
Net worth*	292.50	249.16	18,968.38	16,504.58	14.93
Earnings per share (EPS) (Basic)	0.56	0.53	37.68	34.74	8.46
Earnings per share (EPS) (Diluted)	0.56	0.53	37.68	34.66	8.71
Book value per equity share	3.66	3.11	237.10	206.31	14.92

[Conversion Rate USD 1 = Rs. 67.09 for Profit and Loss items; USD 1 = Rs. 64.85 for Balance Sheet items (financial year 2016-17) and USD 1 = Rs. 65.76 for Profit and Loss items; USD 1 = Rs. 66.24 for Balance Sheet items (financial year 2015-16)].

*Net worth = Equity Share Capital Reserves and Surplus (excluding capital reserve) Other Comprehensive Income.

The highlights of the financial performance on an unconsolidated basis for the year ended March 31, 2017 are as under:

Particulars	(Amount in USD Million except EPS and Book Value)		(Amount in Rs. Million except EPS and Book Value)		% Change (based on the
	2016-17	2015-16	2016-17	2015-16	amounts in Rs.)
Revenue from Operations	258.30	220.06	17,329.64	14,471.36	19.75
Earnings before interest, depreciation and amortization and taxes	55.18	49.51	3,701.79	3,255.77	13.70
Finance Cost	0.01	0.01	0.91	0.92	(1.09)
Depreciation and amortization	9.09	8.90	609.68	585.35	4.16
Other income	14.10	12.08	946.21	794.70	19.07
Provision for income tax	16.35	14.72	1,097.09	968.21	13.31
Net profit for the year	43.83	37.96	2,940.32	2,495.99	17.80
Transfer to general reserve	17.53	16.15	1,176.12	1,061.84	10.76
Net worth*	279.79	236.21	18,144.14	15,646.46	15.96
Earnings per share (EPS) (Basic)	0.55	0.48	36.75	31.27	17.52
Earnings per share (EPS) (Diluted)	0.55	0.47	36.75	31.20	17.79
Book value per equity share	3.50	2.95	226.80	195.58	15.96

[Conversion Rate USD 1 = Rs. 67.09 for Profit and Loss items; USD 1 = Rs. 64.85 for Balance Sheet items (financial year 2016-17) and USD 1 = Rs. 65.76 for Profit and Loss items; USD 1 = Rs. 66.24 for Balance Sheet items (financial year 2015-16)].

*Net worth = Equity Share Capital Reserves and Surplus Other Comprehensive Income

Material Events Occurring after Balance Sheet Date

There were no material changes and commitments affecting the financial position of your Company between the end of the financial year and the date of this report.

Liquidity

Your Company continues to maintain adequate amount of liquidity to meet its strategic and growth objectives. Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2017, your Company, on an unconsolidated basis, had cash and cash equivalents (including investments) amounting to Rs. 8,159.98 Million as against Rs. 7,610.69 Million as at March 31, 2016. The details of cash and cash equivalents (including investments) are as below:

(In Rs. Million)

Particulars	As at March 31, 2017	As at March 31, 2016
Investment in Mutual Funds at fair value	6,193.93	5,640.25
Fixed Deposits with scheduled banks	564.18	561.72
Deposit with Financial Institutions	435.00	300.00
Ta x free Bonds (quoted)	517.04	609.46
Cash and Bank balances	449.83	499.26
1 Total	8,159.98	7,610.69

Dividend

In January 2017, your Directors declared an Interim Dividend of Rs. 6 per share on the paid-up equity share capital out of the net profits of your Company. Total outflow on account of this interim dividend including dividend distribution tax amounted to Rs. 577.72 Million.

The Board has recommended a Final Dividend of Rs. 3 per share for the financial year 2016-17. Total outflow on account of final dividend including dividend distribution tax would amount to Rs. 288.86 Million. The payment of final dividend of Rs. 3 per share is subject to the approval of the Members. Thus, including the proposed final dividend, the total dividend for the financial year 2016-17 would be Rs. 9 per share as compared to Rs. 8 per share in the financial year 2015-16.

Out of the interim dividend declared in January 2017, Rs. 0.12 Million remained unclaimed as on March 31, 2017.

The Company has uploaded its Dividend Distribution Policy on its website at ''https://www.persistent.com/wp-content/uploads/2016/09/Dividend-Distribution-Policy.pdf''

Transfer to reserves

Your Company proposes to transfer an amount of Rs. 1,176.12 Million to the General Reserve and an amount of Rs. 1,145.08 Million is proposed to be retained in the Statement of Profit and Loss after payment of interim dividend and tax thereon. The balance in the Profit and Loss Account as on March 31, 2017 is Rs. 7,784.28 Million.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Companies Act, 2013 (the ‘Act’) read with the relevant rules, your Company has not accepted any fixed deposits during the year under report.

Team Persistent

Talent Additions during the Year

Your Company continues to attract high caliber quality talent in the industry. During the financial year 2016-17, your Company recruited 2,310 employees on a consolidated basis consisting of regular employees, trainees / interns, consultants, business consultants, contract consultants consisting of (technical and non-technical) professionals.

As on March 31, 2017, your Company employed 9,460 professionals (including trainees and associates) on a consolidated basis spread across 18 countries. The technical strength was 8,808 employees which comprised among others, 4,969 graduates (Engineers and Technicians), 2,043 post graduates and 26 Ph.D.s. Your Company is going global and there was a significant increase in the distribution of overseas employees which now constitutes 15.97% of the total work force as against 12.28% in the last year.

Your Company recruits fresh talent from various engineering colleges in India. During the year under report, your Company added a batch of 223 new graduates through campus. Your Company strongly believes in nurturing ‘Industry - Academia’ partnerships and has many programs to engage with students such as BE project mentoring, Persistent Day, Internship and sessions through experts of Persistent Computing Institute (PCI).

The attrition rate during the year was 15.69% which was less than the attrition rate of 16.43% in the previous year.

Continuous Learning and Skill Enablement

In line with a focus on continuously learning and self-development, Persistent University is driving ongoing skills development, thus ensuring that employees are ready for the future. It serves as a one-stop learning destination with offerings to enhance technical skills, business communication, management and behavioral skills. Multiple learning methodologies are offered such as in-class trainings, remote trainings, blended trainings, Massive Online Courses, self-learning and assessments for internal certification. Employees can choose from a variety of courses along with combination of learning methodologies as per their individual learning plan (ILP). Every employee’s ILP is in line with the Company, project and individual aspirations.

Training details during the financial year 2016-17

Your Company covered 77% of the employees through at least one training this year, and 63% employees passed at least one internal certification. Your Company trained about 746 campus hires in the Entry Level Training Program (ELTP) and about 477 employees under Full Stack Training this year.

The total investment for In-Class training was around 1,700 person months and totaling to 11,887 enrollments. Self-learning investment on In-house knowledge center course enrollments was around 1,000 person months.

Total enrollments for internal certifications, either after In-Class training or self-learning, were 24,310.

Your Company encourages learning and knowledge enhancements via various means. This year, your Company continued with the Technothon initiative, where the campus hires work on new technologies (IoT, Machine Learning, Block Chain, Dev Ops, AWS, MEAN Stack, full stack). They build and exhibit end-to-end mini-projects. Around 80 such mini projects were exhibited after the ELTP.

Infrastructure

During the financial year 2016-17, the total built-up capacity owned by your Company in India and abroad was 1,15,478 m2.

The details of owned facilities of your Company are as follows:

Location	Year of Acquisition / Completion	Total Built-up Area (m2)	Total Seating Capacity
Pune
Kapilvastu	1994	202	35
Panini	1998	929	80
Bhageerath	2002	12,170	586
Aryabhata - Pingala	2007	31,680	2,618
Hinjawadi	2012	41,446	3,173
Goa
Charak	1997*	3,280	412
Bhaskar	2014	3,762	313
Nagpur
IT Tower	2003	3,708	352
Gargi and Maitreyi	2011	17,279	1,263
Grenoble, France	2000**	1,022	50
Total		1,15,478	8,882

* Company started to occupy this premises from October 2005 onwards.

** Company acquired this premises in August 2011 as part of the acquisition of the Grenoble team.

Along with the Company owned premises, your Company also operates from leased facilities at Bengaluru, Hyderabad, Kuala Lumpur (Malaysia), Belfast (UK), Colombo (Sri Lanka), Guadalajara (Mexico), Rehovot (Israel), Dublin (Ireland), Ottawa (Canada), Edinburgh (Scotland) and Santa Clara (CA), Irvine (CA), Dublin (OH), Littleton (MA), Raleigh (NC), Bellevue (WA), Nashua (NH) in the US.

Awards and recognitions during the financial year 2016-17

During the financial year 2016-17, your Company continued its tradition of winning various awards and getting new recognitions. Your Company was a proud recipient of the following awards during the year:

1. Recognized in ‘Leadership'' zone across all categories in ‘Zinnov Zones for Digital Services’

2. Named Appian Regional Partner of the Year, Americas, and Awarded “Best Use of Mobile" in Appian App Market Awards

3. Won the India''s ‘Coding Power House'' in 2016 which is thrice in a row

4. Recognized for the strongest overall capabilities in Distributed Agile Delivery of Services by Ovum Decision Matrix: 2016-2017

5. Recognized as Oracles'' North America Partner of the Year in Security

6. Recognized in Leadership Zone for ‘Software Platform Engineering & Management'' and ‘Engineering Analytics & Decision Sciences'' in ‘Zinnov Zones 2016 - IoT Technology Services'' Report

7. Got featured in Forbes India Magazine - “With an eye on the cloud, Persistent Systems continues to innovate"

8. Recognized at the Oracle Excellence Awards 2016 as a specialized partner for security

9. Recognized by the Association for Talent Development in the 2016 BEST Awards for demonstrating enterprise-wide success through talent development

10. Cited as a Leader among BPM Service Providers by The Forrester Wave™: BPM Service Providers, Q4 2016 Report

11. Ranked amongst the ‘Fastest Growing Firms‘ in Consulting Magazine

12. Recognized for its industry-leading Product Engineering competency in ‘Zinnov Zones 2016 - Product Engineering Services'' Report

13. Recognized as ‘Salesforce Platinum Consulting Partner'', a reflection of your Company''s growing strength and market success

14. Named by IBM as the ‘Worldwide Watson Internet of Things Innovative Business Partner of the Year'' at the IBM World of Watson 2016 Business Partner Awards

15. Recognized by the New HfS Report for Growing Momentum in Salesforce Ecosystem

16. Beacon Award Finalist recognition at the 2017 IBM Partnerworld Leadership conference in Las Vegas

17. Won the Prestigious Global award from Association for Talent Development

18. Won the Premier Global Award from Training Magazine

19. Won the TISS- LEAPVAULT CLO AWARD for Best Corporate University from Tata Institute of Social Sciences which is five times in a row

20. Won ‘Platinum'' rating in ‘The Asset Corporate Awards 2016'' for Excellence in Governance, CSR & Investor Relations

21. League of American Communications Professionals (LACP), Florida, USA announced the Annual Report 2016 as the winner of -

i) ‘Gold'' award for excellence within its Competition Class

ii) Ranked 40^th rank among Top 100 Communications Materials of 2016

22. Won a ‘Special Jury Award'' for Environment and Sustainability by HYSEA for the year 2015-16

23. The Infrastructure, Facility, Human Resources & Realty Association (iNFHRA) has awarded the following awards:

i) Xcellence award for Ecological Sustainability to Mr. Sanjay Chaudhari, Senior Manager - Admin

ii) Xcellence award for Corporate Travel, Transport & Logistics to Mr. Amol Undre, Associate Sr. Manager - Admin

iii) Xcellence award for Safety & Security to Mr. Robin Hyam, Associate General Manager - Admin Auditors

Appointment of statutory auditors

The Members of your Company at the Twenty-Fourth Annual General Meeting held on July 26, 2014, appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) and M/s. Joshi Apte & Co., Chartered Accountants (Firm Registration No. 104370W) as the Joint Statutory Auditors of your Company to hold such office till the conclusion of the Annual General Meeting in the calendar year 2019 and 2017, respectively.

Pursuant to such appointment, M/s. Joshi Apte & Co., Chartered Accountants will retire at the conclusion of the Annual General Meeting scheduled to be held on July 20, 2017. The Directors acknowledge their valuable contribution during the last 27 years and wishes them success in their future endeavors.

M/s. Deloitte Haskins & Sells LLP has confirmed their eligibility and willingness to accept office, if the appointment is ratified by the Members of your Company. Further, in terms of the Regulation 33(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), the statutory auditor of your Company has subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Deloitte Haskins & Sells LLP has confirmed that they hold a valid certificate issued by ‘Peer Review Board'' of ICAI; and have provided a copy of the said certificate to your Company for reference and records.

The ratification of appointment of Statutory Auditor is subject to the approval of the Members of your Company.

Your Directors propose ratification of appointment of M/s. Deloitte Haskins & Sells LLP as the Statutory Auditors of your Company.

Secretarial Audit Report

Pursuant to Section 204 of the Act, the Board of Directors had appointed M/s. SKO & Associates, Practicing Company Secretaries as the Secretarial Auditors of your Company for the financial year 2016-17.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as Annexure A. The comments of the Board on the observations of the Secretarial Auditors are as follows:

Sr. No.	Observations by Secretarial Auditors	Comments by the Board
1.	Pursuant to Section 89 of the Act, the Company has not filed in six instances forms with the Registrar of Companies, within the prescribed time, intimating change in beneficial interest on transfer of shares to the employees pursuant to the exercise of vested stock options during the year under report.	The Company has been prompt to notify the changes in the beneficial interest to the Ministry of Corporate Affairs (MCA). However, due to technical issues with the MCA website (which was also acknowledged by MCA), the Company could not intimate the changes within prescribed time for those six instances.
2.	Pursuant to section 125 of the Act, the Company has not filed Form IEPF - 2 within prescribed limit of 90 days during the year under report.	Since the Form IEPF - 2 was not available on the website of MCA, the Company could not file the same within prescribed time. However, as soon as the Form was made available by MCA, the Company promptly filed it.

Board and Corporate Governance Board Meetings

The details pertaining to the composition, terms of reference and other details of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

Directors and Key Managerial Personnel

Dr. Anant Jhingran who was an Independent Director of the Company since November 10, 2011, resigned from the Board with effect from November 3, 2016 to focus on his other professional commitments. The Directors take this opportunity to thank Dr. Jhingran for his strategic guidance and his contributions to your Company. The Directors wish him success in his future endeavors.

Mr. Thomas (Tom) Kendra was appointed as an Independent Director with effect from January 22, 2016. On March 28, 2017, your Company entered into an agreement with M/s. Azure Associates LLC, USA which is owned by Mr. Kendra for providing business consultation, coaching, advisory and mentoring services to the Company. Pursuant to the said agreement, Mr. Kendra’s status has changed from ''Independent Director'' to ''Non-Executive Non-Independent Director'' with effect from April 1, 2017. The said agreement was ratified by the Board of Directors at its meeting held on April 24 and 25, 2017.

A separate proposal seeking approval of the Members for noting the change of status for Mr. Kendra from ''Independent Director'' to ''Non-Executive Non-Independent Director'' of your Company forms part of the Notice of the ensuing Annual General Meeting.

The appointment of 5 (Five) Independent Directors was made at the 24^th Annual General Meeting (AGM) held on July 24, 2014 for a period of 5 (Five) consecutive years for a term up to conclusion of the 29^th AGM to be held in the calendar year 2019. Pursuant to Section 149(13) of the Act, they are not liable to retire by rotation.

In terms of Section 152(6) of the Act and Article 137 of the Articles of Association of your Company, Dr. Anand Deshpande, Chairman and Managing Director is liable to retire by rotation at the Twenty-Seventh Annual General Meeting as he is the Non-Independent Director who is holding office for the longest period among the Non-Independent directors liable to retire by rotation.

Dr. Deshpande has confirmed his eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing Annual General Meeting. In the opinion of your Directors, Dr. Deshpande has requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the re-appointment of Dr. Deshpande, be passed.

At present, your Company has 5 (Five) Non-Executive Directors who are Independent Directors. Pursuant to the Regulation 17(1)(b) of the Listing Regulations, every listed company shall have at least half of its total strength of the Board of Directors as Independent Directors. Based on the present composition of the Board of Directors, your Company complies with this requirement.

In terms of the Listing Regulations, your Company conducts the Familiarization Program for Independent Directors about their roles, rights, responsibilities in your Company, nature of the industry in which your Company operates, business model of your Company, etc., through various initiatives. The details of the same can be found at: ''http://investors.persistent.com/familiarisation-program''.

Major changes in the shareholding of the Promoter and Promoter Group

During the Financial Year 2016-17, Mr. S. P. Deshpande, Promoter and former Director of the Company gifted 39,99,999 shares of the Company (i.e. 4.99% of the paid-up share capital) to Rama-Purushottam Foundation (RPF), a Section 8 Company formed for philanthropic activities, against NIL consideration on December 21, 2016 as his contribution towards the corpus.

In addition to the above transfer of shares to RPF, Mr. Deshpande has gifted a few shares aggregating to 9,66,000 shares (i.e. 1.21% of the paid-up share capital) to his close relatives against NIL consideration on December 21, 2016 as a part of his succession planning.

As on March 31, 2017, Mr. Deshpande holds 2,88,651 shares of the Company (i.e. 0.36% of the paid-up share capital) jointly with his spouse. The detailed shareholding of the Promoter and Promoter Group forms part of Annexure D of the Directors'' Report section forming part of this Annual Report.

Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149 of the Act.

Committees of the Board

The composition of the committees of the Board is given elsewhere in this Annual Report. Until April 2017, your Company did not have a separate Risk Management Committee. Instead, the terms of reference of the Risk Management Committee as prescribed in the Regulation 19 of the Listing Regulations were included in the terms of refrence of the Audit Committee. This was in terms of the discussion of the Board of Directors at its meeting held in July 2014.

However, the Board, at its meeting held in April 2017, approved constitution of the Risk Management Committee. The first meeting of the newly formed Risk Management Committee will be held in July 2017.

The details of the powers, functions, composition and meetings of all the Committees of the Board held during the year under report are given in the Report on Corporate Governance section forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were accepted by the Board of Directors of your Company from time to time during the year under report.

Compensation and Remuneration Committee

The Compensation and Remuneration Committee of the Board was constituted on April 23, 2004. In terms of the erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI ESOP Guidelines"), your Company re-constituted the Compensation and Remuneration Committee for the administration and superintendence of the employee stock options schemes on October 4, 2007.

The Board of Directors, at its meeting held in April 2014, named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Act. As regards the terms of the Compensation and Remuneration Committee of your Company, the same are in line with the statutory terms of the Nomination and Remuneration Committee.

The details including the composition, terms of reference, and the meetings thereof held during the financial year the Compensation and Remuneration Committee and the Remuneration Policy of the Company are given in the Report on Corporate Governance section forming part of this Annual Report.

Nomination and Governance Committee

The Board of Directors, at its meeting held in April 2014, named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Act. As regards the terms of the Nomination and Governance Committee of your Company, the same are in line with the statutory terms of the Nomination and Remuneration Committee.

The details including the composition and terms of reference of the Nomination and Governance Committee of the Board of Directors of your Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

The policy for appointment of a new director on the Board is as follows:

The Board of Directors decides the criteria for the appointment of a new director on the Board from time to time. This criteria may include candidate''s expertise area, age, industry experience, professional background, association with other companies and such other things.

Once the criteria are determined, the Board directs the Nomination and Governance Committee to compile profiles of suitable candidates through networking, industry associations and business connects. The Nomination and Governance Committee considers each and every profile on the decided parameters and shortlists the candidates. Shortlisted candidates are then interviewed personally or through tele-conference by the Members of the Committee.

Once the Committee is convinced about a candidate''s competency, his/her business acumen, commitment towards his/ her association with your Company and his/her availability for your Company on various matters as and when they arise, it recommends the candidate to the Board of Directors for its further consideration.

Employees'' remuneration

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees posted in India and drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure B of the Directors'' Report.

The details of employees posted outside India and drawing remuneration in excess of the limits set out in the said Rules can be made available on request.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure C.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company at the time of grant.

In line with the Ind AS 102 on ''Share Based Payments'', your Company has computed the cost of equity-settled transactions by using the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period.

Weighted average exercise prices and weighted average fair values of options:

The Binomial tree valuation model has been used for computing the weighted average fair value of the stock options granted during the financial year 2016-17 and 2015-16 considering the following inputs:

Particulars	March 31, 2017	March 31, 2016
	Scheme XII	Scheme XI
Weighted average share price (Rs.)	700.50	583.66
Exercise Price (Rs.)	10	10
Expected Volatility	51.00%	35.08%
Life of the options granted (Vesting and exercise period)	2.5 Months	3.5 Years
Dividend Yield	1%	1%
Average risk-free interest rate	7.1%	7.8%
Expected dividend rate	60%	60%

No new options were granted to the Independent Directors of your Company during the year under report. Shares held by Independent Directors of your Company as on March 31, 2017 are as under:

Name of the Director	Shares held (through exercise of vested Stock Options)	Shares held (through allotment under a pre IPO scheme)	Shares held (through market purchase / IPO)	Total Shares held
Ms. Roshini Bakshi	Nil	Nil	Nil	Nil
Mr. Pradeep Bhargava*	13,600	Nil	Nil	13,600
Mr. Sanjay Bhattacharyya**	14,000	Nil	Nil	14,000
Mr. Thomas (Tom) Kendra#	Nil	Nil	Nil	Nil
Mr. Prakash Telang*	14,000	Nil	4,000	18,000
Mr. Kiran Umrootkar*	6,000	Nil	Nil	6,000

* Shares held jointly with the spouse

** Out of 14,000 equity shares, 10,500 shares are jointly held with Mrs. Rita Bhattacharyya

# The designation of Mr. Thomas Kendra has changed from ''Independent Director'' to ''Non-Executive Non-Independent Director'' with effect from April 1, 2017

During the financial year 2016-17, pursuant to the resolutions passed by the Compensation and Remuneration Committee of the Board of Directors through circulation, Independent Directors and employees including ex-employees (''Grantees'') exercised their stock options for shares which were already vested in their name. During this exercise, 684,908 (Six Hundred Eighty Four Thousand Nine Hundred and Eight only) i.e. 0.86% Equity shares of the total Paid-up Capital were transferred from PSPL ESOP Management Trust to the eligible Grantees at an aggregate value of Rs. 92.15 Million under various ESOP Schemes of your Company.

Your Company has 12 (Twelve) ESOP Schemes as on March 31, 2017 under which options were granted to various Independent Directors, employees of the Company and its subsidiaries, details of which are given elsewhere in this Annual Report.

Shares Suspense Account

Your Company had opened an ‘Unclaimed Securities Suspense Account'' on behalf of the allottees who were entitled to the equity shares under the initial public offering. Some of the equity shares could not be transferred to the respective allottees due to technical reasons. Such shares were held in ‘Unclaimed Securities Suspense Account'', to be transferred to allottees as and when they approach your Company.

Your Company strives to ensure that the Equity Shares are credited to the demat account of the respective allottees. During the year under report, your Company voluntarily approached all the 14 (Fourteen) allottees to help them claim their unclaimed shares. In response, your Company received applications from 4 (Four) allottees for crediting the shares from the said Suspense Account to their respective accounts. The Equity Shares along with the Bonus Shares (allotted in March 2015) were credited to their respective demat accounts before March 31, 2017. The balance in the above mentioned Suspense Account as on March 31, 2017 is 400 Equity Shares owned by 10 allottees. Your Company will continue to try contacting these 10 allottees and will arrange credit of due shares to them before the statutory deadline to transfer those shares to the IEPF Suspense Account of the Government of India.

The details of equity shares held in an ‘Unclaimed Securities Suspense Account'' are as follows:

Sr. No.	Particulars	Details
1.	Aggregate number of allottees in the Unclaimed Securities Suspense Account lying at the beginning of the financial year 2016-17	14 allottees
2.	Aggregate number of the outstanding equity shares in the Unclaimed Securities Suspense Account lying at the beginning of the financial year 2016-17	560 Equity shares
3.	Number of allottees who approached issuer for transfer of shares from Unclaimed Securities Suspense Account during the financial year 2016-17	4 allottees
4.	Number of shares transferred from Unclaimed Securities Suspense Account during the financial year 2016-17	160 Equity shares
5.	Aggregate number of allottees in the Unclaimed Securities Suspense Account lying at the end of the financial year 2016-17	10 allottees
6.	Aggregate number of outstanding equity shares in the Unclaimed Securities Suspense Account lying at the end of the financial year 2016-17	400 Equity shares

Note - Voting rights on the above mentioned equity shares are kept frozen till the rightful owner of such equity shares claim these shares.

Institutional Holding

As on March 31, 2017, the total institutional holding in your Company stood at 35.50% of the total paid-up share capital.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Act, your Company has provided the Consolidated Financial Statements as on March 31, 2017. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These documents will also be available for inspection during the business hours at the Registered Office of your Company. A statement showing financial highlights of the subsidiary companies is enclosed to the consolidated financial statements.

The Annual Report of your Company, though does not contain full financial statements of the subsidiary companies, your Company can make available the audited annual accounts and related information of the subsidiary companies, upon request.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2017 are prepared in accordance with the Indian Accounting Standard (Ind AS) 110 on ‘Consolidated Financial Statements'' notified by the Ministry of Corporate Affairs (MCA), and form part of this Annual Report.

Subsidiary Companies, Associate Companies and Joint Ventures

The details of the subsidiaries and associates of your Company as on March 31, 2017 are as under:

(In Rs. Million)

Name of the Entity and	Status	Period of	Total Income		Net Profit/(Loss)
Country of incorporation		Establishment/ Acquisition	As on March 31, 2017	As on March 31, 2016	As on March 31, 2017	As on March 31, 2016
Persistent Systems Inc., USA	Wholly Owned Subsidiary	October 2001	15,387.30	10,390.71	238.67	169.15
Persistent Systems Pte. Ltd., Singapore (Co. Reg. No. 200706736G)	Wholly Owned Subsidiary	April 2007	427.49	377.67	72.99	79.48
Persistent Systems France S.A.S., France	Wholly Owned Subsidiary	April 2011	389.14	366.05	11.55	30.79
Persistent Systems Malaysia Sdn. Bhd., Malaysia	Wholly Owned Subsidiary	September 2013	548.42	542.97	62.54	(1.26)
Persistent Systems Germany GmbH, Germany	Wholly Owned Subsidiary	December 2016			(0.67)
Persistent Telecom Solutions Inc., USA	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems, Inc.)	January 2012	1,437.51	1,208.28	(156.13)	(104.35)
Akshat Corporation (dba Rgen Solutions), USA	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems, Inc.)	July 2015*	253.91	405.51	28.03	28.33
Persistent Systems Israel Ltd., Israel	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems, Inc.)	February 2016	448.65		32.38
Persistent Systems Mexico S.A. de C.V., Mexico	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems, Inc.)	March 2016	139.11		6.08

Aepona Holdings Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems, Inc.)	October 20151
Aepona Group Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Holdings Limited)	October 2015*
Valista Limited, Ireland	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Group Limited)	October 2015*	21.43	13.38	(421.08)#	2.58
Aepona Limited, UK	Step-down subsidiary (Wholly Owned Subsidiary of Aepona Group Limited)	October 2015*	605.76	472.99	(178.21)	76.75
Aepona Software (Private) Limited, Sri LankaA	Step-down subsidiary (Wholly Owned Subsidiary of Valista Limited)	October 2015*	260.43	124.11	22.77	7.21
Valista Inc. USA (Dissolved on June 28, 2016)	Step-down subsidiary (Wholly Owned Subsidiary of Valista Limited)	October 2015*	0.93	0.79	0.79	0.18
CloudSquads, Inc., USA (Dissolved on December 29, 2015)	Step-down subsidiary (Wholly Owned Subsidiary of Persistent Systems, Inc.)	February 2014*		46.07		(5.46)
Klisma e-Services Private Limited, India	Associate Company	March 2012

Particulars of Loans and Guarantees given and Investments made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer notes 6, 7, 15, 16 and 43 of the standalone financial statements)

Related Party Transactions

The Policy to determine materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors is available on your Company''s website at ''https://www.persistent.com/investors/related-party-transactions-policy/''.

During the year under report, your Company had not entered into any material transaction with any party who is related to it as per the Act. There were certain transactions entered into by your Company with its foreign subsidiaries and other parties who are related within the meaning of the Indian Accounting Standard (Ind AS) 24. Attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 34 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirms that none of the transactions with any of related parties were in conflict with your Company''s interest.

The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialization and your Company''s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries.

All related party transactions are entered into on an arm''s length basis, are in the ordinary course of business and are intended to further your Company''s interests.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations and any other applicable law for the time being in force forms an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in the Listing Regulations forms part of this Annual Report.

Management discussion and analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable law for the time being in force based on audited, consolidated financial statements for the financial year 2016-17 forms part of this Annual Report.

Business Responsibility Report

Report on Business Responsibility as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social and governance perspective forms part of this Annual Report.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted into a significant savings in the energy cost.

Carbon management and sustainable development provide business with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving.

Your Company has reduced excessive illumination levels to standard levels in all common areas by using switching or delamping and aggressively controlled lighting with new sensor technologies. Like in the previous year, your Company has continued to maximise the use of energy efficient flat monitors, VRV air-conditioning systems, solar energy for hot water, LED logo on buildings, LED lighting in common areas, installation of power management software for desktops, WattMiser system in AHUs, En-power Computer Management system and VFD Installation for Fresh Air AHU systems for conservation of energy. Your Company has used all LED light fittings at its Hinjawadi (Yajurveda 2^nd floor), Goa (Bhaskar) and Nagpur IT Tower facilities and have proposed to use the same in other facilities. Your Company has regulated working of lifts, vending machines, ventilation systems and water coolers in its premises.

Your Company has made efforts to ensure that there is no cool air leakage from its premises and has adopted measures to ensure optimum usage of air conditioners throughout its premises. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. The power consumption of air conditioning has been reduced by 18% since the cold aisle containment work has been completed in Data center, Hinjawadi. VFD system has been installed for fresh air AHU’s in air-conditioning systems. As a part of your Company’s Green Movement, two 2.1 MW windmills are operational at Dhule and Sangli Districts of Maharashtra. During the financial year 2016-17, Dhule windmill generated 4,124,745 units and Sangali windmill generated 2,939,333 units.

Your Company has installed Ozone based air conditioning systems at a few locations. Modifications have been made in Data Centre arrangement to reduce power consumption. Ground water is used for landscaping to reduce consumption of treated water. A Sewage Treatment Plant was installed at the Gargi-Maitreyi in Nagpur, Aryabhata-Pingala in Pune facilities of your Company and recycled water through these plants is used for gardening.

Your Company celebrated ‘No Plastic Days’ to promote awareness of using plastic and encourage employees to carry cloth or paper bags whenever possible. ‘Zero Plate Wastage Week’ was another event celebrated in all Company facilities. All the waste papers are shredded and disposed to scrap at all facilities.

All the facilities of your Company are certified by DNVGL for ISO 14001:2004 and OHSAS 18001:2007 certifications after recertification audit and are now initiated for upgrading Environmental Management System Standard by ISO 14001:20015. Further, your Company has been certified by the American Global Standards for ISO 14064-1:2006 (Green House Gases Inventory) for all facilities in India for the financial year 2015-16. Best practices to preserve the environment are undertaken by your Company even during constructing its various premises by using crush sand, fly ash bricks and double glass unit, use of gypsum and recycled wood to protect the environment.

Your Company undertakes various initiatives to save energy. A 250 KW rooftop solar power plant was commissioned on the terrace of Aryabhata - Pingala facility on April 30, 2015 and it generated 180,349 units in the financial year 2016-17. Efforts are being made to increase the plant efficiency. The chiller replacement work has been completed at Bhageerath facility to ensure higher efficiency and it saves around 37% of the air-conditioning consumption. The Old UPS system was replaced by modular higher efficiency UPS system at all the facilities and it resulted in 18% power saving in UPS power. Cold aisle containment work was completed in Hinjawadi Data Centre to reduce the power consumption by 19%.

It is your Company’s constant endeavor to conserve and save the Environment and hence your Company has launched the Green Persistent Movement to support the same.

As power cost constitutes an insignificant part of the total expenses, the financial impact of these measures is not material.

As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on Research and Development on accrual basis are as follows:

(In Rs. Million)

Particulars	Year ended on March 31
	2017	2016
Capital expenditure	-	0.11
Revenue expenditure	543.76	62.47
1 Total research and development expenditure	543.76	62.58
As a percentage of total income	2.98%	0.41%

The particulars of foreign exchange earnings and outgo, based on actual inflows and outflows are as follows:

(In Rs. Million)

Particulars	Year ended on March 31
	2017	2016
Earnings	16,115.01	12,361.34
Outgo	5,402.11	2,573.12

Adequacy of Internal Financial Controls

The Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company''s policies, safeguarding of the assets of your Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

Directors'' responsibility statement

The Directors state that:

1. In the preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2017 and of the profit of your Company for that year;

3. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. The annual accounts have been prepared on a going concern basis;

5. Your Directors, had laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

6. Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return of your Company for the financial year ended on March 31, 2017 is provided in the Annexure D to the Directors'' Report.

Vigil Mechanism (Whistle Blower Policy)

The details of the vigil mechanism (whistle blower policy) are given in the Report on Corporate Governance forming part of this Annual Report. Your Company has uploaded the policy on its website at ''https://www.persistent.com/investors/whistle-blower-policy/''.

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at your Company for the financial year 2016-17 forms part of this Annual Report.

Performance Evaluation of the Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, its various Committees and the Directors individually. This was conducted in March and April 2017 by an External Management Consultant and the findings of the evaluation were presented at the meeting of the Nomination and Governance Committee and the Board of Directors held in April 2017. Recommendations and suggested areas of improvement for the Board, its various committees and the individual Directors were considered by the Board.

Listing with the stock exchanges

The Equity Shares of your Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) since April 6, 2010.

Listing fees for the financial year 2016-17 have been paid to both BSE and NSE.

Secretarial Standards

The Ministry of Corporate Affairs notified the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and Secretarial Standard on General Meetings (SS - 2) effective from July 1, 2015. Your Company complies with the same.

Your Company will comply with the other Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) as and when they are made effective.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Sexual Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Internal Complaints Committee(s) (ICC) has been set up across all Company locations in India to redress complaints received regarding harassment. The cases reported to such Committee(s) are investigated by the respective Committee(s) members and the detailed report thereon is presented to the Board of Directors on a regular basis. During the year under report, your Company did not receive any case of sexual harassment and hence as on March 31, 2017, there were no pending cases of sexual harassment in your Company.

Corporate Social Responsibility

Your Company formed a Public Charitable Trust, ‘Persistent Foundation’ in the financial year 2008-09 to institutionalize the Company’s CSR initiatives and to develop a systematic approach to administer the process of grant of donations.

During the year under report, Persistent Foundation (the ‘Foundation’) was able to create excitement among employees to participate in socially relevant causes. With cooperation of the employees of your Company, the Foundation has set up several well-defined programs and activities for the promotion of education, health, community welfare. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through the Government authorities, reputed social organizations and institutions.

In addition to contributing Rs. 67.74 Million to the Foundation, your Company made donations to various other charitable institutions directly and incurred cost of the technical contribution towards MGI-Shakti Project, an initiative of the Government of Maharashtra and coordinated by McKinsey, India. During the year under report, your Company donated a total of Rs. 70.03 Million, which qualifies as CSR expenditure under Section 135(5) of the Companies Act, 2013. This expenditure is more than 2% of the Average Net Profits of your Company made during three immediately preceding financial years.

Your Company won the ‘Special Jury Award’ for Environment and Sustainability by Hyderabad Software Exporters'' Association (HYSEA) for its CSR wing for the financial year 2015-16,

Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2016-17 is annexed hereto as Annexure E. A detailed Report on the activities of the Foundation forms part of this Annual Report.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted the CSR Committee to help your Company to frame, monitor and execute the Company’s CSR activities under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the Company’s social responsibility.

The Board of Directors of your Company has further approved the CSR Policy of your Company to provide a guideline for the Company’s CSR activities. The CSR Policy is also uploaded on your Company’s website at ''https://www.persistent.com/investors/csr-at-persistent/''.

The Company’s CSR Policy highlights that the need for contributing to the society is very large and your Company can make a more significant contribution by staying focused on few areas through its social initiatives. The CSR policy recommends that your Company should consider contributing in the following areas:

1. Health

2. Education

3. Community Development

4. Assistance in natural calamities

The constitution of the CSR Committee is provided elsewhere in the Annual Report.

Other matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

1. Neither the Managing Director nor the Executive Director of your Company receive any remuneration or commission from any of its subsidiaries.

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and your Company''s operations in future.

Future Outlook

Your Company is well placed in the current market scenario. The expertise in building next generation technology, partnerships with the world''s technology leaders and the changes that your Company has made, has set us up very well for the future.

Acknowledgments and appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and Industry, the Reserve Bank of India and the Securities and Exchange Board of India throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Bengaluru, Visakhapatnam Special Economic Zone - Andhra Pradesh, SEEPZ Special Economic Zone -Mumbai, Cochin Special Economic Zone, Central Excise and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Director of Industries, Department of Shops and Establishments, Department of Telecommunication, Department of Commerce (SEZ Section), Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Sales Tax Department, High Court of Judicature at Mumbai, ICGL Goa, Goa Industrial Development Corporation, National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Pune Municipal Corporation, Maharashtra Pollution Control Board, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Telangana State Industrial Infrastructure Corporation, Maharashtra Industrial Development Corporation, Bengaluru Municipal Corporation, Karnataka Industrial Development Corporation, the Department of Scientific and Industrial Research (DSIR), BSNL, Mobile / Internet Service providers.

Your Board also extends its thanks to Axis Bank, Bank of India, Barclays Bank, Banco Nacional de Mexico, S.A., Bank of Tokyo Mitsubishi, BNP Paribas, Chase Bank, Citibank NA, HDFC Bank, Silicon Valley Bank, State Bank of India, Syndicate Bank, HSBC Bank, Wells Forgo Bank and their officials for extending excellent support in all banking related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks the investors and shareholders for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels in your Company. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande

Chairman and Managing Director

DIN: 00005721

Pune, May 30, 2017

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty Fifth Annual Report of your Company along with the Audited Statement of Accounts for the financial year ended March 31, 2015.

Business overview and State of Company''s Affairs

Traditionally, your Company has focused on building software products and through the years has established market leadership position in outsourced product development. Working with leading product companies of the world has helped your Company identify and track next generation technology trends ahead of the market. Your Company focused on building expertise in cloud computing, analytics - especially big data, collaboration and mobility ahead of the market and today works with or has a partnership with all the leaders in these segments. In line with your Company''s strategy to provide full-lifecycle services, since 2011, your Company has partnered with platform technology leaders to establish sell-with partnerships to approach customers jointly.

Additionally, your Company has also established an IP business primarily by acquiring end-of-life and non-strategic products from your Company''s customers. To allow the IP group independent access to customers, during the year, your Company created an independent brand Accelerite (www.accelerite.com). Accelerite is a Persistent brand and looks and feels like a Silicon Valley product start-up.

Your Company''s business can be classified into three segments - account-led, platform-led and IP-led corresponding to outsourced services business, sell-with business and IP-led business respectively.

While working with enterprise customers acquired through sell-with partnership, your Company has observed that because of new technology there are two very distinct kinds of projects being planned in the enterprise. One set of projects can be classified as IT Modernization projects where the focus is on upgrading existing systems to improve efficiency. The other set of projects can be classified as digital transformation projects. Digital transformation projects are focused on changing business and engagement models with customers. Your Company was also able to observe that digital transformation projects can be best implemented with the product development lifecycle that is ingrained in your Company''s product development DNA. This has opened up a large new market for your Company. So far, your Company was focused on ISVs, companies whose business is software. Now, as more and more enterprises are becoming software driven businesses, every business which is keen on digital transformation is potentially a customer for your Company.

During the year under review, the Company''s revenue grew 13.3% year on year to Rs. 18,912.52 Million and profit after tax grew 16.6% to Rs. 2,906.31 Million on a consolidated basis. During the year, the services revenue grew 11.7% while the IP revenue grew 20.5% in INR terms on a consolidated basis.

The Financial Highlights reflecting the state of Company''s affairs are provided elsewhere in this Annual Report.

Talent Additions during the Year

Your Company continues to attract high caliber quality talent in the industry. During the financial year 2014-15, your Company recruited 1,824 employees on a consolidated basis consisting of regular employees, trainees / interns, consultants, business consultants, contract consultants consisting of (technical and non-technical) professionals. The Company attracts a steady stream of experienced US returned professionals that provides a very strong middle management group to your Company.

Your Company''s human resource strength as on March 31,2015 was 8,506 personnel (including trainees and associates) on a consolidated basis spread across 11 countries. The technical strength was 7,861 employees which comprised among others, 6,883 graduates (Engineers and Technicians), 895 post graduates and 26 Ph.Ds. on a consolidated basis.

The attrition rate increased from 14.4% in the previous year to 15.5% during the year. This increase in attrition was strategic and pre-planned in nature. There was also a significant increase in the distribution of overseas employees which now constitutes 9% of the total work force.

Your Company recruits fresh talent from various engineering colleges in India. During the year under report, your Company added a batch of 755 new graduates through campus; recruiting students with software background across your Company locations.

Fresh graduate recruitment is one of the most important sources of hiring the talent into your Company. In fact, it makes up close to one third of our total hiring during each financial year. Talented employees are the core of any IT company. At Persistent, we use Campus hiring as a platform to meet new career aspirants and to identify intelligent, committed youth, who can prove to be valuable assets for your Company in the future. With this motto in place, Persistent takes huge efforts to identify bright students through campus recruitment drives and to nurture them to acquire competencies relevant to our business.

1. On-Campus Recruitments - Each year, your Company visits local colleges and some top notch institutes such as IITs, BITS, and NITs to hire employees. Some of the prominent Campus recruitment initiatives include,

i. Lecture series by experts from your Company at selected colleges

ii. Seminars

iii. Project Competitions

iv. Felicitation of Academic Toppers

v. Online portal with technical content

vi. My Passion Challenge, a platform that pushes the limit and encourages selected students to brush up their concepts before they join your Company.

vii. Your Company also encourages students'' Involvement in certain Company''s events.

2. Off-Campus Recruitments - This recruitment strategy offers us the flexibility to align staffing sources with the business demand. Your Company strongly believes in nurturing ''Industry-Academia'' partnerships, which is why we have designed the following campus recruitment activities.

a. BE Projects - Under these projects, Mentors from your Company provide guidance to students for their projects. Till date, we have guided approximately 600 students from 170 projects. Many of these students have now joined Persistent.

b. Persistent Day - Students get a chance to visit Persistent facilities as an industrial visit and interact with the employees. Till date, 3,000 students have benefitted from this activity.

c. IIT Graduates - Persistent hires fresh graduates from renowned IITs for its Technical / Design related staffing requirements.

d. Internship Programs - Students from various local colleges are invited to do their internship and gain corporate experience at your Company. Later, these interns have a chance to be placed in your Company based on the business needs and their academic and internship performance.

Happy Persistent

Various initiatives were started in your Company to promote meritocracy and inclusivity. A special program called Ascent launched to recognize and nurture high performers in the organisation. A speical program called ''Ascent'' launced to recagnise and nurture high performers in the organisation. A three tier program has been created to groom current and future leaders of the Company. As a part of this program for middle managemnet, out of about 700 people, 33 employees were identified to undergo an intensive two year program to take-up leadership positions for future. About 90 employees were selected for year long ''ChangeMakers'' program, who were given exposure to different and key activities across the organisation. This group has also worked on various ideas and activities towards proposing various improvements and changes to the operational issues in the organisation.

There is a special focus to involve employees in the policy making process. A group called ''Policy Council'' was constituted which has been meeting regularly to examine the various policies and processes in the organsiation especially policies impacting employees and their day-to-day functions. The council has proposed several simplification and modification to policies which has also ensured improved engagement levels and ownership among employees.

The Employee welfare and engagement activities saw a lot of strength through the year. Various interesting initiatives were organized with a special focus on employees and their families. Events like Bring Kids to Office and Children''s Carnival need a special mention as they were greatly appreciated. The annual Pulse event marked the beginning of the 25th year of your Company, with employees and families participating with a lot of enthusiasm. Various technical engagement initiatives like Semicolons and iShare were greatly appreciated and a large number of employees participated in these initiatives.

Prerana, is the forum, for the women run by women in your Company had special focus on women in leadership during this year. A special mentoring program is launched for aspiring women to be nurtured to be future leaders. Various lectures by Women leaders were also arranged from time to time to motivate women in your Company. A special health event Urjaa which was a Surya Namaskar challenge saw very enthusiastic participation by employees across the globe which resulted in substantial contribution towards charity.

There were various activities held for employees in association with the Persistent Foundation to help employees contribute towards activities for the betterment of the society.

Continuous Learning

Persistent University is established as a centralized strategic function for driving ongoing skills development across your Company.

The University serves as a one-stop learning solution with offerings for employees at all levels to enhance their technical, business communication, management and behavioral skills, and includes the Entry Level Training Program, Role Based Training Program, Project request trainings, boot camps, management and leadership programs and organisational trainings. Employees can learn anytime-anywhere to keep abreast with the latest technologies and build the competitive edge. Multiple learning methodologies are offered, including in-class trainings, remote trainings, blended trainings, Massive Online Courses, in-house built self-learning and assessments for internal certification.

Employees can choose from a variety of courses using a combination of different learning methodologies, and create their own individual learning plan which is in line with the enterprise, project and individual aspirations.

Training details during the financial year 2014-15:

Your Company covered 88% of the employees through at least one training this year, and 81% employees passed at least one internal certification.

The total investment for In-Class training was 2,113 person months and totaling to 27,191 enrollments.

In addition, the total investment for online learning including in-house Massive Open Online Courses (MOOC) was 1,100 person months and totalling 12,000 enrollments.

Total enrollments for internal certifications were 10,000.

70 mid-management employees are undergoing training through the leadership programs viz. Arjuna or Leap.

Your Company also covered 2,100 executive level employees with Communication Enhancement Program this year.

Your Company also launched Full Stack Training to align employees for new technology requirements in the market and covered 150 employees in Q4.

Infrastructure

During the financial year 2014-15, the total built-up capacity owned by your Company in India was 1,15,478 m2 which is adequate for 8,800 people. During the year, your Company completed the civil work to upgrade the new builiding Bhaskar acquired in Goa.

The details of owned facilities of your Company are as under:

Location Year of Acquisition Total Built-up Total Seating Completion area (m2) Capacity

Pune

Kapilvastu 1994 202 35

Panini 1998 929 80

Bhageerath 2002 12,170 586

Aryabhata - Pingala 2007 31,680 2,618

Hinjawadi 2012 41,446 3,173

Goa

Charak 1997* 3,280 392

Bhaskar 2014 3,762 311

Nagpur

IT Tower 2003 3,708 352

Gargi and Maitreyi 2011 17,279 1,263

Grenoble, France 2000** 1,022 50

Total 1,15,478 8,860

* Company started to occupy this premises from October 2005 onwards.

** Company acquired this premises in August 2011 as part of the acquisition of the Grenoble team.

Awards and recognitions during the financial year 2014-15

During the financial year 2014-15, your Company continued its tradition of winning various awards and getting new recognitions. Your Company was a proud recipient of the following awards during the year:

1. DQ Live Business Technology Awards 2015 for ''Excellence in the Implementation & Use of Technology for Business Benefits in Analytics Category''

2. Runner-up Award by Computer Society of India (CSI) for Beyond Search: Enabling Digital Transformation.

3. Global Learn Tech Award for Learning Technologies Solution to Persistent Systems Limited.

4. Tata Institute of Social Sciences (TISS) LEAPVAULT CLO Awards Corporate University Persistent Systems.

5. South Asian Federation of Accountants (SAFA) - ''Best Presented Annual Report Awards 2013''.

6. ''Gold Award for Financial Performance, Corporate Governance, Social Responsibility, Environmental Responsibility and Investor Relations'' at The Asset Corporate Awards 2014 from The Asset, Asia''s leading issuer and investor-focused financial monthly publication for the fifth consecutive year.

7. League of American Communications Professionals (LACP), Florida, USA -

a. Gold Award for excellence within its Competition Class on the development of its Annual Report.

b. Silver Category - for the communications materials across all categories of competition of the past year with the production of its Annual Report.

c. Ranked 27th among Top 100 Communications Materials of 2014.

8. Awarded the ''Certificate of Recognition'' for the fifth consecutive year at 14th ICSI National Award for Excellence in Corporate Governance, 2014.

9. Awarded the ResearchBytes IC Award 2014 for ''Best Investor Communication Practice - Small Cap''

10. Global Learn Tech Award for Chief Learning Officer of the Year to Dr. Shubhangi Kelkar, Chief Learning Officer of the Company.

Corporate Social Responsibility

Sustainability, consciousness, actions on environment and climate change awareness and contributions to reducing social imbalance are the corner stones of your Company''s Corporate Social Responsibility (CSR).

Your Company conducts business in a sustainable and socially responsible manner. This principle has been an integral part of your Company''s corporate values for more than two decades. Your Company is committed to the safety and health of the employees, protecting the environment and the quality of life in all regions in which your Company operates.

Your Directors are convinced that your Company''s continued focus on sustainability will help to grow the long-term value of your Company and to realise our strategic priorities. CSR strengthens the motivation of your Company''s employees and their identification with your Company and thereby creates the basis for a strong global team.

To institutionalise the CSR initiative of your Company, your Company formed a Public Charitable Trust by the name ''Persistent Foundation'' in the financial year 2008-09.

During the year under report, Persistent Foundation was able to create excitement among employees to participate in socially relevant causes. With the cooperation of the employees of your Company, Persistent Foundation has set up several well-defined programs and activities for the promotion of education, health, community welfare. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through reputed social organisations and institutions.

In addition to contributing Rs.50.97 Million to Persistent Foundation, your Company made donations of Rs. 0.99 Million to various charitable institutions directly. Thus, during the year under report, your Company donated Rs. 51.96 Million i.e. more than 2% of the Average Net Profits of the Company made during three immediately preceding financial years.

Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2014-15 is given elsewhere in this Annual Report.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted the CSR Committee to help the Company to frame, monitor and execute the CSR activities of the Company under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the social responsibility of your Company.

The Board of Directors of your Company has further approved the CSR Policy of the Company to provide a guideline for CSR activities of the Company. The CSR Policy is also uploaded on the Company''s website at - http://www.persistent.com/ investors/csr-at-persistent

The CSR Policy covers the following focus areas which the Company undertakes through its social initiatives:

1. Health

2. Education

3. Community Development

4. Assistance in Natural Calamities

The constitution of the CSR Committee is provided elsewhere in the Annual Report.

Financial results

The highlights of the financial performance on a consolidated basis for the year ended March 31,2015 are as under:

Particulars (Amount in USD Million (Amount in Rs. Million % except EPS and Book except EPS and Book Change Value) Value) 2014-15 2013-14 2014-15 2013-14

Total Income 323.83 279.17 19,850.67 17,001.69 16.76%

Profit before interest, deprec iation and taxes 78.98 73.12 4,841.62 4,453.07 8.73%

Finance Cost 0.05 0.01 3.37 0.53 535.85%

Depreciation 15.31 16.85 938.53 1,025.95 -8.52%

Provision for income tax 16.21 15.33 993.41 933.82 6.38%

Net profit for the year 47.41 40.93 2,906.31 2,492.77 16.59%

Transfer to general reserve 16.92 16.33 1,037.20 994.30 4.31%

Net worth* 224.96 203.93 14,055.29 12,223.44 14.99%

Earnings per share (EPS) (Basic)** 0.60 0.53 36.84 32.04 14.98%

Earnings per share (EPS) (Diluted)** 0.59 0.51 36.33 31.16 16.59%

Book value per equity share** 2.81 2.55 175.69 152.79 14.99%

[Conversion Rate USD 1 = Rs. 61.30 for Profit and Loss items; USD 1 = Rs. 62.48 for Balance Sheet items (financial year 2014-15) and USD 1 = Rs. 60.90 for Profit and Loss items; USD 1 = Rs. 59.94 for Balance Sheet items (financial year 2013-14)].

*Net worth = Equity Share Capital Reserves and Surplus (including Hedge Reserve).

**The basic and diluted earnings per share and Book value per share for the year ended March 31, 2014 have been restated pursuant to the issue of bonus equity shares in the ratio of 1:1 (One bonus equity share of Rs. 10 for every one equity share of Rs. 10 held).

The highlights of the financial performance on an unconsolidated basis for the year ended March 31,2015 are as under:

Particulars (Amount in USD Million (Amount in Rs. Million % except EPS and Book except EPS and Book Change Value) Value) 2014-15 2013-14 2014-15 2013-14

Total Income 218.30 200.11 13,381.69 12,186.74 9.81%

Profit before interest, depre ciation and taxes 64.98 65.75 3,983.35 4,004.44 - 0.53%

Finance Cost 0.05 0.01 3.37 0.53 535.85%

Depreciation 8.02 9.59 491.69 584.08 -15.82%

Provision for income tax 14.61 15.34 895.32 934.13 -4.15%

Net profit for the year 42.30 40.82 2,592.97 2,485.70 4.32%

Transfer to general reserve 16.92 16.33 1,037.20 994.30 4.31%

Net worth* 216.85 200.51 13,548.76 12,018.68 12.73%

Earnings per share (EPS) (Basic)** 0.54 0.52 32.87 31.94 2.91%

Earnings per share (EPS) (Diluted)** 0.53 0.51 32.41 31.07 4.31%

Book value per equity share** 2.71 2.51 169.36 150.23 12.73%

[Conversion Rate USD 1 = Rs. 61.30 for Profit and Loss items; USD 1 = Rs. 62.48 for Balance Sheet items (financial year 2014-15) and USD 1 = Rs. 60.90 for Profit and Loss items; USD 1 = Rs. 59.94 for Balance Sheet items (financial year 2013-14)]

*Net worth = Equity Share Capital Reserves and Surplus (including Hedge Reserve).

**The basic and diluted earnings per share and Book value per share for the year ended March 31, 2014 have been restated pursuant to the issue of bonus equity shares in the ratio of 1:1 (One bonus equity share of Rs. 10 for every one equity share of Rs. 10 held).

Material Events Occurring after Balance Sheet Date

There were no material changes and commitments affecting the financial position between the end of the Financial Year and the date of this Report.

Outlook and Priorities for FY 2015-16

Your Company''s strategy of enterprise digital transformation is getting widespread interest and has enabled your Company to work with enterprise customers, a much larger and hitherto untapped market for your Company. Your Company also made significant investments in IP and automation to execute well in this large market that has become available for your Company.

The technology roadmap for the next few years is robust. Infrastructure getting built on cloud, analytics, collaboration and mobility broadly classified as SMAC is well accepted and is mainstream. It is part of every Company''s modernization plan. Beyond SMAC, the emergence of sensors and connected devices have created data sources that are generating large amount of data that needs to be harnessed for effective operations. Technology advances have made machine learning based automation a reality. Technology disruptions and discontinuities create opportunities and your Company is well set to capitalize on those opportunities.

Liquidity

Your Company continues to maintain adequate amount of liquidity to meet its strategic and growth objectives. Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31,2015, your Company, on an unconsolidated basis, had cash and cash equivalents (including investments) amounting to Rs. 7,605.09 Million as against Rs. 5,838.11Million as at March 31,2014. The details of cash and cash equivalents are as below:

(In Rs. Million) Particulars As on As on March 31, 2015 March 31, 2014

Investment in Mutual Funds 5,904.60 4,071.36

Fixed Deposits with scheduled banks 438.99 523.93

Tax free Government Bonds (quoted) 775.76 775.76

Cash and Bank balances 485.74 467.06

Total 7,605.09 5,838.11

Bonus Shares - 2015

On the occasion of the Silver Jubilee Year, your Company issued bonus shares in the ratio of 1:1 i.e. (1 bonus share for every 1 equity share held in the Company) by capitalisation of the Securities Premium Account.

Post Bonus Issue, the Company''s paid-up capital is Rs. 80,00,00,000 (Rupees Eighty Crore only) consisting of 8,00,00,000 (Eight Crore) equity shares of Rs. 10 (Rupees Ten only) each.

Dividend

In January 2015, your Directors declared an Interim Dividend of Rs. 10 per share (pre bonus issue) on the paid-up equity share capital out of the net profits of your Company during the year under report. Total outflow on account of interim dividend payout including dividend distribution tax amounted to Rs. 479.98 Million.

Your Directors have recommended a Final Dividend of Rs. 2.50 per share for the Financial Year 2014-15 and a Special Silver Jubilee Dividend of Rs. 2.50 per share, on the expanded capital base post 1:1 Bonus Issue. The total outflow on account of final dividend and dividend distribution tax would amount to Rs. 481.43 Million. The payment of aggregate dividend of Rs. 5.00 per share (post bonus issue) is subject to the approval of the Members.

Thus, including the proposed final and special silver jubilee dividend, the effective dividend during the financial year 2014-15 is Rs. 20 per share on pre-bonus capital base. Thus the dividend already paid and recommended to the Members on a consolidated basis is Rs. 15 on pre-bonus shares and Rs. 5 on post bonus shares as against Rs. 12 for the financial year 2013-14. The total outflow on account of total dividend and dividend distribution tax would amount to Rs. 961.41 Million as compared to Rs. 561.58 Million in the previous year. The payout ratio for this year is 33.1% as compared to 22.5% in the previous year.

Out of the interim dividend declared in January 2015, Rs. 0.15 Million was unclaimed as on March 31, 2015.

Transfer to reserves

Your Company proposes to transfer an amount of Rs. 1,037.20 Million to the General Reserve and an amount of Rs. 594.36 Million is proposed to be retained in the Statement of Profit and Loss.

Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Companies Act, 2013 read with the relevant rules, your Company has not accepted any fixed deposits during the year under review.

Appointment of statutory auditors

The Members of the Company at the Annual General Meeting of the Company held on July 26, 2014 appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117365W/W-100018) and M/s. Joshi Apte & Co., Chartered Accountants (Firm Registration No. 104370W) as the Joint Statutory Auditors of the Company to hold such office till the conclusion of the Annual General Meeting in the calendar year 2019 and 2017, respectively.

M/s. Deloitte Haskins & Sells LLP and M/s. Joshi Apte & Co. have confirmed their eligibility and willingness to accept office, if appointment is ratified by the Members of the Company. Further, in terms of the Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Deloitte Haskins & Sells LLP and M/s. Joshi Apte & Co. have confirmed that they hold a valid certificate issued by ''Peer Review Board'' of ICAI; and have provided a copy of the said certificate to your Company for reference and records.

The ratification of appointment of Statutory Auditors is subject to the approval of the Members of the Company.

Your Directors propose ratification of appointment of M/s. Deloitte Haskins & Sells LLP and M/s. Joshi Apte & Co. as the Joint Statutory Auditors of your Company.

Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s. SKO & Associates, Practising Company Secretaries as the Secretarial Auditors of the Company for the financial year 2014-15.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as Annexure A. The comments of the Board on the observations of the Secretarial Auditors are given after Annexure A above.

The Board has re-appointed M/s. SKO & Associates, Practising Company Secretaries as the Secretarial Auditors of the Company for the financial year 2015-16.

Board Meetings

The details pertaining to the composition, terms of reference, etc. of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

Directors and Key Managerial Personnel

In the last Annual General Meeting, the appointment of Mr. Mritunjay Singh as an Executive Director was confirmed and Ms. Roshini Bakshi was appointed as an Independent Director on the Board of the Company.

The appointment of all the 6 (Six) Independent Directors was made for a period of 5 (Five) consecutive years for a term up to conclusion of the 29th Annual General Meeting to be held in the calendar year 2019. Pursuant to the provisions of the Companies Act, 2013, they are not liable to retire by rotation.

At present, your Company has 6 (Six) Non-Executive Directors who are Independent Directors pursuant to the provisions of the Clause 49 of the Listing Agreement. Pursuant to Section 149 of the Companies Act, 2013, every listed company shall have at least one-third of its total strength of the Board of Directors as Independent Directors. Based on the present composition of the Board of Directors and the number of Independent Directors, the Company complies with this requirement.

In terms of Section 152 of the Companies Act, 2013 and Article 137 of the Articles of Association of your Company, Dr. Anand Deshpande, Director is liable to retire by rotation at the Twenty-fifth Annual General Meeting.

Dr. Anand Deshpande has confirmed his eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing Annual General Meeting. In the opinion of your Directors, Dr. Deshpande has requisite qualifications and experience which would be useful for your Company and would enable him to contribute effectively to your Company in his capacity as the Director of your Company.

In the opinion of your Directors, your Company will continue to benefit from Dr. Deshpande in his capacity as the Director and Chairman and Managing Director of your Company. Your Directors, therefore, recommend that the proposed resolution relating to appointment of Dr. Deshpande be passed.

In terms of the Listing Agreement, the Company conducts the Familiarisation Program for Independent Directors about their roles, rights, responsibilities in the Company, nature of the industry in which the company operates, business model of the company, etc., through various initiatives. The details of the same can be found at: http://www.persistent.com/ investors/familiarisation-programme

Declaration of Independence by Independent Director

The Board confirms that all Independent Directors of the Company have given a declaration to the Board that they meet the criterion of independence as prescribed under Section 149 of the Companies Act, 2013.

Committees of the Board

During the year under report, the Board of Directors of your Company reconstituted the Committees of the Board. The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report.

Audit Committee

The details pertaining to the composition, terms of reference, etc. of the Audit Committee of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report. The recommendations of the Audit Committee were accepted by the Board of Directors of the Company from time to time.

Compensation and Remuneration Committee

The Compensation and Remuneration Committee of the Board (formerly known as ''Compensation Committee'') was constituted on April 23, 2004. In terms of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI ESOP Guidelines"), the Company re-constituted Compensation and Remuneration Committee for the administration and superintendence of the employee stock options schemes on October 4, 2007. The Committee was reconstituted by the Board of Directors at its meeting held in July 26, 2014.

The Board of Directors at its meeting held in April 2014 named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Companies Act, 2013 with respect to the terms of the Compensation and Remuneration Committee of the Company covered under the statutory terms of the Nomination and Remuneration Committee.

The details pertaining to the composition, terms of reference, etc. of the Compensation and Remuneration Committee of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

The Remuneration Policy of the Company is as follows:

Your Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and performance incentives (variable component) to its Executive Directors. Annual increments are decided by the Compensation and Remuneration Committee of the Board of Directors.

i. The remuneration of full time directors (Managing Director and Executive Director) is divided in the following proportion:

a. Fixed portion is 60% of the Annual Gross Salary.

b. Variable portion by way of Bonus is 40% of the Annual Gross Salary. The variable portion of the remuneration is payable in terms of the targets set for various parameters including consolidated revenue and consolidated net profits.

c. Such perquisites and benefits as authorised by the resolution passed by Members of your Company from time to time.

ii. The Independent Directors are entitled to payment of commission of a sum not exceeding 1% per annum of net profits and eligible Independent Directors are entitled for Employee Stock Options under ESOA - X Scheme of the Company which were granted to them before April 1,2014.

iii. The total managerial remuneration not to exceed 11% of the net profits of the Company and the total remuneration to the managerial persons not to exceed 10% of the net profits of the Company in accordance with section 197 of the Companies Act, 2013.

Nomination and Governance Committee

The Board of Directors at its meeting held in April 2014 named this Committee as the Nomination and Remuneration Committee for the purpose of provisions under the Companies Act, 2013 with respect to the terms of the Nomination and Governance Committee of the Company covered under the statutory terms of the Nomination and Remuneration Committee.

The details pertaining to the composition, terms of reference, etc. of the Nomination and Governance Committee of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

The appointment policy of the Company is as follows:

The Board of Directors decides the criterion for the appointment of new director on the Board from time to time. The criterion may include candidate''s expertise area, age, industry experience, professional background, association with other companies and such other things.

Once the criterions are determined, the Board directs the Nomination and Governance Committee to compile profiles of suitable candidates through networking, industry associations and business connects.

The Nomination and Governance Committee considers each and every profile on the decided parameters and shortlists the candidates. Shortlisted candidates are then interviewed personally or through tele-conference by the Members of the Committee.

Once the Committee is convinced about a candidate''s competency, his business acumen, commitment towards his association with the Company and his availability for the Company on various matters on time-to-time, it recommends the candidate to the Board of Directors for further consideration for appointment.

Employees'' remuneration

In terms of the provisions of Section 197(12) of the Act read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure B of the Directors'' Report. Employee stock option plans Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure C.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company at the time of grant.

In line with the guidance note on "Accounting for employee share based payments" issued by the Institute of Chartered Accountants of India and the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 issued by the Securities and Exchange Board of India, your Company has calculated the employee compensation cost using the intrinsic value of stock options. Had the compensation been determined under the fair value method described in the guidance note, your Company''s net income and basic and diluted earnings per share would have reduced to the proforma amounts as shown in the table below:

(In Rs. Million) Particulars Year ended March 31,2015 March 31, 2014

Profit after tax 2,592.97 2,485.70

Add: Employee stock compensation under intrinsic value method 31.71 -

Less: Employee stock compensation under fair value method (34.51) (44.22)

Proforma profit 2,590.17 2,441.48

Earnings Per Share Basic

- As reported 32.87 31.94

- Pro forma 32.83 31.38

Diluted

- As reported 32.41 31.07

- Pro forma 32.38 30.52

Weighted average exercise prices and weighted average fair values of options:

The Binomial tree valuation model has been used for computing the weighted average fair value of the stock options granted during the financial year 2014-15 considering the following inputs:

Particulars March 31, 2015 March 31, 2014 Scheme XI Scheme XI

Weighted average share price (Rs. 632.32 NIL

Exercise Price (Rs. 5 NIL

Expected Volatility 35.08% NIL

Life of the options granted (Vesting and exercise period) 4 Years NIL

Dividend Yield 1% NIL

Average risk-free interest rate 7.8% NIL

Expected dividend rate 60% NIL

No new shares were granted to Independent Directors of your Company during this Financial Year. Shares held by Independent Directors of your Company as on March 31,2015 are as under:

Name of the Shares held Shares held Shares held Shares acquired Total Director (through (through (through through Bonus Shares exercise of allotment market Issue held vested Stock under a pre purchase / Options) IPO scheme) IPO

Ms. Roshini Bakshi Nil Nil Nil Nil Nil

Mr. Pradeep Bhargava 3,500 Nil Nil 3,500 7,000**

Mr. Sanjay Bhattacharyya 3,500 Nil Nil 3,500 7,000@

Dr. Anant Jhingran Nil Nil Nil Nil Nil

Mr. Prakash Telang 3,500 Nil 2,000 5,500 11,000*

Mr. Kiran Umrootkar Nil Nil Nil Nil Nil

"Shares held jointly with Mrs. Abha Bhargava @Shares are held jointly with Mrs. Rita Bhattacharyya ''Shares are held jointly with Mrs. Anjali Telang

During the financial year 2014-15, pursuant to the resolutions passed by the Compensation and Remuneration Committee of the Board of Directors by way of circulation, Independent Directors, employees including ex-employees exercised their stock options for shares which were already vested in their name. During this exercise, 5,34,321 (Five Hundred and Thirty Four Thousand Three Hundred Twenty One only) i.e. 1.34% Equity shares of the total Paid-up Capital (after considering issue of bonus shares in 1:1 ratio made by the Company) were transferred from PSPL ESOP Management Trust to the eligible employees including ex-employees at an aggregate value of Rs. 97.72 Million under various ESOP Schemes of your Company.

Your Company has ten ESOP Schemes under which options were granted to various permanent Independent Directors, employees and the employees of its subsidiary companies, details of which are given elsewhere in this Annual Report.

Your Company has established a new Persistent Employee Stock Option Scheme 2014 (PESOS 2014) for senior employees of the Company. The details of the Scheme are included in the Annexure C to this Report.

Shares Suspense Account

Your Company had opened an ''Unclaimed Securities Suspense Account'' on behalf of the allottees who were entitled to the equity shares under the initial public offering. Some of the equity shares could not be transferred to the respective allottees due to technical reasons. Such shares were held in ''Unclaimed Securities Suspense Account'', to be transferred to allottees as and when they approach your Company.

The Company strives to ensure that the Equity Shares are credited to the demat account of the respective Members of the Company. During the period under report, the Company voluntarily approached all the 24 Members for making the applications to the Company for the unclaimed securities. In response, your Company received applications from 5 (Five) Members for crediting the shares from the unclaimed securities held in the said Suspense Account to their respective accounts. The Equity Shares along with the Bonus Shares were credited to their respective demat accounts before March 31,2015.

The details of equity shares (after considering the issue of bonus shares in the ratio of 1:1) held in an ''Unclaimed Securities Suspense Account'' are as follows:

Sr. Particulars Details No.

1. Aggregate number of shareholders in the 24 Share holders Unclaimed Securities Suspense Account lying at the beginning of the financial year 2014-15

2. Aggregate number of the outstanding equity 960 Equity Shares shares in the Unclaimed Securities Suspense Account lying at the beginning of the financial year 2014-15

3. Number of shareholders who approached issuer 5 Members for transfer of shares from Unclaimed Securi ties Suspense Account during the financial year 2014-15

4. Number of shares transferred from Unclaimed 200 Equity Shares Securities Suspense Account during the financial year 2014-15

5. Aggregate number of shareholders in the Unclaimed 19 Share holders Securities Suspense Account lying at the end of the financial year 2014-15

6. Aggregate number of outstanding equity shares in 760 Equity Shares the Unclaimed Securities Suspense Account lying at the end of the financial year 2014-15

Note - Voting rights on the above mentioned equity shares are kept frozen till the rightful owner of such equity shares claim the shares.

Institutional Holding

As on March 31,2015, the total institutional holding in your Company stood at 37.7% of the total share capital. Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013, your Company has provided the Consolidated Financial Statements as on March 31, 2015. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is attached to the consolidated financial statements.

The Annual Report of your Company, though does not contain full financial statements of the subsidiary companies, your Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of your Company.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31,2015 are prepared in accordance with the Accounting Standard 21 (AS - 21) on ''Consolidated Financial Statements'' issued by the Institute of Chartered Accountants of India, and form part of this Annual Report.

Subsidiary Companies, Associate Companies and Joint Ventures

The details of the subsidiaries and associates of your Company as on March 31,2015 are as under:

(In Rs. Million) Name of the Entity Status Period of Total Inicme Establishment As on March 31,2015

Persistent Systems, Wholly Owned October 2001 8,122.86 Inc., USA Subsidiary

Persistent Systems Wholly Owned April 2007 353.44 Pte. Ltd., Singapore Subsidiary (Co. Reg. No. 200706736G)

Persistent Systems Wholly Owned April 2011 395.20 France S.A.S., Subsidiary France

Persistent Systems Wholly Owned September 720.38 Malaysia Sdn. Bhd., Subsidiary 2013 Malaysia

Persistent Telecom Step-down subsidiary January 2012 1,059.86 Solutions Inc., USA (Wholly Owned Subsidiary of Persi stent Systems, Inc.)

CloudSquads, Inc., Step-down subsidiary February 2014 93.44 USA (Wholly Owned Subsidiary of Persi stent Systems, Inc.)

Sprint Telecom Associate Company March 2011 1.57 India Private Limited

Klisma e-Services Associate Company March 2012 - Private Limited

Name of the Entity Net Profit/(Loss) AS on March As on March As on March 31,2014 31,2015 31,2014

Persistent Systems, Inc., USA 5,715.41 372.11 27.78

Persistent Systems Pte. Ltd., Singapore (Co. Reg. No. 200706736G) 122.47 114.67 45.99

Persistent Systems France S.A.S., France 275.22 61.84 9.26

Persistent Systems Malaysia Sdn. Bhd., Malaysia 69.63 92.84 6.57

Persistent Telecom Solutions Inc., USA1, 263.51 (315.87) (60.78)

CloudSquads, Inc., USA 15.84 (3.20) (2.73)

Sprint Telecom India Private Limited 1.79 - -

Klisma e-Services Private Limited 2.18 (0.24) (5.84)

The Policy for determining material subsidiaries of the Company is available on the Company''s website at http://www. persistent.com/investors/policy-on-material-subsidiary

Particulars of Loans given, Guarantees given and Investments made

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Refer notes 12, 14, 16, 19 and 41 of the standalone financial statements)

Related Party Transactions

The Policy to determine materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors is available on the Company''s website at http://www.persistent.com/investors/policy-on-related- party-transactions.

During the year under review, the Company had not entered into any material transaction with any party who is related to it as per the Companies Act, 2013. There were certain transactions entered into by the Company with its foreign subsidiaries and other parties who are related within the meaning of Accounting Standard (AS - 18). Attention of Members is drawn to the disclosure of transactions with such related parties set out in Note No. 29 of the Standalone Financial Statements, forming part of this Annual Report. The Board of Directors confirms that none of the transactions with any of related parties were in conflict with the Company''s interest.

The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialisation and the Company''s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries.

All related party transactions are entered into on an arm''s length basis, are in the ordinary course of business and are intended to further the Company''s interests.

Corporate governance

A separate section on Corporate Governance with a detailed compliance report as stipulated under the Listing Agreement and any other applicable law for the time being in force forms an integral part of this Report.

Management discussion and analysis

Report on Management Discussion and Analysis as stipulated under the Listing Agreement and any other applicable law for the time being in force based on audited, consolidated financial statements for the financial year 2014-15 forms part of this Annual Report.

Business Responsibility Report

Report on Business Responsibility as stipulated under the Listing Agreement and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social and governance perspective forms an integral part of this Annual Report.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Carbon management and sustainable development provide business with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving.

Your Company has reduced excessive illumination levels to standard levels in all common areas by using switching or delamping and aggressively controlled lighting with new sensor technologies. Like in the previous year, your Company has continued to maximise the use of energy efficient flat monitors, VRV air-conditioning systems, solar energy for hot water, LED logo on buildings, LED lighting in common areas, installation of power management software for desktops, WattMiser system in AHUs, En-power Computer Management system and VFD Installation for Fresh Air AHU systems for conservation of energy. Your Company has used all LED light fittings at its Hinjawadi (E- building 2nd floor), Goa (Bhaskar) and Nagpur IT Tower facilities and have proposed to use the same in other facilities. Your Company has regulated working of lifts, vending machines, ventilation systems and water coolers in its premises.

Your Company has made efforts to ensure that there is no cool air leakage from its premises and has adopted measures to ensure optimum usage of air conditioners throughout its premises. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. The power consumption of air conditioning has been reduced by 18% since the cold aisle containment work has been completed in Data center, Hinjawadi. VFD system has been installed for fresh air AHU''s in air-conditioning systems. As a part of your Company''s Green Movement, two 2.1 MW windmills are operational at Dhule and Sangli Districts of Maharashtra. During the financial year 2014-15, Dhule windmill generated 37,51,499 units and Sangali windmill generated 29,41,825 units.

Your Company has installed Ozone systems with air conditioning systems for balance locations. Modifications have been made in Data Centre arrangement to reduce power consumption. Ground water is used for landscaping to reduce consumption of treated water. A Sewage Treatment Plant was installed at the Gargi-Maitreyi, Aryabhata-Pingala facilities of your Company and recycled water through these plants is used for gardening.

Your Company celebrated ''Road Safety Week'' in the month January, 2015 at Nagpur to promote safety measures. Zero plate wastage week was another event celebrated in all PSL facilities.Your Company''s Bhageerath and Aryabhata-Pingala facilities are accredited under the Star Rating Scheme of BEE and all facilities of your Company have been recommended for ISO 14001:2004 & OHSAS 18001:2007 certifications. Further, your Company has been certified by American Global standards for ISO 14064-1:2006 (Green House Gases Inventory ) for all facilities in India. Best practices to preserve the environment are undertaken by your Company even during constructing its various premises by using crush sand, fly ash bricks and double glass unit, use of gypsum and recycled wood to protect the environment.

The Company has undertaken various initiatives to save energy. A rooftop solar power plant 250 KW is commissioned on the terrace of AR-PG on April 30, 2015 and it is expected to generate @ 4,15,000 units per year. The biogas plant has been made operational for kitchen waste at caterer kitchen at Hinjawadi and it will save 11 kg LPG/day. A sewage water treatment plants at Nagpur and Goa facilities has been installed and commissioned for the usage of its treated water in garden area. The chiller replacement work has been initiated at Bhageerath to ensure higher efficiency and usage of environment friendly gas in it. The Old UPS system is being replaced by higher efficiency UPS system to avoid losses. The replacement of UPS System work is in progress in all major facilities.

The capital investment on Energy Conservation Equipment during FY 2014-15 was Rs. 1,48,50,000 on setting up a solar power plant (i.e. a 250 KW Photo Voltaic Solar Power generation set-up).

It is your Company''s constant endeavor to conserve and save the Environment and has launched the Green Persistent Movement to support the same.

As power costs constitute an insignificant part of the total expenses, the financial impact of these measures is not material.

As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on Research and Development on accrual basis are as follows:

(In Rs. Million) Particulars Year ended March 31, 2015 March 31, 2014

Capital expenditure 0.28 2.43

Revenue expenditure 61.96 37.18

Total research and development expenditure 62.24 39.61

As a percentage of total income 0.47% 0.33%

The particulars of foreign exchange earnings and outgo, based on actual inflows and outflows are as follows:

(In Rs. Million) Particulars Year ended March 31, 2015 March 31,2014

Earnings 11,980.46 10,821.83

Outgo 2,654.43 1,806.21

Adequacy of Internal Financial Controls

The Board is responsible for establishing and maintaining adequate internal financial control as per section 134 of the Companies Act, 2013.

The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business including adherence to the Company''s policies, safeguarding of the assets of the Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information

Directors'' responsibility statement

The Directors state that:

1. In the preparation of the annual accounts, the applicable Accounting Standards have been followed and there is no material departure;

2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31,2015 and of the profit of your Company for that year;

3. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. The annual accounts have been prepared on a going concern basis;

5. Your Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

6. Your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual return of the Company for the financial year ended on March 31,2015 is provided in the Annexure D to the Directors'' Report.

Vigil Mechanism (Whistle Blower Policy)

The details of the vigil mechanism (whistle blower policy) are given in the Report on Corporate Governance forming part of this Annual Report. The Company has uploaded the policy on its website at http://www.persistent.com/investors/ whistle-blower-policy

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at the Company for the financial year 2014-15 forms part of this Annual Report.

Performance Evaluation of the Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, its various Committees and the Directors individually. This was conducted in March and April 2015 by an External Management Consultant and the findings of the evaluation were presented at the meeting of the Nomination and Governance Committee and the Board of Directors. Recommendations and suggested areas of improvement for the Board, its various committees and the individual Directors were considered by the Board.

Disclosure of Cost Audit

The Company had filed Form 23C for appointment of Cost Auditor relating to its activities of generation of electricity from windmill turbine under the Companies (Cost Audit Report) Rules, 2011. However, based on another Circular issued by the Ministry of Corporate Affairs (MCA), the Company claimed exemptions from the requirement of the Cost Auditor for the said purposes and accordingly had written a letter dated December 19, 2012 to MCA, Cost Audit Branch, for withdrawal of the appointment of the said Cost Auditor as well as cancellation of the Form 23C so filed. Reply to the said letter is still awaited from the concerned office of the MCA.

Listing with the stock exchanges

The Equity Shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) since April 6, 2010.

Listing fees for 2014-15 have been paid to both BSE and NSE.

Secretarial Standards

The Company will comply with the Secretarial Standards as and when they are made effective.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Internal Complaints Committee(s) (ICC) has been set up across all its location in India to redress complaints received regarding sexual harassment. The cases reported to such Committee(s) are investigated by the respective Committee(s) members and the detailed report thereon is presented to the Board of Directors on a regular basis. During the year, 4 (Four) cases were reported to the Committee(s) and they were duly disposed off.

The Board confirms that as at March 31,2015, there were no pending cases of anti-harassment in the Company.

Other matters

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

1. Neither the Managing Director nor the Whole-time Director of the Company receive any remuneration or commission from any of its subsidiaries.

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operations in future.

Acknowledgments and appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and the Reserve Bank of India throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Bengaluru, Visakhapatnam Special Economic Zone, Andhra Pradesh, SEEPZ Special Economic Zone, Andheri, Mumbai, Central Excise and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Director of Industries, Department of Shops and Establishments, Development Commissioners, Pune and Hyderabad, Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Sales Tax Department, Securities and Exchange Board of India, High Court of Judicature of Mumbai, ICGL Goa, Goa Industrial Development Corporation, National Stock Exchange of India Limited, BSE Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Pune Municipal Corporation, Maharashtra State Electricity Distribution Company Limited, Telangana (erstwhile Andhra Pradesh) State Electricity Board, Maharashtra Industrial Development Corporation, Bengaluru Municipal Corporation, Karnataka Industrial Development Corporation, Karnataka Telecom including BSNL, Mobile / Internet Service providers.

Your Board also extends its thanks to Axis Bank, Bank of India, Bank of Tokyo Mitsubishi, BNP Paribas, Citibank N.A., HDFC Bank, State Bank of India, Syndicate Bank, and its officials for extending their excellent support in all banking related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks the investors and shareholders for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels in your Company. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande Chairman and Managing Director DIN : 00005721

Pune, June 13, 2015

---

Mar 31, 2014

The Members,

The Directors are pleased to present the Twenty Fourth Annual Report of your Company along with the audited Statement of Accounts for the financial year ended March 31, 2014.

Business overview

Your Company specializes in building computer software products. Your Company''s business is organized with a focus on the following three areas: Products (IP Business), Platforms (Solutions Integration) and Services (Product Engineering). Your Company has decided to brand the product business separately from the Persistent brand and has named it ''Accelerite'' (www.accelerite.com). Accelerite will be headquartered in the Silicon Valley and will help your Company provide clarity – the Persistent brand is for product development and the Accelerite brand is for products.

Your company has organized the development and engineering teams around three strategies: Account-Led, Platform-Led and Product-Led. Further, Account-Led teams are organized as Named Accounts and Growth Accounts.

Driven by growth in the platform based solutions and IP led business, the consolidated revenue of your Company recorded an increase of 15.2% in the US Dollar terms and 28.9% in the Rupee term during the year under review. The consolidated EBIDTA increased by 28.4% and net profit after tax went up by 32.9% during the same period.

A detailed overview of the business is described in the Management Discussion and Analysis (MD&A) section of this report.

Strategic Acquisition of CloudSqauds, Inc.

Persistent Systems, Inc. (PSI), a wholly owned subsidiary of your Company acquired CloudSquads, Inc. (CloudSquads) through stock acquisition in February 2014. CloudSquads is a twenty member team with headquarters in the Silicon Valley and a development team in Pune. CloudSquads, Inc. deploys, integrates and runs social communities on all leading enterprise social platforms – Salesforce, Lithium and Jive. Capabilities of the CloudSquads team complement your Company''s software product development expertise. CloudSquads has built expertise in consulting for enterprises that aligns well to the collaboration business of the Company and extend your Company''s offerings to better serve existing and new ISV and enterprise customer base. They also have IP around connectors for social platforms.

New Branch Offices

During the period under report, your Company established new branch offices in Germany and in South Africa to expand business presence in new geographies as a part of your Company''s growth strategy to diversify in other parts of the world and to support customers there. Your Company also incorporated a wholly owned subsidiary in Malaysia named Persistent Systems Malaysia Sdn. Bhd. during the period under report.

Talent Additions during the Year

Your Company continues to attract high caliber quality talent in the industry. During the financial year 2013-14, your Company recruited 1,816 employees on a consolidated basis consisting of regular employees, trainees / interns, consultants, business consultants, contract consultants consisting of (technical and non-technical) professionals. The Company attracts a steady stream of experienced US returned professionals that provides a very strong middle management group to your Company.

Your Company''s human resource strength as on March 31, 2014, was 7,857 personnel (including trainees and associates) on a consolidated basis spread across 11 countries. The technical strength was 7,326 employees which comprised, among others, 6,257 graduates (Engineers and Technicians), 857 post graduates and 20 PhDs on a consolidated basis.

The details on the employee count are given below:

India Overseas Total

Opening headcount (March 31, 2013) 6,429 541 6,970

Additions 1,612 204 1,816

Attrition 858 71 929

Closing headcount (March 31, 2014) 7,183 674 7,857

The attrition rate reduced from 14.4% in the previous year to 13.4% during the year. There was also a significant increase in the distribution of overseas employees which now constitutes 9% of the total work force.

Your Company recruits from various engineering colleges in India for fresh talent. During the period under report, your Company welcomed a batch of 530 new graduates through campus; recruiting students with software background across your Company locations.

Fresh graduate recruitment has always been one of the most important sources of hiring the right talent into Persistent. It provides a platform for your Company to meet the aspirants and identify intelligent, committed youth, who will become valuable assets to the organization. In the knowledge industry, employees form the core of the organization and your Company take efforts to get the best talent through its campus recruitment drives. Persistent visits local colleges and top notch institutes such as IITs, BITS, and Regional Engineering Colleges to hire employees.

To promote "Industry-Academia" partnerships, our Campus Recruitment team had launched a program called Campus Connect, under which the following activities were conducted:

a. Tech Talk: Renowned speakers shared valuable insights on their area of expertise

b. Industry Visits (Persistent Day): Opportunities were given for students to visit the office premises and interact with the employees of your Company.

c. Faculty Development Program: Your Company''s technical experts conducted training programs for college faculties

d. BE Project: The engineering students in different colleges are provided guidance in their curriculum projects by Persistent mentors throughout the year

e. Guest Lectures: Your Company sends its technical folks / HR folks to share / deliver guest lectures at various engineering colleges across India.

f. IIT Grads: Your Company also hires fresh graduates from renowned IITs for Technical / Design requirements

g. Internship: Students from different local colleges are given an opportunity to gain hands on corporate experience

Happy Persistent

Your Company worked on the theme of "Building a Happy Persistent" for this year. Various initiatives were planned around this theme, to improve motivation and satisfaction levels of employees. During the period under report, your Company conducted several internal surveys, the findings from these surveys helped your Company address employee concerns and work on improvement areas. The mood indicators on eMee, our next generation performance appraisal system, were used very effectively to track the Happiness Index of your Company, most employees who expressed themselves were satisfied that they were noticed when they changed their mood indicator. As and where appropriate their concerns were addressed.

Various employee welfare activities such as sports and cultural events that were organised for and by the employees had participation at all levels. Our annual PULSE invoked great interest from employees at all levels, this is an event conducted at various locations where all employees from the security guards to the top management participate. The final event at various locations showcased cultural talent and vigour amongst the employees of your company.

In the financial year 2013-14, there was a major focus on women''s safety. GPS is installed on the vehicles which are being used to drop women employees who are required to stay in office beyond a certain time. This helps ensuring better safety for the employees of your Company, particularly the women employees. There were lectures conducted by DCP Crime from the Police Department to educate employees on the various safety measures that they should follow at all times. Demonstrations on self-defense techniques conducted.

This year as well your Company celebrated Women''s week in the first week of March 2014. Various events like sessions by doctors, cookery show, donation drive etc. were conducted. A street play was performed by employees to highlight some issues faced by women in the society which was very well received.

Continuous Learning

Your Company considers continuous learning as an important activity towards continued human resource development. In this endeavour, courses, seminars and conferences in technical and domain specific areas were conducted. Your Company has adopted the Massively Online Courses approach to enable ''Anytime Anywhere learning'' to accelerate the pace of training in your Company. The total investment in terms of person months of your Company was 1,100 in learning and development and totaling 12,000 enrollments (contributing 600 person months of online learning).

A Mentoring program to groom those who were interested was launched this year. Your Company also conducted training courses for the benefit of the employees in different areas such as leadership skills, team building, personal effectiveness and foreign languages. Sixty employees at the leadership level had recently undergone a year-long Arjuna program which was completed in December 2013. Similarly, there is a year-long Architect school that has been initiated to groom technical leaders to perform Architect''s role in future.

Infrastructure

During the financial year 2013-14, the total built-up capacity owned by your Company in India was 12,21,492 sq. ft. which is adequate to seat 8,700 people.

The details of owned facilities of your Company are as under:

Year of acquisition Total Built-up Area Total Seating Location / Completion (sq. ft.) Capacity

Pune

Kapilvastu 1994 2,169 35

Panini 1998 10,000 125

Bhageerath 2002 131,000 560

Aryabhata – Pingala 2006 341,000 2,550

Hinjawadi 2011 446,125 3,161

Goa

Charak 1997* 35,310 383

Bhaskar 2013 40,490 308

Nagpur

IT Tower 2003 39,915 361

Gargi and Maitreyi 2011 164,483 1,227

Grenoble, France 2000** 11,000 50

Total 12,21,492 8,760

* Company started to occupy this premises from October 2005 onwards

** Company acquired this premises in August 2011 as part of the acquisition of the Grenoble team.

Awards and recognitions during the financial year 2013-14

During the financial year 2013-14, your Company continued its tradition of winning various awards and getting new recognitions. Your Company was a proud recipient of the following awards during the year:

1. Named in ''Leader Category'' on 2014 IAOP Global Outsourcing 100 Service Provider List.

2. Recognized as a ''Global Service Business Leader'' for the third consecutive year in Global Services 100 List (GS100).

3. Named ''Top 200 Best Under a Billion Companies'' in Asia Pacific by Forbes India for its sustained financial performance.

4. Recognized by Computerworld as a ''2013 Computerworld Honors Laureate'' in the Emerging Technology category.

5. South Asian Federation of Accountants (SAFA) – ''Best Presented Annual Report Awards 2012''.

6. Received ''Gold Award for Corporate Governance, Social Responsibility, Environmental Responsibility and Investor Relations'' at The Asset Corporate Awards 2013 by The Asset, Asia''s leading issuer and investor-focused financial monthly publication.

7. Awarded the Golden Peacock Award for ''Excellence in Corporate Governance – 2013''.

8. Awarded for the third consecutive time the ''Silver Shield for the Excellence in Financial Reporting'' by the Institute of Chartered Accountants of India.

Corporate Social Responsibility

Sustainability, consciousness and actions on environment and climate change and awareness and contributions to reducing social imbalance are the corner stones of your Company''s Corporate Social Responsibility (CSR).

Your Company conducts business in a sustainable and socially responsible manner. This principle has been an integral part of your Company''s corporate values for the last two decades. Your Company is committed to the safety and health of the employees, protecting the environment and the quality of life in all regions in which your Company operates.

Your Directors are convinced that your Company''s continued focus on sustainability will help to grow the long-term value of your Company and to realize our strategic priorities. CSR strengthens the motivation of your Company''s employees and their identification with your Company and thereby creates the basis for a strong global team.

To institutionalise the CSR initiative of your Company, your Company formed a Public Charitable Trust by the name ''Persistent Foundation'' in the financial year 2008-09.

During the year under report, Persistent Foundation was able to create excitement among employees to participate in socially relevant causes. With the cooperation of the employees of your Company, Persistent Foundation has set up several well-defined programs and activities for the promotion of education, health, community welfare. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through reputed social organisations and institutions.

In addition to contributing Rs. 22.46 Million to Persistent Foundation, your Company made donations of Rs. 0.94 Million to various charitable institutions directly. Thus, during the year under report, your Company donated Rs. 23.40 Million i.e. 1.25% of the consolidated net profit of the financial year 2013-14.

Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2013-14 is given elsewhere in this Annual Report.

CSR Committee and CSR Policy

The Board of Directors of your Company has constituted the CSR Committee to help the Company to frame, monitor and execute the CSR activities of the Company under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the social responsibility of your Company.

The Board of your Company has further approved the CSR Policy of the Company to provide a guideline for CSR activities of the Company.

The CSR Policy covers the following focus area which the Company undertakes through its social initiatives:

1. Health

2. Education

3. Community Development

4. Natural Calamities

The constitution of the CSR Committee is provided elsewhere in the Annual Report.

Financial results

The highlights of the financial performance on a consolidated basis for the year ended March 31, 2014 are as under:

Particulars (Amount in USD Million (Amount in Rs. Million % except EPS and except EPS and Book Change Book Value) Value)

2013-14 2012-13 2013-14 2012-13

Total Income 279.17 243.04 17,001.69 13,231.13 28.5%

Profit before interest, depreciation and taxes 73.12 62.69 4,453.07 3,413.10 30.5%

Finance Cost 0.01 0.01 0.53 0.36 47.2%

Depreciation 16.85 14.38 1,025.95 782.86 31.1%

Provision for income tax 15.33 13.84 933.82 753.70 23.9%

Net profit for the year before exceptional and prior 40.93 34.46 2,492.77 1,876.18 32.9% period items

Net profit for the year after exceptional and prior 40.93 34.46 2,492.77 1,876.18 32.9% period items

Transfer to general reserve 16.33 13.36 994.30 727.24 36.7%

Net worth* 203.93 187.61 12,223.44 10,182.55 20.0%

Earnings per share (EPS) (Basic) 1.05 0.89 64.07 48.62 31.8%

Earnings per share (EPS) (Diluted) 1.02 0.86 62.32 46.90 32.9%

Book value per equity share 5.10 4.69 305.59 254.56 20.0%

[Conversion Rate USD 1 = Rs. 60.90 for Profit and Loss items; USD 1 = Rs. 59.94 for Balance Sheet items (financial year 2013-14) and USD 1 = Rs. 54.44 for Profit and Loss items; USD 1 = Rs. 54.275 for Balance Sheet items (financial year 2012-13)] *Net worth = Equity Share Capital Reserves and Surplus (including Hedge reserve)

The highlights of the financial performance on an unconsolidated basis for the year ended March 31, 2014 are as under:

Particulars (Amount in USD Million (Amount in Rs. Million % except EPS and except EPS and Book Change Book Value) Value)

2013-14 2012-13 2013-14 2012-13

Total Income 200.53 188.39 12,212.44 10,255.81 19.1%

Profit before interest, depreciation and taxes 65.75 56.27 4,004.44 3,063.30 30.7%

Finance Cost 0.01 0.01 0.53 0.36 47.2%

Depreciation 9.59 10.97 584.08 596.95 -2.2%

Provision for income tax 15.34 11.90 934.13 647.90 44.2%

Net profit for the year before exceptional and prior 40.82 33.40 2,485.70 1,818.09 36.7% period items

Net profit for the year after exceptional and prior 40.82 33.40 2,485.70 1,818.09 36.7% period items

Transfer to general reserve 16.33 13.36 994.30 727.24 36.7%

Net worth* 200.51 185.36 12,018.68 10,060.44 19.5%

Earnings per share (EPS) (Basic) 1.05 0.87 63.89 47.12 35.6%

Earnings per share (EPS) (Diluted) 1.02 0.83 62.14 45.45 36.7%

Book value per equity share 5.01 4.63 300.47 251.51 19.5%

[Conversion Rate USD 1 = Rs. 60.90 for Profit and Loss items; USD 1 = Rs. 59.94 for Balance Sheet items (financial year 2013-14) and USD 1 = Rs. 54.44 for Profit and Loss items; USD 1 = Rs. 54.275 for Balance Sheet items (financial year 2012-13)] *Net worth = Equity Share Capital Reserves and Surplus (including Hedge reserve)

Outlook and Priorities for FY 15

Your Company is at the threshold of some exciting opportunities. To swiftly respond to these opportunities, your Company has identified the following priorities:

1. Customer Focus: It is important to provide customers an absolutely awesome customer experience. This will be the top priority for your Company during the year. Your Company proposes to be the force multiplier for customers and do what it takes to ensure their success.

2. Continued focus on Platform Technologies: Your Company will invest in platform technologies and continue to strengthen expertise in these areas and work with partners to scale as the market demand is starting to rapidly pick-up.

3. Your Company will continue to focus on enhancing the IP-portfolio.

4. Happy Persistent: Success with customers is possible only through the creative hard work of your Company''s team members. Your Company has focused on creating a Happy Persistent environment in the Company.

Liquidity

Your Company continues to maintain adequate amount of liquidity to meet its strategic and growth objectives. Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2014, your Company, on an unconsolidated basis, had cash and cash equivalents (including investments) amounting to Rs. 5,838.11 Million as against Rs. 4,081.94 Million as at March 31, 2013. The details of cash and cash equivalents are as below:

(In Rs. Million)

Particulars As on March 31, As on March 31, 2014 2013

Investment in Mutual Funds 4,071.36 3,116.18

Fixed Deposits with scheduled banks 523.93 531.69

Tax free Government Bonds (quoted) 775.76 166.19

Cash and Bank balances 467.06 267.88

Dividend

In January 2014, your Directors declared an Interim Dividend of Rs. 8 per share on the paid-up equity share capital out of the net profits of your Company during the period under report. Total outflow on account of interim dividend payout including dividend distribution tax amounted to Rs. 374.39 Million.

Your Directors have recommended a final dividend of Rs. 4 per share for the financial year 2013-14. The total outflow on account of final dividend and dividend distribution tax would amount to Rs. 187.19 Million. The payment of final dividend of Rs. 4 per share is subject to the approval of the shareholders.

Thus, including the proposed final dividend, the total dividend recommended for the financial year 2013-14 would be Rs. 12 per share as compared to Rs. 9 per share in the financial year 2012-13. The total outflow on account of total dividend and dividend distribution tax would amount to Rs. 561.58 Million as compared to Rs. 419.32 Million in the previous year. The payout ratio for this year is 22.5% as compared to 22.3% from the previous year.

Out of the interim dividend declared in January 2014, Rs. 0.25 Million was unclaimed as on March 31, 2014.

Transfer to reserves

Your Company proposes to transfer an amount of Rs. 994.30 Million to the General Reserve and an amount of Rs. 929.82 Million is proposed to be retained in the Statement of Profit and Loss.

Fixed Deposits

In terms of the provision of Section 73 and 74 of the Companies Act, 2013 (earlier Section 58A of the Companies Act, 1956) read with the relevant rules, your Company has not accepted any fixed deposits during the period under review.

Appointment of statutory auditors

M/s. Joshi Apte & Co., Chartered Accountants and M/s. S. R. Batliboi & Co. LLP (formerly known as M/s. S. R. Batliboi & Co.), Chartered Accountants, the joint auditors of your Company retire at the Twenty Fourth Annual General Meeting.

M/s. Joshi Apte & Co. have confirmed their eligibility and willingness to accept office, if reappointed. Further, in terms of the Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI). M/s. Joshi Apte & Co., Chartered Accountants have confirmed that they hold a valid certificate issued by ''Peer Review Board'' of ICAI; and have provided a copy of the said certificate to your Company for reference and records.

M/s. S. R. Batliboi & Co. LLP have communicated their unwillingness to continue as the auditors of the Company for the next term of Audit in view of the restructuring of their operations in India.

Your Company has further received an eligibility and willingness letter from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants to conduct the audit of the Company for the next term of Audit along with a confirmation that they hold a valid certificate issued by the ''Peer Review Board'' of ICAI.

The appointment of Statutory Auditors is subject to the approval of the Members of the Company. A proposal to change the Joint Auditors of your Company from M/s. S. R. Batliboi & Co. LLP to M/s. Deloitte Haskins & Sells LLP, forms part of the Agenda of the forthcoming Annual General Meeting.

Your Directors propose appointment of M/s. Joshi Apte & Co. and M/s. Deloitte Haskins & Sells LLP as the Joint Statutory Auditors of your Company.

Directors

During the period under report, Mr. P. B. Kulkarni retired from the Directorship of the Board of your Company in July 2013 and Dr. Dinesh Keskar resigned from the Directorship of your Company because of increase in professional commitments due to his promotion to an important role in Boeing Asia. The Board places on record its appreciation and thanks to Mr. Kulkarni and Dr. Keskar for the immense contribution made by them during their tenure of directorship at the Company.

In terms of Section 152 of the Companies Act, 2013 (earlier Section 255 of the Companies Act, 1956) and Article 137 of the Articles of Association of your Company, Mr. Nitin Kulkarni, Executive Director is liable to retire by rotation at the Twenty Fourth Annual General Meeting. Mr. Kulkarni has communicated his unwillingness to be re-appointed for the next term of the directorship.

Considering the retirement plans of Mr. Nitin Kulkarni, Executive Director, the Board inducted Mr. Mritunjay Singh, Chief Operating Officer as an Additional Director (Executive Member of the Board) of the Company from June 15, 2014.

Mr. Singh has confirmed his eligibility and willingness to accept the office of the Executive Director of your Company, if confirmed by the Members at the ensuing Annual General Meeting. In the opinion of your Directors, Mr. Singh has requisite qualifications and experience which would be useful for your Company and would enable him to contribute effectively to your Company in his capacity as the Executive Director of your Company.

At present, your Company has 5 (Five) Non-Executive Directors who are Independent Directors pursuant to the provisions of the Clause 49 of the Listing Agreement. Pursuant to Section 149 of the Companies Act, 2013, every listed company shall have at least one-third of its total strength of the Board of Directors as Independent Directors. Based on the present composition of the Board of Directors and the number of Independent Directors, the Company complies with this requirement.

During this Annual General Meeting, it is proposed to confirm the appointment of all the present Independent Directors to bring their appointment in tune with the provisions of the Companies Act, 2013.

Pursuant to the provisions of the Companies Act, 2013, the period of appointment of Independent Directors shall be 5 (Five) consecutive years from the date of their appointment at Annual General Meeting and they are not liable to retire by rotation.

The Company has received notices under Section 160 of the Companies Act, 2013 (Section 257 of the Companies Act, 1956) proposing appointment of 5 (Five) Non-Executive Directors who are Independent Directors and Mr. Singh as Director of the Company at the ensuing Annual General Meeting. Consequent to appointment as a Director, they will occupy the position of Directors of your Company.

In the opinion of your Directors, your Company will continue to benefit from Mr. Singh as well as 5 (Five) Non-Executive Directors who are Independent Directors in their capacity as Director of your Company. Your Directors, therefore, recommend that the proposed resolutions relating to appointment of these Directors be passed.

The Nomination and Governance Committee of your Company is constantly on the look-out for able candidates to join the Board as Independent Directors. The Nomination and Governance Committee is discussing with potential lady candidates to join the Board and will nominate one before the September 30, 2014 deadline.

Committees of the Board

During the period under report, the Board of Directors of your Company reconstituted the Committees of the Board. The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report.

Employees'' remuneration

In terms of the provisions of Section 134 of the Companies Act, 2013 [earlier Section 217(2A) of the Companies Act, 1956], read with the relevant rules, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of first proviso to Section 134 of the Companies Act, 2013 [earlier Section 219(1)(b)(iv) of the Companies Act, 1956], the Annual Report excluding the aforesaid information, is being sent to all the Members of your Company and others entitled thereto. Any Member interested in obtaining such particulars may write to the Company Secretary of your Company.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure A.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company at the time of grant.

In line with the guidance note on "Accounting for employee share based payments" issued by the Institute of Chartered Accountants of India and the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 issued by the Securities and Exchange Board of India, your Company has calculated the employee compensation cost using the intrinsic value of stock options. Had the compensation been determined under the fair value method described in the guidance note, your Company''s net income and basic and diluted earnings per share would have reduced to the proforma amounts as shown in the table below:

(In Rs. Million)

Particulars Year ended

March 31, 2014 March 31, 2013

Profit after tax 2,485.70 1,818.09

Add: Employee stock compensation under intrinsic value method - 0.94

Less: Employee stock compensation under fair value method (44.22) (105.57)

Proforma profit 2,441.48 1,713.46

Earnings Per Share Basic

- As reported 63.89 47.12

- Pro forma 62.75 44.40 Diluted

- As reported 62.14 45.45

- Pro forma 61.04 42.84

Weighted average exercise prices and weighted average fair values of options:

The Binomial tree valuation model has been used for computing the weighted average fair value of the stock options granted during the financial year 2013-14 considering the following inputs:

Particulars March 31, 2014 March 31, 2013

Scheme X Scheme X

Weighted average share price (Rs.) NIL 466.43

Exercise Price (Rs.) NIL 537.25 – 559.40

Expected Volatility NIL 35.28% - 39.00%

Historical Volatility NIL 31.52% - 61.52%

Life of the options granted NIL 7 years (Vesting and exercise period)

Dividend Yield NIL 1.00%

Average risk-free interest rate NIL 7.90% - 8.60%

Expected dividend rate NIL 50%

No new shares were granted to Independent Directors of your Company during this Financial Year. Shares held by Independent Directors of your Company as on March 31, 2014 are as under:

Name of the Director Shares held Shares held Shares held Total Shares held (through exercise (through allotment (through market of vested Stock under a pre IPO purchase / IPO) Options) scheme)

Mr. Pradeep Kumar Bhargava Nil Nil Nil Nil

Mr. Sanjay Kumar Bhattacharyya 1,750 Nil Nil 1,750

Dr. Anant Jhingran Nil Nil Nil Nil

Mr. Prakash Telang 1,750 Nil 2,000 3,750(1)

Mr. Kiran Umrootkar Nil Nil Nil Nil

(1) Shares are held jointly with Mrs. Anjali Telang

During the financial year 2013-14, pursuant to the resolutions passed by the Compensation and Remuneration Committee of the Board of Directors by way of circulation, Independent Directors, employees including ex-employees exercised their stock options for shares which were already vested in their name. During this exercise, 4,67,199 (Four Lakhs Sixty Seven Thousand One Hundred Ninety Nine only) i.e. 1.17% Equity shares of the total Paid-up Capital were transferred from PSPL ESOP Management Trust to the eligible employees including ex-employees at an aggregate value of Rs. 52.64 Million under various ESOP Schemes of your Company.

Your Company has ten ESOP Schemes under which options were granted to various permanent Independent Directors, employees and the employees of its subsidiary companies, details of which are given elsewhere in this Annual Report.

Your Company proposes to establish a new Persistent Employee Stock Option Scheme 2014 (PESOS 2014) for senior employees of the Company. The details of the Scheme and related resulations have been included in the Notice of the Annual General Meeting. The Board of Directors of your Company recommends the proposed resolutions for establishement of this Scheme for approval of the Members.

Shares Suspense Account

Your Company had opened an ''Unclaimed Securities Suspense Account'' on behalf of the allottees who were entitled to the equity shares under the initial public offering. Some of the equity shares could not be transferred to the respective allottees due to technical reasons. Such shares were held in ''Unclaimed Securities Suspense Account'', to be transferred to allottees if and when they approach your Company.

The details of equity shares held in an ''Unclaimed Securities Suspense Account'' are as follows:

Sr. Particulars Details No.

1. Aggregate number of shareholders in the Unclaimed Securities Suspense Account lying at 26 shareholders the beginning of the financial year 2013-14

2. Aggregate number of the outstanding equity shares in the Unclaimed Securities Suspense 520 Equity Shares Account lying at the beginning of the financial year 2013-14

3. Number of shareholders who approached issuer for transfer of shares from Unclaimed 2 Members Securities Suspense Account during the financial year 2013-14

4. Number of shares transferred from Unclaimed Securities Suspense Account during the 40 Equity Shares financial year 2013-14

5. Aggregate number of shareholders in the Unclaimed Securities Suspense Account lying at 24 Shareholders the end of the financial year 2013-14

6. Aggregate number of outstanding equity shares in the Unclaimed Securities Suspense 480 Equity Shares Account lying at the end of the financial year 2013-14

Note – Voting rights on the above mentioned equity shares are kept frozen till the rightful owner of such equity shares claim the shares.

Institutional Holding

As on March 31, 2014, the total institutional holding in your Company stood at 35.59% of the total share capital.

Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013, your Company has provided the Consolidated Financial Statements as on March 31, 2014. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is attached to the consolidated financial statements.

The Annual Report of your Company, though does not contain full financial statements of the subsidiary companies, your Company will make available the audited annual accounts and related information of subsidiary companies, upon request by any shareholder of your Company.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2014 are prepared in accordance with the Accounting Standard 21 (AS - 21) on ''Consolidated Financial Statements'' issued by the Institute of Chartered Accountants of India, and form part of this Annual Report.

Subsidiary companies

The details of the subsidiaries of your Company as on March 31, 2014 are as under:

(In Rs. Million)

Name of the Entity Status Period of Total Income Net Profit/(Loss) Establis -hment As on March As on March As on March As on March 31,2014 31,2013 31, 2014 31, 2013

Persistent Systems, Wholly Owned October 2001 5,715.41 3,824.34 27.78 21.64 Inc., USA Subsidiary

Persistent Systems Wholly Owned April 2007 122.47 8.22 45.99 (5.29) ,Pte. Ltd., Singapore Subsidiary (Co. Reg. No. 200706736G)

Persistent Systems Wholly Owned April 2011 275.22 190.19 9.26 (33.10) France S.A.S. Subsidiary

Persistent Systems Wholly Owned September 69.63 N.A. 6.57 N.A.

Malaysia Sdn. Bhd., Subsidiary 2013 Malaysia

Persistent Telecom Step-down subsidiary January 2012 1,263.51 894.66 (60.78) 75.56 Solutions Inc., USA (Wholly Owned Subsidiary of Persistent Systems, Inc.)

CloudSquads, Inc., Step-down subsidiary February 2014 15.84 N.A. (2.73) N.A. USA (Wholly Owned Subsidiary of Persistent Systems, Inc.)

Corporate governance

A separate section on "Corporate Governance" with a detailed compliance report thereon forms part of this Annual Report.

Voluntary secretarial compliance certificate

Your Company annually obtains a certificate from a whole time Practicing Company Secretary on a voluntary basis for compliance of the provisions of the Companies Act, 1956 and the Companies Act, 2013. The same forms part of this Annual Report.

Management discussion and analysis

Report on Management Discussion and Analysis based on audited, consolidated financial statements for the financial year 2013-14 forms part of this Annual Report.

Business Responsibility Report

Report on Business Responsibility describing the initiatives taken by the Management from an environmental, social and governance perspective forms part of this Annual Report.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Companies Act, 2013 (earlier Section 217(1)(e) of the Companies Act, 1956), read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Carbon management and sustainable development provides businesses with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving.

Your Company has reduced excessive illumination levels to standard levels in all common areas by using switching or de- lamping and aggressively controlled lighting with new sensor technologies. Like the last year, your Company has continued to maximise the use of energy efficient flat monitors, VRV air-conditioning systems, solar energy for hot water, LED logo on buildings, LED lighting in common areas, installation of power management software for desktops, WattMiser system in AHUs, En-power Computer Management system and VFD Installation for Fresh Air AHU systems for conservation of energy. Your Company has used all LED light fittings at its new premises at Bengaluru and Goa. Your Company has regulated working of lifts, vending machines, ventilation systems and water coolers in its premises.

Your Company has made efforts to ensure that there is no cool air leakage from its premises and has adopted measures to ensure optimum usage of Air Conditioners throughout its premises. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. As a part of your Company''s Green Movement, two 2.1 MW windmills are operational at Dhule and Sangli Districts of Maharashtra. Your Company has installed Ozone systems with air conditioning systems for balance locations. Modifications have been made in Data Centre arrangement to reduce power consumption. Ground water is used for landscaping to reduce consumption of treated water. A Sewage Treatment Plant was installed at the Gargi-Maitreyi, Aryabhata-Pingala facilities of your Company and recycled water through these plants is used for gardening.

Your Company effectively manages waste by carrying out ''No Plastic Days'', shredding of paper, handing over e-Waste to authorized agencies of State Pollution Control Board and disposing of dry garbage on a daily basis to a NGO appointed by the Pune Municipal Corporation (PMC). Also, your Company has distributed 1,600 saplings till date and organizes ''No Printer Days'' to promote awareness amongst its employees.

Your Company''s Bhageerath and Aryabhata-Pingala facilities are accredited under the Star Rating Scheme of BEE and all facilities of your Company have been recommended for ISO 14001:2004 & OHSAS 18001:2007 certifications. Best practices to preserve the environment are undertaken by your Company even during constructing its various premises by using crush sand, fly ash bricks and double glass unit, use of gypsum and recycled wood to protect the environment.

It is your Company''s constant endeavor to conserve and save the Environment and has launched the Green Persistent Movement to support the same.

As power costs constitute an insignificant part of the total expenses, the financial impact of these measures is not material.

As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on research and development (accrual basis) are as follows:

(In Rs. Million)

Particulars Year ended

March 31, 2014 March 31, 2013

Capital expenditure 2.43 -

Revenue expenditure 37.18 27.87

Total research and development expenditure 39.61 27.87

As % of total income 0.32% 0.27%

The particulars of foreign exchange earnings and outgo (accrual basis) are as follows:

(In Rs. Million)

Particulars Year ended

March 31, 2014 March 31, 2013

Revenue

Earnings 10,649.32 9,097.29

Outgo 1,587.85 1,367.85

Capital items

Outgo 165.77 140.71

Directors'' responsibility statement The Directors state that:

1. In the preparation of the annual accounts, the applicable mandatory Accounting Standards have been followed and there is no material departure;

2. Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2014 and of the profit of your Company for that year;

3. Your directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

4. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

5. The annual accounts have been prepared on a going concern basis.

Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual return of the Company for the financial year ended on March 31, 2014 is as follows:

I. Registration and other details:

i. CIN: L72300PN1990PLC056696

ii. Registration Date: May 30, 1990

iii. Name of the Company: Persistent Systems Limited

iv. Category of the Company: Company limited by shares

v. Sub-category of the Company: Indian Non-Government Company

vi. Address of the Registered Office and Contact details: Bhageerath, 402 Senapati Bapat Road, Pune 411 016; Tel. No.: 91 (20) 6703 0000; Fax: [phone]; E-mail: [e-mail] Website: www.persistent.com

vii. Whether listed company: Yes

viii. Name, Address and Contact details of Registrar and Transfer Agent: M/s. Link Intime India Private Limited (Unit: Persistent Systems Limited) CIN: U67190MH1999PTC118368 Block No. 202, Second Floor, Akshay Complex, Off Dhole Patil Road, Pune 411 001 Tel. No.: 91 (20) 2616 0084 / 2616 1629; Fax: [phone]; E-mail: [e-mail] Website: www.linkintime.co.in

II. Principal Business Activity of the Company:

Sr. No. Name and Description of main products / services NIC Code of the Product / % to total turnover of the Service Company

1. Software Development and IT Services 892 100%

vii. Remuneration of Directors and Key Managerial Personnel –

Your Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and performance incentives (variable component) to its Executive Directors. Annual increments are decided by the Compensation and Remuneration Committee of the Board of Directors.

The remuneration of full time directors (Managing Director and Executive Director) is divided in the following proportion:

a. Fixed portion which is 60% of the Annual Gross Salary.

b. Variable portion by way of Bonus which is 40% of the Annual Gross Salary. The variable portion of the remuneration is payable in terms of the targets set for various parameters including consolidated revenue and consolidated net profits.

c. Such perquisites and benefits as authorised by the resolution passed by Members of your Company from time to time.

Remuneration to other Directors:

Your Company''s policy on the Directors'' appointment and remuneration in terms of section 178(1) of the Companies Act, 2013:

a. The Independent Directors are entitled to payment of commission at a sum not exceeding 1% per annum of net profits and eligible Independent Directors are entitled for Employee Stock Options under ESOA - X Scheme of your Company.

b. The total managerial remuneration not to exceed 11% of the net profits of your Company and the total remuneration to the managerial persons not to exceed 10% of the net profits of your Company.

Statement on declaration by Independent Directors in terms of section 149(6) of the Companies Act, 2013

Your Company has received declaration from all its Independent Directors confirming that they fulfil all the criterion of being Independent Director as prescribed under the Companies Act, 2013 and the Listing Agreement.

The Directors have further confirmed that their directorships in other companies do not conflict with the interest of the Company.

Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at the Company for the financial year 2013-14 forms part of this Annual Report.

Performance Evaluation of the Board of Directors

Your Company conducted the annual performance evaluation of the Independent Directors and the committees of the Board. This was conducted in April 2014 by an External Management Consultant and the findings of the evaluation were presented at the meeting of the Nomination and Governance Committee of the Board of Directors. Recommendations and suggested areas of improvement for the committees and the individual Directors were considered by the Committee.

Acknowledgments and appreciation

Your Board places on record the support and wise counsel received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and the Reserve Bank of India throughout the financial year.

Your Board extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Bengaluru, Visakhapatnam Special Economic Zone, Andhra Pradesh, SEEPZ Special Economic Zone, Andheri, Mumbai, Central Excise and Customs Department, Department of Revenue, Income Tax Department, Department of Electronics, Director General of Foreign Trade, Director of Industries, Department of Shops and Establishments, Development Commissioners, Pune and Hyderabad, Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Sales Tax Department, Securities and Exchange Board of India, High Court of Judicature of Mumbai, ICGL Goa, Goa Industrial Development Corporation, office of the Official Liquidator, Collector of Stamps, National Stock Exchange of India Limited, Bombay Stock Exchange Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Pune Municipal Corporation, Maharashtra State Electricity Distribution Company Limited, Andhra Pradesh State Electricity Board, Maharashtra Industrial Development Corporation, Bengaluru Municipal Corporation, Karnataka Industrial Development Corporation, Karnataka Telecom including BSNL, Mobile / Internet Service providers.

Your Board also extends its thanks to Axis Bank, Bank of India, Bank of Tokyo Mitsubishi, BNP Paribas, Citibank N.A., HDFC Bank, State Bank of India, Syndicate Bank, and its officials for extending their excellent support in all banking related activities.

Your Board places on record its deep sense of appreciation for the committed services of the associates of your Company at all levels.

Your Board thanks the investors and shareholders for placing immense faith in them.

Your Board takes this opportunity to express its sincere appreciation for the contribution made by the employees at all levels in your Company. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande Chairman and Managing Director

Pune, June 15, 2014

---

Mar 31, 2012

The Directors are pleased to present the Twenty Second Annual Report of your Company along with the audited Statement of Accounts for the financial year ended March 31, 2012.

Business overview

During the year under report, your Company crossed consolidated revenue of Rs 1,000 Crores. This is a major milestone for your Company. The Company crossed Rs 1 Crore turnover in the year 1995-96, Rs 10 Crores in the year 1999-00, Rs 100 Crores in the year 2004-05 and now in the year 2011-12 your Company crossed turnover of Rs 1000 Crores.

The consolidated revenue during the financial year 2011-12 was USD 207.39 Million, an increase of 21.8% in USD terms and was Rs 10,003.11 Million, an increase of 28.9% in Rupee terms as, compared to the financial year 2010-11, which enabled your Company to maintain its track record of year-on-year growth for the twenty second successive year.

The Company enjoyed a favorable tax regime till the financial year ended March 31, 2011 under the STPI Scheme. Starting from current year, the STPI benefits have ceased to exist, though your Company will have some tax benefits from its SEZ operation. Increased profit after tax is significant on the backdrop of rise in the effective tax rate from 8% to 28%.

Two of your Company's subsidiaries, namely Persistent e Business Solutions Limited and Persistent Systems and Solutions Limited merged with effect from April 1, 2011.

Your Company expanded its business presence globally by setting up a subsidiary in France and branch office in Malaysia. Financial results

The highlights of the financial performance on consolidated basis for the year ended March 31, 2012 are as under

Particulars (Amount in USD Million (Amount in Million % except EPS and except EPS and Book Change BookValue) Value)

2011-12 2010-11 2011-12 2010-11

Total Revenue 207.39 170.23 10,003.11 7,758.41 28.9%

Profit before interest, depreciation and taxes 48.17 34.73 2,324.03 1,583.05 46.8%

Depreciation 12.67 9.30 610.96 423.89 44.1%

Provision for income tax 11.42 2.33 550.88 106.16 418.9%

Net profit for the year before exceptional and prior period items 29.38 30.66 1,417.80 1,397.36 1.5% Net profit for the year after exceptional and prior period items 29.38 30.66 1,417.80 1,397.36 1.5%

Transfer to general reserve 10.80 11.99 549.60 534.40 2.8%

Networth* 165.23 167.59 8,405.12 7,471.07 12.5% Earnings per share (basic) (EPS)

after exceptional and prior period items 0.77 0.81 37.02 37.04 -

before exceptional and prior period items 0.77 0.81 37.02 37.04 - Earnings per share (diluted) (EPS)

after exceptional and prior period items 0.74 0.77 35.45 34.93 1.5%

before exceptional and prior period items 0.74 0.77 35.45 34.93 1.5%

[Conversion Rate USD 1 = Rs 48.23 for Profit and Loss items; USD 1 = Rs 50.87 for Balance Sheet items (financial year 2011-12) and USD *= Rs 45.57 for Profit and Loss items; USD *= Rs 44.58 for Balance Sheet items (financial year 2010-11)]

*Networth = Equity Share Capital Reserves and Surplus (including Hedge reserve)

The highlights of the financial performance on unconsolidated basis for the year ended March 31, 2012 are as under

Particulars (Amount in USD Million (Amount in f Million % except EPS and except EPS and Book Change BookValue) Value)

2011-12 2010-11 2011-12 2010-11

Total income 174.73 142.36 8,427.40 6,487.26 29.91%

Profit before interest .depreciation and taxes 51.12 40.12 2,465.37 1,828.25 34.85%

Depreciation 11.70 8.67 564.39 395.09 42.85%

Provision for income tax 10.93 2.13 527.11 97.29 441.79%

Net profit for the year before exceptional and prior period 28.49 29.31 1,373.87 1,335.87 2.84% items

Net profit for the year after exceptional and prior period 28.49 29.31 1,373.87 1,335.87 2.84% items

Transfer to general reserve 10.80 11.99 549.60 534.40 2.84%

Networth* 164.68 166.97 8,377.43 7,443.37 12.55% Earnings per share (basic) (EPS)

after exceptional and prior period items 0.74 0.78 35.87 35.41 1.30%

before exceptional and prior period items 0.74 0.78 35.87 35.41 1.30% Earnings per share (diluted) (EPS)

after exceptional and prior period items 0.71 0.73 34.35 33.40 2.84%

before exceptional and prior period items 0.71 0.73 34.35 33.40 2.84%

[Conversion Rate USD 1 = Rs 48.23 for Profit and Loss items; USD 1 = Rs 50.87 for Balance Sheet items (financial year 2011-12) and USD *= Rs 45.57 for Profit and Loss items; USD *= Rs 44.58 for Balance Sheet items (financial year 2010-11)]

*Networth = Equity Share Capital Reserves and Surplus (including Hedge reserve)

Liquidity

Your Company continues to maintain sufficient cash to meet your Company's strategic objectives. As at March 31, 2012, your Company had cash and cash equivalents (excluding proceeds from initial public offering of the Company) amounting to Rs 2,979.23 Million as against Rs 2,567.98 Million as at March 31, 2011, which includes the following investments

(In Rs Million)

Particulars As on March 31, As on March 31,

2012 2011

Investment in Liquid Mutual Funds 1,915.24 1,697.84

Fixed Deposits with scheduled banks 922.44 752.30

Total 2,837.68 2,450.14

Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks.

During the current financial year, your Company has also invested a sum of Rs 116.19 Million in quoted tax-free Government Securities. The tenure of these securities is ten years.

Directors

During the year under review, Mr. S. P. Deshpande, Founder and Non-Executive member of the Board of Directors retired from the directorship of the Company with effect from end of day of October 31, 2011.

Your Directors place on record the tremendous contribution made by Mr. S. P. Deshpande to the Company since inception. Mr. S. P. Deshpande played a defining role in making the Company what it is today. Through his hard work and indefatigable energy, Mr. Deshpande has inspired management and employees of the Company and has set very high standards for all of them to follow.

Dr. Anant Jhingran and Mr. Pradeep Kumar Bhargava were appointed as Additional Directors (both as Independent Members on the Board of your Company) with effect from November 10, 2011 and April 26, 2012, respectively. The term of Dr. Jhingran and Mr. Bhargava as Additional Directors of your Company will expire at the ensuing Twenty Second Annual General Meeting. They have confirmed their respective eligibility and willingness to accept the offices of Directorship of your Company, if appointed. The Company has received notices under Section 257 of the Companies Act, 1956, proposing appointment of Dr. Jhingran and Mr. Bhargava as Directors of the Company. Separate proposals seeking approval of the Members for the appointment of Dr. Jhingran and Mr. Bhargava as Directors of the Company have been incorporated in the Notice of the forthcoming Annual General Meeting along with their brief details.

In the opinion of your Directors, Dr. Jhingran and Mr. Bhargava have the requisite qualifications and experience which would be useful to your Company and would enable them to contribute effectively in their capacity as independent directors of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Dr. Jhingran and Mr. Bhargava as Directors and the Board recommends that the proposed resolution relating to the appointment of Dr. Anant Jhingran and Mr. Pradeep Kumar Bhargava as Directors of your Company be approved.

In terms of Section 255 of the Companies Act, 1956 and Article 137 of the Articles of Association of the Company, Prof. Krithivasan Ramamritham and Mr. Kiran Umrootkar are liable to retire by rotation at the Twenty Second Annual General Meeting.

Mr. Kiran Umrootkar has confirmed his eligibility and willingness to accept the office of Directorship of your Company, if appointed. In the opinion of your Directors, Mr. Umrootkar has the requisite qualifications and experience which would be useful for your Company and would enable him to contribute effectively to your Company in his capacity as Director of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Mr. Umrootkar as Director and the Board recommends that the proposed resolution relating to re-appointment of Mr. Umrootkar as Director of your Company be approved.

Prof. Krithivasan Ramamritham has expressed his intention not to seek re-appointment. The Board of Directors do not recommend filling for the time being the vacancy to be caused by retirement of Prof. Ramamritham. Prof. Ramamritham has been on the Board of your Company since June 2001 and has made significant contribution and provided guidance in the area of upcoming technology, in last twelve years. The Board places on record its deep sense of appreciation and gratitude for the contribution made by Prof. Ramamritham during his tenure as a member of the Board.

Committees of the Board

During the year under review, the Board of Directors of your Company had reconstituted the Committees of the Board. The details of the powers and functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance forming part of this Annual Report.

Utilisation of funds received from IPO

Your Company had the following objects of the IPO as stated in its Prospectus dated March 23, 2010, (a) to establish the development facilities; (b) to capitalise the Subsidiaries for establishing development facilities and meeting fit outs and interior design costs; (c) to procure hardware; (d) to fund expenditure for general corporate purposes and (e) to achieve the benefits of listing on the Stock Exchanges.

In view of the Company's plan for expanding its operations in SEZ facilities and pursuing non-linear activities, the members at the Twenty First Annual General Meeting of the Company held on July 18, 2011 had approved for use / deployment of unutilised part of the IPO proceeds for (i) capitalizing the subsidiaries of the Company not restricted to establishment of development facilities in SEZ, (ii) establishment of development facilities (iii) procuring hardware and software and

(iv) other general corporate purposes, in addition to the Objects of the Issue stated in the Prospectus of the IPO of the Company.

During the year under review, your Company utilised the entire proceeds of the IPO accruing to the Company, after deducting the Company's share of the underwriting and management fees, selling commissions and other expenses associated with the IPO, amounting to Rs 1,200.60 Million in the manner set forth below

(In Rs Million)

Sr. Project Funds allocated for the activity as % of funds No. per Prospectus read along with consumed as on resolution passed at Annual General March 31, 2012 Meeting held on July 18, 2011

1. Establishment of development facilities 760.20 100%

2. Capitalise our Subsidiaries for establishing development 29.59 100% facilities

3. Procuring hardware/software 204.50 100%

4. Fund expenditure forgeneral corporate purposes 206.31 100%

Total 1,200.60

Acquisition of software marketing and development business based in Grenoble, France from Agilent Technologies, Inc. In August 2011, your Company acquired Agilent Technologies' software marketing and development business based in Grenoble, France. This acquisition will contribute to the Company's strategic thrust in the life sciences and healthcare markets and will help your Company expand its business operations in Europe.

Acquisition of Location Business of Openwave Systems, Inc.

In February 2012, your Company acquired the Location business from Openwave Systems, Inc. through Persistent Telecom Solutions Inc., a step down subsidiary of Persistent Systems, Inc., wholly owned subsidiary of your Company. Your Directors believe that Location business is a very important aspect of enterprise mobility and mobility in general and the Location product can help your Company leverage this both for 911 and for emergency and other related areas and also on the enterprise mobility front.

Your Company will continue to look out for strategic inorganic growth opportunities.

Infrastructure

During the financial year 2011-12, your Company has added a built-up capacity in excess of 0.32 Million sq. ft. and added more than 2,500 seats in new buildings in Nagpur and Pune. With this, the total owned built-up capacity of your Company in India stands at around 1.16 Million sq. ft. and seating capacity for around 8,400 people. Your Company also operates SEZ operations from leased premises in Hyderabad of approx. 47,000 sq. ft. and in Pune of approx. 46,000 sq. ft. In November 2011, your Company inaugurated a new, state-of-the-art facility at MIDC Info Tech Park on South Ambazari Road at Parsodi in Nagpur. The facility comprises two buildings that constitute the development centers and are named after the great Indian Vedic women scholars: Gargi and Maitreyi and the auditorium is named after great Sanskrit poet - Kalidasa. The new facility having a built up area of approx. 0.16 Million sq. ft. provides a seating capacity of 1,250 people and has been constructed on 2 acres of land.

In March 2012, your Company completed the construction of its largest facility in Pune at the Rajiv Gandhi IT Park, Hinjawadi Phase 1. The facility was formally inaugurated by Prof. Deepak Phatak of IIT Bombay on the auspicious day of Gudhi Padwa, which is also the Foundation Day of your Company. The facility comprises four buildings that constitute the development centers and are named after the Sanskrit Vedas: Rigveda, Yajurveda, Samaveda and Atharvaveda while the fifth administration block hosts a state-of-art 650 seater auditorium named after great Indian legendary vocalist Bharat Ratna Pandit Bhimsen Joshi. The facility is spread on built up area of approx 0.45 Million sq. ft. and has a parking area of approx0.25 Million sq. ft. and provides a seating capacity for 3,100 employees.

The details of owned facilities of your Company are as under

Location Year of Total Built-up Total Seating completion of Area (sq. ft.) Capacity construction

Pune

Kapilvastu 1994 2,169 35

Panini 1998 10,000 125

Bhageerath 2002 131,000 560

Aryabhata-Pingala 2006 341,000 2,550

Hinjawadi

Rigveda 113,323 810

Yajurveda 99,213 822

2011

Corporate Building 50,153 44

Samaveda 100,180 711

Atharvaveda 83,256 774

Goa 1997* 35,306 382 Nagpur

ITTower 2003 32,000 361

Maitreyi with Kalidas 2011 98,915 658

Gargi 65,568 569

Grenoble. France 2000** 11,000 50

Total 1,173,083 8,451

*Company started to occupy this premises from October 2005 onwards **Company started to occupy this premises from August 2011 onwards

Dividend

Your Directors declared an Interim Dividend in January 2012 of Rs 3.50 per share on the paid-up equity share capital. Total outflow on account of interim dividend payout including dividend tax was Rs 162.71 Million out of the net profits of your Company during the year under report.

Your Directors recommend a final dividend of Rs 2.50 per share for the financial year 2011-12. The tax on final dividend provided in the financial statements is Rs 16.22 Million. The payment of final dividend of Rs 2.50 per share is subject to the approval of the Members. Thus, including the proposed final dividend, the total dividend recommended for the financial year 2011-12 would be Rs 6.00 per share [previous year Rs 3.50 per share Dividend Rs 2 per share as special one-time Dividend].

Out of the first interim dividend declared in January 2012, Rs 0.32 Million was unclaimed as on March 31, 2012.

Transfer to reserves

Your Company proposes to transfer Rs 549.60 Million to the General Reserve and an amount of Rs 612.96 Million is proposed to be retained in the Profit and Loss Account of your Company. As on March 31, 2012, the balance in the General Reserve is Rs 2,861.37 Million

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure A.

No employee has been granted stock options, during the year under review, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

In line with the guidance note on "Accounting for employee share based payments" issued by the Institute of Chartered Accountants of India and the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 issued by the Securities and Exchange Board of India, your Company has calculated the employee compensation cost using the intrinsic value of stock options. Had compensation been determined under the fair value approach described in the guidance note, the Company's net income and basic and diluted earnings per share would have reduced to the proforma amounts as under

(In f Million)

Particulars Year ended

March 31, 2012 March 31,2011

Profit after tax 1,373.87 1,335.87

Add: Employee stock compensation under intrinsic value method 8.36 7.11

Less: Employee stock compensation under fair value method (68.83) (60.70)

Proforma profit 1,313.40 1,282.28

Earnings Per Share Basic

- As reported 35.87 35.41

- Pro forma 34.30 33.99 Diluted

-Asreported 34.35 33.40

- Pro forma 32.84 32.06

Weighted average exercise prices and weighted average fair values of options

The Binomial tree valuation model has been used for computing the weighted average fair value considering the following inputs

Particulars March 31,2012 March 31,2011

Scheme X Scheme X

Weighted average share price(Rs) 345.70 414.63

Exercise Price (Rs) 315.15 -397.55 389.05-403.25

Expected Volatility 31.90%, 32.56% 31.90%, 32.56%

Historical Volatility 31.52% - 61.52% 31.52% - 61.52%



Particulars March 31,2012 March 31,2011

SchemeX SchemeX

Life of the options granted 7 years 7 years (Vesting and exercise period)

Dividend Yield 1.00% 1.00%

Average risk-free interest rate 7.93%-8.01% 7.93%-8.01%

Expected dividend rate 40% 40%

Shares held by Independent Directors of the Company as on March 31, 2012 are as under

Name of the Director Shares held Shares held Shares held Total Shares held (through exercise (through allot- (through market of vested Stock ment under a pre purchase /IPO) Options) IPO scheme)

Mr. Pradeep Kumar Bhargava(1) N.A. Nil Nil Nil

Mr. S. K. Bhattacharyya(2) N.A. Nil Nil Nil

Dr. AnantJhingran® N.A. Nil Nil Nil

Dr. Dinesh Keskar N.A. Nil Nil Nil

Mr. P.B.Kulkarni 7,000 7,000 300 14,300(4)

Prof. Krithivasan Ramamritham 3,500 7,000 Nil 10,500(5)

Mr. Prakash Telang N.A. Nil 2,000 2,000(6)

Mr. Kiran Umrootkar N.A. Nil Nil Nil

(1) Appointed as an Additional Director on April 26, 2012

(2) Appointed as an Additional Director on May 12, 2011

(3) Appointed as an Additional Director on November 10, 2011

(4)Shares are held jointly with Mrs. Sudha Prabhakar Kulkarni

(5) Out of these shares, 7,000 shares are held jointly with Mrs. Saraswathi Krithivasan

(6) Shares are held jointly with Mrs. Anjali Prakash Telang

During the year under review, pursuant to the resolutions passed by the Compensation Committee of the Board of Directors by way of circulation, employees including ex-employees and Independent Director exercised their stock options for shares which were already vested in their name. During this exercise, 498,238 (Four Lakhs Ninety Eight Thousand Two Hundred Thirty Eight only) equity shares were transferred from PSPL ESOP Management Trust to the eligible employees, ex-employees and Independent Director at an aggregate value of f 34.25 Million under various ESOP Schemes of the Company.

Your Company has ten ESOP Schemes under which shares were granted to various permanent employees. Independent Directors and the employees of its subsidiary companies, details of which are given elsewhere in this Annual Report.

Unclaimed Securities Suspense Account

Your Company had opened an 'Unclaimed Securities Suspense Account' on behalf of the allottees who were entitled for the equity shares under the initial public offering. Some of the equity shares could not be transferred to the respective allottees due to technical reasons. Such shares were held in Unclaimed Securities Suspense Account', to be transferred to allottees if and when they approach your Company. The details of equity shares held in an 'Unclaimed Securities Suspense Account' are as follows

Sr. Particulars Details No.

1. Aggregate number of shareholders in the Unclaimed Securities Suspense Account lying at 28 shareholders the beginning of the financial year 2011-12

2. Aggregate number of the outstanding equity shares in the Unclaimed Securities Suspense 560 equity shares Account lying at the beginning of the financial year 2011-12

3. Number of shareholders who approached issuer for transfer of shares from Unclaimed 1 shareholder Securities Suspense Account during the financial year 2011-12

4. Number of shareholders to whom shares were transferred from Unclaimed Securities Suspense 1 shareholder Account during the financial year 2011-12

5. Aggregate number of shareholders in the Unclaimed Securities Suspense Account lying at 27 shareholders the end of the financial year 2011-12

6. Aggregate number of outstanding equity shares in the Unclaimed Securities Suspense Account 540 equity shares lying at the end of the financial year 2011-12

Note - Voting rights on the above mentioned equity shares are kept frozen till the rightful owner of such equity shares claim the shares.

Institutional holding

As on March 31, 2012, the total institutional holding in your Company stood at 32.97%.

Merger of wholly owned subsidiaries in India

During the year under report, two wholly owned subsidiaries of your Company in India viz. Persistent eBusiness Solutions Limited (PeBS) and Persistent Systems and Solutions Limited (PSSL) got merged with your Company. The Honorable High Court of Judicature of Bombay approved the scheme of amalgamation of PeBS and PSSL with your Company vide its order dated February 3, 2012 with effect from April 1, 2011.

Subsidiary companies

The details of the subsidiaries of your Company as on March 31, 2012 are as under:

Persistent Systems, Inc.

Persistent Systems, Inc., (PSI) is a California C-Corp., a US based wholly owned subsidiary of your Company formed in October 2001. PSI is primarily engaged in sales and marketing activities for the group globally; as well as for providing onsite software services in US.

During the financial year 2011-12, PSI recorded a total income of Rs 2,880.05 Million (USD 59.71 Million) [previous year Rs 2,325.36 Million (USD 51.03 Million)] and a net profit of Rs 39.58 Million (USD 0.82 Million) [previous year net profit of Rs 21.72 Million (USD 0.48 Million)].

Persistent Systems France S.A.S.

Persistent Systems France S.A.S., was formed on April 11, 2011 to explore the strategic opportunities available to your Company in France. During the year under review. Persistent Systems France S.A.S. acquired Agilent Technologies' Software Marketing and development business based in Grenoble, France.

During the financial year 2011-12, Persistent Systems France S.A.S. recorded a total income of Rs 113.39 Million (USD 2.35 Million) and a net loss of Rs 5.96 Million (USD 0.12 Million).

Persistent Systems Pte. Ltd.

Persistent Systems Pte. Ltd. (Co. Reg. No. 200706736G) is a Singapore based wholly owned subsidiary of your Company formed in April 2007. Persistent Systems Pte. Ltd. was primarily formed to concentrate on the business opportunities in ASEAN region.

During the financial year 2011-12, Persistent Systems Pte. Ltd. recorded a total income of Rs 21.39 Million (USD 0.44 Million) [previous year Rs 9.87 Million (USD 0.22 Million)] and a net profit of Rs 2.21 Million (USD 0.05 Million) [previous year net profit of Rs 1.28 Million (USD 0.03 Million)].

Persistent Telecom Solutions Inc.

Persistent Telecom Solutions Inc., a step down subsidiary of PSI, was primarily formed on January 12, 2012 to explore the strategic opportunities available to your Company. Persistent Telecom Solutions Inc. acquired Openwave Systems' Location Product business in February 2012.

During the financial year 2011-12, Persistent Telecom Solutions Inc. recorded a total income of Rs 55.90 Million (USD 1.16 Million) and a net profit of Rs 7.34 Million (USD 0.15 Million).

New branch office in Malaysia

During the period under report, your Company had set up a new Branch Office in Malaysia to pursue strategic opportunities in the Aisa Pacific region.

Joint Venture with Sprint Nextel Corporation

Your Company had formed a joint venture with Sprint International Holding, Inc. ("Sprint International"). The joint venture company - Sprint Telecom India Private Limited ("Sprint India") received an approval of the Foreign Investment Promotion

Board ("FIPB") for investment by Sprint International's in the joint venture. In terms of FIPB approval, your Company will hold 26% and Sprint International will hold 74% in Sprint India. Your Company has made an initial investment of f 6.50 Million towards equity share capital in Sprint India. Sprint India has made an application to Department of Telecommunication for national long distance, international long distance and Internet service provider licenses. Post receipt of regulatory approvals. Sprint India will commence its operations.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2012 are prepared in accordance with the Accounting Standard 21 (AS - 21) on 'Consolidated Financial Statements' issued by the Institute of Chartered Accountants of India, and form part of this Annual Report.

Particulars required as per Section 212of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors' Report, Auditors' Report, Balance Sheet, Profit and Loss Account, Schedules to Accounts and Notes to Accounts of subsidiaries of your Company along with the Balance Sheet of your Company.

In terms of general circular No. 2 / 2011 and No. 5/12/2007—CL—III dated February 8, 2011, the Ministry of Corporate Affairs has issued a direction under Section 212(8) of the Companies Act, 1956 granting general exemption to all the companies having subsidiaries and which require exemption from attaching the prescribed documents as mentioned in Section 212(1) of the Companies Act, 1956. Such exemption would be available to all the companies after fulfilling certain conditions prescribed in the above mentioned general circular.

Accordingly, the Annual Report of your Company does not contain full financial statements of the subsidiary companies. Your Company will make available the audited annual accounts and related information of subsidiary companies, upon request by any Members of your Company. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These documents will also be available for inspection during the business hours at the registered office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is attached to the consolidated financial statements.

Awards and recognitions to the Company during the financial year 2011-12

During the financial year 2011-12, your Company continued its tradition of winning various awards and getting new recognitions. The Company was a proud recipient of the following awards during the financial year 2011-12:

1. The Maharashtra Information Technology Award - 2011 in the category - IT Software, by the Government of Maharashtra.

2. Bloomberg UTV's 'CXO Award - 2011 Technology Chapter', in the 'Indian IT Company of the Year (with revenues below INR 5,000 Crore) category.

3. Zinnov Management Consulting ranked your Company among the Top 2 players in Cloud Computing R&D segment and Top 3 in Software/ ISV R&D segment.

4. Global Services (GS) 100 provider list - one of the Top 100 companies in the 2011 and also featured in the Top Product Engineering companies category.

5. Ranked 5th in PWC Global Software 100 Leaders - 2011.

6. IR Global Rankings (IRGR) - one of the best top five companies that follow 'Corporate Governance Practices' in India.

7. South Asian Federation of Accountants (SAFA) - Best Presented Accounts Award 2010 and 'Certificate of Merit' in the category 'Communication and Information Technology Sector' for the Company's Annual Report 2010.

8. The Institute of Company Secretaries of India (ICSI) National Award for Excellence in Corporate Governance, 2011 - recognised your Company as one of the top companies adopting Excellent practices in Corporate Governance.

9. The Institute of Chartered Accountants of India - Winner of the Silver Shield Award for Excellence in Financial Reporting for the year 2010-2011.

10. The Asset - Gold Award for Social Responsibility and Investor Relations 2011 - one of the top eight international companies that follow 'Social Responsibility and Investor Relations Practices'.

11. The IIA Influence Award 2011 for Best Application of Continuous Auditing or Monitoring Award by The Institute of Internal Auditors- India (Bombay Chapter).

12. Indira Excellence Award for Employer of the Year in Information Technology Category.

13. Global HR Excellence Awards for Outstanding Contribution for cause of Education in the year 2010-11.

14. The Ideas Exchange' Legal Counsel Congress and Awards India 2012 - Top 3 (Finalist) in the following categories (i) the Best employer for In-House Lawyers (ii) the Best Legal Team of the Year and (iii) the Best use of technology by a Legal Department. Further, Mr. Vivek Sadhale, Company Secretary and Head - Legal was nominated in the General Counsel of the Year category.

Significant events in the area of research and development

With a sole purpose of enhancing the scientific capabilities of the Company and to emerge as thought-leaders in the field, your Company established Persistent Labs in the financial year 2010-11. Persistent Labs has a mandate to work on cutting edge scientific and technology projects and is now a recognized Research and Development center by Department of Scientific and Industrial Research (DSIR), Government of India. Presently, Persistent Labs is focusing on Life Sciences oriented projects. In the Life Sciences, personalized medicine and personalized genomics require information technology and bio-informatics support. To emerge as a major player and achieve the thought-leadership role in personalized medicine/genomics, it is necessary to simultaneously build capabilities in Systems Biology and Epigenetics as they are integral part of personalized medicine/genomics field.

The following were the significant events in the area of Research and Development during the year under review:

a. For systems biology work, your Company received funding of 407.10 Lakhs from Council for Scientific and Industrial Research (CSIR), Government of India under New Millennium Indian Technology Leadership Initiative to build a computational model of Indian skin.

b. For Epigenetics capabilities, your Company received funding of 218 Lakhs under Biotechnology Industry Partnership Program of Department of Biotechnology, Government of India to develop a complete Next Generation DNA sequencing (NGS) data analysis suite

eMee and KLISMA

Your Directors' conscious decision on investing in new IP solutions has started reaping benefits for your Company. Your Company was able to leverage these solutions in multifold ways - adding to existing business models. During the year under review, your Company launched two IP solutions namely eMee and KLISMA, the details of which are as follows

eMee: eMee is a next-generation employee engagement platform, specifically developed for enterprises with a distributed workforce. eMee helps in redefining employee engagement, by offering an intuitive and user friendly platform for interacting with colleagues and peers throughout the organization. eMee platform is based on advanced data visualization and gamification technology.

KLISMA: KLISMA is an innovative eCommerce platform, offering a bouquet of services such as mobile shopping leveraging the inbuilt camera, next generation Bl & Analytics that enables retailers better predict consumer shopping behavior, virtual showrooms for retailers to display their products and more. As part of an effort to improve the business efficiency of KLISMA business, KLISMA e-Services Private Limited was formed during the year under report through which KLISMA business will henceforth be conducted.

Corporate governance

A separate section on "Corporate Governance" with a detailed compliance report thereon forms part of this Annual Report.

Voluntary secretarial compliance certificate

Your Company annually obtains a certificate from a whole time Practicing Company Secretary on a voluntary basis for compliance of the provisions of the Companies Act, 1956. The same forms part of this Annual Report.

Management discussion and analysis

Report on Management Discussion and Analysis based on audited, consolidated financial statements for the financial year 2011-12 forms part of this Annual Report.

Outlook

The market is at the threshold of a technology refresh cycle and teams from your Company are actively involved in contributing to new technologies being implemented by customers of your Company. Your Company has invested in thrust areas -- cloud computing, analytics, collaboration and mobility which are well positioned and will help your Company generate sustainable growth in the next few years.

Your Company has established strong partnerships with the Company's customers to establish a "sell-with" program. As part of this program, your Company is deploying next generation products for new enterprise customers.

Your Company continues to invest in intellectual property aligned to customer's needs. IP-led initiatives are based on innovative technology and business models and are able to yield better growth and margins.

Overall, the Management of your Company is confident that the investments and strategies are well aligned to growth opportunities in the market.

Human resource management

Your Company continues to attract the high calibre / quality talent in the industry. Your Company recruits from various engineering colleges in India for fresh talent. During the period under report, your Company welcomed a batch of 1,095 new graduates through campus recruiting students with engineering background across the Company locations.

During the financial year 2011-12, your Company recruited about 2,397 employees on a consolidated basis (2,266 employees on standalone basis) consisting of regular employees, trainees/interns, consultants, business consultants, contract consultants consisting of (technical and non-technical) professionals as a part of growth plan during the financial year ended March 31, 2012, including several qualified and experienced professionals returning from USA. This steady stream of US returning professionals has provided a very strong middle management group to your Company.

Your Company's human resource strength as on March 31, 2012, was 6,628 personnel (including trainees and associates) on a consolidated basis (6,257 personnel on standalone basis) during the year under report. The technical strength was 6,223 employees which comprised 5,544 graduates (Engineers and Technicians), 622 post graduates and 17 PhDs on a consolidated basis.

During the period under report, your Company conducted an Employee Satisfaction Survey which helped your Company address employees motivation and growth more proactively. This survey is based on a 5-point scale (from Strongly Agree to Strongly Disagree). 67.09% employees participated in the survey this year and the satisfaction index is 75.78%. The top 3 strengths identified from the response to this survey are work culture, infrastructure and facilities (office location, safety, provision of food and snacks, provision of free transport) and Policies and processes (flexi timing. Green Persistent Movement, Persistent Foundation, etc.)

The attrition rate for the year under report was 18.35% as against 19.58% for the previous financial year 2010-11. Various employee welfare activities such as sports and cultural events that were organised for and by the employees had wide participation at all levels.

Your Company considers training as an important activity towards human resource development. In this endeavour, several courses, seminars and conferences in technical and domain specific areas were conducted. Your Company also conducted training courses for the benefit of the employees in different areas such as leadership skills specifically for senior middle management and above, team building, personal effectiveness and foreign languages.

Your Company's value proposition is based on providing value to the customers, through innovation and by consistently improving efficiency. With a view to create a resource bandwidth for the future, your Company initiated various measures such as investing in new skills, technologies, business models and training programmes for key technology areas.

Your Company had started Prerana, a woman forum three years back for the development of women leaders in the organization by identifying, nurturing & empowering the leadership abilities in female employees. Year-on-year, 'Prerana' is actively working towards women development. Through Prerana, your Company takes various initiatives such as experience sharing sessions by renowned woman leaders, team building activities, woman focused programs.

Corporate social responsibility

Sustainability, consciousness and actions on environment and climate change and awareness and contributions to reducing social imbalance are the corner stones of our Corporate Social Responsibility.

Your Company conducts its business in a sustainable and socially responsible manner. This principle has been an integral part of your Company's corporate values for last two decades. Your Directors are committed to the safety and health of our employees, protecting the environment and the quality of life in all regions in which your Company operates.

Your Directors are convinced that the Company's continued focus on sustainability will help to grow the long-term value of your Company and to realize our strategic priorities. Corporate social responsibility strengthens the motivation of your Company's employees and their identification with the Company and thereby creates the basis for a strong global team.

To institutionalise the Corporate Social Responsibility initiative of your Company, your Company had formed a Public Charitable Trust by the name "Persistent Foundation" in the financial year 2008-09.

During the year under review. Persistent Foundation was able to create excitement among employees to participate in socially relevant causes. With the co-operation of the employees of your Company, Persistent Foundation has set up several well-defined programs. Persistent Foundation has decided to focus on activities relating to promotion of education, health, community welfare and in speical situations for national calamities, if any. These activities are carried out through projects undertaken by the Foundation with the support of the employees and through reputed social organisations and institutions.

In addition to contributing f 13.13 Million to Persistent Foundation, your Company made donations of f 0.84 Million to various charitable institutions directly. During the year, the Company donated f 13.97 Million, about 1% of the consolidated net profit of the financial year 2010-11.

Report on activities of Persistent Foundation during the financial year 2011-12 is given elsewhere in this Annual Report. Employees' remuneration

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of the employees are set out in the Annexure to the Director Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information, is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Carbon management and sustainable development provides businesses with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving.

Your Company has continued to maximise the use of flat LCD monitors, VRV air-conditioning system, solar energy for hot water, LED logo on buildings, LED lighting in common areas, installation of power management software for desktops, WattMiser system in AHUs for conservation of energy. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. Further, in view of your Company's commitment to green movement, your Company installed a 2.1 MW windmill turbine in Dhule district which became operational in July 2011. Further, your Company has installed additional 2.1 MW windmill turbine in Sangli District which will be operational soon.

As power costs constitute an insignificant part of the total expenses, the financial impact of these measures is not material.

As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on research and development (accrual basis) are as follows

(In Rs Million)

Particulars 2011-12 2010-11

Capital expenditure 8.33 8.80

Revenue expenditure 36.39 38.70

Total research and development expenditure 44.72 47.50

As% of total income 0.53% 0.74%

The particulars of foreign exchange earnings and outgo (accrual basis) are as follows

(In Rs Million)

Particulars 2011-12 2010-11

Revenue

Earnings 7,328.75 5,670.12

Outgo 749.02 637.43

Capital items

Outgo 206.88 103.64

Reappointment of statutory auditors

M/s. Joshi Apte & Co., Chartered Accountants and M/s. S. R. Batliboi & Co., Chartered Accountants, the joint auditors of your Company retire at the Twenty Second Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed. Further in terms of the Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI); and hold a valid certificate issued by Peer Review Board of ICAI. M/s. Joshi Apte & Co. and M/s. S. R. Batliboi & Co. have confirmed that they hold a valid certificate issued by Peer Review Board of ICAI; and have provided a copy of the said certificate to your Company for reference and records.

Fixed Deposits

In terms of the provision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975, the Company has not accepted any fixed deposits during the year under review.

Directors' responsibility statement

The Directors state that

1. in the preparation of the annual accounts, the applicable mandatory Accounting Standards have been followed and there is no material departure;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2012 and of the profit of your Company for that year;

3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. the annual accounts have been prepared on a going concern basis.

Acknowledgments and appreciation

Your Board places on record the help and cooperation received from the Government of India, particularly the Department of Electronics and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and the Reserve Bank of India throughout the financial year.

Your Company extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Visakhapatnam Special Economic Zone, Andhra Pradesh, SEEPZ Special Economic Zone, Andheri, Mumbai, Central Excise and Customs Department, Income Tax Department, Development Commissioners, Pune and Hyderabad, Regional Director of Western Region, Registrar of Companies, Maharashtra, Pune, Sales Tax Department, Securities and Exchange Board of India, High Court of Judicature of Mumbai, office of the Official Liquidator, Collector of Stamps, National Stock Exchange of India Limited, Bombay Stock Exchange Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Pune Municipal Corporation, Maharashtra State Electricity Distribution Company Limited, Andhra Pradesh State Electricity Board, Maharashtra Industrial Development Corporation, Department of Revenue, and Directorate of Industries.

Your Board also extends their thanks to Bank of India, Citibank N.A., State Bank of India, HDFC Bank Limited, Syndicate Bank, Axis Bank, Bank of Tokyo Mitsubishi, Japan, BNP Paribas and its officials for extending their excellent support in all banking related activities.

Your Board takes this opportunity to express their sincere appreciation for the contribution made by employees at all levels. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors Dr. Anand Deshpande

Chairman and Managing Director

June 12,2012

---

Mar 31, 2011

The Directors are pleased to present the Twenty First Annual Report of your Company along with the audited statemenl of accounts for the financial year ended March 31, 2011.

Business overview

The Company completed its first year of listing on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited on April 6, 2011. During the year, your Company was included in BSE - 500 and BSE mid-cap index in the first three months of listing.

The year under report was an excellent year for the growth of the Company and customer traction continued to be good. Your Company showed a significant improvement in business as compared to previous year. The consolidated revenue was USD 170.24 Million during the financial year 2010-11, in comparison with USD 127.31 Million for the financial yea, 2009-10. In Rupee terms, consolidated revenue was Rs 7,758.41 Million for the financial year 2010-11 as compared tc Rs 6,011.56 Million for the financial year 2009-10.

Your Companys focus on four technology thrust areas - cloud computing, analytics, collaboration and mobility have enabled growth of skills in areas that will dominate in the future, ahead of competition. Your Company has established custome, and partner relationships with all the leading software product companies in these areas. Anticipating growth in these areas, your Company is setting up a Technology Consulting Group which will leverage thought leadership in these fou. technology thrust areas. During the year under report, your Company generated specific requests from its customers fo. sell-with partnerships. We believe that there is a significant opportunity to pursue sell-with partnership with prominen! partners and generate new revenue opportunities.

Your Company continues to invest in the sales team having increased the sales team inclusive of pre-sales from 71 tc 108 during the year. The employee support to your Company was excellent as well; and your Company crossed employee mark of 6,000 during the financial year 2010-11. To enhance the international presence and focus within Europe, you, Company set up a subsidiary in France.

Financial results

During the financial year 2010-11, your Company recorded 29.1% growth in revenue in Rupee terms, on a consolidated basis which enabled your Company to maintain its track record of year-on-year growth for the twenty first successive year.

The total unconsolidated income of your Company amounted to Rs 6,453.89 Million (USD 141.63 Million) registering a growth of 25% over the previous year (in Rupee terms). The net profit after tax grew to Rs 1,335.87 Million (USD 29.31 Million), a growth of 14.1 % over the previous year (in Rupee terms).

The highlights of the financial performance for the year ended March 31, 2011 are as under

Particulars (Amount in USD Million (Amount in Rs Million % except EPS and except EPS and Book Change Book Value) Value) 2010-11 2009-10 2010-11 2009-10

Total income 141.63 109.30 6,453.89 5,161.14 25.0%

Profit before interest, depreciation and taxes 40.12 33.16 1,828.25 1,565.63 16.8%

Depreciation 8.67 6.88 395.09 324.95 21.6%

Provision for income tax 2.13 1.49 97.29 70.16 38.7%

Profit after tax 29.31 24.79 1,335.87 1,170.52 14.1%

Transfer to general reserve 11.73 9.92 534.40 468.20 14.1%

Net worth* 166.97 143.03 7,443.37 6,423.58 15.9%

Earnings per share (EPS)

Basic 0.78 0.77 35.41 36.37 -2.6%

Diluted 0.73 0.69 33.40 32.62 2.4%

Book value per equity share 4.08 3.40 186.08 160.59 15.9%

[Conversion Rate USD 1 = X 45.57 for Profit and Loss items; USD 1 = X 44.58 for Balance Sheet items (financial year 2010-11) and USD 1 = X 47.22 for Profit and Loss items; USD 1 = X 44.91 for Balance Sheet items (financial year 2009-10)] *Networth means Equity Share Capital + Reserves and Surplus (including Hedge reserve) + Stock options outstanding.

Consolidated results

During the financial year 2010-11, the total revenue of your Company and its subsidiaries amounted to Rs 7,758.41 Million (USD 170.24 Million) [previous year Rs 6,011.56 Million (USD 127.31 Million)] and the net profit after tax and prior period items amounted to Rs 1,397.37 Million (USD 30.65 Million) [previous year Rs 1,150.24 Million (USD 24.36 Million)].

Liquidity

Your Company continues to be a debt free Company and maintains sufficient cash to meet your Companys strategic objectives. Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2011, your Company had cash and cash equivalents (excluding proceeds from initial public offering of the Company) amounting to Rs 2,567.98 Million as against Rs 1,653.49 Million as at March 31, 2010, which include investments in liquid mutual funds of Rs 2,500.42 Million as against Rs 1,561.73 Million as at March 31, 2010 and Rs 752.30 Million were in fixed deposits with scheduled banks, as against Rs 1.15 Million as at March 31, 2010.

Directors

During the year under review, Mr. Ram Gupta, Independent Director resigned from the directorship of the Company effective from June 8, 2010. Dr. Promod Haque, Non-Executive Director resigned from the directorship of the Company effective from November 1, 2010. The Board places on record its sincere appreciation for the valuable contribution to the growth of the Company made by Mr. Ram Gupta and Dr. Haque during their tenure as Directors of your Company.

During the financial year 2010-11, Mr. Prakash Telang and Mr. Kiran Umrootkar were appointed as Additional Directors both as Independent Members on the Board of your Company with effectfrom August 19,2010. Further, Dr. Dinesh Keskar was appointed as an Additional Director and as an Independent Member on the Board of your Company with effect from October 29, 2010. Mr. Sanjay Kumar Bhattacharyya was appointed as an Additional Director as an Independent Member on the Board of your Company with effectfrom May 12,2011. The term of Mr. Bhattacharyya, Dr. Keskar, Mr. Telang and Mr. Umrootkar as an Additional Director of yourCompany will expire attheTwenty First Annual General Meeting of your Company and they have confirmed their respective eligibility and willingness to accept office of Directorship of your Company, if appointed. The Company has received notices under Section 257 of the Companies Act, 1956, proposing an appointment of Mr. Bhattacharyya, Dr. Keskar, Mr. Telang and Mr. Umrootkar as Directors of the Company. Proposal seeking approval of the Members for the appointment of Mr. Sanjay Kumar Bhattacharyya, Dr. Dinesh Keskar, Mr. Prakash Telang and Mr. Kiran Umrootkar as Directors of the Company have been incorporated in the Notice of the forthcoming Annual General Meeting along with brief details about them.

In the opinion of your Directors, Mr. Bhattacharyya, Dr. Keskar, Mr. Telang and Mr. Umrootkar have the requisite qualifications and experience which would be useful to your Company and would enable them to contribute effectively to your Company in their capacity as Independent Directors of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Mr. Bhattacharyya, Dr. Keskar, Mr. Telang and Mr. Umrootkar as Directors and the Board recommends that the proposed resolution relating to the appointment of Mr. Bhattacharyya, Dr. Dinesh Keskar, Mr. Prakash Telang and Mr. Kiran Umrootkar as Directors of your Company be passed.

Mr. P. B. Kulkarni is liable to retire by rotation at the Twenty First Annual General Meeting and he has confirmed his eligibility and willingness to accept office of Directorship of your Company, if appointed. In the opinion of your Directors, Mr. Kulkarni has the requisite qualifications and experience which could be useful for your Company and would enable him to contribute effectively to your Company in his capacity as Director of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Mr. Kulkarni as Director and the Board recommends that the proposed resolution relating to re-appointment of Mr. Kulkarni as Director of your Company be passed.

The Company has received a notice under Section 257 of the Companies Act, 1956 proposing appointment of Mr. Nitin Kulkarni, Chief Operating Officer as a Director of the Company at the ensuing Annual General Meeting. Consequent to appointment as a Director, being in whole time employment, Mr. Kulkarni will occupy the position of Executive Director of the Company.

In the opinion of your Directors, your Company will continue to benefit from Mr. Nitin Kulkarnis strong delivery leadership and functional experience and would enable him to contribute effectively to your Company in his capacity as Director of your Company. Your Directors, therefore, recommend that the proposed resolution relating to appointment of Mr. Nitin Kulkarni, Chief Operating Officer as a Director of the Company, to be designated as "Executive Director and Chief Operating Officer" be passed.

Committees of the Board

During the year under review, the Board of Directors of your Company had re-constituted the Compensation Committee thereby merging the existing Remuneration Committee and the Compensation Committee of the Board.

The details of the powers and functions, composition and meetings of the Committees of the Board held during the year are given in the report on Corporate Governance forming part of this Annual Report.

Listing of Equity Shares of the Company

The Company had launched the Initial Public Offering in the financial year 2009-10. The issue opened from March 17, 2010 to March 19, 2010. The IPO was subscribed 93.58 times of the issue size. It was a record subscription in last 26 months in the Indian capital market. The allotment of 4,139,000 Equity Shares and transfer of 1,280,706 Equity Shares offered by the Selling Shareholders was made on March 30, 2010 at Rs 310 per share, the upper end of the price band. The Equity Shares were listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited during the year under report on April 6, 2010.

Utilisation of funds received from IPO

Your Company had the following objects of the IPO (a) to establish the development facilities; (b) to capitalise the Subsidiaries for establishing development facilities and meeting fit outs and interior design costs; (c) to procure hardware; (d) to fund expenditure for general corporate purposes and (e) to achieve the benefits of listing on the Stock Exchanges.

Your Company intended to utilise the proceeds of the IPO accruing to the Company, after deducting the Companys share of the underwriting and management fees, selling commissions and other expenses associated with the Issue. The net proceeds collected amounted to Rs 1,200.60 Million which is to be utilised in the manner set forth below

(InRs Million)

Sr. Project Allocated amount Current status of Amount yet to be No. to be utilised from amount utilised from utilised from the Net the Net Proceeds the Net Proceeds Proceeds in future

1. Establishment of development facilities 760.20 203.91 556.29

2. Capitalise our Subsidiaries for establishing 29.59 29.59 - development facilities

3. Procuring hardware 204.50 92.92 111.58

4. Fund expenditure for general corporate 206.31 71.60 134.71 purposes

Total 1,200.60 398.02 802.58

The unutilised IPO funds of Rs 802.58 Million as on March 31, 2011, have been temporarily invested in interest bearing mutual funds. In view of the Companys plan for expanding its operations in SEZ facilities and pursuing non-linear activities, it is felt necessary that more flexibility be accorded for utilisation of unutilised IPO proceeds. Accordingly, the Board of Directors is seeking approval of the members at the ensuing Annual General Meeting for use / deployment of unutilized part of the IPO proceeds for (i) capitalising the subsidiaries of the Company not restricted to establishment of development facilities in SEZ, (ii) establishment of development facilities (iii) procuring software (iv) other general corporate purposes, in addition to the Objects of the Issue stated in the Prospectus of the IPO of the Company.

Acquisition of the OPD Business of Infospectrum

In February 2011, your Company acquired the OPD business of Infospectrum India Private Limited. This acquisition has enabled your Company to further tap the European markets and provide access to the customers from verticals like aerospace and defence, complex manufacturing, maritime, transportation and logistics, satellite imaging and geographic information systems. The acquisition would augment your Companys delivery organization in Nagpur for leveraging its growth plans. With this acquisition, the Companys Nagpur development centre will be 800+ employees with the Company on-boarding 200 experienced software professionals from Infospectrum, India.

Your Company will continue to look out for strategic opportunities for inorganic growth.

Joint Venture with Sprint Nextel Corporation

Your Company formed a joint venture with Sprint Nextel Corporation, the third largest wireless provider in the United States. The joint venture will provide national long distance, international long distance, internet services and managed services in India. Subject to the approval of the Foreign Investment Promotion Board, Sprint International Holding, Inc. will own 74% and your Company will own 26% of the equity in the joint venture company. The joint venture will commence its operation after regulatory approvals are received.

Infrastructure

During the financial year 2010-11, your Company has added a built-up capacity of around 81,000 sq. ft. and added 500 seats. With this, the total owned built-up capacity of your Company in India stands at 8,40,000 sq. ft. and seating capacity of 5,800. The construction of development centre at Nagpur and Hinjawadi is in progress which would increase seating capacity at Nagpur Centre by around 700 seats and at Hinjawadi by around 1,600 seats. The Company also operates in Hyderabad from the leased premises of approx. 1 5,000 sq. ft. having a seating capacity of 140.

The details of owned facilities of your Company are as under

Location Total Built Up Area Existing Built up Total Seating Existing Seating (sq. ft.) Area (sq. ft.) Capacity Capacity

Pune

Panini 10,000 10,000 125 125

Bhageerath 131,000 131,000 560 560

Aryabhata - Pingala 341,000 341,000 2,550 2,550

Hinjawadi* 423,000 200,570 2,980 1,350

Nagpur

IT Tower 32,000 32,000 361 361

New Building* 200,000 90,000 1,200 526

Goa 35,306 35,306 382 382

Total 1,172,306 839,876 8,158 5,854

*Building under construction

Persistent Systems and Solutions Limited (PSSL), wholly owned subsidiary of your Company, in additions to its operations in Special Economic Zone (SEZ) in Hyderabad at a leased premises of approx. 32,000 sq. ft, started its operations in SEZ at Hinjawadi, Pune at a leased premises of approx. 46,000 sq. ft.

Dividend

The Board of Directors recommended that as a policy, the dividend payout ratio be maintained in the range of 10% to 30% of the consolidated net profit after tax.

Your Directors declared Interim Dividend during the financial year 2010-11 in January 2011 at Rs 2.00 per share on the paid up equity share capital. In addition to this, considering that the Company had completed 20 years since its incorporation, an additional Special one-time dividend of Rs 2.00 per Equity Share was paid to the shareholders of the Company along with the first interim dividend. Total outflow on account of interim dividend payout including dividend tax was Rs 186.57 Million out of the net profits of your Company during the year under report.

Your Directors recommend a final dividend of Rs 1.50 per share for the financial year 2010-11. The tax on final dividend provided in the financial statements is Rs 9.97 Million. The payment of final dividend of Rs 1.50 per share is subject to the approval of the shareholders. Thus, including the proposed final dividend, the total dividend recommended for the financial year 2010-11 would be Rs 5.50 per share [previous year Rs 2.50 per share]. Out of the first interim dividend and Special one-time dividend declared in January 2011,Rs 0.26 Lakh was remained unpaid as on March 31, 2011.

Transfer of reserves

Your Company proposes to transfer Rs 534.40 Million to the general reserve out of the amount available for appropriations and an amount of Rs 2,913.39 Million is proposed to be retained in the Profit and Loss Account of your Company.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure A.

No employee has been granted stock options, during the year under review, equal to or exceeding 1 % of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

In line with the guidance note on "Accounting for employee share based payments" issued by the Institute of Chartered Accountants of India and the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 issued by the Securities and Exchange Board of India, your Company has calculated the employee compensation cost using the intrinsic value of stock options. Had compensation been determined under the fair value approach described in the

guidance note, the Companys net income and basic and diluted earnings per share would have reduced to the proforma amounts as under

(InRs Million)

Particulars Year ended March 31, 2011 March 31, 2010

Profit after tax 1,335.87 1,170.52

Add: Employee stock compensation under intrinsic value method 7.11 19.45

Less: Employee stock compensation under fair value method (60.70) (36.06)

Proforma profit 1,282.28 1,153.91 Earnings Per Share Basic

As reported 35.41 36.37

Proforma 33.99 35.85 Diluted

As reported 33.40 32.62

Proforma 32.06 32.16

Weighted average exercise prices and weighted average fair values of options

The Binomial tree valuation model has been used for computing the weighted average fair value considering the following inputs

Particulars March 31, 2011 March 31,2010

Scheme X Scheme IV and VII Scheme IX

Weighted average share price (Rs) 401.41 129.50 137.05

Exercise Price (Rs) 389.05- 403.25 122.24 109.48

Expected Volatility 31.90%, 32.56% 61.52% 61.52%

Historical Volatility 31.52% - 61.52% 31.52% - 61.52% 31.52% - 61.52%

Life of the options granted 7 years 14-15 years 12.5-15 years (Vesting and exercise period)

Dividend Yield 1.00% 1.64% 1.64%

Average risk-free interest rate 7.93%- 8.01% 5.90% 5.90%

Expected dividend rate 40% 58% 58%

Shares held by Independent Directors of the Company are as under

Name of the Director No. of Shares held

Mr. S. K. Bhattacharyya (1) NIL

Dr. Dinesh Keskar (2) NIL

Mr. P. B. Kulkarni 12,550 (*)

Prof. Krithivasan Ramamritham 10,500 (**)

Mr. Prakash Telang (3) NIL

Mr.KiranUmrootkar(3) NIL

(*) Out of these shares, 7,300 shares are held jointly with Mrs. Sudha Prabhakar Kulkarni

(**) Out of these shares, 7,000 shares are held jointly with Mrs. Saraswathi Krithivasan

(1) Appointed as an Additional Director on May 12, 2011

(2) Appointed as an Additional Director on October 29, 2010

(3) Appointed as an Additional Director on August 19, 2010.

During the year under review, pursuant to the resolutions passed by the Compensation Committee of the Board of Directors by way of circulation, employees, including ex-employees and Independent Directors of your Company exercised their stock options for shares which were already vested in their name. During this exercise, 4,94,051 (Four Lakh Ninety Four

Thousand and Fifty One only) Equity shares were transferred from PSPL ESOP Management Trust to the eligible employees, ex-employees and Independent Directors at an aggregate face value of Rs 4.94 Million under various ESOP Schemes of the Company.

Your Company has ten ESOP Schemes under which stock options were granted to various permanent employees. Independent Directors and the employees of its subsidiary companies, details of which are given in Annexure A to this report.

Shares Suspense Account

During the financial year 2010-11, your Company opened an Unclaimed Securities Suspense Account on behalf of the allottees who were entitled for the equity shares under the initial public offering and could not be transferred to the respective allottees due to technical / administrative reasons. Such shares were held in suspense account, which were to be transferred to them in case such allottee approached your Company. The details of equity shares held in an Unclaimed Securities Suspense Account are as follows

Sr. No. Particulars Details

1. Aggregate number of shareholders in the Unclaimed Securities Suspense Account 586 Shareholders lying at the beginning of the financial year 2010-11

2. Aggregate number of the outstanding equity shares in the Unclaimed Securities 24,400 Equity Shares Suspense Account lying at the beginning of the financial year 2010-11

3. Number of shareholders who approached issuer for transfer of shares from Unclaimed 558 Shareholders Securities Suspense Account during the financial year 2010-11

4. Number of shareholders to whom shares were transferred from Unclaimed Securities 558 Shareholders Suspense Account during the financial year 2010-11 (23,840 Equity Shares)

5. Aggregate number of shareholders in the Unclaimed Securities Suspense Account 28 Shareholders lying at the end of the financial year 2010-11

6. Aggregate number of outstanding equity shares in the Unclaimed Securities Suspense 560 Equity Shares Account lying at the end of the financial year 2010-11

Note -Voting rights on the above mentioned equity shares are remained frozen till the rightful owner of such equity shares claims the shares.

Institutional holding

As on March 31, 2011, the total institutional holding in your Company stood at 31.12%.

Subsidiary companies

During the period under report, your Company has five subsidiaries all of which are wholly owned subsidiaries viz. Persistent eBusiness Solutions Limited, India, Persistent Systems, Inc., USA, Persistent Systems Pte. Ltd., Singapore, Persistent Systems and Solutions Limited, India and Persistent Systems France SAS, France.

Subject to required approvals, the Board of Directors of your Company has approved merging of PeBS and PSSL with your Company. Your Company alongwith PeBS and PSSL is taking required steps for completing the merger process.

Persistent Systems France SAS, France

Your Company has been looking at expanding its business in new geographies. Towards this endeavour, the Company incorporated a wholly owned subsidiary Persistent Systems France SAS in France on April 11, 2011. Persistent Systems France SAS was primarily formed to explore the stragetic opportunities available to your Company in France. Persistent Systems France, SAS signed a definitive agreements acquire Agilent Technologies Software Marketing and development business based in Grenoble, France. Subject to customary closing conditions, the acquisition is expected to be completed finalised by August 1,2011.

Persistent eBusiness Solutions Limited

Persistent eBusiness Solutions Limited (PeBS) is an India based wholly owned subsidiary of your Company formed in May 2000. PeBS was formed mainly to provide software development, consultancy and system integration services to India based customers.

During the financial year 2010-11, PeBS recorded a total income of Rs 56.44 Million (USD 1.24 Million) [previous year Rs 63.79 Million (USD 1.35 Million)] and a net profit of Rs 5.09 Million (USD 0.11 Million) [previous year Rs 1.67 Million (USD 0.04 Million)].

Persistent Systems, Inc.

Persistent Systems, Inc., (PSI) is a California C-Corp., a US based wholly owned subsidiary of your Company formed in October 2001. PSI is engaged in providing services to the US based customers.

During the financial year 2010-11, PSI recorded a total income of Rs 2,325.36 Million (USD 51.03 Million) [previous year Rs 1,617.03 Million (USD 34.24 Million)] and a net profit of Rs 21.72 Million (USD 0.48 Million) [previous year net loss of f 18.98 Million (USD 0.40 Million)].

Persistent Systems Pte. Ltd.

Persistent Systems Pte. Ltd. (Co. Reg. No. 200706736G) is a Singapore based wholly owned subsidiary of your Company formed in April 2007. Persistent Systems Pte. Ltd. was primarily formed to concentrate on the business opportunities in ASEAN region.

During the financial year 2010-11, Persistent Systems Pte. Ltd., recorded a total income of Rs 9.87 Million (USD 0.22 Million) [previous year Rs 0.98 Million (USD 0.02 Million)] and a net profit of Rs 1.28 Million (USD 0.03 Million) [previous year net loss ofRs 9.98 Million (USD 0.21 Million)].

Persistent Systems and Solutions Limited

Persistent Systems and Solutions Limited (PSSL) is an India based wholly owned subsidiary of your Company formed in May 2008. PSSL was formed mainly to provide software development services as a unit in SEZ.

During the financial year 2010-11, PSSL recorded a total income of Rs 189.91 Million (USD 4.17 Million) [previous year Rs 66.96 Million (USD 1.42 Million)] and a net profit of Rs 24.40 Million (USD 0.54 Million) [previous year net profit of Rs 7.04 Million (USD 0.1 5 Million)].

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2011 are prepared in accordance with the Accounting Standard 21 (AS - 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, and form part of this Annual Report.

Particulars required as per Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors Report, Auditors Report, Balance Sheet, Profit and Loss Account, Schedules to Accounts and Notes to Accounts of subsidiaries of your Company along with the Balance Sheet of your Company. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. Your Company, therefore, applied to the Ministry of Corporate Affairs, Government of India for an exemption from such attachment as your Company presents the audited consolidated financial statements in the Annual Report.

The Ministry of Corporate Affairs, Government of India, vide its Letter No. 47 / 13 / 2011-CL-lll dated January 20, 2011 granted an exemption to your Company from attaching full financial statements of its four subsidiaries under Section 212 of the Companies Act, 1956.

Further, in terms of general Circular No. 2 / 2011 and No. 5/12/2007-CL-lll dated February 8, 2011, the Ministry of Corporate Affairs has issued a direction under Section 212(8) of the Companies Act, 1956 granting general exemption to all the companies having subsidiaries and which require exemption from attaching the prescribed documents as mentioned in Section 212(1) of the Companies Act, 1956. Such exemption would be available to all the companies after fulfilling certain conditions prescribed in the above mentioned general circular.

Accordingly, the Annual Report does not contain full financial statements of the subsidiary companies. Your Company will make available the audited annual accounts and related information of subsidiary companies, upon request by any shareholder of your Company. These documents will also be available for inspection during the business hours at the registered office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is attached to the consolidated financial statements.

Awards and recognitions

Your Directors are glad to report that the Company continued its tradition of winning various awards. Your Company is proud receipt of the following awards during the period under report.

1. Samsung India Software Operations (SISO) Most Preferred Outsourcing Business Partner Award for the year 2009.

2. Persistents PaxPro Packaging Solution awarded the Consumer Goods Technology Readers Choice Survey Award for the fourth consecutive year.

3. Asias Best Employer Brand Award 2010-11 in the Western Region of India in the category Managing Health at the Workplace.

4. Bloomberg UTVs CXO Awards 2010 - The IT Chapter, in Indias Emerging Software Company of the Year category.

5. Institute of Company Secretaries of India (ICSI) Excellence in Corporate Governance Award 2010.

6. Institute of Chartered Accountants of India (ICAI) Award (Silver Shield) for Excellence in Financial Reporting for the year 2009-10.

7. Titanium Award at the Asset-Triple-A Corporate Awards 2010, for Excellence in Corporate Governance, Social Responsibility and Investor Relations.

8. League of American Communication Professionals (LACP) 2010 Platinum Award and Gold-Debut Award for Persistent Systems Annual Report 2010, and ranked 9th in the top 100 communication designs for the year 2009-10.

Other Significant Events

The following were the significant events during the year under review

1. Your Company celebrated its 20th anniversary on May 30, 2010.

2. Your Company celebrated 5* anniversary of its Goa centre on October 7, 2010.

3. Your Company launched PaxPro, a comprehensive suite of brand asset lifecycle management solutions for consumer product companies. The solutions captures industry best practices for most brand management process, including Artwork & Labelling, Packaging Specifications, Marketing Materials Management, New Product Introduction and Print Management.



Corporate governance

A separate section on "Corporate Governance" with a detailed compliance report thereon forms part of this Annual Report.

Voluntary secretarial compliance certificate

Your Company annually obtains a certificate from the Whole-Time Practicing Company Secretary on a voluntary basis for compliance of the provisions of the Companies Act, 1956. The same forms part of this Annual Report. The Institute of Company Secretaries of India, vide its letter dated February 15, 2011, appreciated the initiative taken by your Company, for obtaining the Voluntary Secretarial Compliance Certificate.

Management discussion and analysis

Report on Management Discussion and Analysis based on audited, consolidated financial statements for the financial year 2010-11 forms part of this Annual Report.

Outlook

Your Company is on the growth path.

Today, technology disruptions are forcing customers to either rebuild their products or create next-generation products to support the changes in the way businesses are governed and technology is being adopted.

The impact of Cloud is already being felt by the industry with the shift from software as a product to software as a service. According to IDC, Cloud Computing is a $ 166.2 Billion dollar market and is forecasted to grow by 26% annual rate between 2010 and 2013. Traditional ISVs lost between 10-20% of their revenue in the recent recession, while software-as-a-service (SaaS) based ISVs grew by 20% in the same period. Switching to a Cloud-based infrastructure is critical for ISVs as virtually every CIO today is investigating how to leverage Cloud-based applications.

Technology areas such as cloud computing, mobility, analytics and collaboration are set to redefine the market and will see your Company pay a vital role in delivering efficient, cost effective, time-to-market products.

Human resource management

Your Company continues to attract the best of talent in the industry. Your Company recruits from various engineering colleges in India for fresh talent. During the financial year 2010-11, your Company recruited about 3,403 employees on a consolidated basis (3,009 employees on standalone basis) consisting of regular employees. Trainees/ Interns, Consultants, Business consultants. Contract consultants consisting of (technical and non-technical) professionals as a part of growth plan during the financial year ended March 31, 2011, including several qualified and experienced professionals returning from USA. This steady stream of US returning professionals has provided a very strong middle management group to your Company.

Your Company had 6,360 personnel (including trainees and associates) on a consolidated basis (5,689 personnel on standalone basis) as on March 31, 2011. The technical strength at present is 5,960 employees which comprise 5,248 graduates (Engineers and Technicians), 694 post graduates and 18 PhDs on a consolidated basis.

During the period under report, your Company welcomed a batch of around 448 new graduates in July 2010 through campus recruiting students with engineering background across the Company locations.

Your Company considers training as an important activity towards human resource development. In this endeavour, several courses, seminars and conferences in technical and domain specific areas were conducted. Your Company also conducted training courses for the benefit of the employees in different areas such as leadership skills specifically for Grade 9.x and above, team building, personal effectiveness and foreign languages. The 2"" batch of around 38 employees successfully completed their Masters of Engineering degree program from the Post Graduate program offered at your Company in collaboration with the Birla Institute of Technology, Pilani during the year ended March 31,2011.

With a view to drive competency improvements, upgrade skills across the organization, make employees more versatile for moving across projects, your Company started the Assessment Center. The Assessment Centre also helps establish a common reference within the organization for various skills and grades and provide additional unbiased input to the appraisal system and career growth. The Assessment Centre currently offers technical assessments for developers in grade 3.x and leads in 5.x, in different skills and technologies.

Your Companys value proposition is based on providing value to our customers, through innovation and by consistently improving efficiency. With a view to create the resource bandwidth for the future, your Company initiated various measures such as investing in new skills, technologies, business models and training programmes for key technology areas.

During the period under report, your Company conducted an Employee Satisfaction Survey which helped your Company address employees motivation and growth more proactively.

The attrition for the year under report was 19.58% as against 13.65% for the previous financial year 2009-10.

Various employee welfare activities such as sports and cultural events that were organised for and by the employees had wide participation at all levels.

Corporate social responsibility

Corporate Social Responsibility encompasses within itself sustainability which means creating an awareness of climate change and social imbalance and demanded suitable action. The Company was promptly responsive to the call. Be it in infrastructure building or social initiatives, conservation, conscience and commitment became Companys watchwords.

Your Company conducts its business in a sustainable and socially responsible manner. This principle has been an integral part of your Companys corporate values for last two decades. Your Directors are committed to the safety and health of our employees, protecting the environment and the quality of life in all regions in which your Company operates.

Your Directors are convinced that the Company continued focus on sustainability will help to grow the long-term value of your Company and to realize our strategic priorities. Corporate social responsibility strengthens the motivation of your Companys employees and their identification with the Company- and thereby creates the basis for a strong global team.

To institutionalise the Corporate Social Responsibility initiative of your Company, your Company had formed a Public Charitable Trust by the name "Persistent Foundation" in the financial year 2008-09.

During the year under review, the Persistent Foundation was able to create excitement among employees to participate in socially relevant causes. In consultation with employees of your Company, the Foundation has set up a well-defined program. Currently, the Foundation has decided to focus on the organisations and institutions that are engaged in activities relating to promotion of education, health, community welfare and for national calamities, if any.

In addition to contributing Rs 10.77 Million to the Foundation, your Company made donations of Rs 0.73 Million to various charitable institutions during the year, aggregating to Rs 11.50 Million, about 1% of the consolidated net profit of the financial year 2009-10.

Report on CSR activities of Persistent Foundation during the financial year 2010-11 is given elsewhere in this Annual Report.

Employees remuneration

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of the employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information, is being sent to all the members of the Company and other entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988. Your Company

strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Carbon management and sustainable development provides businesses with some of the greatest opportunities towards sustainability. Your Company reduced carbon footprints by taking energy conservation measures. Your Company continues to take various measures on energy saving measures.

Your Company has continued to maximise the use of flat LCD monitors, VRV air-conditioning system, solar energy for hot water, LED logo on buildings, LED lighting in common areas, installation of power management software for desktops, WattMiser system in AHUs for conservation of energy. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. Further, in view of your Companys commitment to green movement, your Company initiated the purchase of wind turbine.

During the previous financial year 2009-10, the Bureau of Energy (BEE), Ministry of Power, Government of India, New Delhi implemented the rating programme for the office buildings on the basis of 1 -5 star scale, with 5 star buildings being the most efficient in energy efficiency. As per the survey declared by BEE on November 12, 2009, BEE identified 25 energy efficient office buildings from all over India for Star ratings. Two of the office buildings at Pune were qualified for BEE rating of which Bhageerath premises of your Company secured two stars rating.

As power costs constitute an insignificant part of the total expenses, the financial impact of these measures is not material. As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The Companys internal R&D unit has been recognized as R&D centre by Department of Scientific and Industrial Research (DSIR) during the year under review.

The particulars of expenditure on research and development (accrual basis) are as follows

(In Rs. Million)

Particulars 2010-11 2009-10

Capital expenditure 8.80 -

Revenue expenditure 38.70 52.12

Total research and development expenditure 47.50 52.12

As % of total income 0.74% 1

The particulars of foreign exchange earnings and outgo (accrual basis) are as follows

(In Rs. Million)

Particulars 2010-11 2009-10

Revenue

Earnings 5,607.12 4,743.64

Outgo 637.43 405.24

Capital items

Outgo 103.64 107.67

Reappointment of statutory auditors

M/s. Joshi Apte & Co., Chartered Accountants and M/s. S. R. Batliboi & Co., Chartered Accountants, the joint auditors of your Company retire at the Twenty First Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed. Further in terms of Clause 41 (1 )(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI); and hold a valid certificate issued by Peer Review Board of ICAI. M/s. Joshi Apte & Co. and M/s. S. R. Batliboi & Co. have confirmed that they hold a valid certificate issued by Peer Review Board of ICAI; and have provided a copy of the said certificate to your Company for reference and records.

Fixed deposit

In terms of the provision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975, the Company has not accepted any fixed deposits during the year under review.

Directors responsibility statement The Directors state that

1. in the preparation of the annual accounts, the applicable mandatory Accounting Standards have been followed and there is no material departure;

2. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2011, and of the profit of your Company for that year;

3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. the annual accounts have been prepared on a going concern basis.

Acknowledgments and appreciation

Your Board places on record the help and cooperation received from the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and the Reserve Bank of India throughout the financial year.

Your Company extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pune, Nagpur, Goa, Hyderabad, Central Excise and Customs Department, Income Tax Department, Development Commissioners, Pune and Hyderabad, Registrar of Companies, Maharashtra, Pune, Sales Tax Department, Securities and Exchange Board of India, the National Stock Exchange of India Limited, the Bombay Stock Exchange Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Maharashtra State Electricity Distribution Company Limited, Andhra Pradesh State Electricity Board, Maharashtra Industrial Development Corporation, Department of Revenue and Ministry of Information Technology.

Your Board also extends their thanks to Bank of India, Citibank NA, State Bank of India, HDFC Bank Limited, Syndicate Bank, Axis Bank, Bank of Tokyo Mitsubishi, Japan, BNP Paribas and its officials for extending their excellent support in all banking related activities.

Your Board takes this opportunity to express their sincere appreciation for the contribution made by employees at all levels. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande

Chairman and Managing Director

Pune, June 13, 2011

---

Mar 31, 2010

The Directors are pleased to present the Twentieth Annual Report of your Company along with the audited statement of accounts for the financial year ended March 31, 2010.

Initial public offering (IPO) of your Company

Initial Public Offer (IPO) was the most significant achievement of the financial year 2009-10. The IPO comprised of 5,419,706 equity shares of Rs. 10 each for cash consisting of a fresh issue of 4,139,000 equity shares and an offer for sale of 1,280,706 equity shares by the selling shareholders. The issue opened from March 17, 2010 to March 19, 2010 at a price band of Rs. 290 to Rs. 310 per Equity Share. The IPO was subscribed 93.58 times of the Issue size. It was a record subscription in last 26 months in the Indian capital market. The allotment of 4,139,000 Equity Shares and the transfer of 1,280,706 Equity Shares was made on March 30, 2010 at Rs. 310 per share, the upper end of the price band. The Equity Shares were listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited on April 6, 2010.

Your Board would like to record its sincere thanks to the investors for the overwhelming response to the IPO of your Company.

Business overview

The business during the initial parts of the financial year 2009-10 was very challenging. After two quarters with negative growth to close the financial year 2008-09, the year began in April 2009 with market uncertainties. Due to the difficult and challenging business situation, many customers of your Company had reduced their budgets and your Company had to provide discounts to help customers during their difficult period. During this period, the senior executives of your management team met with more than 200 CEOs and used the opportunity to validate business model of your Company and to explore possible challenges that customers of your Company would like to address. Gesture of the Senior Executives of your Company of helping customers during the difficult period will strengthen the relationships with customers. After two difficult quarters, the business improved during the second half of the year.

After having interacted with the customers of your Company, the management team is convinced that your Company must continue to focus on outsourced software product development. During the last two years, your Company has invested in developing business in four thrust areas - Cloud Computing, Analytics, Enterprise Collaboration and Enterprise Mobility.

Due to adverse conditions in the global financial markets, the consolidated revenue in USD terms was flat at USD 127.31 Million during the year, in comparison with USD 127.84 Million in the previous year. However, in Rupee terms, it has gone up from Rs. 5,938.31 Million in financial year 2008-09 to Rs. 6,011.56 Million in financial year 2009-10.

Your Company continues to invest in the sales team and has staffed the team with experienced people during the year to ensure that your Company’s focus on exports continues. During the year under report, your Company has expanded its activities in Europe and Canada.

Your Directors continued to focus on margin costs and improving operational parameters. Even in this challenging year, your Company continues to be debt free with a cash and cash equivalents (including investments in mutual funds) of Rs. 3,333.60 Million as at March 31, 2010.

Financial results

During the financial year 2009-10, your Company recorded small growth in revenue in Rupee terms, on a consolidated basis, despite challenging business environment for most part of the year under report. The growth, albeit small, was able to allow the Company to maintain the track record of year-on-year growth for the 20th successive year.

The total income of your Company amounted to Rs. 5,161.14 Million (USD 109.30 Million) registering a marginal drop of 2% over the previous year (in Rupee terms). The net profit after tax and extra ordinary items grew to Rs. 1,170.52 Million (USD 24.79 Million), a growth of 100% over the previous year (in Rupee terms).

The highlights of the financial performance for the year ended March 31, 2010 are as under

(Amount in USD Million (Amount in Rs. Million %

Particulars except EPS and except EPS and Change

Book Value) Book Value)

2009-10 2008-09 2009-10 2008-09

Total income 109.30 113.47 5,161.14 5,270.68 (2)

Profit before

interest,

depreciation

and taxes 33.16 19.53 1,565.63 907.05 73

Depreciation 6.88 6.34 324.95 294.72 10

Provision for

income tax 1.49 0.25 70.16 11.56 507

Net profit for the

year before

exceptional and

prior period items 24.79 12.94 1,170.52 600.77 95

Net profit for the

year after

exceptional and

prior period items 24.79 12.62 1,170.52 586.04 100

Transfer to

general reserve 9.92 5.05 468.20 234.40 100

Net worth* 143.03 77.85 6,423.58 3,946.77 63

Earnings per

share (basic) (EPS)

after exceptional

and prior period

items 0.77 0.39 36.37 18.34 98

before exceptional

and prior period

items 0.77 0.40 36.37 18.80 93

Earnings per share

(diluted) (EPS)

after exceptional

and prior period

items 0.69 0.35 32.62 16.34 100

before exceptional

and prior period

items 0.69 0.36 32.62 16.75 95

Book value per

equity share 3.40 2.37 160.59 110.06 46

[Conversion Rate USD 1 = Rs. 47.22 for Profit and Loss items; USD 1 = Rs. 44.91 for Balance Sheet items (financial year 2009-10) and USD 1 = Rs. 46.45 for Profit and Loss items; USD 1 = Rs. 50.70 for Balance Sheet items (financial year 2008-09)]

*Networth means Equity Share Capital + Reserves and Surplus (including Hedge reserve) + Stock options outstanding.

On a consolidated basis, the total revenue of your Company and its subsidiaries amounted to Rs. 6,011.56 Million (USD 127.31 Million) [previous year Rs. 5,938.31 Million (USD 127.84 Million)] and the net profit after tax and exceptional items amounted to Rs. 1,150.24 Million (USD 24.36 Million) [previous year Rs. 660.92 Million (USD 14.24 Million)].

Liquidity

Your Company continues to be a debt free company and maintains sufficient cash to meet your Company’s strategic objectives. Your Company has ensured a balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2010, your Company had cash and cash equivalents amounting to Rs. 3,333.60 Million as against Rs. 940.02 Million as at March 31, 2009, which include investments in liquid mutual funds of Rs. 1,561.73 Million as against Rs. 871.09 Million as at March 31, 2009.

Dividend

The Board of Directors recommended that as a policy, the dividend payout ratio be maintained in the range of 10% to 30% of the consolidated net profit after tax.

Your Directors declared Interim Dividend twice during the financial year 2009-10. First Interim Dividend was declared in November 2009 at Re. 0.50 per share on the paid up equity share capital. Your Directors declared second interim dividend in April 2010 at Rs. 1.50 per share on the paid up share capital. The total interim dividend declared by your Directors for the financial year 2009-10 was Rs. 2.00 per share amounting to Rs. 77.93 Million and dividend tax paid was Rs. 13.24 Million. Total outflow on account of interim dividend payout including dividend tax was Rs. 91.17 Million out of the net profits of your Company during the year under report.

Your Directors recommend a final dividend of Re. 0.50 per share for the financial year 2009-10. The tax on final dividend provided in books is Rs. 3.40 Million. The payment of final dividend of Re. 0.50 per share is subject to the approval of the shareholders. Thus, including the proposed final dividend, the total dividend recommended for the financial year 2009-10 would be Rs. 2.50 per share [previous year Re. 1 per share]. Out of the second interim dividend declared in April 2010, Rs. 165,700.50 was remained unpaid as on June 4, 2010.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the stock options granted under various employee stock option schemes are annexed to this Report as Annexure A.

No employee has been granted stock options, during the year under review, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

In line with the guidance note on Accounting for employee share based payments" issued by the Institute of Chartered Accountants of India and the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 issued by the Securities and Exchange Board of India, your Company has calculated the employee compensation cost using the intrinsic value of stock options. Had compensation been determined under the fair value approach described in the guidance note, the Company’s net income and basic and diluted earnings per share would have reduced to the proforma amounts as under.

(In Rs. Million)

Particulars March 31, 2010 March 31, 2009

Profit after tax and

exceptional items as reported 1,170.52 586.04

Add: Employee stock compensation

under intrinsic value method 19.45 14.83

Less: Employee stock compensation

under fair value method (36.06) (44.08)

Proforma profit 1,153.91 556.79

Earnings Per Share Basic

- As reported 36.37 18.34

- Proforma 35.85 17.43

Diluted

- As reported 32.62 16.34

- Proforma 32.16 15.53

Weighted average exercise prices and weighted average fair values of options

The weighted average fair value of stock options granted during the year was Rs. 48.93. The Binomial tree valuation model has been used for computing the weighted average fair value considering the following inputs.

March 31, 2010

Particulars Scheme IV and VII Scheme IX

Weighted average

share price (Rs.) 129.50 137.05

Exercise price (Rs.) 122.24 109.48

Expected volatility 61.52% 61.52%

Historical volatility 31.52% - 61.52% 31.52% - 61.52%

Life of the options granted

(vesting and exercise period) 14-15 years 12.50-15 years

Dividend yield 1.64 1.64

Average risk-free interest rate 5.90% 5.90%

Expected dividend rate 58.00% 58.00%

Shares held by Independent Directors of the Company as on March 31, 2010 are as under.

Name of the Director No. of Shares held

Mr. Ram Gupta# NIL

Mr. P. B. Kulkarni 10,800 (*)

Prof. Krithivasan Ramamritham 10,500 (**)

# Ceased to be a Director with effect from June 8, 2010.

(*) Out of these shares, 7,300 shares are held jointly with Mrs. Sudha Prabhakar Kulkarni.

(**) Out of these shares, 7,000 shares are held jointly with Mrs. Saraswathi Krithivasan.

During the year under review, pursuant to the resolutions passed by the Compensation Committee of the Board of Directors by way of circulation, 699 employees, including ex-employees and Independent Directors of your Company exercised their stock options for shares that were already vested in the month of February 2010. During this exercise, 2,200,984 (Twenty Two Lakh Nine Hundred and Eighty Four) Equity shares were transferred from PSPL ESOP Management Trust to the eligible employees, ex-employees and Independent Directors at an aggregate value of Rs. 103.64 Million under various ESOP Schemes of the Company.

Your Company has nine ESOP Schemes under which shares were granted to various permanent employees Independent Directors and the employees of its Subsidiary Companies, details of which are given elsewhere in this Annual Report.

Subsidiary companies

As on March 31, 2010, your Company has four subsidiaries all of which are wholly owned subsidiaries viz. Persistent eBusiness Solutions Limited, India, Persistent Systems, Inc., USA, Persistent Systems Pte. Ltd., Singapore and Persistent Systems and Solutions Limited, India.

Persistent eBusiness Solutions Limited

Persistent eBusiness Solutions Limited (PeBS) is an India based wholly owned subsidiary of your Company formed in May 2000. PeBS was formed mainly to provide software development, consultancy and system integration services to India based customers.

During the financial year 2009-10, PeBS recorded a total income of Rs. 63.79 Million (USD 1.35 Million) [previous year Rs. 85.09 Million (USD 1.83 Million)] and a net profit of Rs. 1.67 Million (USD 0.04 Million) [previous year Rs. 4.53 Million (USD 0.10 Million)].

Persistent Systems, Inc.

Persistent Systems, Inc., (PSI) is a California C-Corp., a US based wholly owned subsidiary of your Company formed in October 2001. PSI is engaged in providing services to the US based customers.

During the financial year 2009-10, PSI recorded a total income of Rs. 1,621.54 Million (USD 34.34 Million) [previous year Rs. 1,226.17 Million (USD 26.40 Million)] and a net loss of Rs. 18.98 Million (USD 0.40 Million) [previous year net profit of Rs. 61.65 Million (USD 1.33 Million)].

Persistent Systems Pte. Ltd.

Persistent Systems Pte. Ltd. (Co. Reg. No. 200706736G) is a Singapore based wholly owned subsidiary of your Company formed in April 2007. Persistent Systems Pte. Ltd., was primarily formed to concentrate on the business opportunities in ASEAN region.

During the financial year 2009-10, Persistent Systems Pte. Ltd., recorded a total income of Rs. 0.98 Million (USD 0.02 Million) [previous year Rs. 2.56 Million (USD 0.06 Million)] and a net loss of Rs. 9.98 Million (USD 0.21 Million) [previous year net profit of Rs. 0.39 Million (USD 0.01 Million)].

Persistent Systems and Solutions Limited

Persistent Systems and Solutions Limited (PSSL) is an India based wholly owned subsidiary of your Company formed in May 2008. PSSL was formed mainly to provide software development services as a unit in SEZ.

During the financial year 2009-10, PSSL recorded a total income of Rs. 66.96 Million (USD 1.42 Million) [previous year Rs. 35.25 Million (USD 0.76 Million)] and a net profit of Rs. 7.04 Million (USD 0.15 Million) [previous year Rs. 8.33 Million (USD 0.18 Million)].

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2010 are prepared in accordance with the Accounting Standard 21 (AS – 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, and form part of this Annual Report.

Particulars required as per section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors Report, Auditors’ Report, Balance Sheet, Profit and Loss Account, Schedules to Accounts and Notes to Accounts of subsidiaries of your Company along with the Balance Sheet of your Company. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. Your Company, therefore, applied to the Ministry of Corporate Affairs, Government of India for an exemption from such attachment as your Company presents the audited consolidated financial statements in the Annual Report.

The Ministry of Corporate Affairs, Government of India, vide its letter No. 47 / 13 / 2010–CL–III dated March 26, 2010 granted an exemption to your Company from attaching full financial statements of its four subsidiaries under Section 212 of the Companies Act, 1956.

Accordingly, the Annual Report does not contain full financial statements of the subsidiary companies. Your Company will make available the audited annual accounts and related information of subsidiary companies, upon request by any shareholder of your Company. These documents will also be available for inspection during the business hours at the registered office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is attached to the consolidated financial statements.

Key recruitments

In order to be aligned with the market demands and to help grow the business of your Company, the Company effected the following organizational changes at senior level with effect from April 1, 2010.

1. Dr. Srikanth Sundararajan, previously Chief Operating Officer and based out of Pune, will now lead the key account managers for relationships with strategic customers. In addition, he will track technology and will be responsible for potential strategic acquisition activities that the Company would consider in future. He will be based in New York, USA.

2. Mr. Nitin Kulkarni, previously Executive Vice President - Operations, has taken over as the Chief Operating Officer of your Company in place of Dr. Srikanth Sundararajan.

3. Mr. T. M. Vijayaraman, previously Chief Technology Officer and based in San Jose, California, will lead the newly created Persistent Laboratories to head the research and will be based in Pune, India.

4. Dr. Hemant Pande, previously Executive Vice President – Operations will be responsible for planning, ERP implementation and MIS, in place of Mr. Prashant Raje.

Significant events in the year 2009-10 apart from Initial Public Offering of the Company.

1. Your Company acquired certain assets of Paxonix, Inc., a subsidiary of MeadWestvaco Corporation through the wholly owned subsidiary of your Company viz. Persistent Systems, Inc.

2. Your Company received DIN EN ISO 9001:2008 certification for ChemLMS-LIMS product development processes.

3. Your Company and its wholly owned subsidiary, Persistent Systems and Solutions Limited ("PSSL") received ISO 9001:2008 certificate post certification audits by M/s. TUV Nord. The scope of certification was "Software Product Design, Development, Testing, Enhancement and Support; including Enabling Functions".

Awards and recognitions

Your Directors are glad to report that the Company continued its tradition of winning the following awards during the financial year 2009-10.

1. Awarded as "Most Preferred Outsourcing Business Partner" for the year 2009 by Samsung India Software Operations (SISO).

2. Your Company featured in the Deloitte Technology Fast 500 Asia Pacific 2009 Ranking.

3. Your Company ranked amongst Top Twelve IT Outsourcing Vendor of manufacturing and supply chain services to the life sciences market.

4. Your Company won the ICAI Award for Excellence in Financial Reporting for second consecutive year. The Annual Report of the Company for the year ended March 31, 2009, was adjudicated as a commendable entry amongst the entries received under the Category ‘Information Technology, Communication and Entertainment enterprises’.

Directors

During the year under review, Mr. S. P. Deshpande, Founder Director retired from the day-to-day activities of the Company effective from November 1, 2009 (end of working hours of October 31, 2009). Mr. Deshpande continues to act as a Non- Executive Director of your Company. The Board places on record its sincere appreciation of the valuable contribution to the growth of the Company made by Mr. Deshpande during his tenure as an Executive Director of your Company ever since inception.

Mr. S. P. Deshpande and Dr. Promod Haque, Directors are liable to retire by rotation at the Twentieth Annual General Meeting and they have confirmed their eligibility and willingness to accept office of Directorship of your Company, if reappointed. A brief profile of Mr. Deshpande and Dr. Haque forms part of the notice of the ensuing Annual General Meeting.

In the opinion of your Directors, Mr. Deshpande and Dr. Haque have the requisite qualifications and experience which would be useful to your Company and would enable them to contribute effectively to your Company in their respective capacity as directors of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Mr. Deshpande and Dr. Haque as Directors and recommends that the proposed resolution relating to the reappointment of Mr. Deshpande and Dr. Haque as Directors of your Company be passed.

Mr. Ram Gupta resigned as a member of the Board on June 8, 2010. The Board places on record its appreciation of the services rendered by Mr. Ram Gupta.

Committees of the Board

During the year under review, in addition to the existing Committees of the Board, the Board of Directors of your Company had constituted the IPO Committee of the Board and the Selection Committee for the special purpose.

The IPO Committee was mainly formed for IPO related matters which include decision on the timing, the terms and conditions of the issue of equity shares in the IPO, appointment of all intermediaries in relation to the IPO and finalise all the agreements in relation to the IPO.

The details of the membership and meetings held during the year are given in the report on Corporate Governance forming part of this Annual Report.

After successful completion of the IPO, this Committee was dissolved.

Further, in terms of Directors Relatives (Office or Place of Profit) Rules, 2003, the Board of Directors constituted the Selection Committee to consider the proposal for enhancement in the limits for payment of remuneration within which the Board of Directors may grant increments from time to time to Mrs. Chitra Buzruk, relative of Dr. Anand Deshpande, Chairman and Managing Director and Mr. S. P. Deshpande, Director for her holding and continuing to hold office or place of profit.

The details of the membership and meetings held during the year under review are given in the report on Corporate Governance forming part of this Annual Report.

Corporate governance

A separate section on "Corporate Governance" with a detailed compliance report thereon forms part of this Annual Report.

Voluntary secretarial compliance certificate

Your Company annually obtains a certificate from the whole time Practicing Company Secretary on a voluntary basis for compliance of the provisions of the Companies Act, 1956. The same forms part of this Annual Report. The Institute of Company Secretaries of India, vide its e-mail dated September 30, 2009, appreciated the initiative taken by your Company, for obtaining the Voluntary Secretarial Compliance Certificate.

Management discussion and analysis

Report on Management Discussion and Analysis based on audited, consolidated financial statements for the financial year 2009-10 forms part of this Annual Report.

Outlook

Business outlook for your Company continues to be strong. The thrust areas that we are working in Cloud Computing, Analytics, Enterprise Mobility and Enterprise Collaboration continue to be important in the market. Your Company has established partnerships with most of the prominent vendors in these areas and this should help for growing your Companys business in these areas.

Your Company continues to explore end-of-life opportunities from existing customers.

Human resource management

Your Company continues to attract the best talent available in the industry. Your Company recruits from various engineering colleges in India for fresh talent. During the financial year 2009-10, your Company recruited about 1,511 employees on a consolidated basis (1,313 employees on standalone basis) consisting of Regular employees, Trainees/ Interns, Consultants, Business consultants, Contract consultants consisting of (technical and nontechnical) professionals as a part of growth plan during the financial year ended March 31, 2010, including several qualified and experienced professionals returning from USA. This steady stream of US returning professionals has provided a very strong middle management group to your Company.

Your Company crossed the strength of 4,662 personnel (including trainees and associates) on a consolidated basis (4,323 personnel on standalone basis) during the year under report. The technical strength at present is 4,346 employees which comprises 2,968 graduates (Engineers and Technicians), 1,361 post graduates and 17 PhDs on a consolidated basis.

Your Company considers training as an important activity towards human resource development. In this endeavour, several courses, seminars and conferences in technical and domain specific areas were conducted. Your Company also conducted training courses for the benefit of the employees in different areas such as leadership skills, team building, personal effectiveness and foreign languages. The first batch of around 30 employees successfully completed their Masters of Engineering degree programme from the Post Graduate programme offered at your Company in collaboration with the Birla Institute of Technology, Pilani.

Your Companys value proposition is based on providing value to our customers, through innovation and by consistently improving efficiency. With a view to create the resource bandwidth for the future, your Company initiated various measures such as investing in new skills, technologies, business models and training programmes for key technology areas.

During the period under report, your Company conducted an Employee Satisfaction Survey which helped your Company address employees matter more proactively.

The attrition for the year under report was 13.65% as against 13.54% for the previous financial year 2008-09. Various employee welfare activities such as sports and cultural events that were organised for and by the employees had wide participation at all levels.

Corporate social responsibility

Your Company recognises its social obligations. To institutionalise the Corporate Social Responsibility initiative of your Company, your Company had formed a Public Charitable Trust by the name “Persistent Foundation” in the financial year 2008-09.

During the year under review, the Persistent Foundation was able to create excitement among employees to participate in socially relevant causes. In consultation with employees of your Company, the Foundation has set up a well-defined programme. The Foundation has decided to focus on the organisations and institutions that are engaged in activities relating to promotion of education, health, community welfare and for national calamities, if any.

In addition to contributing Rs. 5.66 Million to the Foundation, your Company made donations of Rs. 0.69 Million to various Charitable Institutions. During the year the Company donated Rs. 6.35 Million, about 1% of the consolidated net profit of the financial year 2008-09. Report on activities of Persistent Foundation during the financial year 2009-10 is given elsewhere in this Annual Report.

Employees remuneration

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the Shareholders of the Company, excluding the statement of particulars of employees referred to hereinbefore. Any Shareholder interested in obtaining a copy of the said statement may write to the Company Secretary of your Company at the Registered Office of your Company.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo Your Company has made the necessary disclosures in this Report in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Company (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Your Company has continued to maximise the use of flat LCD monitors, VRV air-conditioning system, solar energy for hot water and LED logo on the buildings for conservation of energy.

During the year, the Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India, New Delhi implemented the rating programme for the office buildings on the basis of 1-5 star scale, with 5 star buildings being the most efficient in energy efficiency. As per the survey declared by BEE on November 12, 2009, BEE identified 25 energy efficient office buildings from all over India for Star ratings. Two of the office buildings at Pune were qualified for BEE rating; "Bhageerath premises of your Company secured two stars.

As power costs constitute an insignificant part of the total expenses, the financial impact of these measures is not material. As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on research and development (accrual basis) are as follows.

(In Rs. Million)

Particulars 2009-10 2008-09

Capital expenditure - -

Revenue expenditure 52.12 56.10

Total research and development

expenditure 52.12 56.10

As % of total income 1 1

The particulars of foreign exchange earnings and outgo (accrual basis) are as follows

(In Rs. Million)

Particulars 2009-10 2008-09

Revenue

Earnings 4,743.64 5,030.19

Outgo 405.24 397.13

Capital items

Outgo 107.67 340.97

Reappointment of statutory auditors

M/s. Joshi Apte & Co., Chartered Accountants and M/s. S. R. Batliboi & Co., Chartered Accountants, the joint auditors of your Company retire at the Twentieth Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed. Further in terms of the Clause 41(1)(h) of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the Institute of Chartered Accountants of India (ICAI); and hold a valid certificate issued by Peer Review Board of ICAI. M/s. Joshi Apte & Co. and M/s. S. R. Batliboi & Co. have confirmed that they hold a valid certificate issued by Peer Review Board of ICAI; and have provided a copy of the said certificate to your Company for reference and records.

Directors responsibility statement The Directors state that

1. in the preparation of the annual accounts, the applicable mandatory Accounting Standards have been followed and there is no material departure;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2010 and of the profit of your Company for that year;

3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. the annual accounts have been prepared on a going concern basis. Acknowledgments

Your Board places on record the help and cooperation received from the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Corporate Affairs, the Ministry of Finance, the Ministry of Commerce and the Reserve Bank of India throughout the financial year.

Your Company extends its sincere thanks to the officers and staff of the Software Technology Parks of India – Pune, Nagpur, Goa, Hyderabad, Central Excise and Customs Department, Income Tax Department, Registrar of Companies, Maharashtra, Pune, Sales Tax Department, Securities and Exchange Board of India, the National Stock Exchange of India Limited, the Bombay Stock Exchange Limited, Central Depository Services (India) Limited, National Securities Depository Limited, Maharashtra State Electricity Distribution Company Limited, Maharashtra Industrial Development Corporation, Department of Revenue and Ministry of Information Technology.

Your Board also extends their thanks to Bank of India, Citibank N.A., State Bank of India, HDFC Bank Limited, Syndicate Bank, Bank of Tokyo Mitsubishi, Japan and its officials for extending their excellent support in all banking related activities. Your Board takes this opportunity to express their sincere appreciation for the contribution made by employees at all levels. The consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors Dr.Anand Deshpande Pune,June 10,2010 Chairman and Managing Director

---

Mar 31, 2009

The Directors are pleased to present the Nineteenth Annual Report of your Company alongwith the audited statement of accounts for the financial year ended March 31, 2009.

The year under report was largely overshadowed by the global economic crisis and recession. Amidst these challenges, the revenue on consolidated basis, grew in US Dollar terms by 21% year-on-year to USD 127.84 Million and in Rupee terms the growth was 40%, year-on-year amounting to Rs. 5,938.31 Million. This increase was attributed to the growth in business with your Companys existing customers and business from new customers as well.

Your Directors are taking all efforts to rationalise costs and improve operational parameters. Even in this challenging year, your Company continues to be debt free with a cash and cash equivalents of Rs. 940.02 Million.

During the year under report, Mr. Hari Haran joined Persistent Systems, Inc., as the President and will be responsible for overall Sales and Marketing. Your Company continued to make investment in sales and marketing. The sales team at Persistent Systems, Inc., was further strengthened with the appointment of Mr. Ramchandran Kumar as Senior Vice President - Strategic Accounts Sales, Mr. Michael Kerr as Senior Vice President of Sales and Mr. Bradley Scott, Vice President - Channel Sales. Further, with the view to diversify the business operations in European region, your Company appointed Dr. Jorg Turnhoff as Vice President - EMEA Sales in Germany.

During the financial year 2008-09, your Company continued its track record of growth despite challenging business environment. Albeit, it could have done better but for overall global economic slowdown.

The total income of your Company amounted to Rs. 5,270,68 Million (USD 113.47 Million) registering a growth of 29% over the previous year (in Rupee terms), however, the net profit after tax and extra ordinary items declined to Rs. 586.04 Million (USD 12.62 Million), a decline of 30% over the previous year (in Rupee terms).

The highlights of the financial performance for the year ended March 31, 2009 are as under

(Amount in USD Million (Amount in Rs. Million %

Particulars except EPS and except EPS and Change Book Value) Book Value)

2008-09 2007-08 2008-09 2007-08

Total income 113.47 102.06 5,270.68 4,098.87 29%

Profit before interest, depreciation and taxes 19.53 29.19 907.05 1,172.27 -23%

Depreciation 6.34 6.92 294.72 277.97 6%

Provision for income tax 0.25 0.55 11.56 22.00 -47%

Net profit for the year before exceptional and prior period items 12.94 21.72 600.77 872.30 -31%

Net profit for the year after exceptional

and prior period items 12.62 20.84 586.04 837.12 -30%

Transfer to general reserve 5.05 8.34 234.40 334.90 -30%

Net worth 77.44 84.21 3,926.04 3,381.95 16%

Earnings per share (basic) (EPS)

Including exceptional and prior period items 0.39 0.73 18.34 29.30 -37%

Excluding exceptional and prior period items 0.40 0.76 18.80 30.53 -38%

Earnings per share (diluted) (EPS)

Including exceptional and prior period items 0.35 0.58 16.34 23.34 -30% Excluding exceptional and prior period items 0.36 0.61 16.75 24.33 -31%

Book value per equity share 2.36 2.35 109.48 94.31 16%

[Conversion Rate: USD 1 = Rs. 46.45 for Profit and Loss items USD 1 = 50.70 for Balance Sheet items (financial year 2008-09) and USD 1 = Rs. 40.16 (financial year 2007-08)].

On a consolidated basis, the total income of your Company and its subsidiaries amounted to Rs. 6,006.84 Million (USD 129.32 Million) and the net profit after tax and exceptional items amounted to Rs. 660.92 Million (USD 14.23 Million).

Liquidity

Your Company continued to be a debt free company and maintains sufficient cash to meet your Companys strategic objectives. Your Company has ensured balance between earning adequate returns on liquid assets and the need to cover financial and business risks. As at March 31, 2009, your Company had cash and cash equivalents amounting to Rs. 940.02 Million as against 752.20 Million as at March 31, 2008, which include investments in liquid mutual funds of Rs. 871.09 Million as against Rs. 691.35 Million as at March 31, 2008.

Dividend

Your Directors declared Interim Dividend twice during the financial year 2008-09. First Interim Dividend was declared at Re. 0.60 per share on the paid up equity share capital on a pro-rata basis. Your Directors declared second interim dividend at Re. 0.40 per share on the paid up share capital on a pro-rata basis. The total dividend declared by your Directors for the ¦ financial year 2008-09 was Re. 1 per share amounting to Rs. 35.86 Million and dividend tax was Rs. 6.09 Million. Total outflow on account of dividend payout including dividend tax was Rs. 41.95 Million out of the net profits of the Company during the year under report.

Your Directors consider the same as adequate and recommend no further dividend for the financial year 2008-09. During the financial year 2008-09, your Company did not have any unclaimed dividend out of dividend declared till date.

Employee stock option plans

Your Company has various stock option plans for its employees. Details of the options granted under various employee stock option schemes form part of the Report on Corporate Governance and Notes to Accounts.

Subsidiary companies

Your Company had four subsidiaries viz. Persistent eBusiness Solutions Limited, India, Persistent Systems and Solutions Limited, India, Persistent Systems, Inc., USA and Persistent Systems Pte. Limited, Singapore as on March 31, 2009.

Persistent eBusiness Solutions Limited

Persistent eBusiness Solutions Limited (PeBS) is an India based wholly owned subsidiary of your Company formed in May 2000. PeBS is formed mainly to provide software development, consultancy and system integration services to the India based clients.

During the financial year 2008-09, PeBS recorded a total income of Rs. 85.09 Million (USD 1.83 Million) [Previous year Rs. 36.82 Million (USD 0.92 Million)] and a net profit of Rs. 4.53 Million (USD 0.10 Million) [Previous year Rs. 9.77 Million (USD 0.24 Million)].

Persistent Systems, Inc.

Persistent Systems, Inc., (PSI) is the US based wholly owned subsidiary of your Company formed in October 2001. PSI is engaged in providing services to the US based customers.

During the financial year 2008-09, PSI recorded a total income of Rs. 1,226.17 Million (USD 26.40 Million) [Previous year Rs. 709.38 Million (USD 17.66 Million)] and a net profit of Rs. 61.65 Million (USD 1.33 Million) [Previous year loss of Rs. 17.82 Million (USD 0,44 Million)].

Persistent Systems Pte. Limited

Persistent Systems Pte. Limited (Co. Reg. No. 200706736G) is a Singapore based wholly owned subsidiary of your Company formed in April 2007. Persistent Systems Pte. Limited is primarily formed to concentrate on the business opportunities in ASEAN region.

During the financial year 2008-09, Persistent Systems Pte. Limited, recorded a total income of Rs. 2.56 Million (USD 0.06 Million) [previous year Rs. 10.79 Million (USD 0.27 Million)] and a net profit of Rs. 0.39 Million (USD 0.01 Million) [previous year Rs. 2.65 Million (USD 0.07 Million)].

Persistent Systems and Solutions Limited

Persistent Systems and Solutions Limited (PSSL) is an India based wholly owned subsidiary of your Company formed in May 2008. PSSL was formed mainly to provide software development services as a unit in SEZ.

During the financial year 2008-09, PSSL recorded a total income of Rs. 35.25 Million (USD 0.76 Million) and a net profit of Rs. 8.33 Million (USD 0.18 Million).

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2009 are prepared in accordance with the Accounting Standard 21 (AS - 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, form part of this Annual Report.

Particulars required as per section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors Report, Auditors Report, Balance Sheet, Profit and Loss Account, Schedules to Accounts and Notes to Accounts of subsidiaries of your Company alongwith the Balance Sheet of your Company. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. Your Company, therefore, applied to the Ministry of Corporate Affairs, Government of India for an exemption from such attachment as your Company presents the audited consolidated financial statements in the Annual Report.

The Ministry of Corporate Affairs, Government of India, vide its letter no. 47/10/2009-CL-MI dated February 17, 2009, granted an exemption to your Company from attaching full financial statements of the subsidiaries under Section 212 of the Companies Act, 1956.

Accordingly, the Annual Report does not contain full financial statements of the subsidiaries. Your Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any shareholder of your Company. These documents will also be available for inspection during business hours at the registered office of your Company and the registered office of respective subsidiaries. A statement showing financial highlights of the subsidiary companies is attached to the consolidated financial statements.

Key recruitments

During the financial year 2008-09, Mr. Hari Haran was appointed as President, Persistent Systems, Inc., wholly owned subsidiary of your Company (PSI). Further, Mr. Ramchandran Kumar was appointed as Senior Vice President - Strategic Accounts Sales, PSI; Mr. Michael Kerr as Senior Vice President of Sales for IBM initiatives, PSI; Mr. Bradley Scott, Vice President - Channel Sales, PSI. Your Company appointed Dr. Jorg Tumhoff as Vice President - EMEA Sales during the financial year 2008-09.

Significant events in the year 2008-09

1. Your Company had set up a new subsidiary "Persistent Systems and Solutions Limited" (PSSL) which was incorporated on May 22, 2008. PSSL obtained the Certificate of Commencement of Business on May 31, 2008. PSSL is formed mainly to provide software development services as a unit to be set up within a SEZ. PSSL has set up a unit in an SEZ at Cyberabad, Hyderabad.

2. To facilitate your Companys efforts to pursue offshore business opportunities in Canada through an onsite presence, your Company has set up an additional Branch Office in Quebec province in addition to the existing Branch offices in Ontario and British Columbia Provinces.

3. Your Company through its wholly owned subsidiary. Persistent Systems, Inc., established a research center at Indiana University, Bloomington to increase your Companys domain capability, to get access to faculty members who have domain expertise in areas of interest to your Company and its customers and to collaborate with Indiana University in research related activities.

4. The Company has opened a new Branch Office through its wholly owned subsidiary Persistent Systems, Inc. in Ohio to transact business with the Ohio State University Comprehensive Cancer Centre, Ohio.

5. Your Company submitted an application for setting up a Research Centre in affiliation of the University of Pune. The Research Centre would provide an impetus to research within the Company as a launching pad for new technologies and related service offerings. This research would help obtain solutions to the industry problems and would help in expanding your Companys knowledge base.

6. To institutionalise the Corporate Social Responsibility of your Company, your Company formed a public charitable trust "Persistent Foundation". The details of the trust are given under the head "Corporate Social Responsibility" in this report.

Initial public offering (IPO) of your Company

During the financial year 2008-09, your Company filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for the proposed Initial Public Offer (IPO) of your Company. Your Company further obtained in-principle approval from the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE) to list its shares post IPO. However, due to adverse sentiments in the financial markets in India and abroad, your Directors decided to defer the IPO.

Awards and recognitions

Your Directors are glad to report the following awards received by your Company during the financial year 2008-09.

1. Your Company won the coveted NASSCOM Innovation Award for 2008, in the "Market Facing - Business Process and Business Model" category. The NASSCOM Innovation Awards is an annual event currently in its fifth edition and is a key initiative by NASSCOM to highlight the true innovators in the Indian IT industry. The award recognises companies that have made innovation a part of their organisational DNA and used the innovation engine to reinvent their processes, marketing and product development strategies.

2. Your Company won the ICAI Award for Excellence in Financial Reporting. The Annual Report for the year ended March 31, 2008, was adjudicated as a commendable entry amongst the entries received under the Category Information Technology, Communication and Entertainment enterprises.

3. Your Company ranked 9th on Fast Companys Fast 50 Reader Favorites of 2008. Fast Company was looking for companies using business as a force of positive change and helping its customers and your Company was identified as a company practicing it.

Dr. Anand Deshpande, Founder and the Chairman and Managing Director of your Company was honoured with the Career Achievement Award by the Indiana University School of Informatics. The Career Achievement Award is given to alumni in recognition of outstanding contributions and innovation that bring national acclaim and recognition to the field of informatics and honour and distinction to Indiana University.

Dr. Anand Deshpande was also honoured with the Top Management Consortium (TMC) Award of Excellence, 2007-08. The Top Management Consortium bestows Awards of Excellence to recognise and appreciate contribution in specific areas like industry, trade, service industry, public administration and for offering extraordinary services to the society.

Directors

Prof. Krithivasan Ramamritham, Director is liable to retire by rotation at the Nineteenth Annual General Meeting and he has confirmed his eligibility and willingness to accept office of Directorship of your Company, if reappointed. A brief profile of Prof. Krithivasan Ramamritham forms part of the notice of the ensuing Annual General Meeting.

In the opinion of your Directors, Prof. Krithivasan Ramamritham has the requisite qualifications and experience which would be useful to your Company and would enable him to contribute effectively to your Company in his capacity as independent director of your Company.

It is, therefore, considered prudent that your Company should continue to avail of the services of Prof Krithivasan Ramamntham as a Director and recommends that the resolution relating to the reappointment of Prof Krithivasan

Ramamntham, as Director of your Company be passed.

Committees of the board

During the year under review, the Board of Directors of your Company had constituted the Nomination and Governance Committee of the Board, The Committee was mainly formed to ensure overall diversity of representatives and provide guidance to the Board for appointment of top management and to address issues such as required expertise, background leadership skills, time available, conflict of interest, willingness to participate actively and amicable relationships of the proposed appointee within the industry as a director or member of the senior management. The detailed composition of the Committees of the Board forms part of the Report on Corporate Governance which is annexed to this Report.

Corporate governance

A separate section on "Corporate Governance" with a detailed compliance report thereon is annexed to this Report.

Voluntary secretarial compliance certificate

Your Company annually obtains a compliance certificate from the whole time Practicing Company Secretary on a voluntary basis to ensure compliance of the provisions of the Companies Act, 1956. The same is annexed to this Report The Institute of Company Secretaries of India, vide its letter dated September 22, 2008, appreciated the initiative taken by your Company, for obtaining Voluntary Secretarial Compliance Certificate.

Management discussion and analysis

Report on Management Discussion and Analysis based on audited, consolidated financial statements for the vear 2008-09 forms part of this Report.

Outlook

The economic slowdown continues through the first quarter. Since January 2009, representatives of your Company have met with executives for more than 150 customers and the long-term prospects look very good.

The economic slowdown which set in financial year 2008-09, may continue to show its effect in the financial year

2009-10. The financial year 2009-10 will be an overall challenging year for the world economy.

While the situation is challenging, there are definite growth opportunities and your Company is well poised to grab these. Your Company is exploring new growth areas and making use of its available resources to be prepared for business opportunity when the markets turnaround. The economic recovery, when it comes, will see many companies investing again in IT infrastructure and your Company sees opportunities to come.

The addition of senior seasoned executives to the sales team will help your Company to face the challenges of the economic turmoil and your management is cautiously optimistic about the future of your Company.

Human resource management

Your Company recruited about 1,500 (technical and non-technical) professionals as a part of growth planduring the year ended March 31, 2009, including several qualified and experienced professionals returning from USA. This steady stream of US returning professionals has provided a very strong middle management group. Your Company continues to attract the best talent available from various engineering colleges in India.

Your Company crossed the strength of 4,000 personnel during the year under report. The technical strength at present comprises 2,597 graduate engineers of which 206 are post graduates and 17 are the PhDs.

The consolidated human resource strength of your Company and its subsidiaries crossed 4,200 that include trainees and associates,

Your Company considers training as an important activity towards human resource development. In this endeavour several courses, seminars and conferences in technical and domain specific areas were conducted Your Company also conducted training courses for the benefit of the employees in different areas such as leadership skills, team building, personal effectiveness and foreign languages.

With a view to control attrition, your Company had taken various measures on the front of compensation, communication forum through skip level meeting, implementation of career tracks and arrangement with BITS Piiani to impart education

in MS Program to employees of your Company,

Your Companys value proposition is based on providing value to our customers, through innovation and by consistently improving efficiency. When the market starts to move again, there would be a large number of opportunities available, as businesses move to address the gap created by sudden retraction of capital and other expenditure and the emerging needs for the future. With a view to create bandwidth for the future, your Company initiated various measures such as

investing in new skills, technologies, business models and training programmes for key technology areas.

In addition to the earlier initiatives at Pune facility, your Company initiated a Yoga and Doctor facility at Nagpur and Goa during the year under review. Lectures were organised for the employees on "Diet for Professionals" and also for female employees for awareness about harassment and their rights. The Company has an effective mechanism for preventing harassment events including sexual harassment within the Company which ensures that each individual gets right to

work in a professional environment that promotes equal employment opportunities and prohibits discriminatory practices. The Company continued to provide facility for comprehensive health check-up for employees of age 30 and above. Further, cancer awareness session and free eye check - up camp were organised by your Company.

The attrition for the year under report was 13.54% as against 20.4% for the previous financial year 2007-08. Various employee welfare activities such as sports and cultural events that were organised for and by the employees had wide

participation at all levels.

As your Company plans to scale up the operations during the financial year 2009-10, it expects to hire additional 1,800 software professionals in its offshore development centres across Pune, Goa, Nagpur and Hyderabad.

With an objective to develop female leaders in the organisation by identifying, nurturing & empowering the leadership abilities in female employees, a Leadership Development forum "Prerana" was started on the occasion of Womens day. The focus of the forum was on providing leadership training to the female employees in the areas like work-life balance, people management skills, problem solving, project management and share their knowledge in different areas through various events/ activities lectures/ sessions/ seminars, group discussions, presentations. This also provides a platform to share the knowledge and experience with each other thereby building togetherness.

Corporate social responsibility

Your Company recognises its social obligations. As a responsible corporate citizen, your Company has a well defined " donation policy to earmark certain funds for donations. Donations are given primarily to organisations or institutions

that are engaged in activities relating to promotion of education, health, community welfare, police welfare related activities and in the events of national calamity.

In this endeavor, during the year under report, your Company donated major portion towards the health and education related activities followed by institutes for community welfare and the working for mentally challenged persons.

To institutionalise the Corporate Social Responsibility initiative of your Company, your Company has formed a Public Charitable Trust by the name "Persistent Foundation" (Foundation) during the year under report. TS?e Foundation will initially focus on making donations in the field of education, healthcare, community development and specific noticeable contribution to the cause of national or public importance. Your Company donated a sum of Rs. 13 Million towards the corpus of the Foundation during the year under report. The Foundation will also provide a platform to employees who wish to contribute in cash or in kind towards philanthropic activities.

Employees remuneration

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 as amended, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Annual Report is being sent to all the Shareholders of the Company, excluding, the statement of particulars of employees referred to hereinbefore. Any Shareholder interested in obtaining a copy of the said statement may write to the Company Secretary of the Company at the Registered Office of your Company.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company has made the necessary disclosures in this Report in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Company (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988. Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Your Company has continued to maximise the use of flat LCD monitors, VRV air-conditioning system, solar energy for hot water and LED logo on the buildings for conservation of energy. A building automation system has been implemented to control working of air conditioners and to make them more power efficient.

Green Persistent Movement

As an organisation, your Company believes that reducing global warming is our social responsibility and we must ensure that we make our planet a better place to live. In our endeavor to conserve and save the environment, your Company launched the Green Persistent Movement. Your Company had taken a number of initiatives which would help us in making your Company Green and thereby contributing to a greener planet. The Green Persistent Movement was taken up with the following objectives in mind

1. To be an eco friendly organisation by being aware, sensitive and proactive towards development and protection of the environment.

2. To encourage and motivate employees to follow eco friendly practices leading to a nature friendly work place, life style and society.

The movement mainly covers for areas of environment conservation viz. conservation of energy, conservation of trees, pollution control and waste management.

The following initiatives were taken by your Company during the year under Report, under Green Persistent Movement

1. Thursday drives were conducted to motivate employees to follow environment friendly practices for a day in a week with an intention to make it a part of their lifestyle.

2. The conservation of energy campaign was introduced to bring down energy consumption and thus conserve energy. The energy conservation campaign had three initiatives viz. 100% CPU energy conservation, no hand driers and switch off cubicle lights and no lift day.

3. The conservation of trees campaign was introduced to spread awareness about conservation of trees and motivate the employees to contribute effectively towards the cause. Employees of your Company were encouraged to conserve trees and plant atleast one sapling in their vicinity. The conservation of trees campaign had three initiatives viz. sapling distribution, no printer day and celebrating green Dassera.

4. The pollution control campaign was introduced to promote pollution control activities and contribute towards a clean environment. The employees were encouraged to ensure that their vehicle does not contribute to air pollution than the prescribed norms. The pollution control campaign had three initiatives viz. PUC check, launch of car/ bike pooling page on your Companys intranet and no smoking day.

5. The waste management initiative was initiated to ensure the reduction in waste at all levels in routine activities. The waste management campaign has three initiatives viz. reduction in food wastage, no plastic day, reuse of paper used on one side.

6. This year, to celebrate Diwali in a special way, your Company presented its employees with CFL bulbs as Diwali gift to support the Green Persistent Movement. CFL bulbs use lesser electricity than conventional incandescent bulbs and thus help reduce greenhouse gas emissions. More than 12,000 CFL bulbs were distributed at all locations of your Company.

As power costs constitute an insignificant part of the total expenses, the financial impact of these measures is not material. As your Company has not entered into technical collaboration with any entity, there are no particulars relating to technology absorption.

The particulars of expenditure on research and development (accrual basis) are as follows (In Rs. Million)

Particulars 2008-09 2007-08

Capital expenditure - 1.30

Revenue expenditure 56.10 47.14

Total research and development expenditure 56.10 48.44

As % of total income 1 1

During the financial year 2008-09, most of the revenue of your Company was derived from the exports. Your Company has a strong business development team mainly in the US. Your Company continues to invest in the sales team and has staffed the team with experienced people during the year to ensure that your Companys focus on exports continues. Based on the development of the market for the Outsourced Product Development, your Company has expanded its activities in Europe and Canada and this will further add to the export earnings of your Company.

The particulars of foreign exchange earnings and outgo (accrual basis) are as follows

(In Rs. Million)

Particulars 2008-09 2007-08

Revenue

Earnings 5,030.19 3,754.24

Outgo 397.13 339.40

Capital items

Outgo 340.97 109.16

Reappointment of statutory auditors

M/s. Joshi Apte & Co., Chartered Accountants and M/s. S. R. Batliboi & Co., Chartered Accountants, the joint auditors of your Company retire at the Nineteenth Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed.

Directors responsibility statement

The Directors state that

1. in the preparation of the annual accounts, the applicable mandatory Accounting Standards have been followed and there is no materia! departure;

2. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2009 and of the profit of your Company for that year;

3. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, if any;

4. the annual accounts have been prepared on a going concern basis.

Acknowledgments

Your company extends its sincere thanks to the officers and staff of the Software Technology Parks of India - Pane Naaour Goa Bengaluru Hyderabad Central Excise and cusotms Department Income Tax Department Registrar of Companies. Maharashtra State Electricity Distribution Company Limited. Maharashtra Industrial Devolopment Corporation, Department of Revenue and forst and ministry Information Technology.

Your Board also extends their thanks t0 Bank 0f india Citibank N.A., State Bank of India, HDFC Bank Limited Syndicate Bank, Bank of Tokyo Mitsubishi, Japan and its officials for extending their excellent supportin all banking related activites. Your Board takes this oppirtunity to express their sincere appreciation for the contribution made by employee at all levels. The consistent growth was made possible by their hard work,solidarity, cooperation and support.

For and on behalf of the Board of Directors

Dr. Anand Deshpande Pune, June 23, 2009 Chairman and Managing Director

---

Mar 31, 2007

The Directors have pleasure in presenting the Seventeenth Annual Report of your Company together with the audited statement of accounts for the year ended March 31,2007.

Business overview

Your Company has established leadership in Outsourced Software Product Development. The market for outsourced product development is getting differentiated. Product Companies are under margin pressure and are exploring ways to improve profitability by focusing on what is "core" to them and outsourcing what is "context."

Your Companys offering suits large product Companies who are looking to improve their efficiencies and the small start-ups who are looking at improving their time to market and reducing the risk of product development failure. Your Companys offering of supporting all aspects of the product life cycle have made it possible for the customers of the Company to see your Company as a true partner and not just a vendor. This has allowed your Company to establish stable growth in existing customers.

During the year under report, your Company strengthened the management team by adding Dr. Srikanth Sundararajan as the Chief Operating Officer being based in Pune and Mr. Raj Sirohi as the President of Persistent Systems, Inc., the wholly owned subsidiary of your Company being based in California.

Financial results

During the year under report, your Company continued its track record of growth coupled with robust financials.

The total income of your Company amounted to Rs. 29,604 Lakhs (USD 65.93 Million) registering a growth of 40% over the previous year (in rupee terms) and the net profit after extra ordinary items grew to Rs. 5,907 Lakhs (USD 13.16 Million), a growth of 45% over the previous year (in rupee terms).

The highlights of the financial performance for the year ended March 31,2007 are as under

Particulars (Amount USD Million except (Amount Rs.Lakhs except EPS and Book Value) EPS and Book Value) 2006 -07 2005-06 2006-07 2005 -06 %change

Total income 65.93 47.89 29,604 21,217 40

Profit before depreciation and taxes 19.11 13.70 8,582 6,071 41

Depreciation 5.96 4.11 2,675 1,820 47

Provision for taxes 0.40 0.23 182 100 82

Net profit for the year before exceptional and prior period items 12.75 9.37 5,726 4,151 38

Net profit for the year after exceptional and prior period items 13.16 9.19 5,907 4,071 45

Transfer to general reserve 5.26 4.25 2,363 1,882 26

Net worth 57.93 47.84 26,013 21,192 23

Earnings per share (basic)

Including exceptional and prior period items 1.59 1.04 71.58 46.19 55

Excluding exceptional and prior period items 1.54 1.06 69.35 47.11 47

Earnings per share (diluted)

Including exceptional and prior period items 1.28 0.96 57.67 42.57 35

Excluding exceptional and prior period items 1.24 0.98 55.90 43.42 29

Book value per equity share 4.78 3.62 214.67 155.61 38

[Conversion rate: USD 1 = Rs44.90 (2006-07) and USD 1 = Rs. 44.30 (2005-06)]

On a consolidated basis, the total income of your Company and its subsidiaries amounted to Rs. 31,441 Lakhs (USD 70.02 Million) and the net profit after extraordinary items amounted to Rs. 5,552 Lakhs (USD 12.36 Million).

Issue of equity shares

During the year under report, your Company allotted 1,500 equity shares to its Independent Directors on a preferential basis.

Employee stock option plans

Your Company has introduced various Stock Option Plans for employees of the Company. The details of the options granted under these schemes form part of the Corporate Governance report and Notes to Accounts.

Dematerialisation of shares

As a good investor protection measure, your Company has dematerialised its Equity and Preference shares with Central Depository Services (India) Ltd. (CDSL).

As at March 31, 2007, 89.95% of the Companys shares are held in electronic form and remaining 10.05% of the Companys shares are held in physical form.

Subsidiary Companies

Your Company had two subsidiaries viz. Persistent Systems, inc. and Persistent eBusiness Solutions Pvt. Ltd. as at March 31, 2007. Your Company incorporated a subsidiary in Singapore during the current financial year 2007-08.

Persistent Systems, Inc.

Persistent Systems, Inc. (PSI), a wholly owned subsidiary of your Company, was incorporated under the California Corporation Code in the United States of America. PSI is engaged in providing professional services and solutions to the US based customers.

During the year under report, PSI recorded a turnover of Rs. 4,537 Lakhs (USD 10.10 Million) [previous year Rs. 2,920 Lakhs (USD 6.59 Million)] and a loss of Rs. 407 Lakhs (USD 0.91 Million) [previous year profit Rs. 2 Lakhs (USD 0.01 Million)]. PSI worked to improve the visibility of your Companys brand in the US market. This was done by working closely with analysts and other influencers of the Software Industry.

Persistent eBusiness Solutions Pvt. Ltd.

Persistent eBusiness Solutions Pvt. Ltd. (PeBS) is an India based subsidiary of your Company. PeBS recorded a total income of Rs. 137 Lakhs (USD 0.31 Million) [previous year Rs. 53 Lakhs] (USD 0.12 Million)] and a net profit of Rs, 53 Lakhs (USD 0.12 Million) [previous year Rs. 15 Lakhs (USD 0.03 Million)] during the year under report.

Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at March 31, 2007, prepared in accordance with the Accounting Standard 21 (AS-21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India form part of this Annual Report.

Particulars required as per Section 212 of the Companies Act, 1956

As per Section 212 of the Companies Act, 1956, your Company is required to attach the Directors Report, Auditors Report, Balance Sheet, Profit and Loss Account and Schedules to Accounts and Notes to Accounts of your Companys subsidiaries. Your Company applied to the Ministry of Company Affairs, Government of India for an exemption from such attachment as your Company presents the audited consolidated financial statements in the Annual Report.

The Ministry of Company Affairs, Government of India, vide its letter no. 47/ 66/ 2007-CL-HI dated March 15, 2007 granted your Company an exemption from attaching full financial statements of the subsidiaries under Section 212 of the Companies Act, 1956.

Accordingly, the Annual Report does not contain full financial statements of the subsidiaries. Your Company will make available the audited annual accounts and related information of the subsidiary companies, where applicable, upon request by any Shareholder of your Company. These documents will also be available for inspection during business hours at the registered office of your Company and the registered office of respective subsidiaries. A Statement showing the financial highlights of the subsidiary companies is attached to the consolidated financial statements.

Dividend

For the first half of the year under report, Directors declared an interim dividend of Rs. 15 per share on the total Series A Preferred Share Capital on a pro-rata basis and 15% on the paid-up equity share capital, on a pro-rata basis. For the second half of the year, your Directors declared an interim dividend of Rs. 15 per share on the total Series A Preferred Share Capital on a pro-rata basis and 15% on the total paid up equity share capital on a pro-rata basis. Your Directors consider the same to be adequate and recommend no further dividend for the financial year 2006-07.

Key recruitments

During the year under report, Mr. Raj Sirohi was appointed as a Director of Persistent Systems, Inc., a wholly owned subsidiary of your Company and designated as President, Persistent Systems, Inc.

Mr. Sirohi brings with him a rich IT experience of over 25 years. Having offered his expertise to organizations such as HCL Technologies, in India as well as US and Covansys Corporation, Mr. Sirohi is known to have shown his organizational skills in putting together customer-focused teams of high-caliber achievers who have delivered remarkable performances.

A graduate in Business and Economics from Delhi University, Mr. Raj Sirohi has also completed an advanced Management Program from Harvard University.

Dr. Srikanth Sundararajan was appointed as the Chief Operating Officer of your Company, during the year under report. He is responsible for overall operations of your Company.

Dr. Srikanth Sundararajan, prior to joining your Company, was working with IDS. Prior to IDS, he was the Chief Technology Officer at Cognizant Technology Solutions and HCL Technologies. Before returning to India in 2000, he spent 16 years in the US where he worked with Hewlett-Packard and Informix before founding Pretzel Logic, a California-based start up which was merged into a BEA spin-off Webgain, Inc.

Dr. Srikanth Sundararajan has a B. Tech. from IIT, Madras and a Ph.D. from the University of Illinois at Urbana Champagne.

Significant events

Dr. Anand Deshpande, Chairman and Managing Director of your Company has been elected on the Executive Committee of NASSCOM for a two year term 2007-09.

Software 2006

Your Company was Gold Sponsor at the event "Software 2006". The event was a grand success with more than 1,500 CEOs, VPs, VCs and top executives of various organisations visiting the Santa Clara Convention Center on April 4-5, 2006.

One of the compelling attractions and highlights of the two-day conference was Persistents breakout sessions on 10 Best Practices for Successful Offshore Development Centers and Product Development Outsourcing — The Next Wave.

Webinar on Trends, Strategies and Best Practices in Outsourced Product Development

Your Company organised a webinar on Trends, Strategies and Best Practices in Outsourced Product Development in June 2006. Sand Hill Group presented highlights from the study, "Softwares Offshoring Leaders" with a clear objective of providing quick, significant and actionable information on product development trends, strategies and best practices. Seven Networks, shared the important learnings and takeaways from its experience in outsourcing.

Joint Webinar with Google

Google and your Company hosted a joint webinar in November 2006 at Santa Clara, USA. Your Company demonstrated how its ECSC Connector suite extended the reach of Google Search Appliance to crawl various Enterprise Content Management (ECM) repositories. The webinar witnessed a large participation from Google Enterprise Users as well as other Enterprise Search product companies who expressed interest in Persistent ECSC Connector suite.

Interop2006

Your Company showcased its Packaged Identity Interoperability offering IdentityAware at the Interop 2006. A lot of interest was generated by your Companys IdentityAware offering which has been designed to enable software product and appliance vendors to interoperate with the Identity Management Platform of their customers without losing focus. Your Companys ready components and service expertise ensures reduced sales cycles and time to market for the ISVs core product.

Joint event with Google at Lotusphere 2007

Lotusphere is a premier event managed by IBM for the Lotus Notes/ Domino developer and user community. Lotusphere 2007 event had more than 5,000 attendees.

Your Company joined Google at this event to demonstrate their enterprise search integration solution for IBM Lotus Notes and Domino content, which was based on Google Search Appliance from Google and Enterprise Content Search enabling Connectors (ECSC) from your Company.

Your Company and Google exhibited at this event to increase awareness about this joint solution amongst the Notes/ Domino developer and user community and showcase the solution capabilities in live.

Recognitions

The Forrester Research Group identified your Company as a niche vendor in the Outsourced Software Product Development space. Also your Company was classified as a Gold Certified Partner of Microsoft. Your Company appeared in Deloitte Fast 500 list of companies.

The life science group of your Company has partnered with Washington University and the Alvin J. Siteman Cancer Center, St. Louis, USA for developing software for the cancer Biomedical informatics Grid (caBIG™), a National Cancer Institute initiative.

At April 2006 caBIG™ annual gathering of the National Institute of Health (NIH) in Arlington, Virginia, USA, this collaboration was honored with several awards from among 80 organizations. The team received following awards

a. Tissue Banks and Pathology Tools Workspace Team Award in recognition of excellent teamwork in developing and promoting the caTISSUE Core application, a data management tool for tissue banks. caTISSUE Core is a web based informatics system that helps bio-specimen banks in collecting, processing, storing and distributing human tissue material for correlative scientific cancer research.

b. The prestigious caBIG™ Outstanding Team Contribution Award, from among all cancer centers, universities and other participants, in recognition of exemplary work on multiple caBIG™ projects and significant contribution to integrative cancer research, tissue banks and pathology tools, architecture, vocabularies and common data elements workspaces.

Mr. Manoj Bokil, Associate Technical Manager of your Company won the Volunteer of the Year Recognition Award and Certificate of Appreciation at the Society for Technical Communication (STC) Annua! Conference held at Bangalore. Mr. Manoj Bokil continues for a third consecutive term as the City Representative for STC Pune.

Ms. Sulekha Rani and Ms. Vishakha Naik of your Company won the Recognition Award & Certificate of Appreciation respectively at the STC Annual Conference held recently at Bangalore.

Ms. Naik got the award for presenting a paper titled "The recipe for a perfect portfolio" while Ms. Rani won the award for helping Mr. Manoj Bokil in arranging the STC annual conference.

Directors

During the year under report, Mr. Navin Chaddha resigned as Director of your Company with effect from September 5, 2006. The Board places on records its appreciation for the services rendered by him during his tenure of directorship of the Company.

Consequent to resignation of Mr. Navin Chaddha, Mr. Frederick W. W. Bolander was appointed as an Additional Director of your Company with effect from March 2, 2007, as a nominee of Gabriel Venture Partners, The term of Mr. Bolander as an Additional Director of the Company will expire at the ensuing Annual General Meeting of the Company.

Mr. Bolander is a Managing Partner at Gabriel Venture Partners. He has more than 11 years of experience in the venture capital industry. Mr. Bolander focuses on investments involving digital media infrastructure and applications, communications, information technology and the Internet.

Mr. Bolander received a Bachelor of Science in Electrical Engineering from the University of Michigan and he holds an MS in Electrical Engineering from the University of Michigan where he taught computer architecture. Mr. Bolander also holds an MBA from Harvard Business School.

Amalgamation of ControlNet (India) Pvt. Ltd.

During the year under review, your Company completed the process of amalgamation of ControlNet (India) Pvt. Ltd. with your Company. Your Company had acquired ControlNet (India) Pvt. Ltd. in Goa in October 2005 having a focus on VLSI and Embedded Systems area. ControlNet (India) Pvt. Ltd. has been completely integrated into the Company and hence it was considered prudent to amalgamate ControlNet (India) Pvt. Ltd. into your Company.

Corporate Governance

Your Company has pro-actively and voluntarily prepared a report on the measures adopted by it in terms of the Corporate Governance in line with the clause 49 of the Listing Agreement. The report on Corporate Governance is annexed to this report.

Secretarial Compliance Certificate

Your Company annually obtains a compliance certificate from a Practicing Company Secratary on a voluntary basis relating to the compliance with the provisions of the Companies Act, 1956. The same is annexed to the Corporate Governance report.

Corporate social responsibility

Your Company recognises its social obligations. As a responsible social citizen, your Company earmarks certain funds for giving donations. Donations are given primarily to organisations or institutions which are engaged in activities relating to promotion of education, health, information technology, community welfare and also in the event of national calamities.

In this endeavour, apart from regular donations, your Company made a significant contribution for health and police welfare related activities.

Your Company funded for establishment of Police Cyber Lab in cooperation with NASSCOM for Pune Police which will help traning Police Officials, lawyers about cyber crime and related issues. The total budget for the project including Hardware, Software, Interiors and other infra structure was around Rs. 16 Lakhs. The space of 440 sq.ft. for the cyber lab was provided by Pune Police Commissionerate in Police Welfare Center, Shivajinagar, Pune in July 2006. Using its resources, your Company completed interiors, furnishing, air-conditioning and networking (LAN) in 1 month. Your Company also provided 23 computers, 1 LCD projector and UPS system for the Cyber Lab. While the cyber lab started functioning from September 2006, the official inauguration was done on January 20, 2007. After Mumbai & Thane, this is third such facility in Maharashtra.

Your Company participated in CM Programme on "No Load Shedding in Pune". The programme aims to mitigate the load shedding for Pune city with the help of Captive Power Plant (CPP) of High Tension (HT) users of MSEB.

Under this initiative, your Company agreed to generate the power during peak hours and not use MSEB supply. With reduced demand from HT users, MSEB could divert this power to Domestic Consumers and minimize load shedding in Pune.

Employees remuneration

Information as per section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, forms part of this report. As per the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the shareholders of the Company excluding, the statement of particulars of employees referred to hereinbefore. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary of the Company at the Registered office of your Company.

Conservation of energy, technology absorption, research and development, foreign exchange earnings and outgo

Your Company strives to conserve energy on a perpetual basis. Your Company has procured various energy saving devices and systems, which help in conserving energy. A building automation system has been implemented to control working of air conditioners and to make them more power efficient. Bulk of the electric fixtures is equipped with electronic ballast which has resulted in significant savings in the energy cost.

Your Company has taken effective steps such as use of flat LCD monitors, VRV air-conditioning system, solar energy for hot water and LED logo on Building for conservation of energy. Further your Company proposes to use Ozone units for air-conditioning system.

As power costs constitute a very insignificant part of the total expenses, the financial impact of these measures is not material. As your Company has not entered into Technical Collaboration with any entity, there are no particulars relating to Technology Absorption.

Research and Development (R&D) of new product, technologies, tools, processes and methodologies continue to be of importance at your Company. This allows your Company to enhance quality, productivity and customer satisfaction.

The particulars of R&D expenditure are as follows

(Amount Rs. Lakhs)

Particulars 2006-07 2005-06

Capital expenditure 13.43 6.26

Revenue expenditure 257.85 205.03

Total R&Dexpenditure 271.28 211.29

As % of total Income 1 1

The particulars of foreign exchange earnings & outgo are as follows

(Amount Rs. Lakhs) Particulars 2006-07 2005-06

Earnings 29,215.77 21,062.05

Outgo 3,457.12 7,292.18

Capital items (Earnings) - 11,199.45

Explanation to Auditors remark in the report of the Auditors

The delay in payment of Service Tax was caused due to lack of clarity regarding liability of the Company to pay service tax on the sales and marketing services availed outside India.

Auditors

M/s. Joshi Apte & Co., Chartered Accountants and M/s. S. R. Batliboi & Co., Chartered Accountants, the joint auditors of your Company retire at the ensuing Annual General Meeting and are eligible for re-appointment.

Directors responsibility statement

The Directors state that

1. In the preparation of the annual accounts, the applicable mandatory accounting standards have been followed;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts have been prepared on a going concern basis.

Acknowledgments

Your Board would like to thank the Director, Software Technology Park, Pune for unflinching support, guidance and help in the operations of your Company, The Board would also like to place on record the help and co-operation received from the officers and staff of Software Technology Park of India, Central Excise and Customs Department, Income Tax Department, Ministry of Company Affairs, Registrar of Companies, Pune, Sales Tax Department, Central Depository Services (India) Ltd., Maharashtra State Electricity Distribution Company Limited, Maharashtra Industrial Development Corporation, Department of Revenue and Forest and Ministry of Information Technology.

Your Directors would also like to thank Bank of India, Citibank N.A., Bank of Baroda, State Bank of India, Export Import Bank of India (EXIM Bank), Syndicate Bank, Bank of Tokyo Mitsubishi, Japan and its officials for extending excellent support in all banking related activities. Your Directors take this opportunity to express their sincere appreciation for the dedicated work put in by the employees of your Company, which enabled your Company to successfully emerge as a stronger company.

For and on behalf of the Board of Directors

Dr. Anand Deshpande Chairman and Managing Director Pune; April 30, 2007