KPIT Technologies Ltd — Investor Presentation 2020

Jun 11, 2020

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June 11, 2020

BSE Limited National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Towers, Exchange Plaza, C/1, G Block, Dalal Street, Bandra - Kurla Complex, Bandra (E), Mumbai – 400001. Mumbai – 400051. Scrip ID: KPITTECH Symbol: KPITTECH Scrip Code: 542651 Series: EQ Kind Attn: The Manager, Kind Attn: The Manager, Department of Corporate Services Listing Department

Subject:- Presentation on New Stock Option Proposal- Updated version.

Dear Sir/Madam,

Please find enclosed the updated version of presentation on New Stock Option Proposal.

Request you to please take the same on your records and further dissemination.

Thanking you.

Yours faithfully,

For KPIT Technologies Limited (Formerly KPIT Engineering Limited)

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Nida Deshpande

Company Secretary & Compliance Officer

Encl.:- As mentioned above.

O +91 20 6770 6000 E info@kpit.com W kpit.com

KPIT Technologies Limited (Formerly KPIT Engineering Limited) Registered & Corporate Office: Plot No.17, Rajiv Gandhi Infotech Park, MIDC-SEZ, Phase-III, Maan, Taluka-Mulshi, Hinjawadi, Pune-411057, India.

CIN: L74999PN2018PLC174192

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June 2020

New Stock Option Proposal

1

Current Stock Option Plan

Incentive Scheme for Top 300+ Critical Roles

Current ESOP Scheme

• 3.8 M ESOPs issued with Exercise Price of ₹ 85 and vesting over 3 yrs. starting July 2020

Vesting Y1 : 30%, Y2 : 30%, Y3 : 40%

The Options were given out of the available shares with the Employee Welfare Trust and hence there was no dilution.

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2

Current Scenario

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The Covid-19 outbreak has resulted in unprecedented times for the whole world resulting in a lot of uncertainty

We are cautious about FY21 owing to ambiguity due to the current and of a disruption possibility relapse of the pandemic globally The exercise Price of ₹ 85 per share is out of the and money thus not attractive for the critical employees

To counter the current scenario employees will end up taking a salary cut to the tune of ~25% (variable pay basis annual company performance)

We need to ensure these motivated and we employees stay maintain the attrition level lower. Once the current phase ends, we need to be ready for growth and these employees will enable the same

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3

Proposed ESOP Scheme

Modified Incentive Scheme for Top 300+ Critical Roles

Proposed ESOP Scheme

Proposal to cancel the current ESOP Scheme and issue ESOPs under a new Scheme at a price not less than Face Value, decided by the NRC, with options vesting over 3 years, starting June 2021

• Employees proposed to be covered are around 4.25% of the total strength of KPIT • The coverage is based on roles and not grades and will cover to 8 levels grades up below the CEO

Vesting Y1 : 30%, Y2 : 30%, Y3 : 40%

The Options are proposed to be given from the available shares with Employee Welfare Trust and hence there willbe no dilution.

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4

Existing & New ESOP Scheme – Employee angle

3.8 M ESOPs

Existing ESOP Scheme Exercise Price ₹ 85

Proposed ESOP Scheme Exercise Price* ₹ 10

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The main objective of the new proposed ESOP scheme is to act as a strong incentive for the next 3 years by potentially enabling the eligible employees to get compensated for the variable pay and incentive are now. they forgoing

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The proposal to issue ESOPs at Face Value is to ensure the ESOPs in the and the see usually stay money employees always the potential upside for them.

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5

• To be decided by NRC, assumed at Face Value

New ESOP Scheme – Accounting Impact

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Total Cash conserved on the balance sheet as a cumulative impact of variable pay and incentive reduction will be equal to approx. ₹ 500 million

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Considering the current market price, the proposed ESOP Scheme valuation delta will not have a major impact on the profit and loss account.

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Thus as a net impact it will be EPS accretive.

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6

Vesting of Stock Options

The proposed stock options shall vest for senior level and other employees on the basis of company and business unit performance respectively.

The Nomination and Remuneration Committee (NRC) will prescribe the performance criteria as stated above for different groups of employees from time to time based on the areas: broadly following

1. Cash conservation

2. Wallet share in target customers

1. Employee Retention and

4. Profitability

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Thus to summarize….

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The New ESOP Scheme is in lieu of the existing ESOP Scheme and there is NO DILUTION and thus no impact on EPS

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The New ESOP Scheme will shift the first vesting by one year and the grantees will thus not potentially be able to liquidate for one year. Plus it will provide an additional year of incentive for the employees.

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A lesser variable pay and cash incentive will help conserve cash on the balance sheet

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With reduced variable pay and incentives, the New ESOP Scheme will serve as a strong motivation and help reduce attrition

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8

Thank You

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