cyient.com

th Global Headquarters 25 Annual Report Cyient Limited, Plot No. 11, Software Units Layout, Infocity, Madhapur, - 500081, | T: +91 40 6764 1000 2015-16

1 Annual Report 2015-16 cyient.com 25 Years of Tomorrow Designing Together

2 Annual Report 2015-16 cyient.com when Cyient celebrates its on our25 pleasure to writeto you It gives meimmense Dear Shareholders, the Future Envisioning Founder &Executive Chairman B.V.R. the year. company updatesthrough through various industryand With thisletmetake you all forever. an organization thatwilllast to newer heightsandbuild motivated to scaleCyient We are now even more our goalsandaspirations. years andrealized many of company over thelast25 that we builtasustainable silver jubilee.We are proud MOHANREDDY th anniversary,

3 3 Annual Report 2015-16 cyient.com are creating challengesand when clientexpectations driven bydigital Macroeconomic Environment: challenge traditional market leadership. The fresh opportunities for new entrepreneurs andcan Automation, andInternetofThings (IoT) provide Printing, ArtificialIntelligence,DeepLearning, Social, Mobility, Analytics and Cloud(SMAC), 3D diversified scalabledestination. sourcing sector andhasemerged asthelargest continues to gainmarket share intheglobal companies thatare built ontechnology. India of , consumers oftechnology, and see three types ofbusinessesemerge: producers its growth trajectory. Inthedigitalworld, we will over, willcontinue to seeIT-BPM industrystay on adoption ofdigitaltechnologiesbyclientsworld billion milestone inexport revenues. The rapid it over thelastsixyears andcrossing the$100 industry clocked $143billioninFY2016,doubling and issustainingitsdouble-digitgrowth. The still beenableto grow from strength to strength economic environment, theIT-BPM industryhas Indian IT-BPM Industry: growth inourbusiness. from themacroeconomic perspective, we see scarcity ofresources innew technologies. Overall, because ofBrexit, challengeswithwage hikes and talent, weakening ofUKpoundandother currencies challenges: protectionism for free movement of surpassing China.However, we didface someglobal emerged astherecipient ofthehighestFDIinflows 7.6% anddisplayed strong financialdisciplineand large economy withGDPgrowth ofmore than 2016. Lastyear, Indiawas thefastest growing in 2015andisprojected to grow by3.4%during economies. The globaleconomy grew by3.1% while amodestrecovery continued inadvanced growth declinedfor thefifth consecutive year, economies whichaccount for 70%ofglobal subdued. Emerging markets anddeveloping In 2015,globaleconomic activity remained industry verticals andinmany new geographies. opportunities alike withexisting clients, new has historically beenahubofcreative mindsand India, andDefence Procurement Policy (DPP).India new initiatives: Make inIndia, Smart Cities, Digital has beenembracing theshiftsintechnology with Indian Government Initiatives: entrepreneurs. IT-BPM companies andthesenew-generation a strong synergistic relation between thegiant products andserviceswithmore value. We see existing businessmodelsandcreating new hub ofIndia.These startups are disrupting wave ofstartups have become theinnovation Amidst avolatile global We live intimes The government

25 years ofCyient. positive impactfor Cyient inthe coming years. boosting domesticindustrywhichshouldcreate a defence programs worth $30billionaimedat direction. The government hasalsocleared new Procurement Policy (DPP)are steps intheright export strategy andrelease ofthenew Defense in defense procurement. Creation ofdefense There isincreased actionfrom thegovernment the ever-increasing populationinurbanareas. India iscreating therightinfrastructure to house Smart Citiesinitiative willhelpinmakingsure that that allcitizens have accessto essentialservices. will make itpossibleto reach thelastmileto ensure and create very positive socialimpact.DigitalIndia initiative hasthepotential to transform ournation examples ofthedesigntalent inIndia.DigitalIndia Cyient andother designengineeringplayers are supporting complex andhigh-value . the designandinnovation huboftheworld, India hasthecapabilitiesandecosystem to become holistic view ofInnovate-Create-Make-Support. become highly impactfulifwe lookatitfrom the has anedgeintermsofdesigning.Make inIndiawill manufacture for ourclients. Rangsons Electronics ishelpingusdesignaswell as strategic acquisitionsover thepasttwo years. of ourgrowth initiatives, we completed several ambitious goalsfor ourcompany by2020.Aspart Mergers andAcquisitions: engines for thefuture. robotics, andadditive manufacturing asgrowth Things, mechatronics, analytics, automation and for 2020.Cyient hasidentified areas like Internetof journey, we have definedourstrategy and roadmap Manufacturing Company. To track andexecute this boundaries to positionourselves asaDesignLed based roles andresponsibilities, andpushingthe restructuring ourleadership to have more vertical- redefining ourbusinessinlinewithS3strategy, our businessonseven industryverticals. We are running initiatives to transform Cyient byfocusing Strategy: confirms thatourinterventions are bearing results. overwhelming response to ourAnnualInvestor Day engagement significantly improved last year and the orders from existing clientsremain high;associate have beenequitableto allstakeholders. Repeat satisfaction surveys gives usconfidence that we the results ofclient,associate,andinvestor the change.The continuous improvement in further improvement to make sure we are leading best practices andhave beenpersistent on investors, andsociety. We have created industry key stakeholders: clients, associates(employees), always madesure thatwe created value for our To ridethistideofchange,we are Over thelast25years, we have We have very clearand

4 Annual Report 2015-16 cyient.com Embedded Systems. The leadership teamatCyient Services, andan“Established andNiche”player in the newly-added segment,Mechanical Cyient asan“Established andExpansive” player in & Heavy Machinery industries. Italsomentions Transportation, Energy &UtilitiesandConstruction Cyient continues to betheleaderinAerospace, verticals. Asperindependentanalyst firmZinnov, partner for globalOEMs across several industry Maintain thatdifferentiates Cyient asaone-stop reinforce ourvalue proposition ofDesign-Build- Industry Analyst Ratings: institutionalise “Innovation@Cyient”. journals. Incoming years, ourendevour would beto year, we published 38papers indifferent industry that were independently filedby Cyient. Duringthe 16 patentsduringFY15-16includingfour patents innovation andIPcreation withclients. We filed our innovation culture andemphasizing co- 3D Printing Lab,andIoTLab.We are accelerating ‘Innovation @Cyient’ andincubatesourLegoLab, world-class ExperienceCenter thatexemplifies exercise to generate ideas. We establisheda week’s time;andLEGOWar: a rapid prototyping developing working IoT-based prototypes ina technologies; InternetofThings Hackathon: Tango: aimedtowards virtual reality andsensing organization-wide innovation challengeslike Project across allourfocus industries. We have launched and perceptible progress inenablinginnovation innovative solutions. We have madesignificant our engineers have always delightedclientswith Innovation: will create apositive traction for ourbusiness. confident thatstartingthis year theseacquisitions exercise iscomplete andtheteamsare very Build andMaintain strategy. The integration thought through andare inlinewithourDesign, components. These acquisitionswere very well repairs, development, andvalidation ofaero engine Pratt &Whitney ) ishelpingusprovide aerospace aftermarket servicesbusinessof in allverticals inbigdataandanalytics. GSE (the Cyient Insightsiscreating synergistic opportunities from our Telecom and Utilitiesclients. The UTC delivery centerto supportfurtherrequirements coming quarters. Cyient isexpanding the Sydney Czech Republic willbefully functionalover the . Cyient’s new engineeringcenterinPrague, we recently establishedourpresence inEastern footprint ofover twenty globaldelivery centers, Global Delivery Centers: the lives ofmillionspeoplearound theworld. is well poisedto become aglobalbrand thattouches brand promise of“DesigningTomorrow Together” and ourassociatesare confident that Cyient’s Innovation isinCyient’s DNAand To strengthen our We continue to library, andNDLM)are envisioned asthedigital Telangana. These CDLCs (computer center, digital Centers (CDLCs) across Serilingampally Mandal, an initiative to setup54Cyient DigitalLearning To celebrate thesilver jubileeyear, Cyient isrunning District, Telangana. students inLingampally Mandal inRanga Reddy 54 government schoolsbenefiting over 20,000 water, sanitationandhygiene (WASH) facilities in Telangana-Swachh Pathashala campaignto provide Initiative, Cyient Foundation introduced theSwachh Mission (NDLM)centers. UndertheSwachh Bharat schools andsupportsfive NationalDigitalLiteracy Foundation hasimplementeddigitallibraries intwo from primaryeducationthrough highschool.Cyient our facilities andsupportsover 10,500children Foundation hasadopted16schoolsinandaround Corporate Social Responsibility (CSR): resource availability, cost, andinclusiveness. we are judiciously balancingbetween clientneeds, in , Telangana. Insetting upthesecenters, expanded. Cyient isbuildinganew delivery center Engineering CenterinEast Hartford isalsobeing innovative supplierfor thethird consecutive year. Pratt &Whitney recognized Cyient astheirmost by ourtop clients over many years. In2015, exceptional serviceshasbeenacknowledged its clientsthrough high-quality deliverables and Awards andAccolades: Business Responsibility Report. financial disclosures through thepublicationof plans. We have alsoincreased ourfocus onnon- and inpursuit we have created new stock option committed to healthy motivation ofitsassociates board committee interactions. Your company is and are leveraging technology solutionsto enhance provide more efficientinformation flow totheboard Chairman. We have implementedsystems that Committees, Individual Directors, andthe directors for systematic appraisal oftheBoard, by holdingseparate meetingsofindependent of Cyient andlastyear we furtherreinforced this corporate governance have beenacornerstone Corporate Governance: during weekends andholidays. volunteering hours through various CSR activities 2500 Cyient associateshave contributed 9000+ literacy inover 50,000communities intheMandal. 20,000 underprivileged children andwillfoster IT and openupnew possibilitiesto more than Cyient willprovide accessto digitalknowledge transformation ofsociety. This CSR initiative of world, Cyient wants to beasupporterofdigital surrounding BPLcommunity. Inthisdisruptive gateway for theunderprivileged students andthe Cyient’s ability to delight The higheststandards of Cyient

5 5 Annual Report 2015-16 cyient.com third timeand Year Award 2015 Cyient hasbeenawarded ’s Design, Innovation, andClientCentricity. needs. Today Cyient hasbecome synonymous with any challengeoradaptingourselves to market journey was tough. We never shiedaway from facing pure play engineeringservicesfrom India.This Services Outsourcing, andbecametheleaderin created anew industrysegment—Engineering Conclusion: Engineering Servicesindustry. Cyient asthe performance. The Economic Times recognized the Design-Led Manufacturing (DLM)businessreceived Excellence Award 2015 Best Supplier Award Over thepast25years, Cyient has Best Tech Brand Boeing GoldLevel Performance intheservicecategoryfor the for thefirst time.Also, our from ABBfor allround for 2015intheITand Supplier ofthe BVR MohanReddy Wish you allthebest! successful technology brand. Cyient into aninnovation-driven andglobally new phaseofexceptional growth thatwilltransform for creating socialimpact,we are embarkingona clients, astrong investor base,andwithapassion that with13,000+talentedassociates, 300+active coming decade.However, Ifeel very confident I canenvision theworld beingvery different inthe solving tomorrow’s even more complex problems. unleash theircreativity, innovation andfocus on We willcontinue to attract thebesttechnicalminds, positioned asadesignandmanufacturing company. an engineeringandtechnology leader, uniquely Looking to thefuture, Cyient envisions itselfas 6 Annual Report 2015-16 cyient.com Governance Report onCorporate & Analysis Report Management Discussion Report Business Responsibility Directors’ Report Meeting Notice ofAnnualGeneral Corporate Information Director’s Message Lead Independent CEO’s Message Managing Director & Senior Leaders Board ofDirectors & Cyient ataGlance Highlights of2015-16 Key Milestones The Journey Contents

Our Objectives future growth. problems we willbecome more profitable andwell-positioned for closely withthemto develop innovative solutionsto solve complex Together’. By reinforcing ourlongstandingcommitment to working market asacompany whohelpsourclientsin‘DesigningTomorrow Such astrategy ismadepossiblebyournew positioninginthe partner. and differentiate Cyient asanend-to-end “concept to solution” across ourstakeholder community andintheprocess position We believe thatS3willresonate anddeliver value atmany levels across industries. evolving mixofServices, Systems, andSolutions to various clients next five years around ourS3Strategy ofoffering arobust and Operations andData,we are basingourgrowth aspiration for the To buildonourstrong heritageofDesignEngineering,Networks, 24 22 18 16 14 12 10 07 83 61 42 33 26 Route Map to AGMVenue Share Price Movements Shareholder Handbook Significant Milestones Ratio Analysis Financial Analysis Historical Data Statements Consolidated Financial Financial Statements Standalone Abridged Proxy Form Attendance Slip ECS Mandate Slip Global Presence 200 199 196 193 191 187 186 129 108 207 205 203 201 7 7 Annual Report 2015-16 cyient.com The Journey realized we hadanopportunity to address thisgap a supply gapinskilledtalentfor engineering.We industrial growth inthewestern world hadcreated the windsofchange.The demandthatwas driving The Internetrevolution hadarrived andIsensed reforms towards liberalization andglobalization. becoming aglobaleconomy, encouraged byseveral In 1991,Indiawas taking itsfirst steps towards of buildingaglobalengineeringservicescompany. home withfour engineers whobelieved inmy dream Enterprises from thediningtableinmy modest Cyient starteditsjourney in1991asInfotech GIS Start-Up (Cyient 1.0)–Laying theFoundation: especially intimesofdifficulty. made ussuccessful.This hasstood usingoodstead should beequitableto every stakeholder whohas organization’s culture. We always believed thatwe their behavior andbehavior inturn determinesthe of individuals andteamsinanorganization define Respect, Sincerity andTransparency. The values FIRST whichisanacronym for Fairness, Integrity, where itistoday. We always say ourValues come and thatfoundation hasbrought thecompany to Built onValues: thoughts for thefuture. transformed ourorganization over timeandsome with you somereflections onourjourney, how we As Cyient completes 25years, Iwanted to share last 25years andbeyond. (employees), investors, andthesociety -for over value to allfour stakeholders -clients, associates business modelwhichhasdelivered substantial see thatwe have beenableto create asustainable the 1920sto just15years today. Ifeel delightedto than 50years inthelastcentury, from 67years in of leadingUScompanies hasdecreased bymore lifespan ofacompany listedintheS&P500index any organization. Research shows thattheaverage Completing 25years isasignificantmilestone for the western world. The only engineeringwork intellectual property were not robust enoughfor services company. In1991,Indianlaws protecting realize ourinitialgoalofcreating anengineering right decision.Butitactually took usawhile to lead rather thanfollow anditturned outto bethe we went down aroad lesstraveled. We choseto opportunities inthebroader ITservicesspace, While mostofourpeers inIndiaconcentrated on connected Indiato theglobaleconomy. by leveraging the‘broadband disruption’ thathad Cyient was builtonstrong values The mapdatabaseswe produced alsoneeded geographic datafrom papermapsaccurately. Map digitization required technicalskillsto capture opportunity. business model.Andwe madethemostof the rightmarket attherighttimewith infrastructure, andassets. We found ourselves in to invest ingeographic information related to land, the first steps towards becoming digitalandbegan early 90s, government andindustrywere taking maps for geographic information systems. Inthe an interesting adjacency-theneedto digitize We continued to scanthemarket andsoonfound services company. we could not getCyient startedasanengineering hard to justifyreturn oninvestment, whichmeant drawings andthevolume was insignificant.It was available was thelow-end digitization ofpaper gave businesssustainability atscale. contracts withETAK, Navionics, andothers that in theGISspace.We signedseveral long-term projects andstartedto earnbrand recognition GIS solutions. Thereafter, we secured more large Inc. Ithelpedusinvest inaplatform for futuristic of a$5mn+GIScontract from Analytical Surveys clients. The first breakthrough cameinthe form innovation to bringeven more productivity to our quality. Afterthat,we concentrated onprocess to scaleourbusinesswithoutcompromising on build therightcapability. These efforts allowed us spending asmuch11%ofourrevenues to We madesignificantinvestments intraining, certifications like ISO9001:2000. an obsessive focus to quality andbacked thatwith unique andgave usover 99%accuracy. We brought digitization anddeveloped arobust tool thatwas processes. We cameupontheideaofdouble-entry invested intechnology andbuiltrobust production we trained andmotivated. We simultaneously We focused onrecruiting therightpeoplewhom Tools, Technology, andTraining. strategy –theacronym standsfor People, Process, strategy thatcameto beknown asCyient’s “PPT” made ussuccessfulwas executing anoperational achieve therightquality atscale.Whateventually tremendous opportunity, itwas initially tough to knowledge. Whilewe instinctively senseda mapping standards andcombine thatwithdomain to beintelligent.Itwas importantto understand 8 Annual Report 2015-16 cyient.com software development centerinHyderabad that was followed bySEICMMlevel 5certification for the associate satisfaction to judgeourperformance. It which measured quality, clientsatisfaction, and Cyient evolved anew quality system calledBESt This periodalsobrought more focus onquality and delivery centers inPuerto Rico and Frostburg, VA. in , andVizag. Beyond India,we opened our pan-Indiaoperations withengineeringcenters Manikonda campusinHyderabad. We expanded invested intenacres oflandthatdeveloped into the our businessoutpacinginfrastructure and to accommodate 4000engineers. We soonsaw a state-of-the-art delivery centerinHyderabad the year 2000onwards. That year we inaugurated Our operational infrastructure grew rapidly from Airbus, Alstom andseveral others. like Bombardier, Hamilton Sundstrand, Boeing, engineering servicescontracts withglobalOEMs strategic investor inCyient. Thereafter, we secured affordable cost and Pratt soondecided to become a the client’s trustbydelivering quality ontimeatan with was now transforming into reality. We earned Services’ dream thatthefounding teamhadstarted Master ServiceAgreement. The initial‘Engineering UTC) andwe signedamulti-year multi-milliondollar breakthrough withPratt &Whitney (a division of Our persistence helpedusachieve amajor inflection pointinourjourney. at justover US$10mnandwere approaching abig year 2000,we were a1000associateswithrevenues at theendofCyient’s first decadeinbusiness. By the company. We persisted andachieved abreakthrough sight ofourvisionto buildanengineeringservices map digitization servicesuntil2000,we never lost The Accelerator: The EngineeringPlayer (Cyient 2.0)- UK, andCartographic SciencesIndia. clients whichledusto acquire Dataview Solutions to gainmarket footprint andaddmore businessand expansion. Duringthisperiodwe were alsolooking We went publicin1997to raise fundsfor our Swisscom, Telstra, FUGRO, andVWT. signed landmarkcontracts withKPNTelecom, globally. Cyient becameatrustedbrand andwe intensely addressing utilitiesandtelecom markets with GISsystems asthebackbone.We started solutions for assetutilization andclientsatisfaction offerings, which could provide comprehensive moved upthevalue chain.We putinplay service By thistimeourGISbusinesshadsystematically that level ofaccreditation. saw usjoinaselectlistofITcompanies inIndiawith While thebusinessgrew around

7500+ employee duringthesameperiod. associate strength grew five timesfrom 1500 to $10mn+ in2000to $200mn+in2010andour this period,we multiplied revenues 20timesfrom engineering servicesbrand from India.During being aGISservicescompany to awell-recognized by GISandEngineering.We graduated from just This was anaccelerated growth phasepowered Tech/Semiconductor space. and Time to Market to accelerate entryinto theHi- focus onengineeringandGISservicesinEurope, software (AGS) andMap CentricUKto to expand ourUSfootprint, advanced graphics and capabilities, Daxcon EngineeringandWellsco acquired TeleAtlas Indiato scaleourGISbusiness client needsandstrengthen market presence we To keep pacewithskillsrequirement, address , andMalaysia. Germany, Singapore, Melbourne, Dubai,, to ourclients. We openedofficesinthe US, UK, our salesanddelivery teamsto geteven closer Our growing baseofclientsandprojects required us transform into Cyient 3.0. engaged businessconsultants andexperts to help different options. We took cognizance ofthisand We hadto make therightchoicesfrom anumberof ourselves andgearupfor thenext phaseofgrowth. It was acrucialjuncture where we hadto redefine and aglobalbrand inengineeringandGISservices. and experienced leadership, 250+active clients the company. We hadhugepooloftalent,strong completed 20+years ofcommitted servicewith Pratt andBombardier, etc.Many ofour associates several customers: 20+yrs withTomTom, 15+yrs locations. We created longlastingrelationships with associates andwere operating from 25+global (around 2014)aswe hadgrown to asize of10,000+ This was another inflectionpoint for Cyient business. became alogicalprogression for ourengineering prototyping andmanufacturing capability andthose its portfolio, many ofourclientsbeganaskingfor Recognizing Cyient’s ability andintentto broaden decided onaBusinessUnitbasedoperating model. for afocused approach for each vertical andwe Equipment, Hi-Tech, Oil&GasandEnergy. Itcalled also recognized asanestablishedplayer inHeavy Transportation, Telecom, andUtilities. We were position infocus industrieslike Aerospace, (Cyient 3.0),we hadalready grown into leadership second phaseofgrowth andthestartofthisphase Solution” Partner: The Cyient Brand (Cyient 3.0)–“Concept to Towards thetailendofour 9