Genpact
Annual Report 2015

Plain-text annual report

Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-K xAnnual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year endedDecember 31, 2015. ¨Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . Commission file number: 001-33626GENPACT LIMITED(Exact name of registrant as specified in its charter) Bermuda 98-0533350(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)Canon’s Court22 Victoria StreetHamilton HM 12Bermuda(441) 295-2244(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on Which RegisteredCommon shares, par value $0.01 per share New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No xIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Annual Report on Form 10-K or any amendment to this Annual Report on Form 10-K. xIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “acceleratedfiler” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨(Do not check if a smallerreporting company) Smaller reporting company ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No xAs of June 30, 2015, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was $3,386,124,894, based on the closing price of the registrant’s commonshares, par value of $0.01 per share, reported on the New York Stock Exchange on such date of $21.33 per share. Directors, executive officers and significant shareholders of Genpact Limited are consideredaffiliates for purposes of this calculation, but should not necessarily be deemed affiliates for any other purpose.As of February 19, 2016, there were 210,545,157 common shares of the registrant outstanding.Documents incorporated by reference:The registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, 2015. Portions of the proxy statement areincorporated herein by reference to the following parts of this Annual Report on Form 10-K:Part III, Item 10, Directors, Executive Officers and Corporate Governance;Part III, Item 11, Executive Compensation;Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters;Part III, Item 13, Certain Relationships and Related Transactions, and Director Independence; andPart III, Item 14, Principal Accounting Fees and Services.Table of ContentsTABLE OF CONTENTS Page No. PART I Item No. 1. Business 1 1A. Risk Factors 17 1B. Unresolved Staff Comments 34 2. Properties 34 3. Legal Proceedings 34 4. Mine Safety Disclosures 34 PART II 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 35 6. Selected Financial Data 38 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 7A. Quantitative and Qualitative Disclosures About Market Risk 63 8. Financial Statements and Supplementary Data 64 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 64 9A. Controls and Procedures 64 9B. Other Information 65 PART III 10. Directors, Executive Officers and Corporate Governance 65 11. Executive Compensation 66 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 66 13. Certain Relationships and Related Transactions, and Director Independence 66 14. Principal Accounting Fees and Services 66 PART IV 15. Exhibits and Financial Statement Schedules 67 CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Income F-6 Consolidated Statements of Comprehensive Income (loss) F-7 Consolidated Statements of Equity F-8 Consolidated Statements of Cash Flows F-11 Notes to the Consolidated Financial Statements F-12 SIGNATURES EXHIBIT INDEX E-1 iTable of ContentsSpecial Note Regarding Forward-Looking StatementsWe have made statements in this Annual Report on Form 10-K (the “Annual Report”) in, among other sections, Item 1—“Business,” Item 1A—“RiskFactors,” and Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are forward-looking statements. Insome cases, you can identify these statements by forward-looking terms such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,”“could,” “may,” “shall,” “will,” “would” and variations of such words and similar expressions, or the negative of such words or similar expressions. Theseforward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance,which in some cases may be based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our currentexpectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance orachievements to differ materially from those expressed or implied by the forward-looking statements. In particular, you should consider the numerous risksoutlined under Item 1A—“Risk Factors” in this Annual Report. These forward-looking statements include, but are not limited to, statements relating to: • our ability to retain existing clients and contracts; • our ability to win new clients and engagements; • the expected value of the statements of work under our master service agreements; • our beliefs about future trends in our market; • political, economic or business conditions in countries where we have operations or where our clients operate; • expected spending on business process management and information technology services by clients; • foreign currency exchange rates; • our ability to convert bookings to revenue; • our rate of employee attrition; • our effective tax rate; and • competition in our industry.Factors that may cause actual results to differ from expected results include, among others: • our ability to grow our business and effectively manage growth and international operations while maintaining effective internal controls; • our dependence on revenues derived from clients in the United States and Europe and clients that operate in certain industries, such as the financialservices industry; • our dependence on favorable tax legislation and tax policies that may be amended in a manner adverse to us or be unavailable to us in the future; • our ability to successfully consummate or integrate strategic acquisitions; • our ability to maintain pricing and asset utilization rates; • our ability to hire and retain enough qualified employees to support our operations; • increases in wages in locations in which we have operations; iiTable of Contents • our relative dependence on the General Electric Company (GE); • financing terms, including, but not limited to, changes in the London Interbank Offered rate, or LIBOR; • restrictions on visas for our employees traveling to North America and Europe; • fluctuations in exchange rates between the U.S. dollar, the euro, U.K. pound sterling, Chinese renminbi, Hungarian forint, Japanese yen, Indianrupee, Australian dollar, Philippines peso, Guatemalan quetzal, Mexican peso, Polish zloty, Romanian leu, South African rand, Hong Kong dollar,Singapore dollar, Arab Emirates dirham, Brazilian real, Swiss franc, Swedish krona, Danish krone, Kenyan shilling, Czech koruna, Canadian dollar,Saudi Arabian riyal, and Thai bhat; • our ability to retain senior management; • the selling cycle for our client relationships; • our ability to attract and retain clients and our ability to develop and maintain client relationships on attractive terms; • legislation in the United States or elsewhere that adversely affects the performance of business process outsourcing and information technologyservices offshore; • increasing competition in our industry; • telecommunications or technology disruptions or breaches, or natural or other disasters; • our ability to protect our intellectual property and the intellectual property of others; • our ability to maintain the security and confidentiality of personal and other sensitive data of our clients, employees or others; • deterioration in the global economic environment and its impact on our clients, including the bankruptcy of our clients; • regulatory, legislative and judicial developments, including the withdrawal of governmental fiscal incentives; • the international nature of our business; • technological innovation; • our ability to derive revenues from new service offerings; and • unionization of any of our employees.Although we believe the expectations reflected in the forward-looking statements are reasonable at the time they are made, we cannot guarantee futureresults, level of activity, performance or achievements. Achievement of future results is subject to risks, uncertainties, and potentially inaccurate assumptions.Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially frompast results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements. We undertake noobligation to update any of these forward-looking statements after the date of this filing to conform our prior statements to actual results or revisedexpectations. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-Q and Form 8-K reports to the SEC. iiiTable of ContentsPART IItem 1. BusinessOverviewGenpact stands for “generating business impact.” We are a global leader in digitally-powered business process management and services. We architectthe Lean Digital enterprise through our patented Smart Enterprise Processes (SEP) framework that reimagines our clients’ operating models end-to-end,including the middle and back offices. This creates Intelligent Operations that we help design, transform, and run. The impact on our clients is a high returnon transformation investments through growth, efficiency, and business agility. For two decades, first as a General Electric division and later as anindependent company, we have been passionately serving our clients. Today, we generate impact for a few hundred strategic clients, includingapproximately one fifth of the Fortune Global 500, and have grown to over 70,000 people in 25 countries, with corporate offices in New York City. Theresulting business process and industry domain expertise and experience running complex operations are a unique heritage and focus that help us drive thebest choices across technology, analytics, and organizational design.In 2015, we had net revenues of $2.461 billion, of which $2.001 billion, or 81.3%, was from clients other than GE, which we refer to as Global Clients,with the remaining $460 million, or 18.7%, coming from GE.Our business was initially conducted through various entities and divisions of GE. We began operating as an independent company in 2004, when GEplaced our operations under a newly-formed Luxembourg company and sold indirect interests in us to our initial private equity investors. In 2007, we becamea Bermuda company and completed our initial public offering. In 2012, affiliates of Bain Capital Investors, LLC, or Bain Capital, acquired the majority ofour initial private equity investors’ interests. As of December 31, 2015, Bain Capital (through its affiliates) owned approximately 27% of our outstandingequity.We use the terms “Genpact,” “Company,” “we” and “us” to refer to both our predecessor company and its subsidiaries, and Genpact Limited and itssubsidiaries. Our registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda.Our SolutionOur vision is to be the global leader in business process management, helping businesses make smarter decisions and realize better business outcomesthrough our digitally-driven solutions that draw on our deep domain expertise and understanding of process operations, analytics and advanced technology.We seek to build long-term client relationships with companies that wish to improve the ways in which they do business and to whom we can offer a fullrange of services. With our broad and deep capabilities and our global delivery platform, we deliver comprehensive and innovative solutions incorporatingcontinuous process improvement to clients around the world.Our business focuses on industry verticals in banking and financial services, insurance, capital markets, consumer product goods, life sciences,infrastructure, manufacturing and services, healthcare and high tech.Our service offerings in these core verticals are driven by our broad end-to-end process expertise, including: • finance and accounting (F&A) services; • core industry operations services; • analytics and research; • business consulting and enterprise risk consulting; 1SMSMSMTable of Contents • transformation services; • supply chain and procurement services; • enterprise application services; • IT infrastructure management services; and • collections and customer services.We seek to deliver significant business impact for our clients by designing, transforming and running a combination of processes, as well as providingsolutions that combine elements of several of our service offerings. In providing services across our global delivery platform, we draw on core capabilities inprocess expertise, analytics capabilities and technology expertise, as well as the operational insight we have acquired from our experience in managingthousands of processes for our clients. • Process Expertise. We have extensive experience in running a wide range of processes and use this expertise to continuously improve and updateour patented Smart Enterprise Processes (SEP) proprietary framework. We believe we have built a science of process through SEP—a patentedand highly granular approach to managing business processes. In addition to efficiency, SEP focuses on maximizing process effectiveness. Wealso apply the principles of Lean and Six Sigma to eliminate defects and variation and reduce inefficiency. Our Lean and Six Sigma process rigoralso allows us to develop and track operational metrics to measure process performance as a means of monitoring service levels and enhancingproductivity. • Analytics and Research Capabilities. Our analytics and research capabilities are central to our ability to improve business processes. They enableus to work with our clients and identify weaknesses in business processes and redesign and transform them to create additional business value. Theconfluence of big data, regulatory changes and social media are causing a major shift in the way businesses operate. We help our clients harness datato identify trends and issues, uncover new insights, identify and prevent future risks and fine-tune operations to make smarter decisions and meetbusiness goals. We also rigorously apply analytical methodologies, which we use to measure and enhance performance of our client services. Inaddition, we apply these methodologies to measure and improve our own internal functions, including recruitment and retention of personnel. • Technology Expertise. Our information technology expertise includes extensive knowledge and integration of cloud-based advanced digitaltechnologies, third-party hardware, partner solutions, network and computing infrastructure, and enterprise resource planning (ERP) and othersoftware applications. We use technology to better manage the transition of processes, to automate and run processes more efficiently and to replaceor redesign processes to enhance productivity. Our ability to combine our business process and IT expertise, along with our Lean and Six Sigmaskills, helps our clients achieve the full potential of business intelligence platforms and web-based software platforms. Additionally, with thegrowing prevalence of digital technologies incorporated in our solutions, we are certifying a new group of digital black belts and digital masterblack belts. • Operational Insight. Our operational insight enables us to make the best use of our core capabilities. Operational insight starts with the ability tounderstand the business context of a process. We place great value on understanding not only the industry in which a client operates, but also thebusiness culture and institutional parameters within which a process is performed. Operational insight also requires the judgment to determine thebest way to improve a process in light of the knowledge of best practices across different industries, as well as an appreciation of what solutions canbe fully implemented in the context of the particular business environment. 2SMSMSMTable of ContentsSmart Enterprise Processes (SEP)SEP is our patented and highly granular approach to dramatically improving the performance of business processes. In addition to efficiency, itfocuses on maximizing process effectiveness.SEP and its more recent evolution, Digital SEP, is based on work done in the Genpact Process Innovation Lab, where we leverage our exposure tothousands of business processes and hundreds of millions of client transactions to map and analyze end-to-end processes at a granular level. This enables usto test the effectiveness of a client’s processes by measuring opportunities for improvement across the value chain using best-in-class benchmarks gleanedfrom within and across industries and to apply our innovative process design, effective, market-leading technology, and analytical skills and tools to improvethem. The result is a client-specific road map for maximizing process effectiveness. Benefits are delivered by combining our deep domain knowledge ofprocess, key insights and best practices with execution support including focused IT applications and technology, targeted analytics, transformation servicesand global delivery services.Unlike other approaches, SEP focuses on measuring business outcomes, such as improving cash flow and margins, which make visible theeffectiveness of a process in driving business results. The approach also takes an end-to-end, enterprise-wide view, working beyond traditional organizationalsilos.Genpact DigitalGenpact’s Digital practice helps clients reimagine their business operations with an innovative set of advanced technologies along with differentiatedcore IT services that drive transformative solutions for our clients. Our Systems of Engagement™ solutions provide an engagement layer of agile, nimbletechnologies that address end-to-end business processes and are built using social, mobility, big data and cloud-based technologies on our foundation ofdeep process experience and domain expertise.We recently introduced Lean Digital, our unique approach to reimagining companies’ middle and back offices using the full power of digital. OurLean Digital solutions address what we view as the shortfalls that result from many companies either focusing their digital interventions only on front-endand customer-facing processes or digitizing broken or inadequate processes without considering enterprise-wide improvements and the related potentialbusiness outcomes. Leveraging our strong foundation in Lean and Six Sigma principles, Lean Digital incorporates automation and digital technologies inan end-to-end approach that transforms and digitizes companies’ middle and back-office processes, ensuring a seamless connection to the front end.Our Strategic Client ModelWe seek to create long-term relationships with our clients where they view us as an integral part of their organization and not just as a service provider.These relationships often begin with the outsourcing of discrete processes or with shorter-cycle engagements in analytics and research, business consulting,enterprise risk consulting or transformation services. Over time, these relationships typically expand to encompass multiple business processes across abroader set of functions and geographic areas. As clients adapt to constantly changing environments, many are increasingly turning to Genpact for support intransforming their operations to become more competitive and agile. These long-term transformative engagements are global and multi-tower, combiningprocess, technology, and analytics. No matter how large or small the engagement, we strive to be a seamless extension of our client’s operations. To achievethis goal, we developed the Genpact Virtual Captive model for service delivery, and we may implement all or some of its features in any given clientrelationship, depending on the client’s needs. This approach provides clients with dedicated employees and management as well as dedicated infrastructureat our delivery centers to create virtual extensions of the client’s own teams and environments. We train our personnel in the client’s culture to be familiar notonly with the process but with the business environment in which it is being executed. 3SMSMSMSMSMSMSMSMSMTable of ContentsOur StrategyThe specific elements of our strategy include the following:Enhance Targeted Vertical Industry and Domain ExpertiseClients want partners who know their industry and processes at a granular level. We continue to enhance our industry and domain capabilities throughacquisitions, strategic partnerships and by investing in experienced professionals in our targeted verticals and service areas to improve client intimacy andhelp us deliver end-to-end services that drive business impact.Guide Global Enterprises to Best-in-ClassOur Smart Enterprise Processes (SEP) framework, built on the foundation of thousands of Lean Six Sigma-based improvement ideas and benchmarksaround granular process performance, builds deeper client relationships and delivers measurable business impact over time. We have recently begunintegrating new digital technologies and data analytics into these frameworks to develop new Digital SEPs. Our differentiated framework is critical not onlyto extending client contracts but also to creating an expansive partnership with our clients.Differentiate our Solutions by Combining Process Expertise, Analytics and TechnologyClients face an environment of uncertainty and change, which requires them to better leverage existing costs and investments, and make more informeddecisions that address challenges around regulations and risk, while they continue to drive top-line growth and profitability. The insights we derive from ourexperience and expertise, combining smarter processes, analytics and technology, help us provide a differentiated solution to these challenges.Expand Geographically in Key MarketsWe deliver our services and solutions from service delivery centers in 17 countries, including eight locations in the United States. We continue toexpand and diversify our delivery capabilities globally in order to be closer to our clients.Our ServicesOur client solutions often combine several of our service offerings. We recognize that our clients are focused on achieving business outcomes, ratherthan on transferring particular processes or using particular platforms. Accordingly, we focus on understanding their business needs and the business contextof their existing processes in order to design appropriate and comprehensive solutions.Our core vertical activities for our clients include the following: • Banking and Financial Services. Our banking and financial services core operations include application processing; mortgage loan origination;wealth management, risk management; omni-channel account servicing and set-up; collections and customer services; commercial lending,business banking, auto finance, and finance and accounting activities. We use our analytics capabilities to help our clients price products, estimatecapital and reserve requirements, analyze and monitor portfolios, and manage risk. We also handle reporting and monitoring services for statutoryand regulatory compliance, portfolio and performance review services and financial planning and tax services. Our services for financial servicesclients include investment banking support for deals, asset-backed finance surveillance, trade finance 4SMTable of Contents support, payment and fraud operations support, Basel II/III support and risk analysis for derivatives and foreign exchange. Our wealth managementservices include brokerage and retirement offerings that provide end-to-end process services, including onboarding, reconciliations, planadministration, fund administration, and trade support. • Insurance. Our insurance services include underwriting, claims management, risk and catastrophe modeling, customer segmentation and loyalty,and finance and accounting activities. We offer insurance services to several industry sectors—life and annuities, property and casualty, andreinsurance—and provide what we refer to as a “virtual insurance company” for our clients in the insurance industry. We cover many phases ofinsurance business processes including product development, finance, risk management, actuarial, sales and marketing, underwriting support, andclaims and policy administration. • Capital Markets. Our capital markets practice provides an end-to-end range of information technology services for the capital markets industry,including application development and maintenance; managed services such as quality assurance, testing and production support; business processoutsourcing; domain knowledge-based consulting related to technology systems (domain consulting); and consulting not tied to a technologysystem (business consulting). Areas of domain focus within our capital markets practice include asset and wealth management; risk and compliance;client onboarding; Know Your Customer (KYC); collateral management; post trade processing; and data services, such as reference data and datascrubbing and reconciliation. We have also set up centers of excellence focusing on several technology platforms used by the financial servicesindustry, including platforms focused on brokerage compliance, trade processing and portfolio accounting. • Consumer Product Goods. Our consumer product goods services include trade promotion optimization, trade promotion management, ordermanagement, master data management, customer service, marketing optimization, supply chain decision services, marketing analytics, market mixmodeling, and enterprise services such as finance and accounting, indirect procurement and IT operations. We also provide supplier riskmanagement, supplier recovery audit, shopper analytics, store- and product-mix optimization services. • Life Sciences. Our life sciences and pharmaceutical services include contract management for managed markets; regulatory affairs services,including lifecycle management, regulatory operations, Chemistry Manufacturing Controls (CMC) compliance, safety and pharmacovigilance, andregulatory information management; multi-channel customer experience for medical information, sales and marketing, direct-to-consumer support,patient assistance programs (access and reimbursement), and patient support programs; and enterprise services such as F&A, indirect procurement, IToperations, risk management and audit support. We also provide comprehensive analytics services including market research and competitiveintelligence, patient level data analysis, physician and drug analysis, social media monitoring and data management. • Infrastructure, Manufacturing and Services. Our infrastructure, manufacturing and services offerings include enterprise processes such as financeand accounting, indirect procurement and IT operations. Our industry specific solutions include industrial internet solutions, aftermarket servicessupport, industrial asset optimization, engineering services covering the complete product lifecycle from concept to release and sustainingengineering, supply chain management, direct procurement and logistics services. • Healthcare. Our healthcare expertise covers a full spectrum of services including end-to-end transactional processes, advanced technology,analytics and consultative and transformational solutions for payers, providers and pharmacy benefit managers. Our payer solutions help managethe end-to-end life cycle of a claim, from claims processing and adjudication to claims recovery and payment integrity. Our regulatory compliancesolutions for both payers and providers encompass planning, business alignment systems change management, training and testing. Our FX suite ofproducts, which is delivered using a business process as a service, or BPaaS, model, helps payers in the areas of ICD-10 transition, 5Table of Contents DRG shift analysis and payment neutrality. Our services for accountable care organizations provide support for setup, population health, revenueadministration and performance management. Our provider services, including hospital optimization, clinical coding and revenue cyclemanagement, help providers to deliver an optimal experience to patients, improve efficiency and reduce administrative costs. • High Tech. Our high tech services include service support, including customer care service, technical product support and aftermarket services;lead-to-cash; sales force commission management; supply chain and consumer analytics; and enterprise services such as F&A, sourcing andprocurement, and IT operations.In addition to these vertical activities, our broad end-to-end process expertise spans a number of service areas, including F&A services, core industryoperations services, analytics and research, business consulting and enterprise risk consulting, transformation services, supply chain and procurementservices, enterprise application services, IT infrastructure management services, and collections and customer services.Finance and Accounting (F&A)We believe we are one of the world’s premier providers of F&A services. Our services include Accounts Payable (AP), Order to Cash (OTC), Record toReport (R2R), and Enterprise Risk and Compliance services. Our AP services span the end-to-end AP function and include document management, invoiceprocessing, approval and resolution management, and T&E processing. Our OTC services cover customer master data management, credit and contractmanagement, fulfillment, billing, collections, and dispute management services. Our R2R services encompass accounting, closing and reporting, includingSEC reporting, treasury, tax services, financial planning and analysis, and product cost accounting. Genpact Enterprise Risk and Compliance specializes inoperational risk, SOX advisory, third-party risk management and regulatory compliance with services such as enterprise risk management, internal audits,FCPA and IT risk management.In addition to managing our clients’ finance and accounting processes, we help them design, transform, and run their finance operating models toachieve best-in-class performance. Genpact Systems of Engagement for F&A creates an agile technology layer that complements existing systems of record,providing continuity of information and operations across the enterprise. Our Systems of Engagement modules for OTC, AP, and R2R support smartprocesses, detailed analytics, and a host of agile technologies, including proprietary cloud-based technology platforms and bolt-on, best-of-breed solutionsfrom our technology partners. Our F&A services also include SEP frameworks and solutions, which aim to significantly improve client processes.Core Industry Operations ServicesWe help our clients design, transform and run core enterprise operations specific to their industries. On the foundation of domain expertise embeddedin our SEP frameworks, we use our Lean Digital approach to leverage Systems of Engagement technologies and specialized analytics to power what werefer to as Intelligent Operations. We support our clients’ core operations in retail and commercial banking, capital markets, insurance, healthcare, lifesciences, manufacturing, consumer goods and high tech.Analytics and ResearchWe offer analytics services both on a standalone basis and as an integrated part of our other service offerings. We help our clients re-imagine theirbusiness operations in the context of analytics and technology through the delivery of Genpact Intelligent Operationsfueled by our Lean Digitalapproach. Using our Systems of Engagement approach, we have built what we refer to as the Genpact Intelligent Process Insights Engine, a process-awareplatform that embeds technology and analytics to deliver purpose-built analytics applications. Through our Data-to-Action Analytics approach, we helpour clients harness data to assess business opportunities, mitigate risks, improve performance or otherwise help their businesses. Companies do not 6TMTMSMSMSMSMSMSM SMTMSMTable of Contentsalways recognize the inherent potential in data or do not have the capability to apply the rigorous analytical models that might reveal opportunities. Ourdomain-specific analytics prowess, along with a sophisticated innovation ecosystem, is increasingly embedded in all of our service offerings to help clientsmake timely, informed and fact-based decisions. By quantitatively and qualitatively scrutinizing data, we can deliver the insight necessary for our clients toassess new business opportunities, mitigate market risks, and make better business decisions. Our Smart Decision Lab was created to facilitate collaborationand innovation with clients and industry experts, leveraging the combination of data and analytics with process expertise. Our Smart Decision Lab wasincubated to create new lines of competency, build solution prototypes, test new business use cases, and develop intelligent technology applications.Business Consulting and Enterprise Risk ConsultingWe partner with our clients through the lifecycle of designing, transforming and running a broad range of their processes. Our consulting groups helpclients design the right strategy and target operating model for their functions. We help clients develop transformation roadmaps that deliver a targetoperating model vision and implement process-level improvements. Our business and enterprise risk consulting teams support our clients throughtransformation delivery, including enhanced regulatory compliance. We improve risk and control environments across operational and regulatory processeswhile preserving value and mitigating risk exposure. Our consulting business is built on our deep understanding of the complete enterprise operating modeland draws on our expertise in process, state-of-the-art technology, organizational structures, compliance, and risk-mitigation strategies. We combine a design-thinking approach with our industry and domain expertise to create client offerings that apply cutting-edge digital technologies and analytics with a goal ofdriving fundamental shifts in clients’ business performance.Transformation ServicesOur transformation services help clients realize cost savings and/or increased revenues by improving or re-engineering business processes that areunderperforming or designing processes that are needed to meet growth objectives. Clients engage our transformation teams to provide an end-to-end view oftheir organization and help determine business process needs at a strategic level as well as at the execution level. Strategically, we help clients achieve acomprehensive assessment of how well their enterprise-level processes, such as source-to-pay, order-to-cash, record-to-report, inquiry-to-order, new productintroduction and sales force effectiveness, perform against industry benchmarks and best practices. At the execution level, we institutionalize therecommendations by deploying resources to train the client team and drive sustainable best practices.Supply Chain and ProcurementOur supply chain and procurement services include direct and indirect strategic sourcing, category management, spend analytics, procurementoperations, master data management, and other procurement and supply chain advisory services. We work with our clients to design, transform and runsourcing strategies across expense categories, drive process compliance, and realize significant cost reduction in their businesses. This includes sourcing andprocurement process transformation, inventory planning and optimization, value transformation, and process automation. We integrate disparate technologysystems and provide dynamic digital dashboard reporting while transforming business operations and improving service productivity. We leverage ourtechnology expertise in delivering our services in this area, particularly in automating order management processes and optimizing the supply chain. Wehave competency in many of the custom platforms used by our clients and are not tied to any single platform or vendor.Enterprise Application ServicesOur information technology approach focuses on business outcomes and related business processes. Equipped with industry and functional expertiseand guided by our proprietary Lean Digital approach, we aim 7SMTable of Contentsto create Intelligent Operations that execute efficiently and effectively, and continuously learn to adapt. Our focused approach is designed to maximize theimpact that business processes have on business outcomes while limiting capital expenditures, risk, complexity, and time-to-benefit. Our solutions includebusiness intelligence and data services, enterprise resource planning, quality assurance and technology integration. We also have significant expertise inHyperion, SAS and Cognos, and platform support for ERP systems such as Oracle, SAP and Microsoft.IT Infrastructure Management ServicesOur IT infrastructure management services consist of end user computing, infrastructure management services, application production support anddatabase management services. We provide support in more than 25 languages with a global footprint of native speakers. We provide monitoring andmanagement of clients’ data centers, servers, storage, emails, networks, databases, applications and end user devices. We use a network of Remote OperationsCenters to provide 24/7 infrastructure monitoring and management. Along with Information Technology Infrastructure Library (ITIL) ISO 20000, we use SixSigma and Lean principles to address technology problems and to enable our clients to align their IT to business priorities and at the same time reducetechnology costs. We use our proprietary SEP framework Service Disruption to Restore (D2R), along with our accelerators and IP frameworks, tocontinuously reduce defects. We also provide cloud enablement services, ITIL implementation services and comprehensive BPaaS services.Collections and Customer ServicesOur collections and customer services are provided primarily in the areas of consumer banking, business-to-business finance and mortgage servicing.Our collections services include collections strategy design through smart analytics and a full range of accounts receivable management services, such asearly to late stage collections, skip-tracing, refunds and other specialized services. In our collections services, we act as an agent only; we do not acquiredebts for our own account or handle debtor payments. Our customer services include account servicing and customer care services such as handling customerqueries, general servicing and dispute resolution. We provide multi-channel voice and non-voice services, and we also provide origination and ordermanagement support.Our ClientsOur clients include some of the best known companies in the world, many of which are leaders in their respective industries.GE has been our largest client since our inception and accounted for approximately 18.7% of our 2015 revenues. We currently provide services to mostof GE’s business units, including GE Capital, Power and Water, Oil and Gas, Energy Management, Renewables, Aviation, Healthcare, Transportation,Current, Digital and Corporate. The services we currently provide to GE are broad in their nature and are drawn from all of our service offerings. Although wehave a single master services agreement, or MSA, with GE, we have many statements of work, or SOWs, with GE that cover in more detail the nature of thework we will perform and the amounts we will bill for the relevant services. Currently, as a general matter, each GE business unit makes its own decisions asto whether to enter into a SOW with us and as to the terms of any such SOW. Therefore, although some decisions may be made centrally at GE, our revenuesfrom GE are generally attributable to a number of different businesses each with its own leader responsible for decision-making regarding our services.We have over 700 clients spread across a variety of industries and geographies. Our net revenues from Global Clients have grown rapidly in the lastfive years, from approximately $780 million in 2010 to approximately $2 billion in 2015, a compound annual growth rate of 20.7%. Our net revenues fromGlobal Clients as a percentage of total net revenues increased from 62.0% in 2010 to 81.3% in 2015. See Item 7—“Management’s Discussion and Analysis ofFinancial Condition and Results of Operations—Classification of 8SMSMTable of ContentsCertain Net Revenues.” The majority of our Global Clients are based in the United States, and we also have Global Clients in Europe, Asia and Australia.Our contracts with our clients generally take the form of an MSA, which is a framework agreement that is then supplemented by SOWs. Our MSAsspecify the general terms applicable to the services we will provide. For a description of our MSAs and SOWs, see Item 7—“Management’s Discussion andAnalysis of Financial Condition and Results of Operations—Overview—Revenues.”We serve about one fifth of the Global Fortune 500, including AstraZeneca, Boeing, Citigroup, GE, GlaxoSmithKline, Heineken, Honeywell, Merck,Mondelez, Nissan, Walgreens and Wells Fargo.Our PeopleOur people are critical to the success of our business. Our Chief Executive Officer and other members of our senior leadership team have been involvedin our business since its commencement under GE resulting in an experienced and cohesive leadership team. Many members of our leadership teamdeveloped their management skills working within GE and many of them were involved in the founding of our business. They have built our business basedon the experience gained in helping GE meet a wide range of challenges. As a result, we are an institutional embodiment of much of the wisdom andexperience GE developed in improving and managing its own business processes.We have created, and constantly reinforced, a culture that emphasizes teamwork, constant improvement of our processes and, most importantly,dedication to the client. We manage this challenge through innovative human resource practices. These include broadening the employee pool by openingdelivery centers in diverse locations, using innovative recruiting techniques to attract the best employees, emphasizing ongoing training, instilling a vibrantand distinctive culture and providing well-defined, long-term career paths. We also have programs modeled on GE management training programs to developthe next generation of leaders and managers of our business.As of December 31, 2015, we had approximately 72,000 employees. We monitor and manage our attrition rate very closely, and believe it is one of thelowest in the industry. We attribute this to our reputation, our ability to attract high quality applicants, our emphasis on maintaining our culture and thebreadth of exposure, experience and opportunity for advancement that we provide to our employees.Lean and Six Sigma MethodologiesLean is a methodology for reducing waste or inefficiency in a process. Among other things, it is designed to measure and eliminate overproduction,over-processing and waiting, and to improve the flow of a process. Six Sigma is a method for improving process quality by removing variation, defects andtheir causes from business activities. We have Lean Six Sigma programs that train, test and grade employees in Lean and Six Sigma principles and awardthem Lean Six Sigma certifications. We recently launched a simplified transformation framework – ProDG, a four-step method focused on driving outcomesleveraging Lean Six Sigma, transformation, change management, digital and design thinking tools The rankings of Lean Six Sigma qualifications fromlowest to highest are green belt, black belt and master black belt.As of December 31, 2015, we had more than 15,000 employees with Six Sigma green belt training, over 600 employees with Six Sigma black belttraining, and more than 42,000 Lean-trained employees. This large number of employees with Lean Six Sigma training helps infuse our organization with adisciplined, analytical approach to everything we do.RecruitingWe face meaningful competition for skilled employees in every jurisdiction in which we operate. We have refined our talent acquisition strategy byorganizing our recruiting teams by industry vertical and utilizing an 9SMTable of Contentsinternal executive recruiting team, social media platforms, online job portals and professional search firms to recruit globally. Our internal employee referralprogram has also become a key recruiting vehicle for us. We believe that our focus on our employees’ career development makes us attractive to candidatesbeyond our delivery center locations. As part of our global diversity and inclusion efforts, we have launched Career 2.0, a program to attract top femaleleaders who have just returned from the workforce after an extended break.Training and DevelopmentWe believe in extensive and continuous training of our employees. We have the infrastructure to train approximately 5,200 people at any one timewith 234 trainers. In 2015, we had more than 16,000 employees enrolled in part-time professional degree, e-learning and other non-degree programs providedinternally or by universities and other third parties. Our training programs are designed to transfer the industry-specific knowledge and experience of ourindustry leaders to our employees to ensure we maintain our deep process and domain expertise across the industries and processes in which we work. Ourtraining programs cover a large number of topics, including specific service offerings, key technical and IT skills, our different clients’ workplace culturesand Lean and Six Sigma methodologies. A large part of our continuous training is designed to impart the skills and knowledge required by our employees tomove to positions of increasing responsibility within Genpact.RetentionIn order to meet our growth and service commitments, we are constantly striving to attract and retain employees. There is significant turnover ofemployees in the business process management and information technology sectors generally, particularly in India where the majority of our employees arecurrently based. Our attrition rate for all employees who have been employed by us for one day or more was 27% in 2015. We believe this rate is relativelylow for our industry based on statistics published by industry associations such as NASSCOM. We attribute this low attrition rate to a number of factors,including our effective recruiting measures, extensive training and a strong culture of providing opportunities for growth and learning. Approximately 13%of our employees were promoted in 2015, and we filled a majority of new positions internally.We also take aggressive action to monitor and minimize potential attrition. Using Six Sigma principles we have developed an early warning systemthat tracks employees and gives us an insight into which employees are most likely to resign. These employees are automatically highlighted to managementwho can take action such as relocating the employee or enrolling the employee in continuing education programs to increase the likelihood of retention.As another measure designed to minimize attrition, we “right-skill” our employees to the tasks assigned to them. This means that we match the level ofservices required to the experience and qualification of the employee concerned and we avoid having over-qualified people in any particular job. This allowsus to give our highly qualified and experienced people higher-value jobs and, coupled with the practice of up-skilling, ensures better career paths for all ofour employees.Corporate Social ResponsibilityGenpact’s approach to Corporate Social Responsibility focuses on three pillars that reflect our strengths and core expertise as well as causes that ouremployees are passionate about: • Education and employability • Environment and sustainability • Inclusion and community outreach 10Table of ContentsWe have institutionalized a culture of giving and volunteering through a number of global platforms, programs, projects and social initiatives. Ourmore than 14,000 employee volunteers have, among other things, helped underprivileged children and women to develop vocational skills, worked onenvironmental initiatives such as rejuvenating urban forest land and participating in cleaning drives, and participated in programs that address the health andnutritional needs of the poor. Additionally, more than 15,000 of our employees have participated in our payroll-based charitable donation programs.Our AlliancesWe have entered into and continue to pursue partnerships or alliances with companies whose capabilities complement ours in an effort to enhance ourexisting solutions or create new solutions to address market needs. Such alliances may be transaction or deal-specific, may be for the development of jointcapabilities in a service line or may take the form of enterprise-wide transformational partnerships. For example, we have a joint venture with Markit Limited,KYC.com, to create a streamlined service to manage “Know-Your-Customer” information for clients in our capital markets vertical.We recently launched an incubation program designed to enrich our Lean Digital solutions by nurturing partnerships with established and emergingplayers and start-ups that specialize in leading-edge disruptive digital technologies. Our goal is to quickly transform business processes and operations tocreate a step change in companies’ competitiveness. A key ingredient in this ecosystem is our extensive work with our many clients across industries. Ourinnovation center will combine our partners’ solutions with our expertise and hands-on practical experience.Sales and MarketingWe market our services to both existing and potential clients through our business development team. Members of this team are based around theglobe, including in the United States, Europe, Australia and Asia, and dedicate their time to expanding the services we provide to our existing clients as wellas acquiring new clients.We have designated client partners or global relationship managers for each of our strategic relationships. The relationship manager is supported byprocess improvement, quality, transition, finance, human resources, information technology and industry/product subject matter expert teams to ensure thebest possible solution is provided to our clients. We constantly measure our client satisfaction levels to ensure that we maintain high service levels for eachclient, using measures such as the Net Promoter Score. Our sales force is primarily organized by industry vertical teams that are supported by horizontalservice offerings.The length of our selling cycle varies depending on the type of engagement. The sales cycle for project work is much shorter than the sales cycle for alarge business process engagement. Our efforts may begin in response to our lead generation program, a perceived opportunity, a reference by an existingclient, a request for proposal or otherwise. In addition to our business development personnel, the sales effort involves people from the relevant service areas,people familiar with that prospective client’s industry, business leaders and Six Sigma resources. We may expend substantial time and resources in securingnew business. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Revenues.”As our relationship with a client grows, the time required to win an engagement for additional services often gradually declines. In addition, as webecome more knowledgeable about a client’s business and processes, our ability to identify opportunities to create value for the client typically increases.For example, productivity benefits and greater business impact can often be achieved by applying our SEP methodology, by focusing on processes that are“upstream” or “downstream” from the processes we initially handle, or by applying our analytical and IT capabilities to re-engineer processes. In addition,clients often become more willing over time to turn over more complex and critical processes to us as we demonstrate our capabilities. 11SMSMTable of ContentsWe also strive to foster relationships between our senior leadership team and our clients’ senior management. These “C-level” relationships ensure thatboth parties are focused on establishing priorities, aligning objectives and driving client value from the top down. High-level executive relationships havebeen particularly constructive as a means of increasing business from our existing clients. It also provides us with a forum for addressing client concerns. Ourgovernance methodology is designed to ensure that we are well connected at all levels of our clients’ organizations (executive, management and operations).Significant new business opportunities are reviewed by business and sales leaders from the applicable industry vertical, operations personnel, andmembers of our finance department. If they determine that the new business is aligned with our strategic objectives and a good use of our resources, then ourbusiness development team is authorized to pursue the opportunity.Global Delivery PlatformA key differentiator for us is our global network of 72 delivery centers in 17 countries. We also have a number of employees who work directly in clientlocations or provide services from a virtual environment which offers flexibility for both clients and employees. Our presence in locations around the worldprovides us with multi-lingual capabilities, access to a larger talent pool, “near-shoring” capabilities to take advantage of time zones, as well as the ability toprovide services from the United States. With this network, we manage complex processes in multiple geographic regions. We use different locations fordifferent types of services depending on the specific client needs and the mix of skills and cost of employees available in each location. We choose thelocation of our delivery centers based on a number of factors, which include the available talent pool, infrastructure, government support and operating costs,as well as client demand.We have been a pioneer in our industry in opening centers in several cities in India as well as in some of the other countries in which we operate. Wewere one of the first companies in our industry to establish operating centers in certain locations, including Dalian, Foshan and Huaqiao in China; Bucharest,Romania; and Gurgaon, Hyderabad, Jaipur and Kolkata in India. We constantly evaluate new locations, including new countries and new cities withincountries in which we currently operate, as potential sites for delivery centers and offices. Our delivery centers are located in Brazil, China, the CzechRepublic, Guatemala, India, Japan, Kenya, Mexico, the Netherlands, the Philippines, Poland, Romania, Slovakia, South Africa, the United Arab Emirates, theUnited Kingdom, and the United States. As of December 31, 2015, we provided services in more than 30 languages.The large number of different countries from which we serve our clients differentiates us from a number of our competitors and enables us to takeadvantage of different languages and time zones which, in turn, enhances our ability to serve our clients.Intellectual PropertyIncreasingly, the solutions we offer our clients include a range of proprietary methodologies, software, and reusable knowledge capital. We alsodevelop intellectual property in the course of our business and our agreements with our clients regulate the ownership of such intellectual property. Weregularly apply for patents, trademarks, service marks, copyrights and domain names to protect our intellectual property. Some of our intellectual propertyrights are trade secrets and relate to proprietary business process enhancements.At times, we use third-party software platforms and the software systems of our clients to provide our services. Our agreements with our clients normallyinclude a license to use the client’s proprietary systems to provide our services. Clients authorize us to access and use third party software licenses held by theclient so that we may provide our services. 12Table of ContentsIt is our practice to enter into agreements with our employees and independent contractors that: • ensure that all new intellectual property developed by our employees or independent contractors in the course of their employment or engagementis assigned to us; • provide for employees’ and independent contractors’ cooperation in intellectual property protection matters even if they no longer work for us; and • include a confidentiality undertaking by our employees and independent contractors.CompetitionWe operate in a highly competitive and rapidly evolving global market. We have a number of competitors offering services that are the same as orsimilar to ours. Our competitors include: • large multinational service providers, such as Accenture plc, Capgemini S.A. and International Business Machines Corporation, and largemultinational accounting firms, such as Deloitte Consulting LLP and PricewaterhouseCoopers LLP; • companies that are primarily business process service providers operating from low-cost countries, most commonly India, such as ExlServiceHoldings, Inc. and WNS Holdings Limited; • companies that are primarily information technology service providers with some business process service capabilities, such as CognizantTechnology Solutions, Infosys Technologies Limited, Tata Consultancy Services Limited and Wipro Limited; • smaller, niche service providers that provide services in a specific geographic market, industry or service area; and • in-house departments of companies that use their own resources rather than engage an outside firm for the types of services and solutions weprovide.Our revenues are derived primarily from Fortune Global 500 and Fortune 1000 companies. We believe that the principal competitive factors in ourindustry include: • skills and capabilities; • technical and industry expertise; • innovative service and product offerings; • ability to add value, including through continuous process improvement; • reputation and client references; • contractual terms, including competitive pricing; • scope of services; • quality of services and solutions; • ability to sustain long-term client relationships; and • global reach and scale.Our clients typically retain us on a non-exclusive basis. 13Table of ContentsRegulationWe are subject to regulation in many jurisdictions around the world as a result of the complexity of our operations and services, including at thefederal, state and local level, particularly in the countries where we have operations and where we deliver services. We are also subject to regulation byregional bodies such as the European Union, or EU.In addition, the terms of our service contracts typically require that we comply with applicable laws and regulations. In some contracts, we arecontractually required to comply even if such laws and regulations apply to our clients, but not to us. In some of our service contracts, our clients require usto take specific steps intended to make it easier for our clients to comply with requirements that are applicable to them. In some of our other service contracts,our clients undertake the responsibility to inform us about laws and regulations that may apply to us in jurisdictions in which they are located.If we fail to comply with any applicable laws and regulations, we may be restricted in our ability to provide services, and may also be the subject ofcivil or criminal actions involving penalties, any of which could have a material adverse effect on our operations. Our clients generally have the right toterminate our contracts for cause in the event of regulatory failures, subject to notice periods. See Item 1A—“Risk Factors—Risks Related to our Business—Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these laws and regulationscould harm our business.” If we fail to comply with contractual commitments to facilitate our clients’ compliance, we may be liable for contractual damages,and clients in regulated industries may be less willing to use our services.In the United States, we are either directly subject to, or contractually required to comply or facilitate our clients’ compliance with, laws andregulations arising out of our work for clients operating there, especially in the area of banking, financial services and insurance, such as the FinancialModernization Act (sometimes referred to as the Gramm-Leach-Bliley Act), the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act, theRight to Financial Privacy Act, the USA PATRIOT Act, the Bank Service Company Act, the Home Owners Loan Act, the Electronic Funds Transfer Act, theEqual Credit Opportunity Act, the Real Estate Settlement Procedures Act and the Troubled Assets Relief Program, as well as regulation by U.S. agencies suchas the SEC, the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Commodity Futures TradingCommission, the Federal Financial Institutions Examination Council, the Office of the Comptroller of the Currency, and the Consumer Financial ProtectionBureau. We are also subject to regulation under the Health Insurance Portability and Accountability Act, the Federal Trade Commission Act, the FamilyEducational Rights and Privacy Act, the Communications Act, the Electronic Communications Privacy Act and applicable regulations in the area of healthand other personal information that we process as part of our services.Because of our debt collections work in the United States, we are also regulated by laws such as the Truth in Lending Act, the Fair Credit Billing Actand the Fair Debt Collection Practices Act and related regulations. We are currently licensed to engage in debt collection activities in all jurisdictions in theUnited States where licensing is required.Because of our mortgage origination activities in the United States, in addition to the applicable regulations listed above, we are subject to laws suchas the S.A.F.E. Mortgage Licensing Act, the Bank Secrecy Act, the Equal Credit Opportunity Act, the Fair and Accurate Credit Transactions Act, the FairHousing Act, the Homeowners Protection Act, the Truth in Lending Act, the Real Estate Settlement Procedures Act, and the Home Mortgage Disclosure Actand by regulatory bodies such as the U.S. Department of Housing and Urban Development. We currently hold mortgage related licenses in 48 states and theDistrict of Columbia and are regulated by each applicable state regulatory agency.Because of our insurance processing activities, we are currently licensed as a third party administrator in 41 states and are regulated by the departmentof insurance in each such state. In two other states, we qualify for regulatory exemption from licensing based on the insurance processing activities weprovide. 14Table of ContentsWe are affected by laws in the United States, the United Kingdom and the EU that are intended to limit the impact of outsourcing on employees inthose countries. See Item 1A—“Risk Factors—Risks Related to our Business—Future legislation in the United States and other jurisdictions couldsignificantly affect the ability or willingness of our clients and prospective clients to utilize our services.”We are also subject to laws and regulations on direct marketing, such as the Telemarketing Consumer Fraud and Abuse Prevention Act and theTelemarketing Sales Rule, the Telephone Consumer Protection Act and rules promulgated by the Federal Communications Commission, and the CAN-SPAMAct.We are subject to laws and regulations governing foreign trade, such as the Arms Export Control Act, as well as by government bodies such as theCommerce Department’s Bureau of Industry and Security, the State Department’s Directorate of Defense Trade Controls and the Treasury Department’s Officeof Foreign Assets Control.Several of our service delivery centers, primarily located in India, China, the Philippines and Guatemala, benefit from tax incentives or concessionalrates provided by local laws and regulations. The Indian Special Economic Zones Act of 2005, or SEZ legislation, introduced a tax holiday in certainsituations for operations established in designated “special economic zones,” or SEZs. The SEZ tax benefits are available only for new business operationsthat are conducted at qualifying SEZ locations. We cannot predict what percentage of our operations or income in India or other jurisdictions in future yearswill be eligible for a tax holiday. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Income Taxes.” In addition to the tax holidays described above, certain benefits are also available to us under certain Indian state laws. These benefitsinclude rebates and waivers in relation to payments for the transfer or registration of property (including for the purchase or lease of premises), waivers ofconversion fees for land, exemption from state pollution control requirements, entry tax exemptions, labor law exemptions and commercial usage ofelectricity.Our hedging activities and currency transfer are restricted by regulations in certain countries, including India, Romania and China.Certain Bermuda Law ConsiderationsAs a Bermuda company, we are also subject to regulation in Bermuda. Among other things, we must comply with the provisions of the Companies Act1981 regulating the declaration and payment of dividends and the making of distributions from contributed surplus.We are classified as a non-resident of Bermuda for exchange control purposes by the Bermuda Monetary Authority. Pursuant to our non-resident status,we may engage in transactions in currencies other than Bermuda dollars. There are no restrictions on our ability to transfer funds in and out of Bermuda or topay dividends to United States residents that are holders of our common shares.Under Bermuda law, “exempted” companies are companies formed for the purpose of conducting business outside Bermuda from a principal place ofbusiness in Bermuda. As an exempted company, we may not, without a license granted by the Minister of Economic Development, participate in certainbusiness transactions, including transactions involving Bermuda landholding rights and the carrying on of business of any kind, for which we are notlicensed in Bermuda.Available InformationWe file current and periodic reports, proxy statements, and other information with the SEC, copies of which can be obtained from the SEC’s PublicReference Room at 100 F Street, NE., Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling theSEC at 1-800-SEC-0330. 15Table of ContentsThe SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that fileelectronically with the SEC, at www.sec.gov. We make available free of charge on our website, www.genpact.com, our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of theSecurities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Thecontents of our website are not incorporated by reference into this Annual Report.Executive OfficersThe following table sets forth information concerning our executive officers as of February 15, 2016: Name Age Position(s)N.V. Tyagarajan 54 President, Chief Executive Officer and DirectorEdward Fitzpatrick 49 Chief Financial OfficerPatrick Cogny 49 Senior Vice President, Infrastructure, Manufacturing and ServicesVictor Guaglianone 60 Senior Vice President and General CounselPiyush Mehta 47 Senior Vice President, Human ResourcesArvinder Singh 51 Senior Vice President, Capital Markets and IT ServicesMohit Thukral 50 Senior Vice President, Banking, Financial Services and InsuranceN.V. Tyagarajan has served as our President and Chief Executive Officer since June 2011. From February 2009 to June 2011, he was our ChiefOperating Officer. From February 2005 to February 2009, he was our Executive Vice President and Head of Sales, Marketing and Business Development.From October 2002 to January 2005, he was Senior Vice President, Quality and Global Operations, for GE’s Commercial Equipment Finance division.Between 1999 and 2002, he served as our Chief Executive Officer.Edward Fitzpatrick became our Chief Financial Officer in July 2014. Prior to joining Genpact, he spent 13 years at Motorola Solutions Inc. and itspredecessor company Motorola Inc., most recently serving as executive vice president and Chief Financial Officer. Prior to Motorola, he worked at GeneralInstrument Corporation and Price Waterhouse, LLP. Mr. Fitzpatrick also currently serves as a director of CBOE, Inc.Patrick Cogny has served as our Senior Vice President of Infrastructure, Manufacturing and Services since September 2011. From 2005 to August2011, he was the Chief Executive Officer of Genpact Europe. Prior to this, he spent 15 years working for GE in the Healthcare business and in the GE Europecorporate headquarters, in France, the United States and Belgium.Victor Guaglianone has served as our Senior Vice President, General Counsel & Corporate Secretary since January 2007. From 2004 to 2007, he wassenior counsel at Holland & Knight LLP. From 2003 to 2004, he served as a commercial arbitrator for the American Arbitration Association. Prior to 2003, hespent 16 years at GE Capital, most recently as Vice President and Associate General Counsel.Piyush Mehta has served as our Senior Vice President of Human Resources since March 2005. He has worked for us since 2001 as Vice President ofHuman Resources.Arvinder Singh has served as our Senior Vice President, Capital Markets and IT Services since October 2013. From August 2011 to October 2013, hewas Senior Vice President, Sales and Marketing, Client Relationships and Re-engineering. From August 2008 to July 2011, he was Global Head of ClientRelationships and GE, and from June 2005 to August 2008 he was the Business Leader for Lean Six Sigma, Transitions and Solutions. Prior to joiningGenpact in June 2005 he was Senior Vice President, Six Sigma and Chief Quality Officer for GE Vendor Financial Services.Mohit Thukral has served as our Senior Vice President, Banking, Financial Services and Insurance since 2004. He was also responsible for ourhealthcare business from July 2011 to December 2014. 16Table of ContentsItem 1A. Risk FactorsRisks Related to our BusinessOur results of operations could be adversely affected by economic and political conditions and the effects of these conditions on our clients’businesses and levels of business activity.Global macroeconomic conditions affect our clients’ businesses and the markets they serve. Volatile, negative or uncertain economic conditions in oursignificant markets have undermined and could in the future undermine business confidence in our significant markets or in other markets, which areincreasingly interdependent, and cause our clients to reduce or defer their spending on new initiatives, or may result in clients reducing, delaying oreliminating spending under existing contracts with us, which would negatively affect our business. Growth in the markets we serve could be at a slow rate, orcould stagnate or contract, in each case, for an extended period of time. Differing economic conditions and patterns of economic growth and contraction inthe geographical regions in which we operate and the industries we serve have affected and may in the future affect demand for our services. A materialportion of our revenues and profitability is derived from our clients in North America and Europe. Weak demand or a slower-than-expected recovery in thesemarkets could have a material adverse effect on our results of operations. Ongoing economic volatility and uncertainty and changing demand patterns affectour business in a number of other ways, including making it more difficult to accurately forecast client demand and effectively build our revenue andresource plans. Economic volatility and uncertainty is particularly challenging because it may take some time for the effects and changes in demand patternsresulting from these and other factors to manifest themselves in our business and results of operations. Changing demand patterns from economic volatilityand uncertainty could have a significant negative impact on our results of operations.Historically, GE has accounted for a significant portion of our revenues and any material loss of business from, or change in our relationship with,GE could have a material adverse effect on our business, results of operations and financial condition.Historically, we have derived a significant portion of our revenues from GE. For 2013, 2014 and 2015, GE accounted for 22.6%, 20.4% and 18.7% ofour revenues, respectively. As a result of GE’s publicly announced plan to divest a significant portion of its GE Capital business, we expect that our servicesfor GE will decline as GE concludes the planned divestitures. We intend to make efforts to procure contracts with respect to the divested businesses; however,there can be no assurance that we will be able to procure any such contracts or that such contracts would be on favorable terms. In addition, our masterservices agreement with GE, which commits GE to purchase minimum dollar amounts of services annually, expires in December 2016. As a result of theforegoing, we expect our revenues from GE to continue to decline in the future.We expect that our business with GE will continue to come from a variety of GE’s businesses and that, in general, GE’s decisions to use our serviceswill continue to be made by a number of people within GE. Therefore, although some decisions may be made centrally at GE, we expect that the total level ofbusiness we receive will continue to depend on the decisions of the various operating managers of such businesses. Finally, there can be no assurance that GEwill not establish its own business unit to provide English-language business process services from low-wage countries or otherwise compete with us.Any of the above events could have a material adverse effect on our business, results of operations and financial condition.Future legislation in the United States and other jurisdictions could significantly affect the ability or willingness of our clients and prospectiveclients to utilize our services.The topic of companies outsourcing services to organizations operating in other countries is a source of political discussion in many countries. Forexample, many organizations and public figures in the United States 17Table of Contentshave publicly expressed concern about a perceived association between offshore service providers and the loss of jobs in the United States. Current orprospective clients may elect to perform such services themselves or may be discouraged from transferring these services from onshore to offshore providersto avoid negative perceptions that may be associated with using an offshore provider. Any slowdown or reversal of existing industry trends toward offshoreoutsourcing would seriously harm our ability to compete effectively with competitors that provide services from the United States.In the United States, federal and state measures aimed at limiting or restricting offshore outsourcing have been occasionally proposed and enacted. Themeasures that have been enacted to date generally have restricted the ability of government entities to outsource work to offshore business process serviceproviders and have not materially adversely affected our business, primarily because we do not currently work for such governmental entities and they are notcurrently a focus of our sales strategy. Such legislation might, for example, require call centers to disclose their geographic locations, require notice toindividuals whose personal information is disclosed to non-U.S. affiliates or subcontractors, require disclosures of companies’ foreign outsourcing practices,or limit eligibility for government contracts or financial incentives for companies that transfer work to foreign work locations. Legislation to expand privacyprotections in the United States could discourage offshore outsourcing by, for example, requiring notice and consent as a condition for sharing sensitivepersonal information with third party service providers. In addition, the current U.S. President has encouraged tax incentives for U.S. businesses to insourcefunctions or return outsourced operations to the U.S. There can be no assurance that pending or future legislation in the United States that would significantlyadversely affect our business, results of operations and financial condition will not be enacted. Legislation enacted in certain European jurisdictions and anyfuture legislation in Europe, Japan or any other country in which we have clients restricting the performance of business process services from an offshorelocation could also have a material adverse effect on our business, results of operations and financial condition. For example, evolving European Unioncloud computing standards and regulations and proposed taxes on outsourced data center activities may limit or restrict our operations, or make them morecostly. Moreover, legislation enacted in the United Kingdom and by many EU countries, provides that if a company outsources all or part of its business to aservice provider or changes its current service provider, the affected employees of the company or of the previous service provider are entitled to becomeemployees of the new service provider, generally on the same terms and conditions as their original employment. In addition, dismissals of employees whowere employed by the company or the previous service provider immediately prior to that outsourcing, if the dismissals resulted solely or principally fromthe outsourcing, are automatically considered unfair dismissals that entitle such employees to compensation. As a result, in order to avoid unfair dismissalclaims we may have to offer, and become liable for, voluntary redundancy payments to the employees of our clients in the United Kingdom and other EUcountries who have adopted similar laws who transfer business to us. We believe that this legislation could materially affect our ability to obtain newbusiness from companies in the EU and, after including the cost of the potential compensation paid for unfair dismissal claims or redundancies, to provideoutsourced services to our current and future clients in the EU in a cost-effective manner.Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violations of these laws andregulations could harm our business.We are subject to, or subject to contractual requirements to comply with or facilitate our clients’ compliance with, numerous, and sometimesconflicting, legal regimes on matters such as anticorruption, import/export controls, trade restrictions, taxation, immigration, internal and disclosure controlobligations, securities regulation, anti-competition, data privacy and protection, wage-and-hour standards, and employment and labor relations. Our clients’business operations are also subject to numerous regulations, and our clients may require that we perform our services in compliance with regulationsapplicable to them or in a manner that will enable them to comply with such regulations.The global nature of our operations increases the difficulty of compliance. Compliance with diverse legal requirements is costly, time-consuming andrequires significant resources. Violations of one or more of these 18Table of Contentsregulations in the conduct of our business could result in significant fines, criminal sanctions against us and/or our employees, prohibitions on doingbusiness, breach of contract damages and harm to our reputation. Due to the varying degrees of development of the legal systems of the countries in which weoperate, local laws may not be well developed or provide sufficiently clear guidance and may be insufficient to protect our rights.In particular, in many parts of the world, including countries in which we operate and/or seek to expand, practices in the local business communitymight not conform to international business standards and could violate anticorruption laws or regulations, including the U.S. Foreign Corrupt Practices Actand the UK Bribery Act 2010. Our employees, subcontractors, agents, joint venture partners, the companies we acquire and their employees, subcontractorsand agents, and other third parties with which we associate, could take actions that violate policies or procedures designed to promote legal and regulatorycompliance or applicable anticorruption laws or regulations. Violations of these laws or regulations by us, our employees or any of these third parties couldsubject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines orpenalties, disgorgement of profits and suspension or disqualification from work, any of which could materially adversely affect our business, including ourresults of operations and our reputation.Tax matters may have an adverse effect on our operations, effective tax rate and financial condition.We are subject to income taxes in the United States and in numerous foreign jurisdictions, notably in India where we have substantial operations andderive substantial revenue. Our provision for income taxes, actual tax expense and cash tax liability could be adversely affected by a variety of factorsincluding, but not limited to, lower income before taxes generated in countries with lower tax rates; higher income generated in countries with higher taxrates; changes in tax laws and regulations or in applicable income tax treaties; changes in accounting principles or interpretations thereof or in the valuationof deferred tax assets and liabilities; the possible disappearance of certain tax concessions that we have enjoyed in prior years; and adverse outcomes of taxexaminations and pending tax-related litigation. Any of these factors could have a material adverse effect on our operations, effective tax rate and financialcondition.We are subject to examination of our income tax returns by the U.S. Internal Revenue Service and tax authorities around the world, notably in Indiawhere we have substantial operations and derive substantial revenue, and there can be no assurance that negative outcomes from those examinations or anyappeals therefrom will not adversely affect our provision for income taxes and cash tax liability, which in turn could have a material adverse effect on ouroperations, effective tax rate and financial condition. For example, the Government of India is appealing a 2011 ruling by the Delhi High Court that GenpactIndia (one of our subsidiaries) cannot be held to be a representative assessee of GE in connection with an assertion that GE has a “permanent establishment”in India by reason a 2004 transfer of shares of our predecessor company. We believe that, if the Government of India is successful in its appeal, GE would beobligated to indemnify us for any resulting tax, though there can be no assurance as to the outcome of this matter.In addition, the Government of India issued assessment orders to us in 2014 and 2015 seeking to assess tax on certain transactions that occurred in2009 and 2010. We do not believe that the transactions should be subject to tax in India, primarily due to the relief provided under the Mauritius-Indiatreaty, and have accordingly filed appeals. We have received demands for potential tax claims resulting from these two assessments in an aggregate amountof approximately $57 million, including interest. To date, we have paid a total of $28 million to the Indian tax authority under protest, and may be requiredto pay the remainder of the demands pending resolution of the matter. There is no assurance that we will prevail in this matter or similar transactions where wehave relied on the Mauritius-India treaty, and a final determination of tax in the amounts claimed could have a material adverse effect on our operations,effective tax rate and financial condition.More generally, the Indian tax authorities may claim that Indian tax is owed with respect to certain of our transactions, such as our acquisitions(including our subsidiaries organized under Indian law or owning assets located in India), internal reorganizations and the sale of our shares in publicofferings or otherwise by our 19Table of Contentsexisting significant shareholders, in which indirect transfers of Indian subsidiaries or assets are involved. Those authorities may seek to impose tax on usdirectly or as a withholding agent or representative assessee of the seller in these or other transactions.Furthermore, there is growing pressure in many jurisdictions and from multinational organizations such as the Organization for Economic Cooperationand Development (OECD) and the European Union (EU) to amend existing international tax rules in order to render them more responsive to current globalbusiness practices. For example, in October 2015 the OECD published a package of measures for reform of the international tax rules as a product of its BaseErosion and Profit Shifting (BEPS) initiative, which was endorsed by the G20 finance ministers. Many of the initiatives in the BEPS package will requireamendments to the domestic tax legislation of various jurisdictions. Separately, the European Union is asserting that a number of country-specific favorabletax regimes and rulings in certain member states may violate, or have violated, EU law, and may require rebates of some or all of the associated tax benefits tobe paid by benefitted taxpayers in particular cases. Although we monitor these developments, it is very difficult to assess to what extent these changes maybe implemented in the jurisdictions in which we conduct our business or may impact the way in which we conduct our business or our effective tax rate dueto the unpredictability and interdependency of these potential changes. As these and other tax laws and related regulations and practices change, thosechanges could have a material adverse effect on our operations, effective tax rate and financial condition.If the transfer pricing arrangements we have among our subsidiaries are determined to be inappropriate, our tax liability may increase.We have transfer pricing arrangements among our subsidiaries in relation to various aspects of our business, including operations, marketing, sales anddelivery functions. U.S. and Indian transfer pricing regulations, as well as regulations applicable in other countries in which we operate, require that anyinternational transaction involving associated enterprises be on arm’s-length terms. We consider the transactions among our subsidiaries to be substantiallyon arm’s-length terms. If, however, a tax authority in any jurisdiction reviews any of our tax returns and determines that the transfer prices and terms we haveapplied are not appropriate, or that other income of our affiliates should be taxed in that jurisdiction, we may incur increased tax liability, including accruedinterest and penalties, which would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows, which in turncould have a material adverse effect on our operations, effective tax rate and financial condition.Our revenues are highly dependent on clients located in the United States and Europe, as well as on clients that operate in certain industries. Ifevents or conditions occur which adversely affect the economic health of the United States or Europe, demand in the United States or Europe or in certainindustries for the type of services we provide, or the rate of growth in the industries in which our clients operate, our business, results of operations andfinancial condition may be materially and adversely affected.In 2015, more than 65% of our revenues were derived from clients based in North America and more than 15% of our revenues were derived fromclients based in Europe. Additionally, in 2015, more than 40% of our revenues were derived from clients in the financial services industry, which includesinsurance.A number of factors could adversely affect our ability to do business in the United States or Europe, which could in turn have a material adverse effecton our business, results of operations and financial condition. Any deterioration in economic activity in the United States or Europe could adversely affectdemand for our services, thus reducing our revenue. Increased regulation, changes in existing regulation or increased government intervention in theindustries in which our clients operate may adversely affect growth in such industries and therefore have an adverse impact on our revenues. 20Table of ContentsWe may face difficulties in providing end-to-end business solutions or delivering complex and large projects for our clients that could cause clientsto discontinue their work with us, which in turn could harm our business.We continue to expand the nature and scope of our engagements and have recently expanded our service offerings to incorporate digital solutions thatuse social, mobility, big data and cloud-based technologies. Our ability to effectively offer a wide breadth of end-to-end business solutions depends on ourability to attract existing or new clients to new service offerings, and the market for end-to-end solutions is highly competitive. We cannot be certain that ournew service offerings, particularly our newer digital offerings, will effectively meet client needs or that we will be able to attract clients to these serviceofferings. The complexity of our new service offerings, our inexperience in developing or implementing them, and significant competition in the markets forthese services may affect our ability to market these services successfully. In addition, the breadth of our existing service offerings continues to result inlarger and more complex projects with our clients, which have risks associated with their scope and complexities. Our failure to deliver services that meet therequirements specified by our clients could result in termination of client contracts, and we could be liable to our clients for significant penalties or damages.Larger projects may involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel ordelay additional planned engagements. These terminations, cancellations or delays may result from factors that have little or nothing to do with the qualityof our services, such as the business or financial condition of our clients or the economy generally. Such cancellations or delays make it difficult to plan forproject resource requirements and inaccuracies in such resource planning and allocation may have a negative impact on our profitability.We may fail to attract and retain enough qualified employees to support our operations.Our industry relies on large numbers of skilled employees and our success depends on our ability to attract, train and retain a sufficient number ofqualified employees. Historically, high employee attrition has been common in our industry. See Item 1—“Business—Our People.” In 2015, our attrition ratefor all employees who were employed for a day or more was approximately 27%. We cannot assure you that we will be able to reduce our level of attrition oreven maintain our attrition rate at the 2015 level. If our attrition rate increases, our operating efficiency and productivity may decrease.Competition for qualified employees, particularly in India and China, remains high and we expect such competition to continue. We compete foremployees not only with other companies in our industry but also with companies in other industries, such as software services, engineering services andfinancial services companies. In many locations in which we operate, there is a limited pool of employees who have the skills and training needed to do ourwork. If our business continues to grow, the number of people we will need to hire will increase. We will also need to increase our hiring if we are not able tomaintain our attrition rate through innovative recruiting and retention policies. Significant competition for employees could have an adverse effect on ourability to expand our business and service our clients, as well as cause us to incur greater personnel expenses and training costs.Wage increases in the countries in which we have operations may prevent us from sustaining our competitive advantage and may reduce our profitmargin.Salaries and related benefits of our employees are our most significant costs. Most of our employees are based in India and other countries in whichwage levels have historically been significantly lower than wage levels in the United States and Western Europe for comparably skilled professionals, whichhas been one of our competitive advantages. However, wage levels for comparably skilled employees in most of the countries in which we operate haveincreased and further increases are expected at a faster rate than in the United States and Western Europe because of, among other reasons, faster economicgrowth, increased competition for skilled employees and increased demand for business process services. We will lose this competitive advantage to theextent that we are not able to control or share wage increases with our clients. Sharing wage increases may cause 21Table of Contentsour clients to be less willing to utilize our services. In addition, wage increases may reduce our margins. We will attempt to control such costs by our efforts toadd capacity in locations where we consider wage levels of skilled personnel to be satisfactory, but we may not be successful in doing so. We may need toincrease our wage levels significantly and rapidly in order to attract the quantity and quality of employees that are necessary for us to remain competitive,which may have a material adverse effect on our business, results of operations and financial condition. We have also increased, and expect to furtherincrease, the number of employees we have in the United States from the levels than we have had historically, and this could have a negative effect on ourprofit margin.Currency exchange rate fluctuations in various currencies in which we do business, especially the Indian rupee, the euro and the U.S. dollar, couldhave a material adverse effect on our business, results of operations and financial condition.Most of our revenues are denominated in U.S. dollars, with the remaining amounts largely in euros, pounds sterling, the Australian dollar, the Japaneseyen and the Indian rupee. Most of our expenses are incurred and paid in Indian rupees, with the remaining amounts largely in U.S. dollars, Chinese renminbi,Romanian lei, euros, pounds sterling, Philippine pesos, Japanese yen, Polish zloty, Mexican pesos, Guatemalan quetzals, the South African rand andHungarian forints. As we expand our operations to new countries, we will incur expenses in other currencies. We report our financial results in U.S. dollars.The exchange rates between the Indian rupee, the euro and other currencies in which we incur costs or receive revenues, on the one hand, and the U.S. dollar,on the other hand, have changed substantially in recent years and may fluctuate substantially in the future. See Item 7A—“Quantitative and QualitativeDisclosures about Market Risk.”Our results of operations could be adversely affected over time by certain movements in exchange rates, particularly if the Indian rupee or othercurrencies in which we incur expenses appreciate against the U.S. dollar or if the currencies in which we receive revenues, such as the euro, depreciate againstthe U.S. dollar. Although we take steps to hedge a substantial portion of our Indian rupee-U.S. dollar, Mexican peso-U.S. dollar, Philippines peso-U.S. dollar,euro-U.S. dollar, euro- Romanian leu, euro-Hungarian forint, pound sterling-U.S. dollar, Australian dollar-U.S. dollar and our Chinese renminbi-Japanese yenforeign currency exposures, there is no assurance that our hedging strategy will be successful or that the hedging markets will have sufficient liquidity ordepth for us to implement our strategy in a cost effective manner. In addition, in some countries such as India and China, we are subject to legal restrictionson hedging activities, as well as convertibility of currencies, which could limit our ability to use cash generated in one country in another country and couldlimit our ability to hedge our exposures. Finally, our hedging policies only provide near term protection from exchange rate fluctuations. If the Indian rupeeor other currencies in which we incur expenses appreciate against the U.S. dollar, we may have to consider additional means of maintaining profitability,including by increasing pricing, which may or may not be achievable. See also Item 7—“Management’s Discussion and Analysis of Financial Condition andResults of Operations—Overview—Foreign exchange (gains) losses, net.”Restrictions on entry visas may affect our ability to compete for and provide services to clients, which could have a material adverse effect on ourbusiness and financial results.Our business depends on the ability of our employees to obtain the necessary visas and entry permits to do business in the countries where our clientsand, in some cases, our delivery centers, are located. In recent years, in response to terrorist attacks and global unrest, immigration authorities generally, andthose in the United States in particular, have increased the level of scrutiny in granting visas. If further terrorist attacks occur or global unrest intensifies, thenobtaining visas for our personnel may become even more difficult. Local immigration laws may also require us to meet certain other legal requirements as acondition to obtaining or maintaining entry visas. Adverse economic conditions in countries where our clients may be located may create an environmentwhere countries, including the United States, may restrict the number of visas or entry permits available. In addition, immigration laws are subject tolegislative change and varying standards of application and enforcement due to political forces, economic conditions or other events, including terroristattacks. If we are 22Table of Contentsunable to obtain the necessary visas for our personnel who need to travel internationally, if the issuance of such visas is delayed or if the length of such visasis shortened, we may not be able to provide services to our clients or to continue to provide services on a timely and cost-effective basis, receive revenues asearly as expected or manage our delivery centers as efficiently as we otherwise could, any of which could have a material adverse effect on our business,results of operations and financial condition.The information technology industry is subject to rapid technological change and we may not be successful in addressing these changes.The information technology industry is characterized by rapid technological change, evolving industry standards, changing client preferences and newproduct introductions. The success of our digital and information technology business depends, in part, upon our ability to develop solutions that keep pacewith changes in the industry. We may not be successful in addressing these changes on a timely basis or successfully marketing any changes that weimplement. In addition, products or technologies developed by others may render our services uncompetitive or obsolete. Failure to address thesedevelopments could have a material adverse effect on our business, results of operations and financial condition.Our senior leadership team is critical to our continued success and the loss of such personnel could harm our business.Our future success substantially depends on the continued service and performance of the members of our senior leadership team. These personnelpossess business and technical capabilities that are difficult to replace. In particular, our Chief Executive Officer and other members of our senior leadershipteam have been involved in our business since its commencement under GE. Our employment agreement with our Chief Executive Officer does not obligatehim to work for us for any specified period. If we lose key members of our senior leadership team, we may not be able to effectively manage our currentoperations or meet ongoing and future business challenges, and this may have a material adverse effect on our business, results of operations and financialcondition.We may be unable to service our debt or obtain additional financing on competitive terms.On June 30, 2015, we entered into a five-year credit agreement with certain financial institutions as lenders which replaced our prior credit facility. Thecredit agreement provides for an $800 million term credit facility and a $350 million revolving credit facility, and may be increased by us by up to $150million (or a greater amount based on certain conditions). The credit agreement obligations are unsecured, and guaranteed by certain subsidiaries. As ofDecember 31, 2015, the total amount due under the credit facility, including the amount utilized under the revolving facility, was $801.5 million.Our credit agreement contains covenants that require maintenance of certain financial ratios, including consolidated leverage and interest coverageratios, and also, under certain conditions, restrict our ability to incur additional indebtedness, create liens, make certain investments, pay dividends or makecertain other restricted payments, repurchase common shares, undertake certain liquidations, mergers, consolidations and acquisitions and dispose of certainassets or subsidiaries, among other things. Our cash flow from operations provides the primary source of funds for our debt service payments. If our cash flowfrom operations declines, we may be unable to service or refinance our current debt which could adversely affect our business and financial condition.In addition, we may have limited ability to increase our borrowings under our existing credit agreement without increased pricing. We may in thefuture require additional financing to fund one or more acquisitions and may not be able to obtain such additional financing on competitive terms, whichcould restrict our ability to complete such transactions. 23Table of ContentsWe often face a long selling cycle to secure a new contract as well as long implementation periods that require significant resource commitments,which result in a long lead time before we receive revenues from new relationships.We often face a long selling cycle to secure a new contract. If we are successful in obtaining an engagement, that is generally followed by a longimplementation period in which the services are planned in detail and we demonstrate to a client that we can successfully integrate our processes andresources with their operations. During this time a contract is also negotiated and agreed. There is then a long ramping up period in order to commenceproviding the services. We typically incur significant business development expenses during the selling cycle. We may not succeed in winning a new client’sbusiness, in which case we receive no revenues and may receive no reimbursement for such expenses. Even if we succeed in developing a relationship with apotential new client and begin to plan the services in detail, a potential client may choose a competitor or decide to retain the work in-house prior to the timea final contract is signed. If we enter into a contract with a client, we will typically receive no revenues until implementation actually begins. Our clients mayalso experience delays in obtaining internal approvals or delays associated with technology or system implementations, thereby further lengthening theimplementation cycle. We generally hire new employees to provide services to a new client once a contract is signed. We may face significant difficulties inhiring such employees and incur significant costs associated with these hires before we receive corresponding revenues. If we are not successful in obtainingcontractual commitments after the selling cycle, in maintaining contractual commitments after the implementation cycle or in maintaining or reducing theduration of unprofitable initial periods in our contracts, it may have a material adverse effect on our business, results of operations and financial condition.Our profitability will suffer if we are not able to price appropriately, maintain asset utilization levels and control our costs.Our profitability is largely a function of the efficiency with which we utilize our assets, and in particular our people and delivery centers, and thepricing that we are able to obtain for our services. Our utilization rates are affected by a number of factors, including our ability to transition employees fromcompleted projects to new assignments, hire and assimilate new employees, forecast demand for our services and thereby maintain an appropriate headcountin each of our geographies and workforce and manage attrition, and our need to devote time and resources to training, professional development and othertypically non-chargeable activities. The prices we are able to charge for our services are affected by a number of factors, including our clients’ perceptions ofour ability to add value through our services, competition, introduction of new services or products by us or our competitors, our ability to accuratelyestimate, attain and sustain revenues from client engagements, margins and cash flows over increasingly longer contract periods and general economic andpolitical conditions. Therefore, if we are unable to price appropriately or manage our asset utilization levels, there could be a material adverse effect on ourbusiness, results of operations and financial condition. Our profitability is also a function of our ability to control our costs and improve our efficiency. As weincrease the number of our employees and grow our business, we may not be able to manage the significantly larger and more geographically diverseworkforce that may result and our profitability may not improve. New taxes may also be imposed on our services such as sales taxes or service taxes whichcould affect our competitiveness as well as our profitability.Our results of operations and share price could be adversely affected if we are unable to maintain effective internal controls.The accuracy of our financial reporting is dependent on the effectiveness of our internal controls. We are required to provide a report from managementto our shareholders on our internal control over financial reporting that includes an assessment of the effectiveness of these controls. Internal control overfinancial reporting has inherent limitations, including human error, sample-based testing, the possibility that controls could be circumvented or becomeinadequate because of changed conditions, and fraud. Because of these inherent limitations, internal control over financial reporting might not prevent ordetect all misstatements or fraud. If we cannot maintain and execute adequate internal control over financial reporting or implement required new or 24Table of Contentsimproved controls that provide reasonable assurance of the reliability of the financial reporting and preparation of our financial statements for external use,we could suffer harm to our reputation, fail to meet our public reporting requirements on a timely basis, be unable to properly report on our business and ourresults of operations, or be required to restate our financial statements, and our results of operations, the market price of our common shares and our ability toobtain new business could be materially adversely affected.We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimatesand assumptions could adversely affect our financial results.Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The application of generally acceptedaccounting principles requires us to make estimates and assumptions about certain items and future events that affect our reported financial condition, andour accompanying disclosure with respect to, among other things, revenue recognition and income taxes. We base our estimates on historical experience,contractual commitments and on various other assumptions that we believe to be reasonable under the circumstances and at the time they are made. Theseestimates and assumptions involve the use of judgment and are subject to significant uncertainties, some of which are beyond our control. If our estimates, orthe assumptions underlying such estimates, are not correct, actual results may differ materially from our estimates, and we may need to, among other things,adjust revenues or accrue additional charges that could adversely affect our results of operations.Our operating results may experience significant fluctuations.Our operating results may fluctuate significantly from period to period. The long selling cycle for many of our services as well as the time required tocomplete the implementation phases of new contracts makes it difficult to accurately predict the timing of revenues from new clients or new SOWs as well asour costs. In addition, our future revenues, operating margins and profitability may fluctuate as a result of: lower demand for our services; lower win ratesversus our competition; changes in pricing in response to client demands and competitive pressures; changes to the financial condition of our clients;employee wage levels and utilization rates; changes in foreign exchange rates, including the Indian rupee versus the U.S. dollar and the euro versus the U.S.dollar; the timing of collection of accounts receivable; enactment of new taxes; changes in domestic and international income tax rates and regulations; andchanges to levels and types of share-based compensation awards and assumptions used to determine the fair value of such awards. As a result of these factors,it is possible that in some future periods, our revenues and operating results may be significantly below the expectations of public market analysts andinvestors. In such an event, the price of our common shares would likely be materially and adversely affected.We enter into long-term contracts and fixed price contracts with our clients. Our failure to price these contracts correctly may negatively affect ourprofitability.The pricing of our services is usually included in SOWs entered into with our clients, many of which are for terms of two to five years. In certain cases,we have committed to pricing over this period with only limited sharing of risk regarding inflation and currency exchange rates. In addition, we are obligatedunder some of our contracts to deliver productivity benefits to our clients. If we fail to estimate accurately future wage inflation rates, currency exchange ratesor our costs, or if we fail to accurately estimate the productivity benefits we can achieve under a contract, it could have a material adverse effect on ourbusiness, results of operations and financial condition.A portion of our SOWs are currently billed on a fixed price basis rather than on a time and materials basis. We may increase the number of fixed pricecontracts we perform in the future. Any failure to accurately estimate the resources or time required to complete a fixed price engagement or to maintain therequired quality levels or any unexpected increase in the cost to us of employees, office space or technology could expose us to risks associated with costoverruns and could have a material adverse effect on our business, results of operations and financial conditions. 25Table of ContentsWe could be liable to our clients or others for damages, subject to criminal liability, and our reputation could be damaged, if our informationsystems are breached or confidential or sensitive client or employee data is compromised.We are often required to collect, process and store sensitive or confidential client data in connection with the services we provide under our contracts,including names, address, social security numbers, personal health information, credit card account numbers, payment history records, and checking andsavings account numbers. In addition, we collect and store data regarding our employees. As a result, we are subject to numerous data protection and privacylaws and regulations designed to protect this information in the countries in which we operate. If any person, including any of our current or formeremployees, negligently disregards or intentionally breaches our established controls with respect to sensitive data or if we do not adapt to changes in dataprotection legislation, we could be subject to significant litigation, monetary damages, regulatory enforcement actions, fines and/or criminal prosecution inone or more jurisdictions.The threat of incursion into our information systems and technology infrastructure has increased in recent years with the increasing number andsophistication of third parties who have hacked, attacked, disrupted or otherwise invaded information systems of other companies and have misappropriatedor disclosed data. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently or may bedesigned to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate thesetechniques or implement adequate preventative measures. If an actual or perceived breach of our security occurs, whether through breach of our computersystems, systems failure or otherwise, the market perception of the effectiveness of our security measures and our reputation could be harmed and we couldlose existing or potential customers. We may also be liable to our clients or others for damages caused by disclosure of confidential information or systemfailures. Many of our contracts do not limit our potential liability for breaches of confidentiality. We may also be subject to civil actions and criminalprosecution by government or government agencies for breaches relating to such data. Our insurance coverage for breaches or mismanagement of such datamay not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us and our insurers may disclaimcoverage as to any future claims.We may be subject to claims for substantial damages by our clients arising out of disruptions to their businesses or inadequate service, and ourinsurance coverage may be inadequate.Most of our service contracts with clients contain service level and performance requirements, including requirements relating to the quality of ourservices. Failure to consistently meet service requirements of a client or errors made by our employees in the course of delivering services to our clients coulddisrupt the client’s business and result in a reduction in revenues or a claim for damages against us. Additionally, we could incur liability if a process wemanage for a client were to result in internal control failures or impair our client’s ability to comply with its own internal control requirements.Under our MSAs with our clients, our liability for breach of our obligations is generally limited to actual damages suffered by the client and istypically capped at the greater of an agreed amount or the fees paid or payable to us under the relevant agreement. These limitations and caps on liabilitymay be unenforceable or otherwise may not protect us from liability for damages. In addition, certain liabilities, such as claims of third parties for which wemay be required to indemnify our clients or liability for breaches of confidentiality, are generally not limited under those agreements. Our MSAs aregoverned by laws of multiple jurisdictions, therefore the interpretation of such provisions, and the availability of defenses to us, may vary, which maycontribute to the uncertainty as to the scope of our potential liability. Although we have commercial general liability insurance coverage, the coverage maynot continue to be available on acceptable terms or in sufficient amounts to cover one or more large claims and our insurers may disclaim coverage as to anyfuture claims. The successful assertion of one or more large claims against us that exceed available insurance coverage, or changes in our insurance policies(including premium increases or the imposition of large deductible or co-insurance requirements), could have a material adverse effect on our business,results of operations and financial condition. 26Table of ContentsIf we are unable to collect our receivables or unbilled services, our results of operations, financial condition and cash flows could be adverselyaffected.Our business depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed. We evaluate thefinancial condition of our clients and usually bill and collect on relatively short cycles. We have established allowances for losses of receivables andunbilled services. Actual losses on client balances could differ from those that we currently anticipate, and, as a result, we might need to adjust ourallowances. We might not accurately assess the creditworthiness of our clients. Macroeconomic conditions could also result in financial difficulties for ourclients, including bankruptcy and insolvency. This could cause clients to delay payments to us, request modifications to their payment arrangements thatcould increase our receivables balance, or default on their payment obligations to us. If we experience an increase in the time to bill and collect for ourservices, our cash flows could be adversely affected.Some of our contracts contain provisions which, if triggered, could result in lower future revenues and have a material adverse effect on ourbusiness, results of operation and financial condition.Some of our contracts allow a client, in certain limited circumstances, to request a benchmark study comparing our pricing and performance with thatof an agreed list of other service providers for comparable services. Based on the results of the study and depending on the reasons for any unfavorablevariance, we may be required to make improvements in the services we provide or to reduce the pricing for services on a prospective basis to be performedunder the remaining term of the contract, which could have an adverse effect on our business, results of operations and financial condition.Some of our contracts, including our contract with GE, contain provisions that would require us to pay penalties to our clients and/or provide ourclients with the right to terminate the contract if we do not meet pre-agreed service level requirements. Failure to meet these requirements could result in thepayment of significant penalties by us to our clients which in turn could have a material adverse effect on our business, results of operations and financialcondition.A few of our MSAs provide that during the term of the MSA and under specified circumstances, we may not provide similar services to the competitorsof our client. Some of our contracts also provide that, during the term of the contract and for a certain period thereafter ranging from six to 12 months, we maynot provide similar services to certain or any of our client’s competitors using the same personnel. These restrictions may hamper our ability to compete forand provide services to other clients in the same industry, which may inhibit growth and result in lower future revenues and profitability.Some of our contracts with clients specify that if a change of control of our company occurs during the term of the contract, the client has the right toterminate the contract. These provisions may result in our contracts being terminated if there is such a change in control, resulting in a potential loss ofrevenues. In addition, these provisions may act as a deterrent to any attempt by a third party to acquire our company.Some of our contracts with clients require that we bear the cost of any sales or withholding taxes or unreimbursed value-added taxes imposed onpayments made under those contracts. While the imposition of these taxes is generally minimized under our contracts, changes in law or the interpretationthereof and changes in our internal structure may result in the imposition of these taxes and a reduction in our net revenues.Our industry is highly competitive, and we may not be able to compete effectively.Our industry is highly competitive, highly fragmented and subject to rapid change. We believe that the principal competitive factors in our markets arebreadth and depth of process, technology and domain expertise, service quality, the ability to attract, train and retain qualified people, compliance rigor,global delivery capabilities, price and marketing and sales capabilities. We compete for business with a variety of companies, including large multinationalfirms that provide consulting, technology and/or business process services, off- 27Table of Contentsshore business process service providers in low-cost locations like India, in-house captives of potential clients, software services companies that also providebusiness process services and accounting firms that also provide consulting or outsourcing services.Some of our competitors have greater financial, marketing, technological or other resources and larger client bases than we do, and may expand theirservice offerings and compete more effectively for clients and employees than we do. Some of our competitors have more established reputations and clientrelationships in our markets than we do. In addition, some of our competitors who do not have global delivery capabilities may expand their delivery centersto the countries in which we are located which could result in increased competition for employees and could reduce our competitive advantage. There couldalso be new competitors that are more powerful as a result of strategic consolidation of smaller competitors or of companies that each provide differentservices or service different industries.Increased competition may result in lower prices and volumes, higher costs for resources, especially people, and lower profitability. We may not beable to supply clients with services that they deem superior and at competitive prices and we may lose business to our competitors. Any inability to competeeffectively would adversely affect our business, results of operations and financial condition.Our business could be materially and adversely affected if we do not protect our intellectual property or if our services are found to infringe on theintellectual property of others.Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in designing, developing, implementing andmaintaining applications and other proprietary intellectual property rights. In order to protect our rights in these various intellectual properties, we rely upona combination of nondisclosure and other contractual arrangements as well as trade secret, copyright and trademark laws. We also generally enter intoconfidentiality agreements with our employees, consultants, clients and potential clients and limit access to and distribution of our proprietary information.India is a member of the Berne Convention, an international intellectual property treaty, and has agreed to recognize protections on intellectual propertyrights conferred under the laws of other foreign countries, including the laws of the United States. There can be no assurance that the laws, rules, regulationsand treaties in effect in the United States, India and the other jurisdictions in which we operate and the contractual and other protective measures we take, areadequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change. We may not be able to detectunauthorized use and take appropriate steps to enforce our rights, and any such steps may not be successful. Infringement by others of our intellectualproperty, including the costs of enforcing our intellectual property rights, may have a material adverse effect on our business, results of operations andfinancial condition.Although we believe that we are not infringing on the intellectual property rights of others, claims may nonetheless be successfully asserted against usin the future. The costs of defending any such claims could be significant, and any successful claim may require us to modify, discontinue or rename any ofour services. Any such changes may have a material adverse effect on our business, results of operations and financial condition.A substantial portion of our assets and operations are located in India and we are subject to regulatory, economic, social and political uncertaintiesin India.We are subject to several risks associated with having a substantial portion of our assets and operations located in India.We have benefited from many policies of the Government of India and the Indian state governments in the states in which we operate which aredesigned to promote foreign investment generally and the business process services industry in particular, including significant tax incentives, relaxation ofregulatory restrictions, liberalized import and export duties and preferential rules on foreign investment and repatriation. There is no assurance that suchpolicies will continue. Various factors, such as changes in the current central government, 28Table of Contentscould trigger significant changes in India’s economic liberalization and deregulation policies and disrupt business and economic conditions in Indiagenerally and our business in particular.In addition, our financial performance and the market price of our common shares may be adversely affected by general economic conditions andeconomic and fiscal policy in India, including changes in exchange rates and controls, interest rates and taxation policies, as well as social stability andpolitical, economic or diplomatic developments affecting India in the future. In particular, India has experienced significant economic growth over the lastseveral years, but faces major challenges in sustaining that growth in the years ahead. These challenges include the need for substantial infrastructuredevelopment and improving access to healthcare and education. Our ability to recruit, train and retain qualified employees, develop and operate our deliverycenters, and attract and retain clients could be adversely affected if India does not successfully meet these challenges.Our delivery centers are at risk of damage from natural disasters and other disruptions.Our delivery centers and our data and voice communications may be damaged or disrupted as a result of natural disasters such as earthquakes, floods,heavy rains, epidemics, tsunamis and cyclones, technical disruptions such as electricity or infrastructure breakdowns, including damage totelecommunications cables, computer glitches and electronic viruses or man-made events such as protests, riots and labor unrest. Such events may lead to thedisruption of information systems and telecommunication services for sustained periods. They also may make it difficult or impossible for employees to reachour business locations. Damage or destruction that interrupts our provision of services could adversely affect our reputation, our relationships with ourclients, our leadership team’s ability to administer and supervise our business or it may cause us to incur substantial additional expenditure to repair orreplace damaged equipment or delivery centers. We may also be liable to our clients for disruption in service resulting from such damage or destruction.While we currently have commercial liability insurance, our insurance coverage may not be sufficient. Furthermore, we may be unable to secure suchinsurance coverage at premiums acceptable to us in the future or at all. Prolonged disruption of our services would also entitle our clients to terminate theircontracts with us. Any of the above factors may adversely affect our business, results of operations and financial condition.We may face difficulties as we expand our operations into countries in which we have no prior operating experience.We intend to continue to expand our global footprint in order to maintain an appropriate cost structure and meet our clients’ delivery needs. This mayinvolve expanding into countries other than those in which we currently operate. It may involve expanding into less developed countries, which may haveless political, social or economic stability and less developed infrastructure and legal systems. As we expand our business into new countries we mayencounter regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or becomeprofitable in such countries. This may affect our relationships with our clients and could have an adverse effect on our business, results of operations andfinancial condition.Terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect ouroperations and client confidence.Terrorist attacks and other acts of violence or war may adversely affect worldwide financial markets and could potentially lead to economic recession,which could adversely affect our business, results of operations, financial condition and cash flows. These events could adversely affect our clients’ levels ofbusiness activity and precipitate sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risksto our people and to our delivery centers and operations around the world.Southern Asia has, from time to time, experienced instances of civil unrest and hostilities among neighboring countries, including India and Pakistan.In recent years, military confrontations between India and 29Table of ContentsPakistan have occurred in the region of Kashmir and along the India/Pakistan border. There have also been incidents in and near India such as terrorist attackson the Indian Parliament and in the city of Mumbai, troop mobilizations along the India/Pakistan border and an aggravated geopolitical situation in theregion. Such military activity or terrorist attacks in the future could influence the Indian economy by disrupting communications and making travel moredifficult. Resulting political tensions could create a greater perception that investments in companies with Indian operations involve a high degree of risk,and that there is a risk of disruption of services provided by companies with Indian operations, which could have a material adverse effect on our share priceand/or the market for our services. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involvedthe threat or use of nuclear weapons, we might not be able to continue our operations. We generally do not have insurance for losses and interruptions causedby terrorist attacks, military conflicts and wars.If more stringent labor laws become applicable to us or if our employees unionize, our profitability may be adversely affected.India has stringent labor legislation that protects employee interests, including legislation that sets forth detailed procedures for dispute resolution andemployee removal and legislation that imposes financial obligations on employers upon retrenchment. Though we are exempt from some of these labor lawsat present under exceptions in some states for providers of IT-enabled services, there can be no assurance that such laws will not become applicable to us inthe future. If these labor laws become applicable to our employees, it may become difficult for us to maintain flexible human resource policies and attract andemploy the numbers of sufficiently qualified candidates that we need or discharge employees, and our compensation expenses may increase significantly.In addition, our employees may in the future form unions. If employees at any of our delivery centers become eligible for union membership, we maybe required to raise wage levels or grant other benefits that could result in an increase in our compensation expenses, in which case our profitability may beadversely affected.We may engage in strategic transactions that could create risks.As part of our business strategy, we regularly review potential strategic transactions, including potential acquisitions, dispositions, consolidations,joint ventures or similar transactions, some of which may be material. Through the acquisitions we pursue, we may seek opportunities to add to or enhancethe services we provide, to enter new industries or expand our client base, or to strengthen our global presence and scale of operations. We have completedmore than ten acquisitions since our inception. There can be no assurance that we will find suitable candidates in the future for strategic transactions atacceptable prices, have sufficient capital resources to accomplish our strategy, or be successful in entering into agreements for desired transactions.Acquisitions, including completed acquisitions, also pose the risk that any business we acquire may lose clients or employees or could under-performrelative to expectations. We could also experience financial or other setbacks if transactions encounter unanticipated problems, including problems related toexecution or integration. Following the completion of an acquisition, we may have to rely on the seller to provide administrative and other support,including financial reporting and internal controls, to the acquired business for a period of time. There can be no assurance that the seller will do so in amanner that is acceptable to us.Our principal shareholders exercise significant influence over us, and their interests in our business may be different from yours.A significant percentage of our issued and outstanding common shares are currently beneficially owned by affiliates of Bain Capital. As ofDecember 31, 2015, Bain Capital (through its affiliates) beneficially owned approximately 27% of our outstanding common shares.Our shareholder agreement with Bain Capital and its co-investors provides that Bain Capital has the right to nominate four directors to our board, solong as it maintains certain minimum shareholding thresholds, and the 30Table of Contentsshareholders party to the agreement have agreed to vote their shares for the election of such persons. These shareholders can exercise significant influenceover our business policies and affairs and all matters requiring a shareholders’ vote, including the composition of our board of directors, the adoption ofamendments to our certificate of incorporation and bye-laws, the approval of mergers or sales of substantially all of our assets, our dividend policy and ourcapital structure and financing. This concentration of ownership also may delay, defer or even prevent a change in control of our company and may makesome transactions more difficult or impossible without the support of these shareholders, even if such transactions are beneficial to other shareholders. Theinterests of these shareholders may conflict with your interests. Bain Capital currently holds interests in companies that compete with us and it may, from totime, make significant investments in companies that could compete with us. In addition, pursuant to our shareholder agreement and to the extent permittedby applicable law, our directors who are affiliated with Bain Capital are not required to present to us corporate opportunities (e.g., acquisitions or newpotential clients) of which they become aware. So long as Bain Capital owns a significant amount of our equity it will be able to strongly influence ourdecisions.We may become subject to taxation as a result of our incorporation in Bermuda or place of management, which would have a material adverseeffect on our business, results of operations and financial condition.We have received a written assurance from the Bermuda Minister of Finance under The Exempted Undertaking Tax Protection Act 1966 of Bermuda tothe effect that if there is enacted in Bermuda any legislation imposing tax computed on profits or income, or computed on any capital asset, gain orappreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax shall not be applicable to us or to any of ouroperations or common shares, debentures or other obligations or securities until March 31, 2035, except insofar as such tax applies to persons ordinarilyresident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda. We cannot assure you that after such date we would notbe subject to any such tax. If we were to become subject to taxation in Bermuda or any other jurisdiction as a result of our incorporation in Bermuda, it couldhave a material adverse effect on our business, results of operations and financial condition.We may not be able to realize the entire book value of goodwill and other intangible assets from acquisitions.As of December 31, 2015, we have approximately $1,038.3 million of goodwill and $98.6 million of intangible assets. We periodically assess theseassets to determine if they are impaired and we monitor for impairment of goodwill relating to all acquisitions and our formation in 2004. Goodwill is notamortized but is tested for impairment testing at least on an annual basis as of December 31 of each year, based on a number of factors including macro-economic conditions, industry and market considerations, overall financial performance, business plans and expected future cash flows. Impairment testing ofgoodwill may also be performed between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value ofgoodwill below its carrying amount. We perform an assessment of qualitative factors to determine whether the existence of events or circumstances leads to adetermination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the results of the qualitativeassessment, the Company performs the quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of areporting unit is less than its carrying amount. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings inthe period of impairment. We cannot assure you that future impairment of goodwill will not have a material adverse effect on our business, financialcondition or results of operations. 31Table of ContentsRisks Related to our SharesFuture sales of our common shares could cause our share price to decline.Sales of substantial amounts of common shares by our employees and other shareholders, or the possibility of such sales, may adversely affect the priceof our common shares and impede our ability to raise capital through the issuance of equity securities. As of December 31, 2015, Bain Capital (through itsaffiliates) and its co-investors beneficially owned approximately 32% of our outstanding common shares. Subject to certain restrictions set forth in ourshareholder agreement with Bain Capital and its co-investors, such shareholders are able to sell their common shares in the public market from time to timewithout registering them, subject to certain limitations on the timing, amount and method of those sales imposed by Rule 144 under the Securities Act of1933, as amended.Pursuant to our shareholder agreement, Bain Capital has the right, subject to certain conditions and with certain exceptions, to require us to fileregistration statements covering all of the common shares it owns or to include those common shares in registration statements that we may file for ourselvesor for another holder of our common shares. Following their registration and sale under the applicable registration statement, those shares will become freelytradable. By exercising their registration rights and selling a large number of common shares, these holders could cause the price of our common shares todecline. In addition, the perception in the public markets that sales by them might occur could also adversely affect the market price of our common shares.Historically we have generally not declared dividends, and future determinations to pay dividends will be at the discretion of our board of directors.Historically we have not declared regular dividends. On August 30, 2012, we declared a special cash dividend of $2.24 per share, or approximately$502 million in the aggregate, which we paid on September 24, 2012 to holders of record as of September 10, 2012. Any determination to pay dividends toholders of our common shares in the future will be at the discretion of our board of directors and will depend on many factors, including our financialcondition, results of operations and general business conditions and any other factors our board of directors deems relevant. Our ability to pay dividends willalso continue to be subject to restrictive covenants contained in credit facility agreements governing indebtedness we and our subsidiaries have incurred ormay incur in the future.We are organized under the laws of Bermuda, and Bermuda law differs from the laws in effect in the United States and may afford less protection toshareholders.Our shareholders may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a state of the UnitedStates. As a Bermuda company, we are governed by, in particular, the Companies Act 1981, or the Companies Act. The Companies Act differs in somematerial respects from laws generally applicable to U.S. corporations and shareholders, including the provisions relating to interested directors, mergers,amalgamations, takeovers and indemnification of directors.Generally, the duties of directors and officers of a Bermuda company are owed to the company only. Shareholders of Bermuda companies generally donot have the right to take action against directors or officers of the company except in limited circumstances. Directors of a Bermuda company must, inexercising their powers and performing their duties, act honestly and in good faith with a view to the best interests of the company, exercising the care andskill that a reasonably prudent person would exercise in comparable circumstances. Directors have a duty not to put themselves in a position in which theirduties to the company and their personal interests may conflict and also are under a duty to disclose any personal interest in any contract or arrangement withthe company or any of its subsidiaries. If a director of a Bermuda company is found to have breached his or her duties to that company, he may be heldpersonally liable to the company in respect of that breach of duty. A director may be liable jointly and severally with other directors if it is shown that thedirector knowingly engaged in fraud or dishonesty. In cases not involving fraud or dishonesty, the liability of the director will be determined 32Table of Contentsby the Bermuda courts on the basis of their estimation of the percentage of responsibility of the director for the matter in question, in light of the nature of theconduct of the director and the extent of the causal relationship between his or her conduct and the loss suffered.In addition, our bye-laws contain a broad waiver by our shareholders of any claim or right of action, both individually and on our behalf, against any ofour officers or directors. The waiver applies to any action taken by an officer or director, or the failure of an officer or director to take any action, in theperformance of his or her duties, except with respect to any matter involving or arising out of any fraud or dishonesty on the part of the officer or director or tomatters which would render it void pursuant to the Companies Act. This waiver limits the right of shareholders to assert claims against our officers anddirectors unless the act or failure to act involves fraud or dishonesty. Therefore, our shareholders may have more difficulty protecting their interests thanwould shareholders of a corporation incorporated in a state within the United States.The market price for our common shares has been and may continue to be volatile.The market price for our common shares has been and may continue to be volatile and subject to price and volume fluctuations in response to marketand other factors, some of which are beyond our control. Among the factors that could affect our stock price are: • actual or anticipated fluctuations in our quarterly and annual operating results; • changes in financial estimates by securities research analysts; • changes in the economic performance or market valuations of other companies engaged in providing business process and information technologyservices; • loss of one or more significant clients; • addition or loss of executive officers or key employees; • regulatory developments in our target markets affecting us, our clients or our competitors; • announcements of technological developments; • limited liquidity in our trading market; • sales or expected sales of additional common shares or purchases or expected purchases of common shares; and • terrorist attacks or natural disasters or other such events impacting countries where we or our clients have operations.In addition, securities markets generally and from time to time experience significant price and volume fluctuations that are not related to the operatingperformance of particular companies. These market fluctuations may have a material adverse effect on the market price of our common shares.You may be unable to effect service of process or enforce judgments obtained in the United States or Bermuda against us or our assets in thejurisdictions in which we or our executive officers operate.We are organized under the laws of Bermuda, and a significant portion of our assets are located outside the United States. It may not be possible toenforce court judgments obtained in the United States against us in Bermuda or in countries, other than the United States, where we have assets based on thecivil liability or penal provisions of the federal or state securities laws of the United States. In addition, there is some doubt as to whether the courts ofBermuda and other countries would recognize or enforce judgments of United States courts 33Table of Contentsobtained against us or our directors or officers based on the civil liability or penal provisions of the federal or state securities laws of the United States orwould hear actions against us or those persons based on those laws. We have been advised by Appleby (Bermuda) Limited, our Bermuda counsel, that theUnited States and Bermuda do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercialmatters. Therefore, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether ornot based solely on United States federal or state securities laws, would not automatically be enforceable in Bermuda. Similarly, those judgments may not beenforceable in countries, other than the United States, where we have assets.Item 1B. Unresolved Staff CommentsNone.Item 2. PropertiesWe have delivery centers in 17 countries. Our only material properties are our premises in India at Phase V, Gurgaon, which comprises of 212,531square feet, and Uppal, Hyderabad which comprises approximately 449,286 square feet, both of which we own. We have a mixture of owned and leasedproperties and substantially all of our leased properties are leased under long-term leases with varying expiration dates. We believe that all of our propertiesand facilities are well-maintained.Item 3. Legal ProceedingsThere are no legal proceedings pending against us that we believe are likely to have a material adverse effect on our business, results of operations andfinancial condition.Item 4. Mine Safety DisclosuresNot applicable. 34Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesStock Price Information and StockholdersThe principal market on which the Company’s common shares are traded is the New York Stock Exchange under the symbol “G.” The following tablesets forth the high and low closing sales price of the Company’s common shares for each quarter of 2014 and 2015. As of January 31, 2016, there were 20holders of record of our common shares. Sales Price High Low Year Ended December 31, 2015: First Quarter $23.76 $18.87 Second Quarter $23.31 $21.33 Third Quarter $23.64 $21.22 Fourth Quarter $25.85 $23.42 Year Ended December 31, 2014: First Quarter $18.25 $14.28 Second Quarter $17.66 $16.04 Third Quarter $18.27 $16.32 Fourth Quarter $19.30 $15.81 35Table of ContentsThe following graph and table compare the performance of an investment in our common shares with investments in the S&P 500 Index (capitalizationweighted) and a peer group of companies for the period from January 1, 2011 through December 31, 2015. The selected peer group for the period presented iscomprised of six companies that we believe are our closest reporting issuer competitors: Accenture plc, Cognizant Technology Solutions Corp., ExlServiceHoldings, Inc., Infosys Technologies Limited, Wipro Technologies Limited, and WNS (Holdings) Limited. The graph presents the average of the returns ofthe component entities of our peer group index as of the beginning of each period for which a return is presented. The performance shown in the graph andtable below is historical and should not be considered indicative of future price performance. 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 Genpact $93.60 $111.44 $93.02 $96.64 $105.37 $107.50 Offshore IT/BPO & Global IT $99.18 $95.50 $86.73 $84.34 $101.36 $86.12 S&P 500 $104.24 $103.83 $88.96 $98.88 $110.74 $107.10 9/30/2012 12/31/2012 3/31/2013 6/30/2013 9/30/2013 12/31/2013 Genpact $107.82 $100.19 $117.58 $124.37 $122.04 $118.75 Offshore IT/BPO & Global IT $96.65 $92.77 $111.61 $102.63 $118.27 $130.33 S&P 500 $113.27 $112.13 $123.38 $126.29 $132.21 $145.33 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015 Genpact $112.61 $113.32 $105.49 $122.37 $150.29 $137.88 Offshore IT/BPO & Global IT $126.84 $125.17 $126.24 $132.59 $154.08 $153.00 S&P 500 $147.21 $154.12 $155.07 $161.88 $162.59 $162.21 9/30/2015 12/31/2015 Genpact $152.62 $161.47 Offshore IT/BPO & Global IT $160.87 $169.71 S&P 500 $150.96 $160.70 This graph is not deemed to be “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, and should not bedeemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act of 1934. 36Table of ContentsDividendsWe have not declared a cash dividend in the past two fiscal years. Any determination to pay dividends to holders of our common shares in the futurewill be at the discretion of our board of directors and will depend on many factors, including our financial condition, results of operations, general businessconditions, capital allocation strategy and any other factors our board of directors deems relevant.Unregistered Sales of Equity SecuritiesNone.Purchase of Equity Securities by the Issuer and Affiliated PurchasersAs we previously disclosed, in February 2015 our Board of Directors authorized a plan to repurchase up to $250 million in value of our commonshares. This share repurchase plan does not obligate us to acquire any specific number of shares and does not specify an expiration date. All sharesrepurchased under the plan have been cancelled.Share repurchase activity during the three months ended December 31, 2015 was as follows: Period Total Numberof SharesPurchased Average PricePaid perShare ($) Total Number of SharesPurchased as Part of PubliclyAnnounced Plan or Program Approximate Dollar Valueof Shares that May Yet BePurchased Under the Planor Program ($) October 1-October 31, 2015 984,271 23.72 984,271 67,622,425 November 1-November 30, 2015 690,289 25.21 690,289 50,221,384 December 1-December 31, 2015 1,083,160 25.05 1,083,160 23,083,297 Since January 1, 2016, we have completed $250 million in share purchases under the February 2015 program. In February 2016, our board of directorsapproved an additional $250 million share repurchase program, bringing the total authorization under our existing program to $500 million. This repurchaseprogram does not obligate us to acquire any specific number of shares and does not specify an expiration date. 37Table of ContentsItem 6. Selected Financial DataThe table below presents selected historical financial data.We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Financial data as ofDecember 31, 2014 and 2015 and for the three-year period ended December 31, 2015 have been derived from our audited consolidated financial statementsincluded elsewhere in this Annual Report on Form 10-K. Financial data as of December 31, 2011, 2012 and 2013 and for the years ended December 31, 2011and 2012 have been derived from our audited consolidated financial statements not included in this Annual Report on Form 10-K.You should read the selected financial data below together with the financial statements included herein and Item 7—“Management’s Discussion andAnalysis of Financial Condition and Results of Operations.” Year Ended December 31, 2011 2012 2013 2014 2015 (dollars and share count in millions, except per share data) Statement of income data: Total net revenues $1,600.4 $1,902.0 $2,132.0 $2,279.4 $2,461.0 Income from operations $216.2 $264.3 $309.5 $294.0 $334.2 Net income available to Genpact Limited common shareholders $184.3 $178.2 $229.7 $192.0 $239.8 Earnings per common share Basic $0.83 $0.80 $1.00 $0.87 $1.11 Diluted $0.81 $0.78 $0.97 $0.85 $1.09 Weighted average number of common shares used in computing earnings percommon share Basic 221.6 223.7 229.3 220.8 216.6 Diluted 226.4 229.5 235.8 225.2 219.1 As of December 31, 2011 2012 2013 2014 2015 (dollars in millions) Balance sheet data: Cash and cash equivalents $408.0 $459.2 $571.3 $461.8 $450.9 Total assets 2,403.4 2,605.9 2,689.4 2,742.5 2,793.5 Long-term debt, including current portion 102.9 661.9 657.9 653.6 776.5 Genpact Limited shareholders’ equity $1,433.1 $1,168.4 $1,322.7 $1,285.1 $1,304.4 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe following discussion should be read in conjunction with our audited consolidated financial statements and the related notes that appearelsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion includes forward-looking information that involvesrisks and assumptions, which could cause actual results to differ materially from management’s expectations. See “Special Note Regarding Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.OverviewWhile our business began as the India-based captive business process services operation for GE’s financial services business, we started activelypursuing business from clients other than GE, or Global Clients, on January 1, 2005. Since that time, we have succeeded in increasing our business anddiversifying our revenue sources, including through acquisitions. Our 2015 revenues were $2.461 billion, an increase of 8% year-over-year, or 10% on aconstant currency basis. See Item 7—“Net Revenues” below for an explanation of how we calculate constant currency, which is a non-GAAP financialmeasure. 38Table of ContentsRevenuesRevenue by top clients. The table below sets forth the percentage of our total net revenues derived from our largest clients, including GE, in the yearsended December 31, 2013, 2014 and 2015: Percentage of total net revenues Year ended December 31, 2013 2014 2015 Top five clients 32.9% 30.7% 28.5% Top ten clients 40.9% 39.2% 36.9% Top fifteen clients 46.9% 45.3% 43.0% Top twenty clients 51.9% 50.3% 48.0% We earn revenues pursuant to contracts which generally take the form of a master service agreement, or MSA, which is a framework agreement that isthen supplemented by statements of work, or SOWs. Our MSAs specify the general terms applicable to the services we will provide. Our MSAs are generallyfor terms of three to seven years, although they may also have an indefinite term or be for terms of less than three years. In most cases they do not specifypricing terms or obligate the client to purchase a particular amount of services. We then enter into SOWs under an MSA, which specify particular services tobe provided and the pricing terms. Most of our revenues are from SOWs with terms of two to five years. We typically have multiple SOWs under any givenMSA, and the terms of our SOWs vary depending on the nature of the services provided. We seek to develop long-term relationships with our clients. Webelieve that these relationships best serve our clients as they create opportunities for us to provide a variety of services using the full range of our capabilitiesand to deliver continuous process improvement.New business proposals are reviewed in line with our strategy to target specific industry verticals and geographical markets. We begin each year with aset of named accounts, including prospective clients with operations in our target areas, and all opportunities during the year are reviewed by businessleaders from the applicable industry vertical, operations personnel, and members of our finance team. In this way, we try to ensure that contract terms meet ourpricing, cash and service objectives. See Item 1—“Business—Sales and Marketing.”There are a variety of aspects to our pricing of contracts. Under some of our MSAs, we are able to share a limited amount of inflation and currencyexchange risk for engagements lasting longer than 12 months. Many of our MSAs also provide that, under transaction and fixed-price SOWs, we are entitledto retain a portion of certain productivity benefits we achieve. However, some of our MSAs and/or SOWs require certain minimum productivity benefits to bepassed on to our clients. Once an MSA and related SOWs are signed and production of services commences, our revenues and expenses increase as servicesare ramped up to the agreed upon level. In many cases, we may have opportunities to increase our margins over the life of an MSA or SOW, driven by anumber of factors.Our MSA with GE, which was last extended in January 2010 and expires on December 31, 2016, provides for a minimum annual volume commitmentduring each year of its term. The minimum annual volume commitment for 2016 is $90 million, subject to certain potential adjustments or credits. The actuallevel of services purchased by GE in the last nine years has exceeded its minimum annual commitment for each such year.Although some decisions may be made centrally at GE, the total level of business we receive from GE generally depends on the decisions of thevarious operating managers of the GE businesses we serve. Because our business from GE is derived from a variety of businesses within GE, our exposure toGE is diversified in terms of industry risk. See Item 1A—“Risk Factors—Historically, GE has accounted for a significant portion of our revenues and anymaterial loss of business from, or change in our relationship with, GE or GE’s businesses could have a material adverse effect on our business, results ofoperations and financial condition.” 39Table of ContentsClassification of certain net revenues. We classify our net revenues in two categories: net revenues from GE and net revenues from Global Clients.Net revenues from Global Clients consist of revenues from services provided to all clients other than GE and the companies in which GE owns 20% or less ofthe outstanding equity interest. If GE ceases to own at least 20% of a business we serve, we treat the revenues from such business as Global Client revenuesbeginning on the date that GE ceases to be a 20% shareholder. In many cases, we have continued to perform services for such businesses following theirdivestiture by GE even though they were not obligated by the GE MSA to continue to use our services. In such cases, we have either entered into new MSAswith respect to such businesses following their divestiture by GE or agreed with such businesses to continue to work pursuant to the terms agreed to by GE.We are currently undertaking efforts, and plan to continue efforts, to procure engagements with the businesses that GE is divesting as part of its planneddivestiture of a portion of its GE Capital businesses.Expenses. Personnel expenses are a major component of both our cost of revenue and our selling, general and administrative expenses. Personnelexpenses include salaries and benefits (including stock-based compensation) as well as costs related to recruiting and training. Personnel expenses areallocated between cost of revenue and selling, general and administrative expenses based on the classification of the employee. Stock-based compensationand depreciation and amortization expense are allocated between cost of revenue and selling, general and administrative expenses based on an employee’sfunction.Our industry is labor-intensive. Wage levels in the countries in which our delivery centers are located have historically increased on a year-over-yearbasis. We attempt to address the impact of wage increases, and pressures to increase wages, in a number of ways, which include seeking to control entry-levelwages, managing our attrition rate, delivering productivity and “right-skilling,” which refers to ensuring that positions are not filled by overqualifiedemployees. We try to control increases in entry-level wages by implementing innovative recruiting policies, utilizing continuous training techniques,emphasizing promotion opportunities and maintaining an attractive work atmosphere and company culture. In 2011, we launched an integrated talentmanagement program globally to expand the pool of potential applicants we hire and to upgrade our employees’ skill levels so that employees may take onhigher value-added tasks over time across multiple domains. We have been scaling up this program every year to hire at optimal costs and are now partneringwith universities, governments, not-for-profit entities and private institutions to create sustainable pipelines for our talent supply. In 2015, we launched acertification program for our Six Sigma black belts and master black belts to train them on our Lean Digital approach, tools and design thinking. We alsoimplemented various initiatives in 2015 to train our sales force, consulting teams and lead solution architects in concepts relating to design thinking anddigital technologies in support of our Lean Digital approach.In planning capacity expansion, we look for locations that help us ensure global delivery capability while helping us control average salary levels. InIndia and in other countries where we may open multiple locations, we try to expand into cities where competition for personnel and wage levels may belower than in more developed cities. In addition, under some of our contracts we have the ability to share with our clients a portion of any increase in costsdue to inflation. Nevertheless, despite these steps, we expect general increases in wage levels in the future, which could adversely affect our margins. Asignificant increase in attrition rates would also increase our recruiting and training costs and decrease our operating efficiency, productivity and profitmargins. Increased attrition rates or increased pricing may also cause some clients to be less willing to use our services. See Item 1A—“Risk Factors—Wageincreases in the countries in which we have operations may prevent us from sustaining our competitive advantage and may reduce our profit margin.”Our operational expenses include facilities maintenance expenses, travel and living expenses, communications expenses, and consulting and certainother expenses. Consulting charges, consisting of the cost of consultants and subcontractors who are directly responsible for the performance of services forclients, are included in cost of revenue. Facilities maintenance expenses and certain other expenses are allocated between cost of revenue and selling, generaland administrative expenses based on the employee’s function.Cost of revenue. The principal component of cost of revenue is personnel expenses. We include in cost of revenue all personnel expenses foremployees who are directly responsible for the performance of services for 40SMSMTable of Contentsclients, their supervisors and certain support personnel who may be dedicated to a particular client or a set of processes. Travel and living expenses areincluded in cost of revenue if the personnel expense for the employee incurring such expense is included in cost of revenue.The ratio of cost of revenue to revenues for any particular SOW or for all SOWs under an MSA is typically higher in the early periods of the contract orclient relationship than in later periods. This is because the number of supervisory and direct support personnel relative to the number of employees who areperforming services declines. It is also because we may retain a portion of the benefit of productivity increases realized over time.Selling, general and administrative expenses. Our selling, general and administrative, or SG&A, expenses are primarily comprised of personnelexpenses for senior management, corporate personnel in enabling functions such as human resources, finance, legal, marketing, sales and sales-relatedpersonnel, and other support personnel. The operational costs component of SG&A expenses also includes travel and living costs for such personnel.Additionally, the operational costs component of SG&A expenses includes professional fees, which represent the costs of third party legal, tax, accountingand other advisors, and an allowance for doubtful receivables.Other operating (income) expense, net. Other operating (income) expense, net primarily consists of the impact of the change in the fair value of earn-out consideration relating to business acquisitions and certain operating losses resulting from the impairment of property, plant and equipment, intangibleassets and certain capital work-in-progress items.Foreign exchange (gains) losses, net. Foreign exchange (gains) losses, net, primarily consist of gains or losses on the re-measurement of non-functional currency assets and liabilities. In addition, it includes gains or losses from derivative contracts entered into to offset the impact of the re-measurement of non-functional currency assets and liabilities. It also includes the realized and unrealized gains or losses on derivative contracts that do notqualify for “hedge” accounting. The gains or losses on derivative contracts that qualify for hedge accounting are deferred and included as othercomprehensive income (loss) until the derivative contracts mature, at which time the gains or losses on such cash flow hedges are classified as net revenues,cost of revenue or selling, general and administrative expenses based on the underlying risk being hedged. See note 2 to our consolidated financialstatements and Item 7A—“Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Risk.”Approximately 73% of our fiscal 2015 revenues were earned in U.S. dollars. We also received payments in euros, U.K. pounds sterling, Australiandollars, Chinese renminbi, Japanese yen, South African rand and Indian rupees. Our costs are primarily in Indian rupees, as well as in U.S. dollars, Chineserenminbi, euros and the currencies of the other countries in which we have operations. While some of our contracts provide for limited sharing of the risk ofinflation and fluctuations in currency exchange rates, we bear a substantial portion of this risk, and therefore our operating results could be negativelyaffected by adverse changes in wage inflation rates and foreign currency exchange rates. See our discussion of wage inflation under “—Expenses” above. Weenter into forward currency contracts, which are generally designed to qualify for hedge accounting, in order to hedge most of our cost currency exposurebetween the U.S. dollar and the Indian rupee, Mexican peso and Philippine peso, and between the euro and the Romanian leu, and our revenue currencyexposure between the U.S dollar and the pound sterling, Australian dollar and euro, and between the Chinese renminbi and the Japanese yen. However, ourability to hedge such risks is limited by local law, the liquidity of the market for such hedges and other practical considerations. Thus, our results ofoperations may be adversely affected if we are not able to enter into the desired hedging arrangements or if our hedging strategies are not successful.Other income (expense), net. Other income (expense), net consists primarily of interest expense on indebtedness and capital lease obligations, interestadjustments relating to earn-out consideration in connection with certain acquisitions, certain debt restructuring related items and provisions created forlosses on divestitures. Other income (expense), net also includes interest income on certain deposits. 41Table of ContentsLoss (gain) on equity-method investment activity, net. Loss (gain) on equity-method investment activity, net primarily pertains to the loss or gainfrom our non-consolidated affiliate, Markit Genpact KYC Services Limited, a U.K.-based joint venture with Markit Group Limited formed in 2014Income taxes. We are incorporated in Bermuda and have operations in many countries. Our effective tax rate has historically varied and will continueto vary from year to year based on the tax rate in our jurisdiction of organization, the geographical sources of our earnings and the tax rates in those countries,the tax relief and incentives available to us, the financing and tax planning strategies employed by us, changes in tax laws or the interpretation thereof, andmovements in our tax reserves, if any.Bermuda taxes. We are organized in Bermuda. Bermuda does not impose any income tax on us.Indian taxes. Indian SEZ legislation provides for a 15-year tax holiday scheme for operations established in designated special economic zones, orSEZs. Under the SEZ legislation, qualifying operations are eligible for a deduction from taxable income equal to (i) 100% of their profits or gains derivedfrom the export of services for a period of five years from the commencement of operations; (ii) 50% of such profits or gains for the next five years; and(iii) 50% of such profits or gains for an additional period of five years, subject to the creation of a “Special Economic Zone Re-investment Reserve Account,”to be utilized only for acquiring new plant or machinery or for other business purposes, not including the distribution of dividends. This holiday is availableonly for new business operations that are conducted at qualifying SEZ locations and is not available to operations formed by splitting up or reconstructingexisting operations or transferring existing plant and equipment (beyond prescribed limits) to new locations. During the last nine years, we established newdelivery centers that we believe are eligible for the SEZ benefits. However, we cannot forecast what percentage of our operations or income in India will inthe future be eligible for SEZ benefits, as this will depend on how much of our business can be conducted at the qualifying locations and how much of thatbusiness can be considered to meet the restrictive conditions described above.Our tax expense will increase as a result of the expiration of our tax holidays, and our after-tax profitability will be materially reduced, unless we canobtain comparable benefits under new legislation or otherwise reduce our tax liability.The governments of foreign jurisdictions from which we deliver services may assert that certain of our clients have a “permanent establishment” insuch jurisdictions by reason of the activities we perform on their behalf, particularly those clients that exercise control over or have substantial dependencyon our services. Such an assertion could affect the size and scope of the services requested by such clients in the future.Transfer pricing. We have transfer pricing arrangements among our subsidiaries involved in various aspects of our business, including operations,marketing, sales and delivery functions. U.S. and Indian transfer pricing regulations, as well as the regulations applicable in the other countries in which weoperate, require that any international transaction involving affiliated enterprises be made on arm’s-length terms. We consider the transactions among oursubsidiaries to be substantially on arm’s-length pricing terms. If, however, a tax authority in any jurisdiction reviews any of our tax returns and determinesthat the transfer prices we have applied are not appropriate, or that other income of our affiliates should be taxed in that jurisdiction, we may incur increasedtax liability, including accrued interest and penalties, which would cause our tax expense to increase, possibly materially, thereby reducing our profitabilityand cash flows.Other taxes. We have operating subsidiaries in other countries, including Brazil, China, the Czech Republic, Guatemala, Hungary, Japan, Kenya,Mexico, the Netherlands, the Philippines, Poland, Romania, the United Kingdom, Slovakia, South Africa, the United Arab Emirates and the United States, aswell as sales and marketing subsidiaries in certain jurisdictions, including the United States and the United Kingdom, which are subject to tax in suchjurisdictions.During 2009, one of our subsidiaries in China obtained a ruling from the Government of China certifying it to be a Technologically Advanced ServiceEnterprise. As a result, that subsidiary was subject to a lower 42Table of Contentscorporate income tax rate of 15% for a three-year period that began in 2009 and was extended through December 31, 2017, subject to the fulfillment ofcertain conditions. Our delivery centers also enjoy corporate tax holidays or concessional tax rates in certain other jurisdictions, including the Philippinesand Guatemala. These tax concessions will expire over the next few years, possibly increasing our overall tax rate.Our ability to repatriate surplus earnings from our foreign subsidiaries in a tax-efficient manner is dependent upon interpretations of local law, possiblechanges in such laws and the renegotiation of existing double tax avoidance treaties. Changes to any of these may adversely affect our overall tax rate.Tax audits. Our tax liabilities may also increase, including due to accrued interest and penalties, if the applicable income tax authorities in anyjurisdiction, during the course of any audits, were to disagree with any of our tax return positions. Through the period ended December 30, 2004, we have anindemnity from GE for any additional taxes attributable to periods prior to December 30, 2004.Tax losses and other deferred tax assets. Our ability to utilize our tax loss carry-forwards and other deferred tax assets and credits may be affected ifour profitability deteriorates or if new legislation is introduced that changes carry-over or crediting rules. Additionally, reductions in enacted tax rates mayaffect the value of our deferred tax assets and our tax expense.AcquisitionsFrom time to time we may make acquisitions or engage in other strategic transactions if suitable opportunities arise, and we may use cash, securities,other assets or a combination thereof as consideration.On August 18, 2015, we acquired certain assets and assumed certain liabilities from Citibank, N.A. comprising a portion of its U.K. wealth managementoperations for cash consideration of $3.4 million. Together with the asset purchase, we hired certain U.K.-based employees of the seller. There are nocontingent consideration arrangements in connection with this acquisition. With this transaction, we have expanded upon our end-to-end, technology-enabled wealth management service offering acquired from Citibank, N.A. in January 2015, described below. Goodwill arising from the acquisition amountedto $1.2 million and has been allocated to our India reporting unit.On April 1, 2015, we acquired certain assets and assumed certain liabilities of a finance-and-accounting service delivery center in Bratislava, Slovakiafor cash consideration of $6.1 million. As part of the transaction, we hired certain employees of the seller. There are no contingent consideration arrangementsin connection with this acquisition. This transaction strengthens our finance-and-accounting services domain expertise in the consumer product goodsindustry and adds incremental European language capacity. Goodwill arising from the acquisition amounted to $3.1 million and has been allocated to ourEurope reporting unit.On January 16, 2015, we acquired certain assets and assumed certain liabilities from Citibank, N.A. comprising a portion of its U.S. wealth managementoperations for cash consideration of $11.7 million. Together with the asset purchase, we hired certain employees of the seller’s U.S. wealth managementbusiness. There are no contingent consideration arrangements in connection with this acquisition. With this transaction, we have acquired an end-to-end,technology enabled wealth management service offering. Goodwill arising from the acquisition amounted to $3.4 million and has been allocated to our Indiareporting unit.In November 2014, we acquired from Hitachi Management Partner, Corp. a finance-and-accounting service delivery center in Japan, and wesimultaneously entered into a five-year master services agreement with Hitachi Ltd. The contingent earn-out consideration for this acquisition is based onadditional work contracted by the delivery center for the period from November 4, 2014 to November 4, 2021. This acquisition expands our presence inJapan and strengthens our finance-and-accounting service offerings. The purchase consideration for the acquisition was $21.7 million. Goodwill arising fromthe acquisition amounted to $16.8 million and has been allocated to our China reporting unit. 43Table of ContentsIn May 2014, we acquired 100% of the outstanding equity interest in each of Pharmalink Consulting Limited, a company incorporated under the lawsof England and Wales, and Pharmalink Consulting Inc., a California corporation (collectively referred to as “Pharmalink”). The contingent earn-outconsideration for this acquisition is based on gross profits and order bookings of sustainable outsourcing contracts for the period from June 1, 2014 toJune 30, 2016. This acquisition enabled us to provide additional regulatory consulting, outsourcing and operations capabilities for our clients in the lifesciences industry. The purchase consideration for the acquisition of Pharmalink was $138.8 million. Goodwill arising from the acquisition amounted to$110.1 million and was allocated to our India reporting unit.BookingsNew bookings is an operating or other statistical measure. We define new bookings as the total contract value of new client contracts, and certainrenewals, extensions and changes to existing contracts to the extent that such contracts represent incremental future business. In determining total contractvalue for this purpose, we assume the minimum volume to which the client has committed. Regular renewals of contracts with no change in scope, which weconsider business as usual, are not counted as new bookings. We provide information regarding our new bookings because we believe doing so providesuseful trend information regarding changes in the volume of our new business over time and may be a useful metric as an indicator of future revenue growthpotential. New bookings is also used by management to measure our sales force productivity.New bookings in 2015 were $2.59 billion, up approximately 20% from $2.16 billion in 2014. The increase in new bookings is attributable to ourinvestments in front-end sales and digital capabilities and our focus on large deals in our targeted verticals and service lines.Bookings can vary significantly year to year depending in part on the timing of the signing of a small number of large contracts. The types of servicesclients are demanding, the duration of the contract and the pace and level of their spending may impact the conversion of new bookings to revenues. Forexample, business process outsourcing bookings, which are typically for multi-year contracts, generally convert to revenue over a longer period of timecompared to information technology outsourcing bookings, which are often for short-term, project-based work.Information regarding our bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. The calculation of newbookings involves estimates and judgments. There are no third-party standards or requirements governing the calculation of bookings. We do not update ournew bookings for material subsequent terminations or reductions related to bookings originally recorded in prior fiscal years. New bookings are recordedusing then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations. Our revenuesrecognized each year will vary from the new bookings value since new bookings is a snapshot measurement of a portion of the total client contract value at agiven time.Critical Accounting Policies and EstimatesA summary of our significant accounting policies is included in Note 2—“Summary of Significant Accounting Policies” to our consolidated financialstatements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highlyuncertain at the time the estimate is made and if changes in the estimate that are reasonably possible could materially impact the financial statements orrequire a higher degree of judgment than others in their application. We base our estimates on historical experience, contractual commitments and on variousother assumptions that we believe to be reasonable under the circumstances and at the time they are made. We believe the following critical accountingpolicies require a higher level of management judgment and estimates than others in preparing the consolidated financial statements. 44Table of ContentsRevenue recognition. We typically face a long selling cycle in securing a new client. It is not unusual for us to spend twelve to eighteen months ormore from the time we begin actively soliciting a new client until we begin to recognize revenues.All costs related to contract acquisition prior to signing a contract are expensed as incurred. Once a contract is signed, we defer revenues from thetransition of services to our delivery centers, as well as the related cost of revenue. We recognize such deferred revenues and related costs of revenue over theperiod in which the related service delivery is expected to be performed. Deferred costs are limited to the amount of deferred revenues. Any costs incurred foracquiring contracts, such as contract acquisition fees or other upfront fees paid to a client or any other third party, are amortized over the period of a contract.Such amounts are generally recoverable from clients in the event of premature contract termination without cause.We price our services under a variety of arrangements, including time and materials, transaction-based and, to a lesser extent, fixed-price contracts.When services are priced on a time-and-materials basis, we charge the client based on full-time equivalent, or FTE, rates for the personnel who will directlyperform the services. The FTE rates are determined on a periodic basis, vary by category of service delivery personnel and are set at levels to reflect all of ourcosts, including the cost of supervisory personnel, the allocable portion of other costs, and a margin. In some cases, time-and-materials contracts are based onhourly rates of the personnel providing the services. We recognize revenues when persuasive evidence of an arrangement exists, the sales price is fixed ordeterminable, services have been rendered, and collectability is reasonably assured. Revenues derived from time-and-materials and transaction-basedcontracts are recognized as the related services are performed.In transaction-based pricing, clients are charged a fixed fee per transaction, with the fee per transaction sometimes linked to the total number oftransactions processed. Some of our contracts give the client the option to prospectively change from a time-and-materials model to a transaction-basedpricing model.In the case of fixed-price contracts, including those for application maintenance and support services, revenues are recognized ratably over the terms ofthe contracts. Revenues with respect to fixed-price contracts for the development, modification or customization of software are recognized on a percentage-of-completion method. Guidance has been drawn from FASB guidelines on Software—Revenue Recognition, to account for revenue from fixed-pricearrangements for software development and related services in conformity with FASB guidance on Revenue Recognition—Construction—Type andProduction-Type Contracts. The input (effort or cost expended) method has been used to measure progress towards completion, because managementconsiders this to be the best available measure of progress on these contracts as there is a direct relation between input and productivity. Provisions forestimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on current contract estimates.We sometimes enter into multiple-element revenue arrangements in which a customer may purchase a combination of our services. Revenue frommultiple-element arrangements is recognized, for each element, based on (1) the attainment of the delivery criterion; (2) its fair value, which is determinedusing the selling price hierarchy of vendor-specific objective evidence (“VSOE”) of fair value, third-party evidence or best estimated selling price, asapplicable, and (3) its allocated selling price, which is based on the relative sales price method.If we receive payment in respect of services prior to the time a contract is signed, we recognize the payment as an advance from a client. When therelated contract is signed, the advance becomes revenue to the extent the services are rendered and price is fixed or determinable.Some of our client contracts also include incentive payments for benefits delivered to clients. Revenues relating to such incentive payments arerecorded when the contingency is satisfied, price is determinable and we conclude that the amounts are earned.Accounts receivable. Our accounts receivable include amounts for services that we have performed but for which we have not received payment. Wetypically follow a 30-day billing cycle and, as such, at any point in time we may have accrued up to 30 days of revenues that have not been billed. Wemaintain an allowance for 45Table of Contentsdoubtful accounts for estimated losses inherent in our accounts receivable portfolio. In establishing the required allowance, we consider current marketconditions and our clients’ financial condition, the amount of receivables in dispute, and the current receivables’ aging and current payment patterns of theclient. We do not have any off-balance-sheet credit exposure related to our clients.Business combinations. The application of business combination accounting requires the use of significant estimates and assumptions. We accountfor business combinations by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest inthe acquired business, measured at their acquisition date fair values. The allocation of the purchase price utilizes significant estimates in determining the fairvalues of assets acquired and liabilities assumed, including with respect to intangible assets and deferred and contingent consideration. Significant estimatesand assumptions we may make include, but are not limited to, the timing and amount of future revenue and cash flows based on, among other things,anticipated growth rates, customer attrition rates, and the discount rate reflecting the risk inherent in future cash flows.Goodwill and other intangible assets. Goodwill represents the cost of acquired businesses in excess of the fair value of the identifiable tangible andintangible net assets purchased. Goodwill is tested for impairment at least on an annual basis on December 31, or as circumstances warrant based on a numberof factors, including operating results, business plans and future cash flows. We perform an assessment of qualitative factors to determine whether theexistence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carryingamount. Based on our assessment of events or circumstances, we perform a quantitative assessment of goodwill impairment if it is determined that it is morelikely than not that the fair value of a reporting unit is less than its carrying amount. Based on the results of our assessment of qualitative factors, wedetermined that the fair values of all of our reporting units are likely to be higher than their respective carrying values as of December 31, 2014 and 2015. Wereview for amortization for impairment our identified intangible assets with defined useful lives whenever events or changes in circumstances indicate thatthe related carrying amounts may not be recoverable. Determining whether we have incurred an impairment loss requires comparing the carrying amount tothe sum of undiscounted cash flows expected to be generated by the asset. When determining the fair value of our reporting units or our intangible assets, weutilize various assumptions, including discount rates, estimated growth rates, economic trends and projections of future cash flows. These projections alsotake into account factors such as the expected impact of new client contracts, expanded or new business from existing clients, efficiency initiatives, and thematurity of the markets in which each of our businesses operates. We generally categorize intangible assets acquired individually or with a group of otherassets or in a business combination as customer-related, marketing-related and other intangible assets. See Note 2—“Summary of Significant AccountingPolicies—Business combinations, goodwill and other intangible assets” to our consolidated financial statements for more information about how we valueour intangible assets. Actual results may vary, and may cause significant adjustments to the valuation of our assets in the future.Derivative instruments and hedging activities. We enter into forward foreign exchange contracts to mitigate foreign exchange risk on intercompanytransactions and forecasted transactions denominated in foreign currencies. Most of these transactions meet the criteria for hedge accounting as cash flowhedges under FASB guidance on Derivatives and Hedging.With respect to derivatives designated as cash flow hedges, we formally document all relationships between hedging instruments and hedged items, aswell as our risk management objectives and strategy for undertaking various hedge transactions. In addition, we formally assess, both at the inception of ahedge and on a quarterly basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If it isdetermined that a derivative or a portion thereof is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, we willprospectively discontinue hedge accounting with respect to that derivative.We recognize derivative instruments and hedging activities as either assets or liabilities in our Consolidated Balance Sheets and measure them at fairvalue. Changes in the fair values of these hedges are deferred and 46Table of Contentsrecorded as a component of other comprehensive income (losses), net of tax, until the hedged transactions occur and are recognized in the ConsolidatedStatements of Income along with the underlying hedged item and disclosed as a part of “Total net revenues,” “Cost of revenue” and “Selling, general andadministrative expenses,” as applicable.We value our derivatives based on market observable inputs, including both forward and spot prices for currencies. Derivative assets and liabilitiesincluded in Level 2 primarily represent foreign currency forward contracts. The quotes are taken from independent sources and databases.Income taxes. We account for income taxes using the asset and liability method. Under this method, income tax expense is recognized for the amountof taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for future tax consequences attributable todifferences between the financial statement carrying amounts of existing assets and liabilities, and their tax bases and operating losses are carried forward, ifany. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporarydifferences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in theperiod in which the tax status change becomes effective. Deferred tax assets are recognized in full, subject to a valuation allowance that reduces the amountrecognized to that which is more likely than not to be realized. In assessing the likelihood of realization, we consider estimates of future taxable income. Inthe case of an entity that benefits from a corporate tax holiday, deferred tax assets or liabilities for existing temporary differences are recorded only to theextent such temporary differences are expected to reverse after the expiration of the tax holiday.We also evaluate potential exposures related to tax contingencies or claims made by tax authorities in various jurisdictions and determine if a reserveis required. A reserve is recorded if we believe that a loss is more likely than not to occur and the amount can be reasonably estimated. Any such reserves arebased on estimates and are subject to changing facts and circumstances considering the progress of ongoing audits, case law and new legislation. We believethat the reserves we have established are adequate.We apply a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition bydetermining, based on the technical merits, that the position is more likely than not to be sustained upon examination. The second step is to measure the taxbenefit as the largest amount of the tax benefit that is greater than 50% likely of being realized upon settlement. We also include interest and penaltiesrelated to unrecognized tax benefits within our provision for income tax expense.We generally plan to indefinitely reinvest the undistributed earnings of foreign subsidiaries, except for those earnings that can be repatriated in a tax-free manner. Accordingly, we do not currently accrue any material income, distribution or withholding taxes that would arise if such earnings wererepatriated.Retirement benefits. We record annual amounts relating to defined benefit plans based on calculations that incorporate various actuarial and otherassumptions, including discount rates, mortality, assumed rates of return on plan assets, future compensation increases and attrition rates. We review theseassumptions on an annual basis and modify the assumptions based on current rates and trends when it is appropriate to do so. Actual results in any given yearwill often differ from actuarial assumptions because of economic and other factors.Stock-based compensation expense. We recognize and measure compensation expense for all stock-based awards based on the grant date fair value.For option awards, grant date fair value is determined under the option pricing model (Black-Scholes-Merton model) and, for stock-based awards other thanoption awards, grant date fair value is determined on the basis of the fair market value of the Company’s shares on the grant date of such awards. Determiningthe fair value of stock-based awards requires estimates and assumptions, including estimates of the period the stock awards will be outstanding before theyare exercised, future volatility in the price of our common shares, and the number of stock-based awards that are likely to be forfeited. The Black-Scholes-Merton option pricing model also involves the use of additional key assumptions, including dividend yield and risk-free interest rate. For performance shareunits, we are required to estimate the most probable outcome of the performance conditions in order to determine the stock-based compensation cost to berecorded 47Table of Contentsover the vesting period. We periodically assess the reasonableness of our assumptions and update our estimates as required. If actual results differsignificantly from our estimates, stock-based compensation expense and our results of operations could be materially affected.Results of OperationsThe following table sets forth certain data from our income statement for the years ended December 31, 2013, 2014 and 2015. Year ended December 31, Percentage changeIncrease/(Decrease) 2013 2014 2015 2014 vs.2013 2015 vs.2014 (dollars in millions) Net revenues—GE* $482.0 $466.1 $459.9 (3.3)% (1.3)% Net revenues—Global Clients* 1,649.9 1,813.4 2,001.1 9.9% 10.4% Total net revenues 2,132.0 2,279.4 2,461.0 6.9% 8.0% Cost of revenue Services 1,319.6 1,378.1 1,493.5 4.4% 8.4% Gross profit 812.4 901.4 967.5 10.9% 7.3% Gross profit margin 38.1% 39.5% 39.3% Operating expenses Selling, general and administrative expenses 484.8 585.6 608.1 20.8% 3.8% Amortization of acquired intangible assets 23.6 28.5 28.5 20.7% (0.1)% Other operating (income) expense, net (5.6) (6.9) (3.3) 23.7% (51.6)% Income from operations 309.5 294.0 334.2 (5.0)% 13.7% Income from operations as a percentage of total net revenues 14.5% 12.9% 13.6% Foreign exchange (gains) losses, net (20.8) 12.4 (5.3) (159.5)% (142.6)% Other income (expense), net (24.3) (27.3) (26.9) 12.2% (1.4)% Income before equity method investment activity, net and income taxexpense 306.0 254.4 312.6 (16.9)% 22.9% Loss (gain) on equity method investment activity, net (0.2) 4.8 10.8 (2,937.3)% 125.2% Income before income tax expense 306.2 249.6 301.8 (18.5)% 20.9% Income tax expense 71.1 57.4 61.9 (19.2)% 7.9% Net income 235.1 192.2 239.8 (18.2)% 24.8% Net income attributable to non-controlling interest 5.3 0.2 — (96.8)% (100.0)% Net income attributable to Genpact Limited shareholders $229.7 $192.0 $239.8 (16.4)% 24.9% Net income attributable to Genpact Limited shareholders as apercentage of total net revenues 10.8% 8.4% 9.7% *As described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Classification of Certain NetRevenues,” net revenues from certain businesses in which GE ceased to be a 20% shareholder are classified as a part of GE net revenues until theirdivestiture by GE and as a part of Global Client net revenues post-divestiture. Net revenues from GE in the year ended December 31, 2014, afterexcluding net revenues from such dispositions by GE, decreased by 2.4% compared to the year ended December 31, 2013. There was no impact on netrevenues from GE in the year ended December 31, 2015 as a result of excluding net revenues from such dispositions by GE. 48Table of ContentsFiscal Year Ended December 31, 2015 Compared to Fiscal Year Ended December 31, 2014Net revenues. Our net revenues were $2,461.0 million in 2015, up $181.6 million, or 8.0%, from $2,279.4 million in 2014. The growth in netrevenues was primarily driven by an increase in business process outsourcing, or BPO, services delivered to our Global Clients, including the impact ofrevenues derived from large, transformational deals. Adjusted for foreign exchange, primarily the depreciation of the euro, Japanese yen and Australian dollaragainst the U.S. dollar, our net revenues grew 10.2% on a constant currency basis compared to 2014. We provide information about our revenue on a constantcurrency basis so that our revenue may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-periodcomparisons of our business performance. Total net revenues on a constant currency basis are calculated by restating current-period activity using the priorfiscal period’s foreign currency exchange rates and hedging gains/losses.Our average headcount increased by 4.7% to approximately 67,400 in 2015 from approximately 64,400 in 2014. Annualized net revenues peremployee were $36,700 in 2015, up from $35,900 in 2014. Year ended December 31, PercentagechangeIncrease/(Decrease) 2014 2015 2015 vs. 2014 (dollars in millions) Global Clients: BPO services $1,381.2 $1,578.1 14.3% IT services 432.2 423.0 (2.1) Total net revenues from Global Clients $1,813.4 $2,001.1 10.4% GE : BPO services 355.5 355.0 (0.2)% IT services 110.6 104.9 (5.1) Total net revenues from GE $466.1 $459.9 (1.3)% Total net revenues from BPO services 1,736.7 1,933.1 11.3% Total net revenues from IT services 542.7 527.9 (2.7)% Total net revenues $2,279.4 $2,461.0 8.0% Net revenues from Global Clients in 2015 were $2,001.1 million, up $187.8 million, or 10.4%, from $1,813.4 million in 2014. This increase wasprimarily driven by growth in our targeted verticals, including banking and financial services, consumer product goods, life sciences, insurance and hightech. As a percentage of total net revenues, net revenues from Global Clients increased from 79.6% in 2014 to 81.3% in 2015.Net revenues from GE in 2015 were $459.9 million, down $6.2 million, or 1.3%, from 2014. The decline in net revenues from GE was in line with ourexpectations for the year. Net revenues from GE declined as a percentage of our total net revenues from 20.4% in 2014 to 18.7% in 2015.Net revenues from BPO services in 2015 were $1,933.1 million, up $196.4 million, or 11.3%, from $1,736.7 million in 2014. This increase wasprimarily attributable to an increase in services delivered to our Global Clients, particularly finance and accounting services, core industry verticaloperations, analytics and consulting services. Net revenues from IT services were $527.9 million in 2015, down $14.8 million, or 2.7%, from $542.7 millionin 2014 due to an overall decrease in IT services delivered to our clients. This decrease was primarily the result of a decline in revenues from our healthcareand capital markets verticals.Net revenues from BPO services as a percentage of total net revenues increased to 78.5% in 2015 from 76.2% in 2014 with a corresponding decline inthe percentage of total net revenues attributable to IT services. 49Table of ContentsCost of revenue and gross margin. The following table sets forth the components of our cost of revenue and the resulting gross margin: Year Ended December 31, As a percentage oftotal net revenues 2014 2015 2014 2015 (dollars in millions) Personnel expenses $943.1 $1,013.2 41.4% 41.2% Operational expenses 390.4 432.5 17.1 17.6 Depreciation and amortization 44.5 47.8 2.0 1.9 Cost of revenue $1,378.1 $1,493.5 60.5% 60.7% Gross margin 39.5% 39.3% Cost of revenue was $1,493.5 million, up $115.5 million, or 8.4%, from 2014. Wage inflation, an increase in our operational headcount to support thegrowth in our business, and related increases in subcontractor, infrastructure, communication and travel expenses contributed to the higher cost of revenue in2015 compared to 2014. These increases were partially offset by improved operational efficiencies and favorable foreign exchange, primarily thedepreciation of the Indian rupee and euro against the U.S. dollar. Foreign exchange fluctuations cause gains and losses on our foreign currency hedges andhave a translation impact when we convert our non-U.S. dollar income statement items to the U.S. dollar, our reporting currency.Our gross margin decreased marginally from 39.5% in 2014 to 39.3% in 2015 due to the factors described above.Personnel expenses. Personnel expenses as a percentage of total net revenues decreased from 41.4% in 2014 to 41.2% in 2015. Personnel expenseswere $1,013.2 million, up $70.1 million, or 7.4%, from $943.1 million in 2014. The impact of wage inflation and an approximately 3,000-person, or 5.3%,increase in our operational headcount resulted in higher personnel expenses in 2015 compared to 2014. These increases were partially offset by favorableforeign exchange and productivity improvements.Operational expenses. Operational expenses as a percentage of total net revenues increased from 17.1% in 2014 to 17.6% in 2015. Operationalexpenses were $432.5 million, up $42.1 million, or 10.8%, from 2014. An increase in the use of subcontractors and increases in infrastructure, communicationand travel expenses in 2015 contributed to the increase in operational expenses compared to 2014. These increases were partially offset by operationalefficiencies and favorable foreign exchange.Depreciation and amortization expenses. Depreciation and amortization expenses as a percentage of total net revenues were 1.9%, compared to 2.0%in 2014. Depreciation and amortization expenses as a component of cost of revenue were $47.8 million, up $3.3 million, or 7.3%, from 2014. This increasewas primarily due to the expansion of certain existing facilities in India and was partially offset by favorable foreign exchange.Selling, general and administrative expenses. The following table sets forth the components of our selling, general and administrative, or SG&A,expenses: Year Ended December 31, As a percentage oftotal net revenues 2014 2015 2014 2015 (dollars in millions) Personnel expenses $419.3 $430.1 18.4% 17.5% Operational expenses 157.8 169.0 6.9 6.9 Depreciation and amortization 8.6 9.0 0.4 0.4 Selling, general and administrative expenses $585.6 $608.1 25.7% 24.7% SG&A expenses as a percentage of total net revenues decreased to 24.7% from 25.7% in 2014. SG&A expenses were $608.1 million, up $22.5 million,or 3.8%, from 2014. Investments in front-end sales and 50Table of Contentsrelationship management teams and subject matter experts through the hiring of seasoned personnel in targeted markets and verticals along with the impactof wage inflation contributed to higher SG&A expenses. As a result, our sales and marketing expenses as a percentage of net revenues were approximately6.9% in 2015, up from approximately 6.6% in 2014. Additionally, fees for professional services contributed to higher SG&A expenses in 2015 compared to2014. These increases were partially offset by productivity savings, including the more effective use of support staff, a reduction in stock-basedcompensation costs and by favorable foreign exchange, primarily the depreciation of the Indian rupee and euro against the U.S. dollar.Personnel expenses. Personnel expenses as a percentage of total net revenues were 17.5%, down from 18.4% in the year ended 2014. Personnelexpenses as a component of SG&A expenses were $430.1 million, up $10.8 million, or 2.6%, from 2014. The impact of wage inflation and a $17.2 million, or4.1%, increase in personnel expenses due to our investments in front-end sales and relationship management teams resulted in an increase in personnelexpenses compared to 2014. This increase was partially offset by productivity savings, including as a result of the more effective use of support staff, areduction in stock-based compensation costs, and favorable foreign exchange.Operational expenses. Operational expenses as a percentage of total net revenues were 6.9%, unchanged from 2014. Operational expenses as acomponent of SG&A expenses were $169.0 million, up $11.3 million, or 7.2%, compared to 2014. Operational expenses increased primarily due to higherfees for professional services and an increase in travel expenses for subject matter experts in 2015 compared to 2014, partially offset by favorable foreignexchange.Depreciation and amortization. Depreciation and amortization expenses as a percentage of total net revenues were 0.4%, unchanged from 2014.Depreciation and amortization expenses as a component of SG&A expenses were $9.0 million, up $0.4 million, or 4.6%, from 2014. This marginal increasewas primarily due to the expansion of certain facilities in India.Amortization of acquired intangibles. Non-cash charges on account of the amortization of acquired intangibles were $28.5 million, unchanged from2014. A $1.6 million increase in amortization expenses in 2015 is primarily due to our acquisition in the second quarter of 2014 of Pharmalink. This increasewas more than offset by a decline of $1.9 million in the amortization expense of intangibles arising out of the Company’s 2004 reorganization when webegan operating as an independent company. The 2004 reorganization intangibles were fully amortized in 2014.Other operating (income) expense, net. The following table sets forth the components of other operating (income) expense, net: Year Ended December 31, Percentage changeIncrease/(Decrease) 2014 2015 2015 vs. 2014 (dollars in millions) Other operating (income) expense $(3.2) $(2.5) (20.5)% Provision for impairment on intangible assets — 10.7 100.0 Change in fair value of earn-out consideration and deferred consideration(relating to business acquisitions) (3.7) (11.5) 210.8 Other operating (income) expense, net $(6.9) $(3.3) (51.6)% Other operating (income) expense, net as a percentage of total netrevenues (0.3)% (0.1)% Other operating income, net of expenses, was $3.3 million, down from $6.9 million in 2014. This decrease was primarily due to a $10.7 million non-recurring charge in the third quarter of 2015 relating to a software intangible asset, which charge is discussed in Note 10—“Goodwill and intangible assets”to our consolidated 51Table of Contentsfinancial statements. We recorded an $11.5 million gain in 2015 compared to a $3.7 million gain in 2014 due to changes in the fair value of earn-outconsideration payable in connection with certain acquisitions.Income from operations. As a result of the foregoing factors, income from operations as a percentage of total net revenues increased from 12.9% in2014 to 13.6% in 2015. Income from operations was $334.2 million, up $40.2 million from $294.0 million in 2014.Foreign exchange (gains) losses, net. We recorded a net foreign exchange gain of $5.3 million in 2015, compared to a net foreign exchange loss of$12.4 million in 2014 primarily due to the re-measurement of non-functional currency assets and liabilities and related foreign exchange contracts. The gainin 2015 resulted primarily from the depreciation of the Indian rupee against the U.S. dollar, and the loss in 2014 is primarily attributable to the depreciationof the euro against the U.S. dollar.Other income (expense), net. The following table sets forth the components of other income (expense), net: Year ended December 31, Percentage changeIncrease/(Decrease) 2014 2015 2015 vs. 2014 (dollars in millions) Interest income $4.4 $8.7 97.0% Interest expense (33.8) (29.8) (11.8) Loss on extinguishment of debt — (10.1) 100.0 Other income 2.1 4.4 106.4 Other income (expense), net $(27.3) $(26.9) (1.4)% Other income (expense), net as a percentage of total netrevenues (1.2)% (1.1)% Our net other expenses decreased by $0.4 million in the year ended 2015 compared to the year ended 2014, primarily due to higher interest income,higher other income, mainly due to a non-recurring loss on the sale of a capital asset in 2014, and lower interest expense, which together more than offset theaccelerated amortization in 2015 of $10.1 million in debt issuance costs in connection with the refinancing of our credit facility, which is discussed in Note14 to our consolidated financial statements. The decrease in our interest expense is primarily due to a lower interest rate on our loan and a lower amountdrawn down under our revolver in 2015 compared to 2014. The weighted average rate of interest on our debt decreased from 3.4% in 2014 to 2.5% in 2015.Our interest income increased by $4.3 million in 2015 compared to 2014, primarily due to higher account balances in India, where we earn higher interestrates on our deposits, in 2015 compared to 2014, and to the non-recurring receipt of interest income on income tax refunds in 2015.Equity-method investment activity, net. Equity-method investment activity, net in 2015 primarily represents our $10.8 million share of loss,compared to a $4.8 million loss in 2014, from our non-consolidated affiliate, Markit Genpact KYC Services Limited, a U.K.-based joint venture with MarkitGroup Limited formed in 2014.Income tax expense. Our income tax expense increased from $57.4 million in 2014 to $61.9 million in 2015 due to higher pre-tax income. Oureffective tax rate, or ETR, was 20.5% in 2015, down from 23.0% in 2014. The improvement in our ETR was primarily driven by an increase in our earnings inlower-tax locations.Net income attributable to non-controlling interest. Non-controlling interest primarily refers to profit or loss associated with the non-controllingpartners’ interest in the operations of Genpact Netherlands B.V. As a result of our purchase of the non-controlling interests in Genpact Netherlands B.V. in thethird quarter of 2014, we now have 100% control of the entity. Accordingly, no income or loss was attributable to non-controlling interest in respect ofGenpact Netherlands B.V. in 2015. 52Table of ContentsNet income attributable to Genpact Limited common shareholders. As a result of the foregoing factors, net income attributable to Genpact Limitedcommon shareholders as a percentage of net revenues increased from 8.4% in 2014 to 9.7% in 2015. Net income attributable to our common shareholdersincreased by $47.8 million from $192.0 million in 2014 to $239.8 million in 2015.Fiscal Year Ended December 31, 2014 Compared to Fiscal Year Ended December 31, 2013Net revenues. Our net revenues were $2,279.4 million in 2014, up $147.4 million, or 6.9%, from $2,132.0 million in 2013. The growth in netrevenues was primarily driven by an increase in business process outsourcing, or BPO, services delivered to our Global Clients, an increase in informationtechnology, or IT, services delivered to both our Global Clients and GE, and by the acquisition of Pharmalink, which we refer to as our “regulatory affairsacquisition” and which contributed $26.1 million to our net revenues in 2014. Adjusted for foreign exchange, which had an adverse impact on our netrevenues in 2014, our net revenues grew 7.9% compared to 2013. Our average headcount increased by 8.6% to approximately 64,400 in 2014 fromapproximately 59,300 in 2013. Our annualized net revenues per employee were $35,900 in 2014, compared to $36,000 in 2013. Year ended December 31, Percentage changeIncrease/(Decrease) 2013 2014 2014 vs. 2013 (dollars in millions) Global Clients: BPO services $1,231.5 1,381.2 12.2% IT services 418.5 432.2 3.3% Total net revenues from Global Clients $1,649.9 $1,813.4 9.9% GE: BPO services 376.8 355.5 (5.6)% IT services 105.3 110.6 5.0% Total net revenues from GE $482.0 $466.1 (3.3)% Total net revenues from BPO services 1,608.2 1,736.7 8.0% Total net revenues from IT services 523.8 542.7 3.6% Total net revenues $2,132.0 $2,279.4 6.9% Net revenues from Global Clients in 2014 were $1,813.4 million, up $163.4 million, or 9.9%, from $1,649.9 million in 2013. This increase wasprimarily driven by growth in five of our targeted verticals—consumer product goods, life sciences, insurance, capital markets and infrastructure,manufacturing and services—and by revenues derived from our regulatory affairs acquisition. As a percentage of total net revenues, net revenues from GlobalClients increased from 77.4% in 2013 to 79.6% in 2014.Net revenues from GE were $466.1 million in 2014, down $16.0 million, or 3.3%, from 2013, primarily as a result of divestitures made by GE and anexpected decline in BPO services delivered to GE, which was partially offset by growth in short-cycle IT and consulting projects. Net revenues from GEdeclined as a percentage of our total net revenues from 22.6% in 2013 to 20.4% in 2014. Net revenues from GE in 2014, after excluding net revenues fromdispositions by GE, decreased 2.4% from 2013.Net revenues from BPO services for 2014 were $1,736.7 million, up $128.5 million, or 8.0%, from $1,608.2 million in 2013. This increase wasprimarily attributable to an increase in revenues from our Global Clients—particularly for finance and accounting services, core vertical operations andconsulting services—and to our regulatory affairs acquisition. Net revenues from IT services were $542.7 million in 2014, up $18.9 million, or 3.6%, from$523.8 million in 2013 due to an increase in IT services delivered to both our Global Clients and GE.Net revenues from BPO services as a percentage of total net revenues increased to 76.2% in 2014 from 75.4% in 2013 with a corresponding decline inthe percentage of total net revenues attributable to IT services. 53Table of ContentsCost of revenue and gross profit. The following table sets forth the components of our cost of revenue and the resulting gross profit: Year Ended December 31, As a percentage oftotal net revenues 2013 2014 2013 2014 (dollars in millions) Personnel expenses $904.4 $943.1 42.4% 41.4% Operational expenses 367.2 390.4 17.2 17.1 Depreciation and amortization 47.9 44.5 2.2 2.0 Cost of revenue $1,319.6 $1,378.1 61.9% 60.5% Gross profit $812.4 $901.4 38.1% 39.5% Cost of revenue was $1,378.1 million, up $58.5 million, or 4.4%, from 2013. Of this increase, $18.5 million is attributable to our regulatory affairsacquisition. Wage inflation, an increase in personnel expenses due to an increase in our operational headcount, and increased use of subcontractors forservice delivery also contributed to higher cost of revenue in 2014 compared to 2013. These increases were partially offset by lower stock-basedcompensation costs, the effects of foreign exchange volatility, and the improved operational efficiencies described above in 2014 compared to 2013.Our gross margin increased from 38.1% in 2013 to 39.5% in 2014. This increase is primarily attributable to improved operational efficiencies,including the more effective deployment and use of operations personnel. The increase in gross margin is also attributable to foreign exchange volatility,which causes gains and losses on our foreign currency hedges and has a foreign currency translation impact when we convert our non-U.S. dollar incomestatement items to the U.S. dollar, our reporting currency. The impact of these factors was partially offset by the effects of wage inflation.Personnel expenses. Personnel expenses as a percentage of total net revenues decreased from 42.4% in 2013 to 41.4% in 2014, primarily due toimproved operational efficiencies, including the more effective deployment and use of operations personnel, the increased use of subcontractors for servicedelivery, the effects of foreign exchange volatility and a decrease in stock-based compensation expenses. The impact of these factors was partially offset by a$10.6 million increase in personnel expenses attributable to our regulatory affairs acquisition in 2014. Wage inflation and an approximately 3,500-person, or6.8%, increase in our operational headcount (excluding the regulatory affairs acquisition) also resulted in higher personnel expenses in 2014 compared to2013. As a result, personnel expenses for 2014 were $943.1 million, up $38.7 million, or 4.3%, from $904.4 million in 2013.Operational expenses. Operational expenses as a percentage of total net revenues decreased from 17.2% in 2013 to 17.1% in 2014 primarily due tothe effects of foreign exchange volatility. Operational expenses for 2014 were $390.4 million, up $23.2 million, or 6.3%, from 2013 as a result of theincreased use of subcontractors for service delivery and an approximately $7.7 million increase in operational expenses attributable to our regulatory affairsacquisition.Depreciation and amortization expenses. Depreciation and amortization expenses as a percentage of total net revenues declined to 2.0% in 2014from 2.2% in 2013. Depreciation and amortization expenses as a component of cost of revenue for 2014 were $44.5 million, down $3.4 million, or 7.0%, from2013. This decrease was primarily due to an increase in fully depreciated assets since the end of 2013 at our delivery centers located in India, the U.S. andEurope and to the effects of foreign exchange volatility and were partially offset by depreciation and amortization expenses resulting from the expansion ofcertain existing facilities and the addition of new delivery centers in India. 54Table of ContentsSelling, general and administrative expenses. The following table sets forth the components of our selling, general and administrative, or SG&A,expenses: Year Ended December 31, As a percentage oftotal net revenues 2013 2014 2013 2014 (dollars in millions) Personnel expenses $347.4 $419.3 16.3% 18.4% Operational expenses 129.0 157.8 6.0 6.9 Depreciation and amortization 8.4 8.6 0.4 0.4 Selling, general and administrative expenses $484.8 $585.6 22.7% 25.7% SG&A expenses as a percentage of total net revenues increased from 22.7% in 2013 to 25.7% in 2014. SG&A expenses in 2014 were $585.6 million,up $100.8 million, or 20.8%, from 2013. Our sales and marketing expenses in 2014 were $151.5 million, or 25.9% of SG&A expenses, up from $100.8million, or 20.8% of SG&A expenses, in 2013. SG&A expenses increased primarily as a result of our investments in sales and business developmentpersonnel and subject matter experts through the hiring of more than 100 seasoned professionals in our targeted markets—such as the United States andEurope—and industry verticals—namely, banking and financial services, insurance, consumer product goods and life sciences. Wage inflation alsocontributed to the increase in SG&A expenses in 2014. As a result, our sales and marketing expenses as a percentage of net revenues were approximately6.6% in 2014, up from approximately 4.7% in 2013.Of the total increase in SG&A expenses, $5.4 million is attributable to our regulatory affairs acquisition. Additionally, travel costs related to sales andmarketing activities and fees for professional services related to strategic initiatives contributed to higher SG&A expenses. These increases were partiallyoffset by a lower reserve for doubtful receivables in 2014 compared to 2013, an expense of $1.1 million in 2013 resulting from the amendment of our creditfacility and by the effects of foreign exchange volatility.Personnel expenses. Personnel expenses as a percentage of total net revenues in 2014 were 18.4%, up from 16.3% in 2013. Personnel expenses as acomponent of SG&A expenses were $419.3 million in 2014, up $71.9 million, or 20.7%, from 2013. Our sales team personnel expenses increased byapproximately 47.6%, primarily driven by the addition of more than 100 client-facing personnel in 2014. Another $3.6 million of the increase is due to ourregulatory affairs acquisition. Wage inflation and an increase in our support headcount also resulted in higher personnel costs in 2014 compared to 2013.This increase was partially offset by the effects of foreign exchange volatility.Operational expenses. Operational expenses as a percentage of total net revenues increased from 6.0% in 2013 to 6.9% in 2014. Operationalexpenses as a component of SG&A expenses increased by $28.8 million, or 22.3%, in 2014 compared to 2013. Higher sales and marketing related travel andfees for professional services resulted in higher operational expenses in 2014 compared to 2013. Of this increase, $1.8 million is attributable to our regulatoryaffairs acquisition. We also incurred acquisition-related expenses of $2.8 million in 2014. These increases were partially offset by an $8.3 million decline inthe reserve for doubtful receivables in 2014, an expense of $1.1 million relating to the amendment of our credit facility in 2013, and the effects of foreignexchange volatility.Depreciation and amortization. Depreciation and amortization expenses as a percentage of total net revenues were 0.4% in 2014, unchanged from2013. Depreciation and amortization expenses for 2014 were $8.6 million, compared to $8.4 million in 2013. Fully depreciated assets increased since the endof 2013 at our facilities in India, the U.S. and Europe, which, together with the effects of foreign exchange volatility, resulted in lower depreciation in 2014.This decrease was offset by depreciation and amortization expenses resulting from the expansion of certain facilities in India, the addition of new facilities,and the acquisitions we consummated in 2013 and 2014. 55Table of ContentsAmortization of acquired intangibles. Non-cash charges on account of the amortization of acquired intangibles were $28.5 million in 2014, up $4.9million from 2013. Our 2014 acquisitions contributed additional amortization expenses of $5.3 million. This increase was partially offset by a decline of $1.0million in the amortization expense of intangibles arising out of the Company’s 2004 reorganization when we began operating as an independent company.In each case, the amortization was consistent with the applicable estimated useful life of the acquired intangible assets.Other operating (income) expense, net. The following table sets forth the components of other operating (income) expense, net: Year ended December 31, Percentage changeIncrease/(Decrease) 2013 2014 2014 vs. 2013 (dollars in millions) Other operating (income) expense $(3.3) $(3.2) (2.9)% Provision for impairment of capital work in progress/property, plant andequipment 2.4 — (100.0) Change in fair value of earn-out consideration and deferred consideration(relating to business acquisitions) (4.7) (3.7) (20.6) Other operating (income) expense, net $(5.6) $(6.9) 23.7% Other operating (income) expense, net as a percentage of total net revenues (0.3)% (0.3)% Other operating income, net of expenses, was $6.9 million in 2014, up from $5.6 million in 2013. In 2013, we recorded a $2.4 million non-recurringprovision for impairment against certain capital assets in India. This was partially offset by a $1.0 million lower gain resulting from changes in the earn-outconsideration payable in connection with certain acquisitions.Income from operations. As a result of the foregoing factors, income from operations as a percentage of net revenues decreased from 14.5% in 2013 to12.9% in 2014. Income from operations was $294.0 million, down $15.5 million from $309.5 million in 2013.Foreign exchange (gains) losses, net. We recorded a net foreign exchange loss of $12.4 million in 2014, compared to a net foreign exchange gain of$20.8 million in 2013. The net foreign exchange loss in 2014 is primarily due to the re-measurement of our non-functional currency assets and liabilities andrelated foreign exchange contracts resulting from the depreciation of the Euro against the U.S. dollar in 2014. The net foreign exchange gain in 2013 isprimarily due to the depreciation of the Indian rupee against the U.S. dollar.Other income (expense), net. The following table sets forth the components of other income (expense), net: Year ended December 31, Percentage changeIncrease/(Decrease) 2013 2014 2015 vs. 2014 (dollars in millions) Interest income $15.7 $4.4 (72.0)% Interest expense (35.7) (33.8) (5.4) Loss on extinguishment of debt (3.2) — (100.0) Provision (created) reversed for loss ondivestitures (3.5) — (100.0) Other income 2.3 2.1 (8.9) Other income (expense), net $(24.3) $(27.3) 12.2% Other income (expense), net as a percentageof total net revenues (1.1)% (1.2)% 56Table of ContentsOur net other expenses increased by $3.0 million in the year ended 2014 compared to the year ended 2013, primarily on account of higher net interestexpense in 2014. This increase was partially offset by a $3.5 million provision, created in 2013, for losses on the divestitures of Clearbizz B.V. andGantthead.com, Inc. Our net interest expense increased by $6.3 million as the result of a $5.1 million decrease in interest expense and an $11.3 milliondecrease in interest income in 2014 compared to 2013. The decrease in interest expense was the result of lower interest expense of $2.1 million in 2014 dueto a lower interest rate on our amended facility. We also incurred a $3.2 million loss on extinguishment of debt in June 2013 in connection with theamendment of our credit facility. The weighted average rate of interest on our debt decreased from 3.8% in 2013 to 3.4% in 2014. Our interest incomedecreased by $11.3 million in 2014 primarily due to higher account balances in jurisdictions in which we earn lower interest rates during 2014 compared to2013 and to the non-recurring receipt of interest income on an income tax refund in 2013.Equity-method investment activity, net. Equity-method investment activity, net in 2014 primarily represents our share of loss from our non-consolidated affiliate, Markit Genpact KYC Services Limited, a joint venture with Markit Group Limited. We entered into this joint venture in 2014. Equity-method investment activity, net in 2013 primarily represents our share of gain from NIIT Uniqua, our joint venture with NIIT.Income tax expense. Our income tax expense decreased from $71.1 million in 2013 to $57.4 million in 2014 due primarily to lower pre-tax income.Our effective tax rate, or ETR, was 23.0% in 2014, down from 23.6% in 2013. The improvement in our ETR was primarily driven by the growth of ouroperations in low-tax and tax-exempt locations, mostly in India.Net income attributable to non-controlling interest. Non-controlling interest primarily refers to profit or loss associated with the non-controllingpartners’ interest in the operations of Genpact Netherlands B.V. and the non-controlling shareholders’ interest in the operations of Hello Communications(Shanghai) Co., Ltd. Net income attributable to non-controlling interest decreased from $5.3 million in 2013 to $0.2 million in 2014. This decrease was theresult of our purchase of the non-controlling interests in Genpact Netherlands B.V. in the third quarter of 2014, over which we now have 100% control, and toour divestiture of Hello Communications (Shanghai) Co. Ltd. in February 2013.Net income attributable to Genpact Limited common shareholders. As a result of the foregoing factors, net income attributable to Genpact Limitedcommon shareholders as a percentage of net revenues, decreased from 10.8% in 2013 and to 8.4% in 2014. Net income attributable to Genpact Limitedcommon shareholders decreased by $37.7 million from $229.7 million in 2013 to $192.0 million in 2014.SeasonalityOur financial results may vary from period to period. Our revenues are typically higher in the third and fourth quarters than in other quarters, as a resultof several factors. We generally find that demand for short-term IT projects, transformation services and analytics services increases in the fourth quarter asour clients utilize the balance of their budgets for the year. In addition, contracts for long-term IT Services and BPO engagements are often signed in the firstand second quarters as clients begin new budget cycles. Volumes under such contracts then increase in the latter part of the year as engagements ramp up.Additionally, demand for certain services, such as collections and transaction processing, is often greater in the second half of the year as our clients’ volumesin such areas increase.The tables in Note 29 to our consolidated financial statements present unaudited quarterly financial information for each of our last eight fiscalquarters on a historical basis. We believe the quarterly information set forth therein contains all adjustments necessary to fairly present such information. Thecomparison of our results for the first quarter of 2015 with the fourth quarter of 2014 reflects the seasonal trends described above. The results for any interimperiod are not necessarily indicative of the results that may be expected for the full year. 57Table of ContentsStatement of financial positionKey changes in our financial position during 2015Following are the significant changes in our financial position as of December 31, 2015 compared to December 31, 2014: • Long-term debt increased by $122.9 millionOur long-term debt increased primarily as a result of the refinancing of our 2012 credit facility in June 2015 through a new credit facility. As a resultof this refinancing, we extinguished $663.2 million in outstanding term loan under our previous credit facility. Refer to Note 14 to our consolidatedfinancial statements for additional information. • Short-term borrowings decreased by $113.5 millionOur short-term borrowings decreased, primarily due to the repayment of $135 million under our revolving facility in 2015, partially offset by $21.5million in proceeds as a result of the refinancing of our 2012 credit facility in June 2015. Refer to Note 15 to our consolidated financial statementsfor additional information. • Accounts receivable increased by $64.4 millionThe increase in our accounts receivable is primarily due to increased sales in 2015 and an increase in our days sales outstanding, from 79 days as ofDecember 31, 2014 to 82 days as of December 31, 2015. • Goodwill and intangible assets decreased by $34.8 millionGoodwill decreased by $18.9 million primarily due to foreign exchange fluctuations in 2015, partially offset by goodwill arising out of our 2015acquisitions. Our intangible assets decreased by $15.9 million, primarily due to amortization expenses and a non-recurring charge relating to asoftware intangible asset in 2015, partially offset by intangible assets acquired in 2015. Refer to Notes 3 and 10 to our consolidated financialstatements for additional information. • Other assets and prepaid expenses increased by $31.8 millionThe increase in other assets and prepaid expenses is primarily due to a net increase in advance tax payments, advance supplier payments anddeferred transition costs. • Accrued expenses, other current liabilities and other liabilities increased by $23.1 millionThe increase in accrued expenses, other current liabilities and other liabilities is primarily due to higher accruals in 2015 due to increased businessactivity in 2015 to support higher sales, including infrastructure repair and maintenance costs, higher capital expenditures and employee-relatedaccruals. These increases were partially offset by a decrease in earn-out consideration payable in connection with certain acquisitions and the mark-to-market impact of our derivative financial instruments.Liquidity and Capital ResourcesOverviewInformation about our financial position as of December 31, 2014 and 2015 is presented below: As of December 31,2014 As of December 31,2015 Percentage changeIncrease/(Decrease) (dollars in millions) 2015 vs. 2014 Cash and cash equivalents $461.8 $450.9 (2.4)% Short term borrowings 135.0 21.5 (84.1) Long-term debt due within one year 4.3 39.1 812.6 Long-term debt other than the current portion 649.3 737.3 13.6 Genpact Limited total shareholders’ equity $1,285.1 $1,304.4 1.5% 58Table of ContentsFinancial ConditionWe have historically financed our operations and our expansion, including acquisitions, with cash from operations and borrowing facilities.Our cash and cash equivalents were $450.9 million as of December 31, 2015, compared to $461.8 million as of December 31, 2014. Our cash and cashequivalents are comprised of (a) $219.5 million in cash in current accounts across all operating locations to be used for working capital and immediatecapital requirements and (b) $231.4 million in deposits with banks to be used for medium-term planned expenditures and capital requirements. We held noshort-term deposits as of December 31, 2015 and December 31, 2014.As of December 31, 2015, $431.9 million of the $450.9 million of cash and cash equivalents was held by our foreign (non-Bermuda) subsidiaries.$11.7 million of this cash is held by a foreign subsidiary for which the Company expects to incur and has accrued a deferred tax liability on the repatriationof $8.0 million of retained earnings. $71.6 million of the cash and cash equivalents held by our foreign subsidiaries is held in jurisdictions where no tax isexpected to be imposed upon repatriation.As we previously disclosed, in February 2015 our Board of Directors authorized a plan to repurchase up to $250 million in value of our commonshares. During the year ended December 31, 2015, we purchased 9,867,873 of our common shares under this program. Such shares were purchased at aweighted average price of $23.00 per share for an aggregate cash amount of approximately $226.9 million. Since January 1, 2016, we have completed $250million in share purchases under the February 2015 share repurchase program.In February 2016, our Board of Directors approved an additional $250 million share repurchase program, bringing the total authorization under ourexisting program to $500 million. Our repurchase program does not obligate us to acquire any specific number of shares. Under the program, we maypurchase shares in privately negotiated or open market transactions. Pursuant to our February 2015 share repurchase program and our repurchase programannounced in February 2016, we purchased an aggregate of 1,307,830 of our common shares between January 1, 2016 and February 26, 2016 at a weightedaverage price of $24.28 per share for an aggregate cash amount of $31.8 million.We expect that in the future our cash from operations, cash reserves and debt capacity will be sufficient to finance our operations as well as our growthand expansion plans. Our working capital needs are primarily to finance our payroll and other administrative and information technology expenses inadvance of the receipt of accounts receivable. Our primary capital requirements include opening new delivery centers, expanding related operations tosupport our growth, and financing acquisitions.Cash flows from operating, investing and financing activities, as reflected in our Consolidated Statements of Cash Flows, are summarized in thefollowing table: Year Ended December 31, Percentage changeIncrease/(Decrease) 2014 2015 2015 vs. 2014 (dollars in millions) Net cash provided by (used for) Operating activities $271.8 $327.4 20.5% Investing activities (192.8) (100.5) (47.9) Financing activities (177.4) (218.9) 23.4 Net increase (decrease) in cash and cash equivalents $(98.4) $8.1 (108.2)% Cash flows from operating activities. We generated net cash from operating activities of $327.4 million in 2015, up $55.6 million from 2014. Theincrease in cash inflows is primarily attributable to a $45.1 million increase in net income adjusted for amortization, depreciation and other non-cash items. Anet change in our operating assets and liabilities of $10.5 million in 2015 compared to 2014 also contributed to the increase in cash 59Table of Contentsgenerated from operating activities, primarily due to (i) higher payables in 2015 due to accruals for certain sales and strategic planning events andinfrastructure repair and maintenance costs in the fourth quarter of 2015, (ii) an $11.7 million decrease in net income tax payments compared to 2014 as aresult of an increase in our earnings in low-tax and tax-exempt locations and the timing of certain tax payments, including the payment of a one-timeintercompany dividend tax of $5.0 million in 2014, and (iii) higher upfront investments in certain large deals in 2014. These items were partially offset by a$54.8 million increase in investments in trade receivables in 2015 compared to 2014. Our days sales outstanding were 82 days as of December 31, 2015compared to 79 days as of December 31, 2014.Cash flows from investing activities. Our net cash used for investing activities was $100.5 million in 2015, down $92.3 million from 2014. Thisdecrease was primarily due to the payment of $130.8 million, net of cash acquired, for our regulatory affairs acquisition in 2014 compared to payments in2015 of (i) $15.1 million for our acquisitions of wealth management operations platforms in the U.S. and the U.K. and (ii) $6.1 million for our acquisition of adelivery center in Slovakia. We also made an $18.4 million investment in 2015 in our non-consolidated affiliate, Markit Genpact KYC Services Limited.Cash flows from financing activities. Our net cash used for financing activities was $218.9 million in 2015, up $41.5 million from 2014. In June2015, we refinanced our 2012 credit facility through a new credit facility comprised of an $800.0 million term loan and a $350.0 million revolving facility.As a result, we extinguished the outstanding term loan, amounting to $663.2 million, under the previous facility and obtained $800.0 million in newfunding, resulting in a net inflow of $136.8 million. In the third and fourth quarters of 2015, we repaid $20.0 million of the term loan under our new facility.In connection with our entry into the new facility in the second quarter of 2015, we paid $5.5 million in expenses and repaid $135.0 million, representing theamount we had drawn down under the 2012 revolving credit facility as of the date of the June 2015 refinancing. Additionally, in 2015, we obtained andrepaid two short-term loans in the amounts of $672.5 million and $737.5 million, in connection with which we paid debt issuance costs of $1.0 million. Wealso had lower proceeds from short-term borrowings (net of repayments) of $21.5 million in 2015 compared to $135.0 million in 2014. Additionally,payments for net settlement of stock-based awards were $4.7 million higher in 2015 than in 2014. The impact of the foregoing items on cash flows was offsetby lower share repurchase payments of $226.9 million in 2015 compared to $302.6 million and related expenses of $2.5 million in 2014.Financing Arrangements (Credit Facility)In June 2015 we refinanced our 2012 facility through a new credit facility comprised of a term loan of $800 million and a revolving credit facility of$350 million. As of December 31, 2014 and December 31, 2015, our outstanding term loan debt, net of debt amortization expense of $11.3 million and $3.5million, was $653.6 million and $776.5 million, respectively. As of December 31, 2014 and December 31, 2015, the limits available were $14.3 million and$15.8 million, respectively, of which $8.1 million and $10.3 million was utilized, constituting non-funded drawdown. For details on our financingarrangements, refer to notes 14 and 15 to our consolidated financial statements.Goodwill Impairment TestingGoodwill of a reporting unit is tested for impairment at least annually and between annual tests if an event occurs or circumstances change that wouldmore likely than not reduce the fair value of the reporting unit below its carrying amount. In accordance with ASU 2011-08, the Company has an option toperform an assessment of qualitative factors, such as macro-economic conditions, industry and market considerations, overall financial performance, businessplans and expected future cash flows, to determine whether events or circumstances exist which lead to a determination that it is more likely than not that thefair value of a reporting unit is less than its carrying amount. Based on our assessment of such qualitative factors, we concluded that the fair values of all ofour reporting units are likely to be higher than their respective carrying values as of December 31, 2015. 60Table of ContentsOff-Balance Sheet ArrangementsOur off-balance sheet arrangements consist of foreign exchange contracts and certain operating leases. For additional information, see the Risk Factorentitled “Currency exchange rate fluctuations in various currencies in which we do business, especially the Indian rupee, the euro and the U.S. dollar, couldhave a material adverse effect on our business, results of operations and financial condition,” the section titled “Contractual Obligations” below, and Note 7to our consolidated financial statements.Contractual ObligationsThe following table sets forth our total future contractual obligations as of December 31, 2015: Total Less than 1year 1-3 years 3-5 years After 5 years (dollars in millions) Long-term debt $843.4 $55.5 $108.6 $679.3 $— —Principal payments 776.4 39.1 78.4 658.9 — —Interest payments* 67.0 16.4 30.2 20.4 — Short-term borrowings 21.7 21.7 — — — —Principal payments 21.5 21.5 — — — —Interest payments** 0.2 0.2 — — — Capital leases 4.2 1.7 2.0 0.5 — —Principal payments 3.4 1.3 1.7 0.4 — —Interest payments 0.8 0.4 0.3 0.1 — Operating leases 131.4 27.9 45.9 28.6 29.0 Purchase obligations 47.0 35.4 10.3 1.3 — Capital commitments net of advances 8.2 8.2 — — — Earn-out consideration 26.1 18.1 6.6 1.4 — —Reporting date fair value 22.9 17.0 5.0 0.9 — —Interest 3.2 1.1 1.6 0.5 — Other liabilities 74.3 46.8 16.6 10.9 — Total contractual obligations $1,156.3 $215.3 $190.0 $722.0 $29.0 *Our interest payments on long-term debt are calculated at a rate equal to LIBOR plus a margin of 1.50% per annum based on our debt rating as ofDecember 31, 2015.**Our interest payments on short-term debt represent estimated payments at a rate equal to LIBOR plus a margin of 1.50% per annum based on our debtrating as of December 31, 2015 and our expectation for the repayment of such debt.Recent Accounting PronouncementsRecently adopted accounting pronouncementsFor a description of recently adopted accounting pronouncements, see Note 2—“Recently adopted accounting pronouncements” under Item 1—“Financial Statements” above and Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations”—“CriticalAccounting Policies and Estimates” in this Annual Report on Form 10-K.Recently issued accounting pronouncementsIn May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which will replace mostexisting revenue recognition guidance in U.S. GAAP. The 61Table of Contentscore principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled toreceive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flowsarising from customer contracts, including significant judgments and changes in judgments. The ASU will be effective for us beginning January 1, 2018,including interim periods in our fiscal year 2018, and allows for both retrospective and prospective adoption. We are in the process of determining themethod of adoption and assessing the impact of this ASU on our consolidated results of operations, cash flows, financial position or disclosures.In January 2015, the FASB issued ASU No. 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.Such items are defined as transactions or events that are both unusual in nature and infrequent in occurrence, and, currently, are required to be presentedseparately in an entity’s income statement, net of income tax, after income from continuing operations. The changes eliminate the concept of anextraordinary item and, therefore, the presentation of such items will no longer be required. Notwithstanding this change, an entity will still be required topresent and disclose a transaction or event that is both unusual in nature and infrequent in occurrence in the notes to the financial statements. These changesbecome effective for us on January 1, 2016. We do not expect the adoption of this update to have a material impact on our consolidated results of operations,cash flows, financial position or disclosures.In February 2015, the FASB issued ASU No. 2015-02, Amendment to the Consolidation Analysis, which specifies changes to the analysis that an entitymust perform to determine whether it should consolidate certain types of legal entities. These changes (i) modify the evaluation of whether limitedpartnerships and similar legal entities are variable interest entities or voting interest entities, (ii) eliminate the presumption that a general partner shouldconsolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with variable interest entities, particularly thosethat have fee arrangements and related party relationships, and (iv) provide a scope exception from consolidation guidance for reporting entities withinterests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the InvestmentCompany Act of 1940 for registered money market funds. These changes become effective for us on January 1, 2016. We do not expect the adoption of thisupdate to have a material impact on our consolidated results of operations, cash flows, financial position or disclosures.In May 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides explicitguidance to evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The new guidance clarifies that if a cloud computingarrangement includes a software license, the customer should account for the license consistent with its accounting for other software licenses. If thearrangement does not include a software license, the customer should account for the arrangement as a service contract. The ASU will be effective for usbeginning January 1, 2016, including interim periods in our fiscal year 2016, and allows for both retrospective and prospective adoption. We will adopt therequirements of this standard prospectively and do not expect the adoption of this update to have a material impact on our consolidated results of operations,cash flows, financial position or disclosures.In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations,” which eliminates the requirement for an acquirer in a businesscombination to account for measurement-period adjustments retrospectively. Under the ASU, the acquirer shall recognize adjustments to provisional amountsthat are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU will be effective for usbeginning January 1, 2016, including interim periods in our fiscal year 2016. We do not expect the adoption of this update to have a material impact on ourconsolidated results of operations, cash flows, financial position or disclosures.In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments—Overall: Recognition and Measurement of Financial Assets andFinancial Liabilities,” which primarily affects accounting for equity investments, financial liabilities under the fair value option, and the presentation anddisclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizingdeferred tax assets resulting from unrealized losses on available-for-sale debt securities. The ASU 62Table of Contentswill be effective for us beginning January 1, 2018, including interim periods in our fiscal year 2018. Early adoption is permitted. We are in the process ofdetermining the method of adoption and assessing the impact of this ASU on our consolidated results of operations, cash flows, financial position anddisclosures.In February 2016, the FASB issued ASU No. 2016-02, “Leases.” The core principle of the ASU is that a lessee should recognize the assets and liabilitiesthat arise from its leases other than those that meet the definition of a short-term lease. The ASU requires extensive qualitative and quantitative disclosures,including with respect to significant judgments made by management. The ASU will be effective for us beginning January 1, 2019, including interim periodsin our fiscal year 2019. Early adoption is permitted. We are in the process of determining the method of adoption and assessing the impact of this ASU on ourconsolidated results of operations, cash flows, financial position and disclosures.Item 7A. Quantitative and Qualitative Disclosures About Market RiskForeign currency riskOur exposure to market risk arises principally from exchange rate risk. A substantial portion of our revenues (approximately 73% in fiscal 2015) isreceived in U.S. dollars. We also receive revenues in Japanese yen, euros, U.K. pounds sterling, Australian dollars, Chinese renminbi, South African rand andIndian rupees. Our expenses are primarily in Indian rupees and we also incur expenses in U.S. dollars, Chinese renminbi, euros and the currencies of the othercountries in which we have operations. Our exchange rate risk arises from our foreign currency revenues, expenses, receivables and payables. Based on theresults of our European operations for fiscal 2015, and excluding any hedging arrangements that we had in place during that period, a 5.0% appreciation ordepreciation of the Euro against the U.S. dollar would have increased or decreased, as applicable, our revenues in fiscal 2015 by approximately $7 million.Similarly, excluding any hedging arrangements that we had in place during that period, a 5.0% depreciation of the Indian rupee against the U.S. dollar wouldhave decreased our expenses incurred and paid in Indian rupees in fiscal 2015 by approximately $34 million. Conversely, a 5.0% appreciation of the Indianrupee against the U.S. dollar would have increased our expenses incurred and paid in rupees in fiscal 2015 by approximately $37 million.We have sought to reduce the effect of any Indian rupee-U.S. dollar, Chinese renminbi-Japanese yen, euro-Hungarian forint, euro-Romanian leu, andcertain other local currency exchange rate fluctuations on our results of operations by purchasing forward foreign exchange contracts to cover a portion ofour expected cash flows and accounts receivable. These instruments typically have maturities of zero to sixty months. We use these instruments as economichedges and not for speculative purposes, and most of them qualify for hedge accounting under the FASB guidance on Derivatives and Hedging. Our abilityto enter into derivatives that meet our planning objectives is subject to the depth and liquidity of the market for such derivatives. In addition, the laws ofChina and India limit the duration and amount of such arrangements. We may not be able to purchase contracts adequate to insulate us from Indian rupee-U.S. dollar and Chinese renminbi-Japanese yen foreign exchange currency risks. In addition, any such contracts may not perform adequately as hedgingmechanisms. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Foreign Exchange (gains) losses, net.”Interest rate riskOur exposure to interest rate risk arises principally from interest on our indebtedness. As of December 31, 2015, we had approximately $798 million ofindebtedness under our credit facility, comprised of a long-term loan of $776.5 million, net of $3.5 million of debt amortization expenses, and a revolvingloan of $21.5 million. Interest on indebtedness under our credit facility is variable based on LIBOR and we are subject to market risk from changes in interestrates. Based on our indebtedness as of December 31, 2015, a 1% change in interest rates would impact our net interest expense by $7.8 million in 2016. 63Table of ContentsCredit riskAs of December 31, 2015, we had accounts receivable, including long-term accounts receivable, net of provisions for doubtful receivables, of $598.5million. Of this, $106.5 million was owed by GE, and the balance, or $492.0 million, was owed by Global Clients. No single Global Client owed more than5% of our accounts receivable balance as of December 31, 2015.Item 8. Financial Statements and Supplementary DataThe financial statements and supplementary data required by this item are listed in Item 15—“Exhibits and Financial Statement Schedules” of thisAnnual Report on Form 10-K.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of disclosure controls and proceduresDisclosure controls and procedures are the Company’s controls and other procedures which are designed to ensure that information required to bedisclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periodsspecified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure thatinformation required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to ourmanagement, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of theCompany’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer, of the effectiveness of thedesign and operation of the Company’s disclosure controls and procedures pursuant to the Securities Exchange Act of 1934 (“Exchange Act”) Rule 13a-15(b). Based upon that evaluation, the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer concluded that the Company’sdisclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidatedsubsidiaries) required to be included in the Company’s periodic SEC filings.Management’s Report on Internal Control over Financial ReportingGenpact’s management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonableassurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. Internal control over financial reporting includes those policies and procedures that:(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;(ii) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization ofmanagement and/or our Board of Directors; and(iii) provide reasonable assurance regarding the prevention or timely detection of any unauthorized acquisition, use or disposition of our assetsthat could have a material effect on our financial statements. 64Table of ContentsDue to its inherent limitations, including that it relies on sample-based testing, internal control over financial reporting may not prevent or detectmisstatements. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate dueto changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conductedan evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations ofthe Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on its evaluation, our management concluded that our internalcontrol over financial reporting was effective as of December 31, 2015.During 2015, we acquired certain wealth management operations from Citibank, N.A. in the U.K. We have excluded from our assessment of theeffectiveness of the Company’s internal control over financial reporting as of December 31, 2015 the operations of such acquisition and the internal controlover financial reporting associated with total assets of $13,318 thousand (of which $3,242 thousand represents goodwill and intangible assets includedwithin the scope of the assessment) and total revenues of $8,818 thousand included in the consolidated financial statements of the Company as of and for theyear ended December 31, 2015.KPMG, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report on Form10-K and, as part of its audit, has issued an attestation report, included herein, on the effectiveness of our internal control over financial reporting. See“Report of Independent Registered Public Accounting Firm” on page F-3.Changes in internal control over financial reportingDuring 2015, we implemented a new enterprise resource planning, or ERP, system. The new ERP system was designed and implemented, in part, toenhance the overall system of internal control over financial reporting through further automation and integration of business processes and was notimplemented in response to any identified deficiency or material weakness in the Company’s internal control over financial reporting. This implementationwas significant in scale and complexity and significantly affected certain accounting functions. Both during and after the implementation, the Companymaintained its internal control design by changing detailed key controls to achieve all key financial reporting assertions. Other than the ERPimplementation, there were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under theExchange Act) during the quarterly period ended December 31, 2015 that have materially affected, or are reasonably likely to materially affect, theCompany’s internal control over financial reporting.Item 9B. Other InformationNone.PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceInformation about our executive officers is contained in the section titled “Executive Officers” in Part I of this Annual Report on Form 10-K. The otherinformation required by this Item will be included in our Proxy Statement for the 2016 Annual General Meeting of Shareholders under the captions “DirectorNominees,” “Corporate Governance,” and “Section 16(a) Beneficial Ownership Reporting Compliance,” which will be filed with the SEC no later than 120days after the close of the fiscal year ended December 31, 2015 and is incorporated by reference in this report. 65Table of ContentsItem 11. Executive CompensationThe information required by this Item will be included in our Proxy Statement for the 2016 Annual General Meeting of Shareholders under the caption“Information about Executive and Director Compensation,” which will be filed with the SEC no later than 120 days after the close of the fiscal year endedDecember 31, 2015 and is incorporated by reference in this report.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by this Item will be included in our Proxy Statement for the 2016 Annual General Meeting of Shareholders under thecaptions “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance under Equity Compensation Plans,”which will be filed with the SEC no later than 120 days after the close of the fiscal year ended December 31, 2015 and is incorporated by reference in thisreport.Item 13. Certain Relationships and Related Transactions, and Director IndependenceThe information required by this Item will be included in our Proxy Statement for the 2016 Annual General Meeting of Shareholders under the caption“Certain Relationships and Related Transactions,” which will be filed with the SEC no later than 120 days after the close of the fiscal year endedDecember 31, 2015 and is incorporated by reference in this report.Item 14. Principal Accounting Fees and ServicesThe information required by this Item will be included in our Proxy Statement for the 2016 Annual General Meeting of Shareholders under the caption“Independent Registered Public Accounting Firm Fees and Other Matters,” which will be filed with the SEC no later than 120 days after the close of the fiscalyear ended December 31, 2015 and is incorporated by reference in this report. 66Table of ContentsPART IVItem 15. Exhibits and Financial Statement Schedules (a)Documents filed as part of this Annual Report on Form 10-K: 1.Consolidated Financial StatementsThe consolidated financial statements required to be filed in the Annual Report on Form 10-K are listed on page F-1 hereof. The requiredfinancial statements appear on pages F-4 through F-60 hereof. 2.Financial Statement SchedulesSeparate financial statement schedules have been omitted either because they are not applicable or because the required information isincluded in the consolidated financial statements. 3.ExhibitsSee the Exhibit Index on pages E-1 through E-4 for a list of the exhibits being filed or furnished with or incorporated by reference intothis Annual Report on Form 10-K. 67Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESIndex to Consolidated Financial Statements Page No. Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2014 and 2015 F-4 Consolidated Statements of Income for the years ended December 31, 2013, 2014 and 2015 F-6 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2013, 2014 and 2015 F-7 Consolidated Statements of Equity for the years ended December 31, 2013, 2014 and 2015 F-8 Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2014 and 2015 F-11 Notes to the Consolidated Financial Statements F-12 F-1Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and ShareholdersGenpact Limited:We have audited the accompanying consolidated balance sheets of Genpact Limited and subsidiaries’ (“Genpact Limited” or the “Company”) as ofDecember 31, 2014 and 2015, and the related consolidated statements of income, comprehensive income (loss), equity, and cash flows for each of the years inthe three-year period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these consolidated financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe thatour audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company asof December 31, 2014 and 2015, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31,2015, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internalcontrol over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 26, 2016 expressed an unqualified opinion onthe effectiveness of the Company’s internal control over financial reporting./s/ KPMGGurgaon, IndiaFebruary 26, 2016 F-2Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and ShareholdersGenpact Limited:We have audited Genpact Limited and subsidiaries’ (“Genpact Limited” or the “Company”) internal control over financial reporting as ofDecember 31, 2015, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and forits assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control OverFinancial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in allmaterial respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performingsuch other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on thefinancial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based oncriteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO).The Company acquired certain wealth management operations from Citibank, N.A. in the United Kingdom and management excluded from itsassessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015, certain wealth management operationsacquired from Citibank, N.A. in the United Kingdom’s internal control over financial reporting associated with total assets of $13,318 thousands (of which$3,242 thousands represent goodwill and intangible assets included within the scope of the assessment) and total revenues of $8,818 thousands included inthe consolidated financial statements of the Company as of and for the year ended December 31, 2015. Our audit of internal control over financial reportingof the Company also excluded an evaluation of the internal control over financial reporting of certain wealth management operations acquired fromCitibank, N.A. in the United Kingdom.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balancesheets of the Company as of December 31, 2014 and 2015, and the related consolidated statements of operations, comprehensive income (loss), equity, andcash flows for each of the years in the three-year period ended December 31, 2015, and our report dated February 26, 2016 expressed an unqualified opinionon those consolidated financial statements./s/ KPMGGurgaon, IndiaFebruary 26, 2016 F-3Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Balance Sheets(In thousands, except per share data and share count) Notes As of December 31,2014 As of December 31,2015 Assets Current assets Cash and cash equivalents 4 $461,788 $450,907 Accounts receivable, net 5 525,754 590,137 Deferred tax assets 25 45,486 — Prepaid expenses and other current assets 8 155,480 154,025 Total current assets $1,188,508 $1,195,069 Property, plant and equipment, net 9 175,936 175,396 Deferred tax assets 25 59,135 99,395 Investment in equity affiliates 494 6,677 Intangible assets, net 10 114,544 98,601 Goodwill 10 1,057,214 1,038,346 Other assets 11 146,706 180,005 Total assets $2,742,537 $2,793,489 See accompanying notes to the Consolidated Financial Statements. F-4Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Balance Sheets(In thousands, except per share data and share count) Notes As of December 31,2014 As of December 31,2015 Liabilities and equity Current liabilities Short-term borrowings 15 $135,000 $21,500 Current portion of long-term debt 14 4,288 39,134 Accounts payable 15,544 10,086 Income taxes payable 25 13,586 24,122 Deferred tax liabilities 25 1,239 — Accrued expenses and other current liabilities 13 452,457 499,638 Total current liabilities $622,114 $594,480 Long-term debt, less current portion 14 649,314 737,332 Deferred tax liabilities 25 6,671 2,093 Other liabilities 16 179,302 155,228 Total liabilities $1,457,401 $1,489,133 Shareholders’ equity Preferred shares, $0.01 par value, 250,000,000 authorized, none issued — — Common shares, $0.01 par value, 500,000,000 authorized, 218,684,205 and 211,472,312issued and outstanding as of December 31, 2014 and December 31, 2015, respectively 2,184 2,111 Additional paid-in capital 1,296,730 1,342,022 Retained earnings 398,706 411,508 Accumulated other comprehensive income (loss) (412,484) (451,285) Total equity $1,285,136 $1,304,356 Commitments and contingencies 28 Total liabilities and equity $2,742,537 $2,793,489 See accompanying notes to the Consolidated Financial Statements. F-5Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Income(In thousands, except per share data and share count) Year ended December 31, Notes 2013 2014 2015 Net revenues Net revenues from services $2,131,997 $2,279,438 $2,461,044 Cost of revenue Services 21, 27 1,319,571 1,378,088 1,493,547 Gross profit $812,426 $901,350 $967,497 Operating expenses: Selling, general and administrative expenses 22, 27 484,810 585,646 608,114 Amortization of acquired intangible assets 10 23,645 28,543 28,513 Other operating (income) expense, net 23 (5,556) (6,870) (3,322) Income from operations $309,527 $294,031 $334,192 Foreign exchange (gains) losses, net (20,763) 12,363 (5,269) Other income (expense), net 24 (24,308) (27,283) (26,907) Income before equity-method investment activity, net and income taxexpense $305,982 $254,385 $312,554 Loss(gain) on equity-method investment activity, net (169) 4,795 10,800 Income before income tax expense $306,151 $249,590 $301,754 Income tax expense 25 71,100 57,419 61,937 Net income $235,051 $192,171 $239,817 Net income attributable to non-controlling interest 5,334 169 — Net income attributable to Genpact Limited shareholders $229,717 $192,002 $239,817 Net income available to Genpact Limited common shareholders 20 $229,717 $192,002 $239,817 Earnings per common share attributable to Genpact Limited commonshareholders 20 Basic $1.00 $0.87 $1.11 Diluted $0.97 $0.85 $1.09 Weighted average number of common shares used in computing earnings percommon share attributable to Genpact Limited common shareholders Basic 229,348,411 220,847,098 216,606,542 Diluted 235,754,267 225,168,665 219,145,044 See accompanying notes to the Consolidated Financial Statements. F-6Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Comprehensive Income (Loss)(In thousands) Year ended December 31, 2013 2014 2015 GenpactLimitedShareholders Non-controllinginterest GenpactLimitedShareholders Non-controllinginterest GenpactLimitedShareholders Non-controllinginterest Net Income $229,717 $5,334 $192,002 $169 $239,817 $— Other comprehensive income: Currency translation adjustments (114,555) 103 (41,964) (11) (64,504) — Net income (loss) on cash flow hedging derivatives, net of taxes (Note 7) (28,654) — 90,200 — 22,880 — Retirement benefits, net of taxes 1,867 — (1,106) — 2,823 — Other comprehensive income (loss) $(141,342) $103 $47,130 $(11) $(38,801) $— Comprehensive income (loss) $88,375 $5,437 $239,132 $158 $201,016 $— See accompanying notes to the Consolidated Financial Statements. F-7Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Equity(In thousands, except share count) Genpact Limited Shareholders Common shares AdditionalPaid-in Capital RetainedEarnings Accumulated OtherComprehensiveIncome (Loss) Non-controllinginterest TotalEquity No. ofShares Amount Balance as of January 1, 2013 225,480,172 $2,253 $1,202,448 $281,982 $(318,272) $3,370 $1,171,781 Issuance of common shares on exercise of options(Note 18) 4,635,977 46 43,979 — — — 44,025 Issuance of common shares under the employeestock purchase plan (Note 18) 109,698 1 1,833 — — — 1,834 Net settlement upon vesting of restricted share units(Note 18) 540,617 5 (4,470) — — — (4,465) Net settlement upon vesting of performance units(Note 18) 496,112 5 (6,575) — — — (6,570) Disposition of non-controlling interest — — — — — (1,055) (1,055) Distribution to non-controlling interest — — — — — (6,423) (6,423) Stock-based compensation expense (Note 18) — — 31,129 — — — 31,129 Comprehensive income: Net income — — — 229,717 — 5,334 235,051 Other comprehensive income — — — — (141,342) 103 (141,239) Balance as of December 31, 2013 231,262,576 $2,310 $1,268,344 $511,699 $(459,614) $1,329 $1,324,068 F-8Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Equity(In thousands, except share count) Genpact Limited Shareholders Common shares AdditionalPaid-in Capital RetainedEarnings Accumulated OtherComprehensiveIncome (Loss) Non-controllinginterest TotalEquity No. ofShares Amount Balance as of January 1, 2014 231,262,576 $2,310 $1,268,344 $511,699 $(459,614) $1,329 $1,324,068 Net settlement on issuance of common shares uponexercise of options (Note 18) 3,319,760 33 16,018 — — — 16,051 Issuance of common shares under the employeestock purchase plan (Note 18) 151,461 2 2,345 — — — 2,347 Net settlement on vesting of restricted share units(Note 18) 329,311 3 (2,361) — — — (2,358) Net settlement on vesting of performance units(Note 18) 913,939 9 (15,681) — — — (15,672) Stock repurchased and retired (Note 19) (17,292,842) (173) — (302,452) — — (302,625) Expenses related to stock purchase (Note 19) — — — (2,543) — — (2,543) Distribution to non-controlling interest — — — — — (1,487) (1,487) Stock-based compensation expense (Note 18) — — 28,065 — — — 28,065 Comprehensive income: Net income — — — 192,002 — 169 192,171 Other comprehensive income — — — — 47,130 (11) 47,119 Balance as of December 31, 2014 218,684,205 $2,184 $1,296,730 $398,706 $(412,484) $— $1,285,136 See accompanying notes to the Consolidated Financial Statements. F-9Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Equity(In thousands, except share count) Genpact Limited Shareholders Common shares AdditionalPaid-in Capital RetainedEarnings Accumulated OtherComprehensiveIncome (Loss) Non-controllinginterest TotalEquity No. ofShares Amount Balance as of January 1, 2015 218,684,205 $2,184 $1,296,730 $398,706 $(412,484) $— $1,285,136 Issuance of common shares upon exercise of options(Note 18) 1,428,605 14 13,550 — — — 13,564 Issuance of common shares under the employee stockpurchase plan (Note 18) 121,485 1 2,523 — — — 2,524 Net settlement upon vesting of restricted share units(Note 18) 259,776 3 (2,309) — — — (2,306) Net settlement upon vesting of performance units(Note 18) 846,114 8 (8) — — — — Stock repurchased and retired (Note 19) (9,867,873) (99) — (226,818) — — (226,917) Excess tax benefit on stock-based compensation(Note 25) — — 6,560 — — — 6,560 Expenses related to stock purchase (Note 19) — — — (197) — — (197) Stock-based compensation expense (Note 18) — — 24,976 — — — 24,976 Comprehensive income: Net income — — — 239,817 — — 239,817 Other comprehensive income — — — — (38,801) — (38,801) Balance as of December 31, 2015 211,472,312 $2,111 $1,342,022 $411,508 $(451,285) $— $1,304,356 See accompanying notes to the Consolidated Financial Statements. F-10Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Cash Flows(In thousands) Year ended December 31, 2013 2014 2015 Operating activities Net income attributable to Genpact Limited shareholders $229,717 $192,002 $239,817 Net income attributable to non-controlling interest 5,334 169 — Net income $235,051 $192,171 $239,817 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 52,815 51,064 54,286 Amortization of debt issuance costs (including loss on extinguishment of debt) 6,035 3,240 13,546 Amortization of acquired intangible assets 23,645 28,543 28,513 Intangible assets write-down — — 10,714 Reserve for doubtful receivables 11,420 3,107 2,449 Unrealized (gain) loss on revaluation of foreign currency asset/liability (6,251) 9,419 (4,999) Equity-method investment activity, net (169) 4,795 10,800 Excess tax benefit on stock-based compensation — — (6,560) Stock-based compensation expense 31,129 28,065 24,976 Deferred income taxes (1,116) (12,252) (18,713) Others, net 5,939 1,291 (238) Change in operating assets and liabilities: Increase in accounts receivable (60,817) (24,088) (78,923) Decrease (Increase) in prepaid expenses, other current assets and other assets 9,377 (31,657) (32,602) Increase (Decrease) in accounts payable 1,785 (7,268) (3,988) Increase in accrued expenses, other current liabilities and other liabilities 9,316 27,500 69,606 Increase (Decrease) in income taxes payable (6,555) (2,092) 18,757 Net cash provided by operating activities $311,604 $271,838 $327,441 Investing activities Purchase of property, plant and equipment (48,879) (62,577) (62,173) Proceeds from sale of property, plant and equipment 3,442 564 1,486 Investment in equity affiliates — — (18,423) Short term deposits placed (55,001) (25,000) — Redemption of short term deposits 69,249 25,000 — Payment for business acquisitions, net of cash acquired (49,235) (130,809) (21,363) Proceeds from divestiture of business, net of cash divested 1,982 — — Net cash used for investing activities $(78,442) $(192,822) $(100,473) Financing activities Repayment of capital lease obligations (1,803) (2,095) (2,035) Payment of debt issuance and refinancing costs (8,104) — (6,584) Proceeds from long-term debt 121,410 — 800,000 Repayment of long-term debt (123,098) (6,750) (684,875) Proceeds from short-term borrowings 275,000 195,000 1,451,500 Repayment of short-term borrowings (355,000) (60,000) (1,565,000) Proceeds from issuance of common shares under stock-based compensation plans 45,859 30,144 16,088 Payment for net settlement of stock-based awards (9,315) (25,975) (7,194) Payment of earn-out consideration (3,868) (1,088) (230) Distribution to non-controlling interest (6,423) (1,487) — Payment for stock purchased and retired — (302,625) (226,917) Payment for expenses related to stock purchase — (2,543) (197) Excess tax benefit on stock-based compensation — — 6,560 Net cash used for financing activities $(65,342) $(177,419) $(218,884) Effect of exchange rate changes (55,772) (11,085) (18,965) Net increase/(decrease) in cash and cash equivalents 167,820 (98,403) 8,084 Cash and cash equivalents at the beginning of the period 459,228 571,276 461,788 Cash and cash equivalents at the end of the period $571,276 $461,788 $450,907 Supplementary information Cash paid during the period for interest $30,788 $27,175 $20,950 Cash paid during the period for income taxes $71,857 $83,803 $72,102 Property, plant and equipment acquired under capital lease obligations $2,342 $2,176 $1,656 See accompanying notes to the Consolidated Financial Statements F-11Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)1. Organization(a) Nature of OperationsThe Company is a provider of digitally-powered business process outsourcing and services. The architect of the Lean Digital enterprise, theCompany uses its patented Smart Enterprise Processes (SEP) framework to reimagine its clients’ operating models end-to-end, including their middle andback offices. This creates Intelligent Operations that the Company helps to design, transform, and run. Today, the Company generates impact for a fewhundred strategic clients, including approximately one fifth of the Fortune Global 500, and has grown to over 70,000 people in 25 countries.(b) OrganizationPrior to December 30, 2004, the business of the Company was conducted through various entities and divisions of GE. On December 30, 2004, in aseries of transactions referred to as the “2004 Reorganization,” GE transferred such operations to the Company. In August 2007, the Company completed aninitial public offering of its common shares. On October 25, 2012, Glory Investments A Limited, formerly known as South Asia Private Investments, anaffiliate of Bain Capital Investors, LLC (“Bain Capital”), became the Company’s largest shareholder when, together with its affiliated assignees and twoadditional co-investors, it purchased 67,750,678 common shares of the Company from the Company’s initial private equity investors.2. Summary of significant accounting policies(a) Basis of preparation and principles of consolidationThe accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S.GAAP).The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Genpact Limited, a Bermudacompany, and all of its subsidiaries that are more than 50% owned and controlled. When the Company does not have a controlling interest in an entity butexerts significant influence on the entity, the Company applies the equity method of accounting. All intercompany transactions and balances are eliminatedin consolidation.The non-controlling interest disclosed in the accompanying consolidated financial statements represents the non-controlling partners’ interest in theoperation of Genpact Netherlands B.V., the non-controlling shareholders’ interest in the operation of Hello Communications (Shanghai) Co., Ltd. and theprofits or losses associated with the non-controlling interest in such operations. The non-controlling partners of Genpact Netherlands B.V. are individuallyliable for the tax obligations on their shares of profit as it is a partnership. Accordingly, non-controlling interest relating to Genpact Netherlands B.V. hasbeen computed prior to tax and disclosed accordingly in the Consolidated Statements of Income. During the year ended December 31, 2013, the Companycompleted the divestiture of Hello Communications (Shanghai) Co., Ltd. During the year ended December 31, 2014, the Company purchased the non-controlling interest in Genpact Netherlands B.V., resulting in the Company’s 100% control of the partnership.(b) Use of estimatesThe preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions thataffect the amounts reported in the consolidated financial statements. F-12SMSMSMTable of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, intangibles and goodwill, revenuerecognition, reserves for doubtful receivables, valuation allowances for deferred tax assets, the valuation of derivative financial instruments, measurements ofstock-based compensation, assets and obligations related to employee benefits, and income tax uncertainties and other contingencies. Management believesthat the estimates used in the preparation of the consolidated financial statements are reasonable. Although these estimates are based upon management’sbest knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjusted prospectively in theCompany’s consolidated financial statements.(c) Revenue recognitionThe Company derives its revenue primarily from business process outsourcing and information technology management services, which are providedon a time-and-material, transaction or fixed-price basis. The Company recognizes revenue when persuasive evidence of an arrangement exists, the sales priceis fixed or determinable, services have been rendered and collectability is reasonably assured. Revenues from services rendered under time-and-materials andtransaction-based contracts are recognized as the services are provided. The Company’s fixed-price contracts include contracts for application development,maintenance and support services. Revenues on these contracts are recognized ratably over the term of the agreement. The Company accrues for revenue andunbilled receivables for the services rendered between the last billing date and the balance sheet date.Customer contracts can also include incentive payments received for discrete benefits delivered to clients. Revenues relating to such incentivepayments are recorded when the contingency is satisfied and the Company concludes the amounts are earned.Revenue with respect to fixed-price contracts for the development of software and related services is recognized in accordance with the percentage-of-completion method. Guidance has been drawn from Financial Accounting Standards Board (“FASB”) guidance on Software—Revenue Recognition toaccount for revenue from fixed-price arrangements for software development and related services in conformity with FASB guidance on RevenueRecognition—Construction—Type and Production-Type Contracts. The input (effort or cost expended) method has been used to measure progress towardscompletion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded inthe period in which such losses become probable based on the current contract estimates.The Company has deferred the revenue and costs attributable to certain process transition activities with respect to its customers where such activitiesdo not represent the culmination of a separate earnings process. Such revenue and costs are subsequently recognized ratably over the period in which therelated services are performed. Further, the deferred costs are limited to the amount of the deferred revenues.Revenues are reported net of value-added tax, business tax and applicable discounts and allowances. Reimbursements of out-of-pocket expensesreceived from clients have been included as part of revenues.The Company enters into multiple-element revenue arrangements in which a client may purchase a combination of its services. Revenue from multiple-element arrangements is recognized, for each element, based on (1) the attainment of the delivery criterion; (2) its fair value, which is determined using theselling price hierarchy of vendor-specific objective evidence (“VSOE”) of fair value, third-party evidence or best estimated selling price, as applicable, and(3) its allocated selling price, which is based on the relative sales price method. F-13Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) (d) Accounts receivableAccounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. Amounts collected on trade accounts receivable areincluded in net cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company maintains an allowance for doubtfulaccounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical lossesadjusted to take into account current market conditions and its clients’ financial condition, the amount of receivables in dispute, and the current receivables’aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and thepotential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its clients.(e) Cash and cash equivalentsCash and cash equivalents consist of cash and bank balances and all highly liquid investments purchased with an original maturity of three months orless.(f) Short-term investmentsAll liquid investments with an original maturity greater than 90 days but less than one year are considered to be short-term investments. Marketableshort-term investments are classified and accounted for as available-for-sale investments. Available-for-sale investments are reported at fair value withchanges in unrealized gains and losses recorded as a separate component of other comprehensive income (loss) until realized. Realized gains and losses oninvestments are determined based on the specific identification method and are included in “Other income (expense), net.” The Company does not hold theseinvestments for speculative or trading purposes.(g) Property, plant and equipment, netProperty, plant and equipment are stated at cost less accumulated depreciation and amortization. Expenditures for replacements and improvements arecapitalized, whereas the costs of maintenance and repairs are charged to earnings as incurred. The Company depreciates and amortizes all property, plant andequipment using the straight-line method over the following estimated economic useful lives of the assets: YearsBuildings 40Furniture and fixtures 4Computer equipment and servers 4Plant, machinery and equipment 4Computer software 4Leasehold improvements Lesser of lease periodor 10 yearsVehicles 3-4The Company capitalizes certain computer software and software development costs incurred in connection with developing or obtaining computersoftware for internal use when both the preliminary project stage is completed and it is probable that the software will be used as intended. Capitalizedsoftware costs include only F-14Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) (i) external direct costs of materials and services utilized in developing or obtaining computer software, (ii) compensation and related benefits for employeeswho are directly associated with the software project, and (iii) interest costs incurred while developing internal-use computer software. Capitalized softwarecosts are included in property, plant and equipment on the Company’s balance sheet and amortized on a straight-line basis when placed into service over theestimated useful lives of the software. The useful life of certain enterprise resource planning software implemented during the year ended December 31, 2015is estimated to be 7 years.Advances paid towards the acquisition of property, plant and equipment outstanding as of each balance sheet date and the cost of property, plant andequipment not put to use before such date are disclosed under “Capital work in progress.”(h) Research and development expenseDevelopment costs incurred for software to be sold, if any, are expensed as incurred as research and development costs until technological feasibilityhas been established for the product. Technological feasibility is established upon completion of a detailed design program or, in its absence, completion of aworking model. Thereafter, all software production costs will be capitalized and amortized over their useful lives and reported at the lower of unamortizedcost and net realizable value.(i) Business combinations, goodwill and other intangible assetsThe Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805, BusinessCombinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in theacquired business, measured at their acquisition date fair values. Contingent consideration is included within the acquisition cost and is recognized at its fairvalue on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value as of each reporting date until the contingency isresolved. Changes in fair value are recognized in earnings. All assets and liabilities of the acquired businesses, including goodwill, are assigned to reportingunits. Acquisition-related costs are expensed as incurred under Selling, General and Administrative Expenses.Goodwill represents the cost of acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill isnot amortized but is tested for impairment at least on an annual basis on December 31, based on a number of factors, including operating results, businessplans and future cash flows. The Company performs an assessment of qualitative factors to determine whether the existence of events or circumstances leadsto a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Based on the assessment of events orcircumstances, the Company performs a quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of areporting unit is less than its carrying amount. If, based on the quantitative impairment analysis, the carrying value of the goodwill of a reporting unitexceeds the fair value of such goodwill, an impairment loss is recognized in an amount equal to the excess. In addition, the Company performs a qualitativeassessment of goodwill impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of areporting unit below its carrying amount. See Note 10 for information and related disclosures. F-15Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) Intangible assets acquired individually or with a group of other assets or in a business combination are carried at cost less accumulated amortizationbased on their estimated useful lives as follows: Customer-related intangible assets 1-14 yearsMarketing-related intangible assets 1-10 yearsOther intangible assets 3-9 yearsIntangible assets are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefitsof the intangible assets are consumed or otherwise realized.In business combinations, where the fair value of identifiable tangible and intangible net assets purchased exceeds the cost of the acquired business,the Company recognizes the resulting gain under “Other operating (income) expense, net” in the Consolidated Statements of Income.(j) Impairment of long-lived assetsLong-lived assets, including certain intangible assets, to be held and used are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of such assets may not be recoverable. Such assets are required to be tested for impairment if the carrying amount of theassets is higher than the future undiscounted net cash flows expected to be generated from the assets. The impairment amount to be recognized is measured asthe amount by which the carrying value of the assets exceeds their fair value. The Company determines fair value by using a discounted cash flow approach.(k) Foreign currencyThe Company’s consolidated financial statements are reported in U.S. dollars, the Company’s functional currency. The functional currency for theCompany’s subsidiaries organized in Europe, other than the U.K., the Czech Republic and one subsidiary in Poland, is the euro, and the functional currenciesof the Company’s subsidiaries organized in Brazil, China, Colombia, Guatemala, India, Japan, Morocco, South Africa, the Philippines, the U.K., Poland, theCzech Republic, Hong Kong, Singapore, Australia, Canada and United Arab Emirates are their respective local currencies. The functional currency of allother Company subsidiaries is the U.S. dollar. The translation of the functional currencies of the Company’s subsidiaries into U.S. dollars is performed forbalance sheet accounts using the exchange rates in effect as of the balance sheet date and for revenues and expense accounts using a monthly averageexchange rate prevailing during the respective period. The gains or losses resulting from such translation are reported as currency translation adjustmentsunder other comprehensive income (loss), net, under accumulated other comprehensive income (loss) as a separate component of equity.Monetary assets and liabilities of each subsidiary denominated in currencies other than the subsidiary’s functional currency are translated into theirrespective functional currency at the rates of exchange prevailing on the balance sheet date. Transactions of each subsidiary in currencies other than thesubsidiary’s functional currency are translated into the respective functional currencies at the average monthly exchange rate prevailing during the period ofthe transaction. The gains or losses resulting from foreign currency transactions are included in the consolidated statements of income. F-16Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) (l) Derivative instruments and hedging activitiesIn the normal course of business, the Company uses derivative financial instruments to manage fluctuations in foreign currency exchange rates. TheCompany purchases forward foreign exchange contracts to mitigate the risk of changes in foreign exchange rates on intercompany transactions andforecasted transactions denominated in foreign currencies.The Company recognizes derivative instruments and hedging activities as either assets or liabilities in its consolidated balance sheets and measuresthem at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designatedand qualifies for hedge accounting. Changes in the fair values of derivatives designated as cash flow hedges are deferred and recorded as a component ofother comprehensive income (loss) reported under accumulated other comprehensive income (loss) until the hedged transactions occur and are thenrecognized in the consolidated statements of income along with the underlying hedged item and disclosed as part of “Total net revenues,” “Cost of revenue,”and “Selling, general and administrative expenses,” as applicable. Changes in the fair value of derivatives not designated as hedging instruments, and theineffective portion of derivatives designated as cash flow hedges are recognized in the consolidated statements of income and are included in foreignexchange (gains) losses, net, and other income (expense), net, respectively.With respect to derivatives designated as hedges, the Company formally documents all relationships between hedging instruments and hedged items,as well as its risk management objectives and strategy for undertaking various hedge transactions. The Company also formally assesses, both at the inceptionof the hedge and on a quarterly basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If it isdetermined that a derivative or portion thereof is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, the Company willprospectively discontinue hedge accounting with respect to that derivative.In all situations in which hedge accounting is discontinued and the derivative is retained, the Company continues to carry the derivative at its fairvalue on the balance sheet and recognizes any subsequent change in its fair value in the consolidated statements of income. When it is probable that aforecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately, in foreign exchange (gains) losses, net in theconsolidated statements of income, the gains and losses attributable to such derivative that were accumulated in other comprehensive income (loss).(m) Income taxesThe Company accounts for income taxes using the asset and liability method of accounting for income taxes. Under this method, income tax expenseis recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for future taxconsequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and alloperating loss carry forwards, if any. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the yearsin which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or taxstatus is recognized in the statement of income in the period that includes the enactment date or the filing or approval date of the tax status change. Deferredtax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferredtax assets will not be realized. F-17Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) The Company applies a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position forrecognition by determining, based on the technical merits, that the position will more likely than not be sustained upon examination. The second step is tomeasure the tax benefit as the largest amount of the tax benefit that is greater than 50% likely of being realized upon settlement. The Company includesinterest and penalties related to unrecognized tax benefits within its provision for income tax expense.(n) Employee Benefit PlanContributions to defined contribution plans are charged to consolidated statements of income in the period in which services are rendered by thecovered employees. Current service costs for defined benefit plans are accrued in the period to which they relate. The liability in respect of defined benefitplans is calculated annually by the Company using the projected unit credit method. Prior service cost, if any, resulting from an amendment to a plan isrecognized and amortized over the remaining period of service of the covered employees. The Company recognizes its liabilities for compensated absencesdependent on whether the obligation is attributable to employee services already rendered, relates to rights that vest or accumulate and payment is probableand estimable.The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and otherassumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. The Company reviews its assumptionson an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modificationsto those assumptions is recorded in other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. TheCompany believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions.(o) Stock-based compensationThe Company recognizes and measures compensation expense for all stock-based awards based on the grant date fair value. For option awards, grantdate fair value is determined under the option-pricing model (Black-Scholes-Merton) and for awards other than option awards, grant date fair value isdetermined on the basis of the fair market value of a Company common share on the date of grant of such awards. The Company recognizes compensationexpense for stock-based awards net of estimated forfeitures. Stock-based compensation recognized in the consolidated statements of income for the yearsended December 31, 2013, 2014 and 2015 is based on awards ultimately expected to vest. As a result, the expense has been reduced for estimated forfeitures.Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from such estimates.(p) Financial instruments and concentration of credit riskFinancial instruments that potentially subject the Company to concentration of credit risk are reflected principally in cash and cash equivalents,derivative financial instruments and accounts receivable. The Company places its cash and cash equivalents and derivative financial instruments withcorporations and banks with high investment grade ratings, limits the amount of credit exposure with any one corporation or bank and conducts ongoingevaluations of the creditworthiness of the corporations and banks with which it does business. To reduce its credit risk on accounts receivable, the Companyconducts ongoing credit evaluations of its clients. GE F-18Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)2. Summary of significant accounting policies (Continued) accounted for 25% and 18% of the Company’s receivables as of December 31, 2014 and 2015, respectively. GE accounted for 23%, 20% and 19% of theCompany’s revenues in the years ended December 31, 2013, 2014 and 2015, respectively.(q) Earnings (loss) per shareBasic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per shareis computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period. For the purposes ofcalculating diluted earnings per share, the treasury stock method is used for stock-based awards except where the results would be anti-dilutive.(r) Commitments and contingenciesLiabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable thata liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Legal costs incurred in connection with suchliabilities are expensed as incurred.(s) Recently adopted accounting pronouncementsThe following recently released accounting standard has been adopted by the Company and did not have a material impact on the Company’sconsolidated results of operations, cash flows, financial position or disclosures:Effective October 1, 2015, the Company has adopted FASB ASU 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes(“ASU 2015-17”). The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified asnoncurrent on the balance sheet. The guidance however does not change the existing guidance that prohibits offsetting deferred tax liabilities from onejurisdiction against deferred tax assets of another jurisdiction. The Company has applied the new guidance prospectively for all deferred tax assets andliabilities and accordingly, the comparative balance sheet amounts of prior periods were not retrospectively reclassified.(t) ReclassificationCertain reclassifications have been made in the consolidated financial statements of prior periods to conform to the classification used in the currentperiod. The impact of such reclassifications on the consolidated financial statements is not material.3. Business acquisitions(a) Acquisition of wealth management business in the U.K.On August 18, 2015, the Company acquired certain assets and assumed certain liabilities from Citibank, N.A. comprising a portion of its U.K. wealthmanagement operations for cash consideration of $3,418, which F-19Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)3. Business acquisitions (Continued) amount was adjusted to account for certain employee-related liabilities. Together with the asset purchase, the Company hired certain U.K.-based employeesof the seller. With this transaction, the Company has expanded upon its end-to-end, technology-enabled wealth management service offering acquired fromCitibank, N.A. in January 2015, described below.In connection with the transaction, the Company recorded $2,200 in customer-related intangible assets, which have a weighted average amortizationperiod of eight years and against which a deferred tax liability of $440 has been recorded. Goodwill arising from the acquisition amounted to $1,209, whichhas been allocated to the Company’s India reporting unit and is not deductible for tax purposes. In connection with the transaction the Company alsoacquired property, plant and equipment with a value of $1,059 and assumed certain employee-related liabilities amounting to $610. The results of operationsof the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s Consolidated Financial Statementswith effect from August 18, 2015, the date of the acquisition.(b) Acquisition of delivery center in SlovakiaOn April 1, 2015, the Company acquired certain assets and assumed certain liabilities of a finance-and-accounting service delivery center in Bratislava,Slovakia, for cash consideration of $6,100. As part of the transaction, the Company hired certain employees of the seller. There are no contingentconsideration arrangements in connection with the acquisition. This acquisition strengthens the Company’s finance-and-accounting services domainexpertise in the consumer product goods industry and adds incremental European language capacity.In connection with the transaction, the Company recorded $3,000 in customer-related intangible assets, which have an amortization period of fiveyears. Goodwill arising from the acquisition amounted to $3,065, which has been allocated to the Company’s European reporting unit and is deductible fortax purposes. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in theCompany’s Consolidated Financial Statements with effect from April 1, 2015, the date of the acquisition.(c) Acquisition of wealth management business in the U.S.On January 16, 2015, the Company acquired certain assets and assumed certain liabilities from Citibank, N.A. comprising a portion of its U.S. wealthmanagement operations for cash consideration of $11,678. Together with its asset purchase, the Company hired certain employees of the seller’s U.S. wealthmanagement business. With this transaction, the Company has acquired an end-to-end, technology-enabled wealth management service offering.In connection with the transaction, the Company recorded $9,100 in customer-related intangible assets, which have a weighted average amortizationperiod of five years. Goodwill arising from the acquisition amounted to $3,400, which has been allocated to the Company’s India reporting unit and isdeductible for tax purposes. The Company also assumed a pre-existing liability of the seller amounting to $822 in connection with the acquisition.Acquisition-related costs of $798 have been included in selling, general and administrative expenses as incurred. The results of operations of theacquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s Consolidated Financial Statements witheffect from January 16, 2015, the date of the acquisition. F-20Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)3. Business acquisitions (Continued) (d) Acquisition of delivery center in JapanOn November 4, 2014, the Company acquired from Hitachi Management Partner, Corp. a finance-and-accounting service delivery center in Japan. Inconnection with the acquisition, the Company entered into a five-year business process outsourcing agreement with Hitachi Ltd. The purchase considerationfor the acquisition is set forth below: Cash consideration after adjustment for pension underfunding and closing net assets value $10,539 Fair value of contingent earn-out consideration (ranging from $0 to $15,750) 11,198 Total estimated purchase consideration $21,737 The contingent earn-out consideration for this acquisition is based on additional work contracted by the delivery center for the period fromNovember 4, 2014 to November 4, 2021. The total consideration paid by the Company at the closing of the transaction was $7,108, net of cash acquired of$3,491. With this acquisition, the Company has expanded its presence in Japan and strengthened its finance-and-accounting service offering.During the quarter ended December 31, 2015, the Company recorded a measurement period adjustment that resulted in a $96 increase in pension assetsand the recognition of a current asset with a value of $147 with a corresponding impact on goodwill. The measurement period adjustments did not have asignificant impact on the Company’s Consolidated Statements of Income, Balance Sheets or Cash Flows in any period and were accordingly recorded duringthe period ended December 31, 2015.In connection with the transaction, the Company recorded $7,522 in customer-related intangible assets, which have a weighted average amortizationperiod of seven years and against which a deferred tax liability of $2,496 was recorded. Goodwill arising from the acquisition, including measurement periodadjustments, amounted to $16,791, which has been allocated to the China reporting unit and is non-deductible for tax purposes as the Company has notrecorded any tax benefit for amortization. In connection with the transaction, the Company also assumed net liabilities amounting to $80, includingmeasurement period adjustments. The results of operations of the delivery center and the fair value of its assets and liabilities are included in the Company’sConsolidated Financial Statements with effect from November 4, 2014, the date of the acquisition.Acquisition-related costs of $796 have been included in selling, general and administrative expenses as incurred.(e) Pharmalink Consulting Limited and Pharmalink Consulting Inc.On May 29, 2014, the Company acquired 100% of the outstanding equity interest in each of Pharmalink Consulting Limited, a company incorporatedunder the laws of England and Wales, and Pharmalink Consulting Inc., a California corporation (collectively referred to as “Pharmalink”). The purchaseconsideration for the acquisition is set forth below: Cash consideration after adjustment for net debt and working capital $126,069 Fair value of contingent earn-out consideration (ranging from $0 to $27,405) 12,730 Total estimated purchase consideration $138,799 F-21Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)3. Business acquisitions (Continued) The contingent earn-out consideration is based on gross profits and order bookings of sustainable outsourcing contracts for the period from June 1,2014 to June 30, 2016. The total consideration paid at closing for the Company’s acquisition of Pharmalink was $123,701, net of cash acquired of $2,200.Pharmalink is a provider of regulatory affairs services to the life sciences industry. With this acquisition, the Company added regulatory consulting,outsourcing and operations capabilities for clients in the life sciences industry.During the quarter ended December 31, 2014, the Company recorded a measurement period adjustment that resulted in a non-current liability of $585and a corresponding indemnification asset with no impact on goodwill. During the quarter ended June 30, 2015, the Company recorded a measurementperiod adjustment that resulted in a $168 increase in the purchase consideration, with a corresponding increase in goodwill. These measurement periodadjustments did not have a significant impact on the Company’s Consolidated Statements of Income, Balance Sheets or Cash Flows in any period and wereaccordingly recorded during the quarters ended December 31, 2014 and June 30, 2015, respectively.The following table summarizes the allocation of the estimated purchase price based on the fair value of the assets acquired and the liabilities assumedas of the date of acquisition including measurement period adjustments: Purchase price $138,799 Acquisition-related costs included in selling, general and administrative expenses as incurred 1,977 Recognized amounts of identifiable assets acquired and liabilities assumed Net assets acquired 7,174 Intangible assets 29,923 Deferred tax asset (liability), net (8,419) Total identifiable net assets acquired $28,678 Goodwill 110,121 Total $138,799 Goodwill has been allocated to the India reporting unit and is not deductible for tax purposes. The intangible assets consist of customer-related andmarketing-related intangible assets with a weighted average amortization period of six years.The results of operations of Pharmalink and the fair value of its assets and liabilities are included in the Company’s Consolidated Financial Statementswith effect from May 29, 2014, the date of the acquisition.4. Cash and cash equivalentsCash and cash equivalents as of December 31, 2014 and 2015 are comprised of: As of December 31, 2014 2015 Deposits with banks $130,610 $231,367 Other cash and bank balances 331,178 219,540 Total $461,788 $450,907 F-22Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 5. Accounts receivable, net of reserve for doubtful receivablesThe following table provides details of the Company’s reserve for doubtful receivables: Year ended December 31, 2013 2014 2015 Opening Balance as of January 1 $$9,073 $16,560 $15,192 Additions due to acquisitions — 178 — Additions charged to cost and expense 11,420 3,107 2,449 Deductions (3,933) (4,653) (6,111) Closing Balance $16,560 $15,192 $11,530 Accounts receivable were $540,946 and $601,667, and the reserves for doubtful receivables were $15,192 and $11,530, resulting in net accountsreceivable balances of $525,754 and $590,137 as of December 31, 2014 and 2015, respectively. In addition, accounts receivable due after one year of$11,635 and $8,348 as of December 31, 2014 and 2015, respectively, are included under other assets in the Consolidated Balance Sheets.Accounts receivable from related parties were $5,840 and $1,980 as of December 31, 2014 and 2015, respectively. There are no reserves for doubtfulreceivables in respect of amounts due from related parties.6. Fair Value MeasurementsThe Company measures certain financial assets and liabilities, including derivative instruments, at fair value on a recurring basis. The fair valuemeasurements of these derivative instruments were determined using the following inputs as of December 31, 2014 and 2015: As of December 31, 2014 Fair Value Measurements at Reporting Date Using Quoted Prices inActive Markets forIdentical Assets Significant OtherObservableInputs Significant OtherUnobservableInputs Total (Level 1) (Level 2) (Level 3) Assets Derivative instruments (Note a) $33,967 $— $33,967 $— Total $33,967 $— $33,967 $— Liabilities Derivative instruments (Note b) $101,516 $— $101,516 $— Total $101,516 $— $101,516 $— F-23Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)6. Fair Value Measurements (Continued) As of December 31, 2015 Fair Value Measurements at Reporting Date Using Quoted Prices inActive Markets forIdentical Assets Significant OtherObservableInputs Significant OtherUnobservableInputs Total (Level 1) (Level 2) (Level 3) Assets Derivative instruments (Note a) $30,380 $— $30,380 $— Total $30,380 $— $30,380 $— Liabilities Derivative instruments (Note b) $59,620 $— $59,620 $— Total $59,620 $— $59,620 $— (a)Included in prepaid expenses and other current assets and other assets in the consolidated balance sheets.(b)Included in accrued expenses and other current liabilities and other liabilities in the consolidated balance sheets.The Company values its derivative instruments based on market observable inputs, including both forward and spot prices for the relevant currencies.The quotes are taken from an independent market database.7. Derivative financial instrumentsThe Company is exposed to the risk of rate fluctuations on foreign currency assets and liabilities and on foreign currency denominated forecasted cashflows. The Company has established risk management policies, including the use of derivative financial instruments to hedge foreign currency assets andliabilities and foreign currency denominated forecasted cash flows. These derivative financial instruments are largely deliverable and non-deliverableforward foreign exchange contracts. The Company enters into these contracts with counterparties that are banks or other financial institutions, and theCompany considers the risk of non-performance by such counterparties not to be material. The forward foreign exchange contracts mature between 0 and 60months and the forecasted transactions are expected to occur during the same period. F-24Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)7. Derivative financial instruments (Continued) The following table presents the aggregate notional principal amounts of outstanding derivative financial instruments together with the relatedbalance sheet exposure: Notional principal amounts (note a) Balance sheet exposure asset (liability) (note b) As ofDecember 31,2014 As ofDecember 31,2015 As ofDecember 31,2014 As ofDecember 31,2015 Foreign exchange forward contracts denominated in: United States dollars (sell) Indian rupees (buy) $1,282,800 $1,139,400 $(86,913) $(48,197) United States dollars (sell) Mexican peso (buy) 5,640 8,520 (514) (1,163) United States dollars (sell) Philippines peso (buy) 72,900 58,500 (738) (1,387) Euro (sell) United States dollars (buy) 98,903 146,719 5,458 9,109 Euro (sell) Romanian leu (buy) 81,072 39,027 562 567 Japanese yen (sell) Chinese renminbi (buy) 28,586 62,740 2,766 (1,379) Pound sterling (sell) United States dollars (buy) 133,435 118,438 4,278 7,496 Australian dollars (sell) United States dollars (buy) 104,362 106,544 7,552 5,714 $(67,549) $(29,240) (a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties and donot measure the Company’s exposure to credit or market risks. However, the amounts exchanged are based on the notional amounts and otherprovisions of the underlying derivative financial instrument agreements.(b)Balance sheet exposure is denominated in U.S. dollars and denotes the mark-to-market impact of the derivative financial instruments on the reportingdate.FASB guidance on Derivatives and Hedging requires companies to recognize all derivative instruments as either assets or liabilities at fair value in theBalance Sheet. In accordance with the FASB guidance on Derivatives and Hedging, the Company designates foreign exchange forward contracts as cash flowhedges for forecasted revenues and the purchase of services. In addition to this program, the Company uses derivative instruments that are not accounted foras hedges under the FASB guidance in order to hedge foreign exchange risks related to balance sheet items such as receivables and intercompany borrowingsdenominated in currencies other than the Company’s underlying functional currency.The fair value of the Company’s derivative instruments and their location in the Company’s financial statements are summarized in the table below: Cash flow hedges Non-designated As ofDecember 31,2014 As ofDecember 31,2015 As ofDecember 31,2014 As ofDecember 31,2015 Assets Prepaid expenses and other current assets $16,636 $17,400 $202 $884 Other assets $17,129 $12,096 $— $— Liabilities Accrued expenses and other current liabilities $64,650 $34,576 $965 $34 Other liabilities $35,901 $25,010 $— $— F-25Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)7. Derivative financial instruments (Continued) Cash flow hedgesFor derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain (loss) on the derivative instrument isreported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedgedtransaction is recognized in the consolidated statements of income. Gains (losses) on the derivatives, representing either hedge ineffectiveness or hedgecomponents excluded from the assessment of effectiveness, are recognized in earnings as incurred.In connection with cash flow hedges, the gains (losses) recorded as a component of other comprehensive income (loss), or OCI, and the related taxeffects are summarized below: Year ended December 31, 2013 2014 2015 Before-Taxamount Tax(Expense)orBenefit Net oftaxAmount Before-Taxamount Tax(Expense)orBenefit Net oftaxAmount Before-Taxamount Tax(Expense)orBenefit Net oftaxAmount Opening balance as of January 1 $163,756) $59,070 $(104,686) $(205,952) $72,612 $(133,340) $(66,786) $23,646 $(43,140) Net gains (losses) reclassified into statement of income on completion of hedgedtransactions (66,812) 25,239 (41,573) (49,161) 17,498 (31,663) (42,106) 15,346 (26,760) Changes in fair value of effective portion of outstanding derivatives, net (109,008) 38,781 (70,227) 90,005 (31,468) 58,537 (5,410) 1,530 (3,880) Gain (loss) on cash flow hedging derivatives, net (42,196) 13,542 (28,654) 139,166 (48,966) 90,200 36,696 (13,816) 22,880 Closing balance as of December 31 $(205,952) $72,612 $(133,340) $(66,786) $23,646 $(43,140) $(30,090) $9,830 $(20,260) The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below: Derivatives inCash FlowHedgingRelationships Amount of Gain (Loss)recognized in OCI onDerivatives(Effective Portion) Location ofGain (Loss)reclassified fromOCI intoStatement ofIncome (EffectivePortion) Amount of Gain(Loss) reclassified from OCIinto Statementof Income(Effective Portion) Location of Gain(Loss) recognized inIncome on Derivatives(Ineffective Portionand Amount excludedfrom EffectivenessTesting) Amount of Gain(Loss) recognizedin income onDerivatives(Ineffective Portionand Amountexcluded fromEffectivenessTesting) Year ended December 31, Year ended December 31, Year endedDecember 31, 2013 2014 2015 2013 2014 2015 2013 2014 2015 Forward foreign exchange contracts $(109,008) $90,005 $(5,410) Revenue $7,548 $(4,301) $13,667 Foreign exchange(gains) losses, net $— $— $— Cost of revenue (59,929) (35,539) (44,634) Selling, general andadministrativeexpenses (14,431) (9,321) (11,139) $(109,008) $90,005 $(5,410) $(66,812) $(49,161) $(42,106) $— $— $— F-26Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)7. Derivative financial instruments (Continued) Non-designated Hedges Derivatives not designated as hedginginstruments Location of (Gain) Loss recognized in Statement ofIncome on Derivatives Amount of (Gain) Lossrecognized in Statement ofIncome on Derivatives Year ended December 30, 2013 2014 2015 Forward foreign exchange contracts (Note a) Foreign exchange (gains) losses, net $18,353 $(287) $(6,566) $18,353 $(287) $(6,566) (a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items such asreceivables and intercompany borrowings, and were not originally designated as hedges under FASB guidance on derivatives and hedging. Realized(gains) losses and changes in the fair value of these derivatives are recorded in foreign exchange (gains) losses, net in the consolidated statements ofincome.8. Prepaid expenses and other current assetsPrepaid expenses and other current assets consist of the following: As of December 31, 2014 2015 Advance income and non-income taxes $61,251 $52,953 Deferred transition costs 40,185 36,620 Derivative instruments 16,838 18,284 Prepaid expenses 12,949 12,565 Customer acquisition cost 5,557 6,687 Employee advances 5,816 3,878 Deposits 1,754 1,820 Advances to suppliers 3,358 8,028 Others 7,772 13,190 $155,480 $154,025 F-27Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 9. Property, plant and equipment, netProperty, plant and equipment, net consist of the following: As of December 31, 2014 2015 Land $10,324 $9,873 Buildings 46,272 47,718 Furniture and fixtures 33,908 33,356 Computer equipment and servers 169,730 172,086 Plant, machinery and equipment 74,981 79,599 Computer software 93,054 110,153 Leasehold improvements 89,770 86,997 Vehicles 6,607 6,009 Capital work in progress 7,314 10,727 Property, plant and equipment, gross $531,960 $556,518 Less: Accumulated depreciation and amortization (356,024) (381,122) Property, plant and equipment, net $175,936 $175,396 Depreciation expense on property, plant and equipment for the years ended December 31, 2013, 2014 and 2015 was $46,408, $44,029 and $47,673,respectively. Computer software amortization for the years ended December 31, 2013, 2014 and 2015 amounted to $9,949, $9,105 and $9,114, respectively.The depreciation and amortization expenses set forth above include the effect of the reclassification of foreign exchange (gains) losses related to theeffective portion of foreign currency derivative contracts, amounting to $3,542, $2,070 and $2,501 for the years ended December 31, 2013, 2014 and 2015,respectively.Property, plant and equipment, net include assets held under capital lease arrangements amounting to $3,435 and $2,797 as of December 31, 2014 andDecember 31, 2015, respectively. Depreciation expense in respect of these assets was $1,726, $1,786 and $1,594 for the years ended December 31, 2013,2014 and 2015, respectively.10. Goodwill and intangible assetsThe following table presents the changes in goodwill for the years ended December 31, 2014 and 2015: As of December 31, 2014 2015 Opening balance $953,849 $1,057,214 Goodwill relating to acquisitions consummated during the period 127,047 7,674 Impact of measurement period adjustments — (135) Effect of exchange rate fluctuations (23,682) (26,407) Closing balance $1,057,214 $1,038,346 F-28Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)10. Goodwill and intangible assets (Continued) Goodwill has been allocated to the following reporting units, which represent different business units of the Company, as follows: As of December 31, 2014 2015 India $477,969 $461,383 China 60,585 59,250 Europe 39,189 38,242 Americas 46,583 46,583 IT services 432,888 432,888 $1,057,214 $1,038,346 In the years ended December 31, 2014 and 2015, in accordance with ASU 2011-08, the Company performed an assessment of qualitative factors todetermine whether events or circumstances exist that may lead to a determination that it is more likely than not that the fair value of a reporting unit is lessthan its carrying amount. Based on its assessment, the Company concluded that it is not more likely than not that the fair value of any of the Company’sreporting units is less than its carrying amount.The total amount of goodwill deductible for tax purposes is $37,628 and $36,390 as of December 31, 2014 and 2015, respectively.The Company’s intangible assets acquired either individually or with a group of other assets or in a business combination are as follows: As of December 31, 2014 As of December 31, 2015 Grosscarryingamount Accumulatedamortization&Impairment Net Grosscarryingamount Accumulatedamortization&Impairment Net Customer-related intangible assets $310,069 $228,095 $81,974 $319,035 $247,463 $71,572 Marketing-related intangible assets 43,137 23,801 19,336 42,749 27,021 15,728 Other intangible assets 19,002 5,768 13,234 29,729 18,427 11,301 $372,208 $257,664 $114,544 $391,513 $292,911 $98,601 Amortization expenses for intangible assets disclosed in the consolidated statements of income under amortization of acquired intangible assets for theyears ended December 31, 2013, 2014 and 2015 were $23,645, $28,543 and $28,513, respectively.During the year ended 2015, the Company tested an intangible software asset for recoverability as a result of a downward revision to the forecastedcash flows to be generated by the intangible asset. Based on the results of such testing, the Company determined that the carrying value of the intangibleasset exceeded its fair value by $10,714 and recorded a charge to reduce the carrying value by this amount. The Company used the discounted cash flow orincome approach to determine the fair value of the intangible asset for the purpose of calculating the resulting charge. This charge has been recorded in otheroperating (income) expenses, net in the consolidated statement of income. F-29Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)10. Goodwill and intangible assets (Continued) The estimated amortization schedule for the Company’s intangible assets for future periods is set out below: For the year ending December 31: 2016 $25,961 2017 22,501 2018 18,322 2019 14,531 2020 and beyond 17,286 $98,601 11. Other assetsOther assets consist of the following: As of December 31, 2014 2015 Customer acquisition cost $15,035 $13,458 Advance income and non-income taxes 27,381 50,123 Deferred transition costs 37,230 56,759 Deposits 24,989 24,107 Derivative instruments 17,129 12,096 Prepaid expenses 2,565 4,435 Accounts receivable due after one year 11,635 8,348 Others 10,742 10,679 $146,706 $180,005 12. LeasesThe Company has leased vehicles, furniture and fixtures, computer equipment and servers, and plants, machinery and equipment from various lessorsunder capital lease arrangements which are not material to the consolidated financial statements.The Company conducts its operations using facilities under non-cancellable operating lease agreements that expire at various dates. Future minimumlease payments under these agreements are as follows: Year ending December 31: 2016 $46,056 2017 40,539 2018 34,998 2019 31,124 2020 29,755 2021 and beyond 93,372 Total minimum lease payments $275,844 F-30Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)12. Leases (Continued) Rental expenses in agreements with rent holidays and scheduled rent increases are recorded on a straight-line basis over the applicable lease term. Rentexpenses under cancellable and non-cancellable operating leases were $55,450, $57,178 and $50,342 for the years ended December 31, 2013, 2014 and2015, respectively.The rental expenses set out above include the effect of the reclassification of foreign exchange (gains) losses related to the effective portion of foreigncurrency derivative contracts amounting to $2,851, $1,823 and $2,037 for the years ended December 31, 2013, 2014 and 2015, respectively.13. Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities consist of the following: As of December 31, 2014 2015 Accrued expenses $114,770 $161,672 Accrued employee cost 143,829 158,054 Deferred transition revenue 49,792 44,974 Statutory liabilities 24,713 32,149 Retirement benefits 16,807 17,930 Derivative instruments 65,615 34,610 Advance from clients 19,857 19,815 Earn-out consideration 3,232 16,896 Other liabilities 12,399 12,210 Capital lease obligations 1,443 1,328 $452,457 $499,638 14. Long-term debtIn August 2012, the Company obtained credit facilities aggregating $925,000 from a consortium of financial institutions.In June 2013, the Company amended this credit facility to reduce interest payments thereunder. As of the amendment date, the gross outstanding termloan amounted to $671,625. The amendment did not result in a substantial modification of $553,589 of the outstanding term loan under the previous creditfacility. As a result of the amendment, the Company extinguished $118,036 of the outstanding term loan under the previous facility and obtained additionalfunding amounting to $121,410, increasing the total term loan outstanding to $675,000. The Company expensed $3,103, representing partial acceleration ofthe amortization of the existing unamortized debt issuance costs and an additional fee paid to the lenders in respect of the extinguished amount. The overallborrowing capacity under the revolving facility did not change. The amendment of the revolving facility resulted in accelerated amortization of $54 relatingto the existing unamortized debt issuance cost. The remaining unamortized costs and an additional third party fee paid in connection with the amendmentwere to be amortized over the duration of the term loan and revolving facility, which by their terms were to expire on August 30, 2019 and August 30, 2017,respectively.In June 2015, the Company refinanced its 2012 facility through a new credit facility comprised of an $800,000 term loan and a $350,000 revolvingcredit facility. Borrowings under the new facility bear interest at a rate equal to, at the election of the Company, either LIBOR plus an applicable marginequal to 1.50% per annum F-31Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)14. Long-term debt (Continued) or a base rate plus an applicable margin equal to 0.50% per annum, in each case subject to adjustment based on the Company’s debt ratings provided byStandard & Poor’s Rating Services and Moody’s Investors Service, Inc. Based on the Company’s election and current credit rating, the applicable interest rateis equal to LIBOR plus 1.50% per annum. As a result of the June 2015 refinancing, the gross outstanding term loan under the previous facility, whichamounted to $663,188 as of June 30, 2015, was extinguished, and the Company expensed $10,050, representing accelerated amortization of the existingunamortized debt issuance costs related to the prior facility. Additionally, the refinancing of the revolving facility resulted in the accelerated amortization of$65 relating to the existing unamortized debt issuance cost. The remaining unamortized costs for the revolving facility, together with the fees paid to theCompany’s lenders and third parties in connection with the new term loan and revolving facility, will be amortized over the term of the refinanced facility,which ends on June 30, 2020.As of December 31, 2014 and December 31, 2015, the amount outstanding under the Company’s term loan, net of debt amortization expense of$11,274 and $3,534, was $653,602 and $776,466, respectively. As of December 31, 2014, the term loan bore interest at a rate equal to LIBOR (subject to afloor of 0.75%) plus an applicable margin of 2.75% per annum. As of December 31, 2015, the term loan bore interest at a rate equal to LIBOR plus a margin of1.50% per annum. Indebtedness under the refinanced facility is unsecured. The amount outstanding on the term loan as of December 31, 2015 will be repaidthrough quarterly payments of $10,000, and the balance will be repaid upon the maturity of the term loan on June 30, 2020.The maturity profile of the term loan, net of debt amortization expense, is as follows: Year ended Amount 2016 $39,134 2017 39,181 2018 39,226 2019 39,272 2020 619,653 Total $776,466 15. Short-term borrowingsThe Company has the following borrowing facilities: (a)Fund-based and non-fund-based credit facilities with banks, which are available for operational requirements in the form of overdrafts, letters ofcredit, guarantees and short-term loans. As of December 31, 2014 and December 31, 2015, the limits available were $14,282 and $15,781,respectively, of which $8,138 and $10,301 was utilized, constituting non-funded drawdown. (b)A fund-based and non-fund based revolving credit facility of $350,000, which the company obtained in June 2015 as described in note 14. Thisfacility replaces the Company’s $250,000 facility initially entered into in August 2012 and subsequently amended in June 2013. As ofDecember 31, 2014 and December 31, 2015, a total of $137,224 and $22,947, respectively, was utilized, of which $135,000 and $21,500,respectively, constituted funded drawdown and $2,224 and $1,447, respectively, constituted non-funded drawdown. The revolving facilityexpires in June 2020. The funded drawdown amount bore interest at a rate equal to LIBOR plus a margin of 2.50% as of December 31, 2014. Asof F-32Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)15. Short-term borrowings (Continued) December 31, 2015, the revolving facility bore interest at a rate equal to LIBOR plus a margin of 1.50% per annum. The unutilized amount onthe revolving facility bore a commitment fee of 0.5% and 0.25% as of December 31, 2014 and December 31, 2015, respectively. The creditagreement contains certain customary covenants, including a maximum leverage covenant and a minimum interest coverage ratio. During theyear ended December 31, 2015, the Company was in compliance with the financial covenants. (c)On January 27, 2015 and March 23, 2015, the Company obtained short-term loans in the amount of $672,500 and $737,500, respectively, fromMorgan Stanley Senior Funding, Inc. in connection with certain internal reorganization transactions. These loans bore interest at a rate of2.00% per annum and were fully repaid on January 30, 2015 and March 26, 2015, respectively. The Company recorded $1,045 in debt issuanceexpenses and $235 in interest with respect to the amounts borrowed under the short-term loans.16. Other liabilitiesOther liabilities consist of the following: As of December 31, 2014 2015 Accrued employee cost $5,121 $6,901 Deferred transition revenue 52,419 66,737 Retirement benefits 29,652 29,689 Derivative instruments 35,901 25,010 Amount received from GE under indemnification arrangement, pending adjustment 5,129 3,549 Advance from clients 6,000 4,485 Earn-out consideration 30,758 5,924 Others 11,662 10,729 Capital lease obligations 2,660 2,204 $179,302 $155,228 17. Employee benefit plansThe Company has employee benefit plans in the form of certain statutory and other schemes covering its employees.Defined benefit plansIn accordance with Indian law, the Company provides a defined benefit retirement plan (the “Gratuity Plan”) covering substantially all of its Indianemployees. The Gratuity Plan provides a lump-sum payment to vested employees upon retirement or termination of employment in an amount based on eachemployee’s salary and duration of employment with the Company. The Gratuity Plan benefit cost for the year is calculated on an actuarial basis. TheCompany contributes the required funding for all ascertained liabilities to the Genpact India Employees’ Gratuity Fund. Trustees administer contributionsmade to the trust, and contributions are invested in specific designated instruments as permitted by Indian law. The Company’s overall investment strategy isto F-33Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)17. Employee benefit plans (Continued) invest predominantly in fixed income funds managed by asset management companies. These funds further invest in debt securities such as money marketinstruments, government securities and public and private bonds. During the years ended December 31, 2013, 2014 and 2015, all of the plan assets wereprimarily invested in debt securities.In addition, in accordance with Mexican law, the Company provides certain termination benefits (the “Mexican Plan”) to its eligible Mexicanemployees based on the age, duration of service and salary of each eligible employee. The Mexican Plan benefit cost for the year is calculated on an actuarialbasis.In addition, certain of the Company’s subsidiaries organized or operating in the Philippines and Japan have sponsored defined benefit retirementprograms (respectively, the “Philippines Plan” and the “Japan Plan”). The benefit costs of the Japan Plan and the Philippines Plan for the year are calculatedon an actuarial basis. Company contributions in respect of these plans are made to insurer-managed funds or to a trust. The trust contributions are furtherinvested in government bonds.Current service costs for defined benefit plans are accrued in the year to which they relate on a monthly basis. Actuarial gains or losses, or prior servicecosts, if any, resulting from amendments to the plans are recognized and amortized over the remaining period of service of the employees or over the averageremaining life expectancies for inactive employees if most of the plan obligations are payable to inactive employees.The following table sets forth the funded status of the defined benefit plans and the amounts recognized in the Company’s financial statements basedon an actuarial valuation carried out as of December 31, 2014 and 2015. As of December 31, 2014 2015 Change in benefit obligation Projected benefit obligation at the beginning of the year $28,596 $36,445 Service cost 4,721 5,578 Actuarial loss (gain) 1,843 (3,459) Interest cost 2,410 2,629 Liabilities assumed on acquisition 3,967 — Benefits paid (3,736) (3,846) Effect of exchange rate changes (1,356) (1,730) Projected benefit obligation at the end of the year $36,445 $35,617 Change in fair value of plan assets Fair value of plan assets at the beginning of the year $22,798 $29,721 Employer contributions 7,139 1,283 Actual gain on plan assets 1,907 2,465 Assets assumed on acquisition 2,825 — Actuarial gain/(loss) (6) — Benefits paid (3,736) (3,763) Effect of exchange rate changes (1,206) (1,157) Fair value of plan assets at the end of the year $29,721 $28,549 F-34Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)17. Employee benefit plans (Continued) Amounts included in other comprehensive income (loss) as of December 31, 2014 and 2015 were as follows: As of December 31, 2014 2015 Net actuarial loss $(7,178) $(3,051) Deferred tax assets 2,178 874 Other comprehensive income, net $(5,000) $(2,177) Changes in other comprehensive income (loss) during the year ended December 31, 2015 were as follows: 2015 Net Actuarial loss $3,899 Amortization of net actuarial loss 416 Deferred income taxes (1,304) Effect of exchange rate changes (189) Other comprehensive income (loss), net $2,822 Net defined benefit plan costs for the years ended December 31, 2013, 2014 and 2015 include the following components: Year ended December 31, 2013 2014 2015 Service costs $4,511 $4,721 $5,578 Interest costs 2,104 2,410 2,629 Amortization of actuarial loss 421 419 330 Expected return on plan assets (968) (1,719) (2,154) Net Defined Benefit Plan costs $6,068 $5,831 $6,383 The amount in other comprehensive loss that is expected to be recognized as a component of net periodic benefit cost over the next fiscal year is $72.The weighted average assumptions used to determine the benefit obligations of the Gratuity Plan as of December 31, 2014 and 2015 are presentedbelow: As of December 31, 2014 2015Discount rate 8.50%-8.55% 8.30%-8.45%Rate of increase in compensation per annum 5.20%-11.00% 5.20%-11.00% F-35Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)17. Employee benefit plans (Continued) The weighted average assumptions used to determine the Gratuity Plan costs for the years ended December 31, 2013, 2014 and 2015 are presentedbelow: Year ended December 31, 2013 2014 2015Discount rate 8.85% 9.50%-9.55% 8.50%-8.55%Rate of increase in compensation per annum 5.20%-11.00% 5.20%-11.00% 5.20%-11.00%Expected long-term rate of return on plan assets per annum 8.50% 8.50% 8.50%The weighted average assumptions used to determine the benefit obligations of the Mexican Plan as of December 31, 2014 and 2015 are presentedbelow: Year ended December 31, 2014 2015 Discount rate 6.50% 6.50% Rate of increase in compensation per annum 5.50% 5.50% The weighted average assumptions used to determine the Mexican Plan costs for the years ended December 31, 2013, 2014 and 2015 are presentedbelow: Year ended December 31, 2013 2014 2015 Discount rate 6.50% 6.50% 6.50% Rate of increase in compensation per annum 5.50% 5.50% 5.50% Expected long-term rate of return on plan assets per annum 0.00% 0.00% 0.00% The weighted average assumptions used to determine the benefit obligation of the Japan Plan as of December 31, 2014 and 2015 are presented below: Year ended December 31, 2014 2015Discount rate 0.24%-1.44% 0.24%-1.30%Rate of increase in compensation per annum 0.00% 0.00%-3.55%The weighted average assumptions used to determine the Japan Plans costs for the years ended December 31, 2013, 2014 and 2015 are presentedbelow: Year ended December 31, 2013 2014 2015Discount rate 0.90% 0.50%-1.44% 0.20%-1.30%Rate of increase in compensation per annum 0.00% 0.00% 0.00%-3.55%Expected long-term rate of return on plan assets per annum 2.69% 2.69% 2.69%-3.44%The foregoing expected returns on plan assets are based on the Company’s expectation of the average long-term rate of return expected to prevail overthe next 15 to 20 years on the types of investments prescribed by applicable statute. F-36Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)17. Employee benefit plans (Continued) The Company evaluates these assumptions based on projections of the Company’s long-term growth and prevalent industry standards. Unrecognizedactuarial loss is amortized over the average remaining service period of the active employees expected to receive benefits under the plan.The fair value of the Company’s plan assets as of December 31, 2014 and 2015 by asset category are as follows: As of December 31, 2015 Fair Value Measurements at Reporting Date Using Quoted Prices inActive Markets forIdentical Assets Significant OtherObservableInputs Significant OtherUnobservableInputs Total (Level 1) (Level 2) (Level 3) Asset Category Cash $2,460 $2,460 $— $— Fixed income securities (Note a) 23,190 3,520 19,670 — Other securities (Note b) 2,899 1,234 1,665 — Total $28,549 $7,214 $21,335 $— As of December 31, 2014 Fair Value Measurements at Reporting Date Using Quoted Prices inActive Markets forIdentical Assets Significant OtherObservableInputs Significant OtherUnobservableInputs Total (Level 1) (Level 2) (Level 3) Asset Category Cash $6,104 $6,104 $— $— Fixed income securities (Note a) 21,532 4,053 17,479 — Other securities (Note b) 2,085 512 1,573 — Total $29,721 $10,669 $19,052 $— (a)Include investments in funds that invest 100% of their assets in fixed income securities such as money market instruments, government securities andpublic and private bonds. (b)Include investments in funds that invest primarily in fixed income securities and the remaining portion in equity securities.The expected benefit plan payments set forth below reflect expected future service: Year ending December 31, 2016 $4,212 2017 3,549 2018 3,163 2019 2,915 2020 2,868 2021 – 2025 16,382 $33,089 F-37Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)17. Employee benefit plans (Continued) Expected benefit plan payments are based on the same assumptions that were used to measure the Company’s benefit obligations as of December 31,2015.Defined contribution plansDuring the years ended December 31, 2013, 2014 and 2015, the Company contributed the following amounts to defined contribution plans in variousjurisdictions: Year ended December 31, 2013 2014 2015 India $14,443 $15,272 $15,915 U.S. 3,268 5,565 8,148 U.K. 1,789 3,361 4,453 China 14,681 14,518 14,511 Other Regions 4,641 4,355 4,690 Total $38,822 $43,071 $47,717 18. Stock-based compensationThe Company has issued options under the Genpact Global Holdings 2005 Plan (the “2005 Plan”), the Genpact Global Holdings 2006 Plan (the “2006Plan”), the Genpact Global Holdings 2007 Plan (the “2007 Plan”) and the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 OmnibusPlan”) to eligible persons including employees, directors and certain other persons associated with the Company.With respect to options granted under the 2005, 2006 and 2007 Plans before the date of adoption of the 2007 Omnibus Plan, if an award granted underany such plan is forfeited or otherwise expires, terminates, or is cancelled without the delivery of shares, then the shares covered by the forfeited, expired,terminated, or cancelled award will be added to the number of shares otherwise available for grant under the respective plans.Beginning on July 13, 2007, the date of adoption of the 2007 Omnibus Plan, shares underlying options forfeited, expired, terminated or cancelledunder any of the plans are added to the number of shares otherwise available for grant under the 2007 Omnibus Plan. The 2007 Omnibus Plan was amendedand restated on April 11, 2012 to increase the number of common shares authorized for issuance by 5,593,200 shares to 15,000,000 shares.During the year ended December 31, 2012, the number of common shares authorized for issuance under the 2007 Omnibus Plan and the 2005 Plan wasincreased by 8,858,823 and 495,915 shares, respectively, as the result of an adjustment to outstanding unvested share awards.A brief summary of each plan is provided below:2005 PlanUnder the 2005 Plan, which was adopted on July 26, 2005, the Company is authorized to issue up to 12,706,665 options to eligible persons. F-38Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) 2006 PlanUnder the 2006 Plan, which was adopted on February 27, 2006, the Company is authorized to issue up to 4,942,369 options to eligible persons.2007 PlanUnder the 2007 Plan, which was adopted on March 27, 2007, the Company is authorized to issue up to 16,733,250 options to eligible persons.2007 Omnibus PlanThe Company adopted the 2007 Omnibus Plan on July 13, 2007 and amended and restated it on April 11, 2012. The 2007 Omnibus Plan provides forthe grant of awards intended to qualify as incentive stock options, non-qualified stock options, share appreciation rights, restricted share awards, restrictedshare units, performance units, cash incentive awards and other equity-based or equity-related awards. Under the 2007 Omnibus Plan, the Company isauthorized to grant awards for the issuance of up to a total of 23,858,823 common shares.Stock-based compensation costs relating to the foregoing plans during the years ended December 31, 2013, 2014 and 2015, were $30,901, $27,773and $24,684, respectively, and have been allocated to cost of revenue and selling, general, and administrative expenses.Tax benefits recognized in relation to stock-based compensation charges during the years ended December 31, 2013, 2014 and 2015 were $6,913,$6,366 and $6,125, respectively.Stock optionsAll options granted under the 2007 Omnibus Plan or any prior plans are exercisable into common shares of the Company, have a contractual period often years and vest over four to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost over thevesting period of the option. Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model.The following table shows the significant assumptions used in connection with the determination of the fair value of options granted in 2013, 2014and 2015: 2013 2014 2015Dividend yield — — —Expected life (in months) 84 84 84Risk-free rate of interest for expected life 1.55% 2.18% - 2.29% 1.99%Volatility 39.39% 37.27% - 38.34% 34.97%Volatility was calculated based on the historical volatility of the Company during a period equivalent to the estimated term of the option. TheCompany estimates the expected term of an option using the “simplified method,” which is based on the average of its contractual vesting term. The risk-freeinterest rate that the Company uses in the option valuation model is based on U.S. Treasury bonds with a term similar to the expected term of the options. TheCompany has not paid any regular cash dividends in the last two fiscal years. F-39Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) The Company has issued, and intends to continue to issue, new common shares upon stock option exercises and the vesting of share awards under itsequity-based incentive compensation plans.A summary of stock option activity during the years ended December 31, 2013, 2014 and 2015 is set out below: Year ended December 31, 2013 Shares arisingout of options Weightedaverageexercise price Weighted averageremainingcontractual life(years) Aggregateintrinsicvalue Outstanding as of January 1, 2013 12,413,298 $9.29 $4.2 $— Granted 3,483,000 19.35 — — Forfeited (69,863) 10.65 — — Expired (88,295) 13.26 — — Exercised (4,635,977) 9.31 — 41,849 Outstanding as of December 31, 2013 11,102,163 $12.40 5.2 $70,512 Vested and exercisable as of December 31, 2013 and expected tovest thereafter (Note a) 10,759,137 $12.11 5.2 $70,465 Vested and exercisable as of December 31, 2013 7,091,889 $8.82 3.0 $67,719 Weighted average grant date fair value of grants during the period $8.33 Year ended December 31, 2014 Shares arisingout of options Weightedaverageexercise price Weighted averageremainingcontractual life(years) Aggregateintrinsicvalue Outstanding as of January 1, 2014 11,102,163 $12.40 5.2 $— Granted 520,000 17.54 — — Forfeited (250,673) 19.20 — — Expired (27,228) 12.32 — — Exercised (Note b) (3,972,535) 7.00 — 47,399 Outstanding as of December 31, 2014 7,371,727 $15.44 5.9 $27,886 Vested as of December 31, 2014 and expected to vest thereafter(Note a) 7,073,004 $15.19 5.9 $27,755 Vested and Exercisable as of December 31, 2014 3,542,821 $11.37 3.1 $26,781 Weighted average grant date fair value of grants during the period $7.54 F-40Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) Year ended December 31, 2015 Shares arisingout of options Weightedaverageexercise price Weighted averageremainingcontractual life(years) Aggregateintrinsicvalue Outstanding as of January 1, 2015 7,371,727 $15.44 5.9 $— Granted 170,000 22.77 — — Forfeited (125,000) 19.35 — — Expired (1,277) 14.32 — — Exercised (1,428,605) 9.49 — 22,122 Outstanding as of December 31, 2015 5,986,845 $16.99 5.8 $48,661 Vested as of December 31, 2015 and expected to vest thereafter(Note a) 5,754,969 $16.76 5.8 $47,325 Vested and Exercisable as of December 31, 2015 2,183,846 $12.67 2.7 $26,892 Weighted average grant date fair value of grants during the period $9.15 (a)Options expected to vest reflect an estimated forfeiture rate.(b)2,138,601 of these options were net settled upon exercise by issuing 1,485,826 shares (net of minimum statutory withholding taxes).Cash received upon the exercise of stock options amounted to $44,025, $16,051 and $13,564, and cash tax benefits realized upon the exercise of stockoptions were $1,806, $761 and $6,982 (including excess tax benefits of $0, $0, $6,560) during the years ended December 31, 2013, 2014 and 2015,respectively.As of December 31, 2015, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $14,073, whichwill be recognized over the weighted average remaining requisite vesting period of 2.4 years.Restricted Share UnitsThe Company has granted restricted share units, or RSUs, under the 2007 Omnibus Plan. Each RSU represents the right to receive one common share.The fair value of each RSU is the market price of one common share of the Company on the date of grant. The RSUs granted to date have graded vestingschedules of three months to four years. The compensation expense is recognized on a straight-line basis over the vesting term.A summary of RSUs granted during the years ended December 31, 2013, 2014 and 2015 is set out below: Year ended December 31, 2013 Number of RestrictedShare Units Weighted AverageGrant Date Fair Value Outstanding as of January 1, 2013 1,688,402 $13.74 Granted 91,623 19.52 Vested (Note b) (683,522) 14.28 Forfeited (224,731) 13.60 Outstanding as of December 31, 2013 871,772 $13.96 Expected to vest (Note a) 802,481 F-41Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) Year ended December 31, 2014 Number of RestrictedShare Units Weighted AverageGrant Date Fair Value Outstanding as of January 1, 2014 871,772 $13.96 Granted 227,248 16.58 Vested (Note c) (511,513) 13.83 Forfeited (99,089) 13.77 Outstanding as of Dec 31, 2014 488,418 $15.36 Expected to vest (Note a) 451,721 Year ended December 31, 2015 Number of RestrictedShare Units Weighted AverageGrant Date Fair Value Outstanding as of January 1, 2015 488,418 $15.36 Granted 53,546 20.88 Vested (Note d) (351,338) 15.29 Forfeited (33,236) 14.00 Outstanding as of December 31, 2015 157,390 $17.67 Expected to vest (Note a) 147,226 (a)RSUs expected to vest reflect an estimated forfeiture rate. (b)622,465 of these RSUs were net settled upon vesting by issuing 424,201 shares (net of minimum statutory tax withholding). 61,057 RSUs vested in theyear ended December 31, 2013, in respect of which 59,827 shares were issued in January 2015 after withholding shares to the extent of minimumstatutory withholding taxes. (c)418,821 of these RSUs were net settled upon vesting by issuing 285,706 shares (net of minimum statutory withholding taxes). 92,692 RSUs vested inthe year ended December 31, 2014, shares in respect of which will be issued in 2016 after withholding shares to the extent of minimum statutorywithholding taxes. (d)Vested RSUs were net settled by issuing 199,949 shares (net of minimum statutory tax withholding). 53,546 RSUs vested in the year endedDecember 31, 2015, shares in respect of which will be issuable on December 31, 2016 after withholding shares to the extent of minimum statutorywithholding taxes.102,000 shares vested in the year ended December 31, 2011, shares in respect of which were issued in January 2013 (100,800 shares, net of minimumstatutory withholding taxes). Shares in respect of an additional 13,719 RSUs were issued in January 2013 (13,557 shares, net of minimum statutorywithholding taxes).48,819 RSUs vested in the year ended December 31, 2012. 2,059 common shares underlying 4,533 of such RSUS were issued in April 2013 afterwithholding shares to the extent of applicable minimum statutory withholding taxes. Shares underlying the remaining 44,286 of such RSUs were issued inJanuary 2014 after withholding 681 shares to the extent of the minimum applicable statutory withholding taxes.As of December 31, 2015, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $1,511, which will berecognized over the weighted average remaining requisite vesting period of 2.2 years. F-42Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) Performance UnitsThe Company also grants stock awards in the form of Performance Units, or PUs, under the 2007 Omnibus Plan.Each PU represents the right to receive one common share at a future date based on the Company’s performance against specified targets. PUs grantedto date have vesting schedules of six months to three years. The fair value of each PU is the market price of one common share of the Company on the date ofgrant and assumes that performance targets will be achieved. PUs granted under the plan are subject to cliff vesting. The compensation expense for suchawards is recognized on a straight-line basis over the vesting terms. During the performance period, the Company’s estimate of the number of shares to beissued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and therelated compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.A summary of PU activity during the years ended December 31, 2013, 2014 and 2015 is set out below: Year ended December 31, 2013 Number ofPerformance Units Weighted AverageGrant Date Fair Value Maximum SharesEligible to Receive Outstanding as of January 1, 2013 3,041,511 $13.26 4,402,597 Granted 2,025,090 18.57 3,694,635 Vested (Note b) (1,024,434) 12.03 (1,024,434) Forfeited (426,345) 15.19 (550,078) Addition due to achievement of higher-than-target performance (Note c) 297,911 17.50 Reduction due to achievement of lower-than-maximum performance(Note d) (373,702) Outstanding as of December 31, 2013 3,913,733 $16.44 6,149,018 Expected to vest (Note a) 1,372,781 Year ended December 31, 2014 Number ofPerformance Units Weighted AverageGrant Date Fair Value Maximum SharesEligible to Receive Outstanding as of January 1, 2014 3,913,733 $16.44 6,149,018 Granted 1,337,750 16.78 2,729,125 Vested (Note e) (1,469,200) 14.50 (1,469,183) Forfeited (Note g) (2,629,463) 17.30 (2,664,980) Addition due to achievement of higher-than-target performance (Note f) 139,930 12.04 Reduction due to achievement of lower-than-maximum performance(Note h) (2,095,354) Outstanding as of December 31, 2014 1,292,750 $16.78 2,648,626 Expected to vest (Note a) 1,153,277 F-43Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) Year ended December 31, 2015 Number ofPerformance Units Weighted AverageGrant Date Fair Value Maximum SharesEligible to Receive Outstanding as of January 1, 2015 1,292,750 $16.78 2,648,626 Granted 1,375,650 22.72 2,965,475 Vested (Note i) (855) 16.78 (855) Forfeited (136,216) 17.82 (156,194) Net reduction due to achievement of lower-than-target performance(Note j) (32,007) 20.45 Reduction due to achievement of lower-than-maximum performance(Note k) (2,957,730) Outstanding as of December 31, 2015 2,499,322 $19.95 2,499,322 Expected to vest (Note a) 2,184,906 (a)PUs expected to vest are based on the probable achievement of the performance targets after considering an estimated forfeiture rate. (b)1,164,364 shares vested in respect of PUs granted in 2011. (c)Represents additional shares issued in respect of PUs granted in March 2012 due to the achievement of higher-than-target performance. (d)Represents a reduction in the maximum shares eligible to vest for PUs granted in March 2012.Outstanding PUs as of December 31, 2013 include 483,999, 1,250,807 and 657,000 shares underlying awards granted in May 2011, March 2013 andMay 2013, respectively, for which the performance conditions were not fulfilled. (e)Vested PUs as of December 31, 2014 include 775,904 shares issued in 2014 with respect to grants made in 2011 after withholding shares to the extentof the minimum statutory withholding taxes.Vested PUs as of December 31, 2014 also include 1,329,270 shares underlying PUs granted in March 2012 based on the compensation committee’scertification of the achievement of the performance goals for the performance period based on the Company’s audited financial statements. Shares inrespect of such PUs were issued in January 2015 (845,524 shares after withholding shares to the extent of the minimum statutory withholding taxes). (f)Represents 139,930 additional shares issued in 2014 (included in note (e) above) for PUs granted in 2011. (g)Includes 251,427 shares underlying PUs granted in May 2011, 1,244,507 shares underlying PUs granted in March 2013 and 630,000 shares underlyingPUs granted in May 2013, all of which were forfeited due to non-fulfillment of the performance conditions as certified by the compensation committeebased on the Company’s audited financial statements. (h)Represents a reduction of 333,002 and 39,285 of the maximum shares eligible to vest with respect to PUs granted in March 2011 and June 2011,respectively, as a result of the compensation committee’s certification of the level of achievement of the performance conditions based on theCompany’s audited financial statements. Also includes a reduction of 616,568 shares for grants made in March 2013, 985,500 shares for grants made inMay 2013 and 121,000 shares for grants made in May 2011, due to non-fulfillment of the performance conditions as certified by the compensationcommittee based on the Company’s audited financial statements. F-44Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)18. Stock-based compensation (Continued) (i)Vested PUs were net settled upon vesting by issuing 590 shares (net of minimum statutory tax withholding). (j)Represents a 5.2% to 6.7% reduction, depending on the targets under the PU award granted, in the number of target shares as a result of achievement oflower-than-target performance for the PUs granted in 2015, partially offset by a 0.8% to 6.6% increase in the number of target shares as a result ofachievement of higher-than-target performance for the PUs granted in 2014. (k)Represents the difference between the maximum number of shares achievable and the number of shares expected to vest under the PU awards granted in2015 based on the level of achievement of the performance goals. Also includes the difference between the maximum number of shares achievable andthe number of shares eligible to vest under the PU awards granted in 2014 based on the certified level of achievement of the performance goals.156,511 shares, net of minimum statutory withholding taxes, were issued in January 2013 with respect to 28,901 PUs that vested in 2012 and 214,880PUs that vested as of December 31, 2011.503,969 shares vested in respect of PUs granted in March 2010. 339,601 shares (net of minimum statutory withholding taxes) in respect of such PUswere issued in 2013.231,029 shares vested in the year ended December 31, 2012 in respect of PUs granted in August 2010. 138,035 shares (net of minimum statutory taxwithholding) in respect of such PUs were issued in January 2014.As of December 31, 2015, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $24,345 and will be recognizedover the weighted average remaining requisite vesting period of 1.8 years.Employee Stock Purchase Plan (ESPP)On May 1, 2008, the Company adopted the Genpact Limited U.S. Employee Stock Purchase Plan and the Genpact Limited International EmployeeStock Purchase Plan (together, the “ESPP”).The ESPP allows eligible employees to purchase the Company’s common shares through payroll deductions at 90% of the fair value of a Companycommon share on the last business day of each purchase interval. The dollar amount of common shares purchased under the ESPP must not exceed 15% of theparticipating employee’s base salary, subject to a cap of $25 per employee per calendar year. The offering periods commence on the first business day inMarch, June, September and December of each year and end on the last business day in the subsequent May, August, November and February of each year.4,200,000 common shares have been reserved for issuance in the aggregate over the term of the ESPP.During the years ended December 31, 2013, 2014 and 2015, 109,698, 151,461 and 121,485 common shares, respectively, were issued under the ESPP.The ESPP is considered compensatory under FASB guidance on Compensation-Stock Compensation.The compensation expense for the employee stock purchase plan is recognized in accordance with FASB guidance on Compensation-StockCompensation. The compensation expense for the ESPP during the years ended December 31, 2013, 2014 and 2015 was $228, $292 and $292, respectively,and has been allocated to cost of revenue and selling, general, and administrative expenses. F-45Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 19. Capital stockThe Company’s authorized capital stock as of December 31, 2014 and 2015 consisted of 500 million common shares with a par value of $0.01 pershare, and 250 million preferred shares with a par value of $0.01 per share. There were 218,684,205 and 211,472,312 common shares, and no preferred shares,issued and outstanding as of December 31, 2014 and 2015, respectively.Holders of common shares are entitled to one vote per share. Upon the liquidation, dissolution or winding up of the Company, common shareholdersare entitled to receive a ratable share of the available net assets of the Company after payment of all debts and other liabilities. The common shares have nopreemptive, subscription, redemption or conversion rights.The Company’s board of directors by resolution can establish one or more series of preferred shares having such par value, designations, dividend rates,relative voting rights, conversion or exchange rights, redemption rights, liquidation rights and other relative participation, optional or other rights,qualifications, limitations or restrictions as may be fixed by the board of directors without shareholder approval. Such rights, preferences, powers andlimitations as may be established could also have the effect of discouraging an attempt to obtain control of the Company. These preferred shares are of thetype commonly known as “blank-check” preferred shares.Under Bermuda law, the Company may declare and pay dividends from time to time unless there are reasonable grounds for believing that theCompany is or would, after the payment, be unable to pay its liabilities as they become due or that the realizable value of its assets would thereby be less thanthe aggregate of its liabilities, its issued share capital, and its share premium accounts. Under the Company’s bye-laws, each common share is entitled todividends if, as and when dividends are declared by the Company’s board of directors. There are no restrictions in Bermuda on the Company’s ability totransfer funds (other than funds denominated in Bermuda dollars) in or out of Bermuda or to pay dividends to U.S. residents who are holders of commonshares. The Company’s ability to declare and pay cash dividends is restricted by its debt covenants.Share RepurchasesIn February 2015, the Company’s Board of Directors authorized a program to repurchase up to $250,000 in value of the Company’s common shares.The Company’s share repurchase program does not obligate it to acquire any specific number of shares. Under the program, shares may be purchased inprivately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, asamended. During the year ended December 31, 2015, the Company purchased 9,867,873 of its common shares at a weighted average price of $23.00 per sharefor an aggregate cash amount of $226,917. The purchased shares have been retired. On February 4, 2016, the Company announced that its Board of Directorshas approved a $250 million share repurchase program, bringing the total authorization under the Company’s existing program to $500 million. See Note 30,“Subsequent Events,” for information and related disclosures.On April 8, 2014, the Company purchased 17,292,842 of its common shares at a price of $17.50 per share for an aggregate cash amount ofapproximately $302,625 pursuant to the Company’s modified “Dutch Auction” self-tender offer announced on March 5, 2014. Under the terms of the offer,the Company was authorized to purchase up to $300,000 of its common shares. The number of shares accepted for purchase included the Company’s exerciseof its right to upsize the offer by up to 2% of the Company’s shares then outstanding.Any purchase by the Company of its common shares is accounted for when the transaction is settled. There were no unsettled share purchases as ofDecember 31, 2014 and December 31, 2015. Shares purchased and F-46Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)19. Capital stock (Continued) retired are deducted to the extent of their par value from common stock and from retained earnings for the excess over par value. Direct costs incurred toacquire the shares are included in the total cost of the shares. For the year ended December 31, 2014 and December 31, 2015, $2,543 and $197, respectively,was deducted from retained earnings in direct costs related to share purchases.20. Earnings per shareThe Company calculates earnings per share in accordance with FASB guidance on Earnings per Share. Basic and diluted earnings per common sharegive effect to the change in the number of common shares of the Company. The calculation of basic earnings per common share was determined by dividingnet income available to common shareholders by the weighted average number of common shares outstanding during the respective periods. The potentiallydilutive shares, consisting of outstanding options on common shares, restricted share units, common shares to be issued under the ESPP and performanceunits, have been included in the computation of diluted net earnings per share and the weighted average shares outstanding, except where the result would beanti-dilutive.The number of stock options outstanding but not included in the computation of diluted earnings per common share because their effect was anti-dilutive is 2,616,000, 3,758,000 and 2,821,000 for the years ended December 31, 2013, 2014 and 2015, respectively. Year ended December 31, 2013 2014 2015 Net income available to Genpact Limited common shareholders $229,717 $192,002 $239,817 Weighted average number of common shares used in computing basic earnings percommon share 229,348,411 220,847,098 216,606,542 Dilutive effect of stock-based awards 6,405,856 4,321,567 2,538,502 Weighted average number of common shares used in computing dilutive earnings percommon share 235,754,267 225,168,665 219,145,044 Earnings per common share attributable to Genpact Limited common shareholders Basic $1.00 $0.87 $1.11 Diluted $0.97 $0.85 $1.09 21. Cost of revenueCost of revenue consists of the following: Year ended December 31, 2013 2014 2015 Personnel expenses $904,445 $943,105 $1,013,209 Operational expenses 367,213 390,441 432,535 Depreciation and amortization 47,913 44,542 47,803 $1,319,571 $1,378,088 $1,493,547 F-47Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 22. Selling, general and administrative expensesSelling, general and administrative expenses consist of the following: Year ended December 31, 2013 2014 2015 Personnel expenses $347,384 $419,299 $430,088 Operational expenses 128,982 157,755 169,042 Depreciation and amortization 8,444 8,592 8,984 $484,810 $585,646 $608,114 23. Other operating (income) expense, net Year ended December 31, 2013 2014 2015 Other operating (income) expense $(3,259) $(3,163) $(2,515) Provision for Impairment of intangible assets — — 10,714 Provision for impairment of capital work in progress/ property, plant andequipment 2,373 — — Change in fair value of earn-out consideration and deferred consideration (relatingto business acquisitions) (4,670) (3,707) (11,521) Other operating (income) expense, net $(5,556) $(6,870) $(3,322) 24. Other income (expense), netOther income (expense), net consists of the following: Year ended December 31, 2013 2014 2015 Interest income $15,736 $4,405 $8,676 Interest expense (35,719) (33,800) (29,828) Loss on extinguishment of debt (Note 14) (3,157) — (10,115) Provision (created) reversed for loss on divestitures (3,487) — — Other income (expense) 2,319 2,112 4,360 Other income (expense), net $(24,308) $(27,283) $(26,907) F-48Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 25. Income taxesIncome tax expense (benefit) for the years ended December 31, 2013, 2014 and 2015 is allocated as follows: Year ended December 31, 2013 2014 2015 Income from continuing operations $71,100 $57,419 $61,937 Other comprehensive income: Unrealized gains (losses) on cash flow hedges (13,542) 48,966 13,816 Retirement benefits 138 (413) 1,304 Additional paid-in capital: Excess tax benefit on stock-based compensation — — (6,560) The components of income before income taxes from continuing operations are as follows: Year ended December 31, 2013 2014 2015 Domestic (U.S.) $8,199 $19,614 $23,122 Foreign (Non-U.S.) 297,952 229,976 278,632 Income before income taxes $306,151 $249,590 $301,754 Income tax expense (benefit) attributable to income from continuing operations consists of: Year ended December 31, 2013 2014 2015 Current taxes : Domestic (U.S. federal taxes) $1,443 $3,768 $12,142 Domestic (U.S. state taxes) 2,152 666 301 Foreign (Non-U.S.) 68,621 65,237 68,207 $72,216 $69,671 $80,650 Deferred taxes : Domestic (U.S. federal taxes) $8,357 $2,761 $(5,396) Domestic (U.S. state taxes) (2,216) (193) 344 Foreign (Non-U.S.) (7,257) (14,820) (13,661) $(1,116) $(12,252) $(18,713) Total income tax expense (benefit) $71,100 $57,419 $61,937 F-49Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)25. Income taxes (Continued) Income tax expense (benefit) attributable to income from continuing operations differed from the amounts computed by applying the U.S. federalstatutory income tax rate of 35% to income before income taxes, as a result of the following: Year ended December 31, 2013 2014 2015 Income before income tax expense $306,151 $249,590 $301,754 Statutory tax rates 35% 35% 35% Computed expected income tax expense 107,153 87,356 105,614 Increase (decrease) in income taxes resulting from: Foreign tax rate differential (6,704) (4,703) (16,550) Tax benefit from tax holiday (39,785) (35,868) (38,039) Non-deductible expenses 5,637 3,789 1,884 Effect of change in tax rates (2,268) 176 1,436 Change in valuation allowance 1,088 (2,880) (33) Unrecognized tax benefits 2,304 1,423 6,272 Other 3,675 8,126 1,353 Reported income tax expense (benefit) $71,100 $57,419 $61,937 A portion of the profits of the Company’s operations is exempt from income tax in India. The tax holiday under the STPI Scheme was available for aperiod of ten consecutive years beginning in the year in which the respective Indian undertaking commenced operations and expired completely as ofMarch 31, 2011. One of the Company’s Indian subsidiaries has fourteen units eligible for tax holiday as a Special Economic Zone unit in respect of 100% ofthe export profits it generates for a period of 5 years from commencement, 50% of such profits for the next 5 years (year 6 to year 10 from commencement)and 50% of the profits for an additional period of 5 years (year 11 to year 15 from commencement), subject to the satisfaction of certain capital investmentrequirements. The complete tax holiday for the current SEZ units will begin to expire on March 31, 2022 and will not fully expire until March 31, 2029,provided the Company satisfies the capital investment requirements described above.The effect of the Indian tax holiday on basic earnings per share was $0.17, $0.16 and $0.18, respectively, for the years ended December 31, 2013, 2014and 2015. The effect of the tax holiday on diluted earnings per share was $0.17, $0.16 and $0.17, respectively, for the years ended December 31, 2013, 2014and 2015. F-50Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)25. Income taxes (Continued) The components of the Company’s deferred tax balances as of December 31, 2014 and 2015 are as follows: As of December 31, 2014 2015 Deferred tax assets Net operating loss carry-forwards $55,592 $48,626 Accrued liabilities and other expenses 14,731 16,680 Provision for doubtful debts 5,643 5,655 Property, plant and equipment 4,647 4,538 Unrealized losses on cash flow hedges, net 24,646 10,296 Share-based compensation 11,226 14,253 Retirement benefits 4,517 2,772 Deferred revenue 41,024 39,547 Tax credit carry-forwards 36,602 52,993 Other 6,906 9,173 Gross deferred tax assets $205,534 $204,533 Less: Valuation allowance (21,094) (20,091) Total deferred tax assets $184,440 $184,442 Deferred tax liabilities Intangible assets $29,653 $20,987 Property, plant and equipment 4,971 3,406 Deferred cost 27,261 31,953 Investments in foreign subsidiaries not indefinitely reinvested 17,429 23,097 Other 8,415 7,697 Total deferred tax liabilities $87,729 $87,140 Net deferred tax asset $96,711 $97,302 As of December 31, Classified as 2014 2015 Deferred tax assets Current $45,486 $— Non-current $59,135 $99,395 Deferred tax liabilities Current $1,239 $— Non-current $6,671 $2,093 $96,711 $97,302 F-51Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)25. Income taxes (Continued) The change in the total valuation allowance for deferred tax assets as of December 31, 2013, 2014 and 2015 is as follows: Year ended December 31, 2013 2014 2015 Opening valuation allowance $23,922 $24,654 $21,094 Reduction during the year (2,643) (8,662) (3,499) Addition during the year 3,375 5,102 2,496 Closing valuation allowance $24,654 $21,094 $20,091 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assetswill not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which temporarydifferences are deductible. Management considers the scheduled reversal of deferred tax liabilities and projected taxable income in making this assessment.In order to fully realize a deferred tax asset, the Company must generate future taxable income prior to the expiration of the deferred tax asset underapplicable law. Based on the level of historical taxable income and projections for future taxable income over the periods during which the Company’sdeferred tax assets are deductible, management believes that it is more likely than not that the Company will realize the benefits of these deductibledifferences, net of the existing valuation allowances at December 31, 2015. The amount of the Company’s deferred tax assets considered realizable, however,could be reduced in the near term if estimates of future taxable income during the carry-forward period are reduced.In 2014, the Company determined that it was more likely than not that the deferred tax assets of a foreign subsidiary would be partially realized afterconsidering all positive and negative evidence. Prior to 2014, because of significant negative evidence, including a history of losses, an uncertain revenuestream, and potential reorganization activity that could adversely affect the foreign subsidiary’s future operations and profitability on a continuing basis infuture years, the Company determined that it was more likely than not that the subsidiary’s deferred tax assets would not be realized. However, as ofDecember 31, 2014, such subsidiary had realized cumulative pre-tax income for the preceding three years and has forecasted future pre-tax income sufficientto realize a portion of its deferred tax assets. After consideration of the relative impact of all evidence, both negative and positive, and the weight accorded toeach, the Company concluded that it was more likely than not that a portion of the subsidiary’s deferred tax assets would be realized and that the applicablevaluation allowance should be partially released up to $3,000. F-52Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)25. Income taxes (Continued) As of December 31, 2015, the Company’s deferred tax assets related to net operating loss carry-forwards amounted to $48,626. Net operating losses ofsubsidiaries in the United Kingdom, Hungary, Singapore, Malaysia, Hong Kong, Spain, Northern Ireland, Australia, Morocco, South Africa, Colombia, Brazil,India (unabsorbed depreciation) and Luxembourg amounting to $134,959 can be carried forward for an indefinite period. The remaining tax loss carry-forwards expire as set forth in the table below: US - Federal Europe Others Year ending December 31, 2016 $— $639 $— 2017 — 67 81 2018 — 790 255 2019 — 2 48 2020 — 4,474 652 2021 — — 812 2022 — 2,644 29 2023 — 10,042 1,027 2024 — 6,458 10,632 2025 — 4,042 1,133 2026 — 363 — 2030 — 205 — 2031 68,084 196 — 2032 — 68 — 2033 4,575 — — $72,659 $29,990 $14,669 The Company’s total U.S. federal net operating loss carry-forwards of approximately $72,659 relate to excess tax deductions resulting from share-basedcompensation as of December 31, 2015. No federal deferred tax benefit has been recognized for this deduction. If and when realized, the tax benefitassociated with this excess deduction will be credited to additional paid-in capital. Excess tax benefits of $0, $0 and $6,560 were realized during the yearsended December 31, 2013, 2014 and 2015, respectively, and were recorded through additional paid-in capital.As of December 31, 2015, the Company had additional deferred tax assets on U.S. state and local tax loss carry-forwards amounting to $7,502 withvarying expiration periods between 2016 and 2034.As of December 31, 2015, the company had a total alternative minimum tax credit of $28,476, of which $11,055, $10,757 and $3,106, all attributableto India, will expire in 2024, 2025 and 2026, respectively, and the balance, attributable to the United States, can be carried forward for an indefinite period. F-53Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)25. Income taxes (Continued) As of December 31, 2015, the company had a total foreign tax credit of $25,583, which will expire as set forth in the table below: Year ending December 31, Amount 2022 $893 2023 1,202 2024 15,552 2025 7,936 $25,583 Undistributed earnings of the Company’s foreign (non-Bermuda) subsidiaries amounted to approximately $706,048 as of December 31, 2015. TheCompany plans to indefinitely reinvest such undistributed earnings, except for those earnings for which a deferred tax liability has already been accrued orwhich can be repatriated in a tax-free manner. Accordingly, with limited exceptions, the Company does not accrue any income, distribution or withholdingtaxes that would arise if such earnings were repatriated. Due to the Company’s changing corporate structure, the various methods that are available torepatriate earnings, and uncertainty relative to the applicable taxes at the time of repatriation, it is not practicable to determine the amount of tax that wouldbe imposed upon repatriation. If undistributed earnings are repatriated in the future, or are no longer deemed to be indefinitely reinvested, the company willaccrue the applicable amount of taxes associated with such earnings at that time.As of December 31, 2015, $431,897 of the Company’s $450,907 in cash and cash equivalents was held by the Company’s foreign (non-Bermuda)subsidiaries. $11,707 of this cash is held by foreign subsidiaries for which the Company expects to incur and has accrued a deferred tax liability on therepatriation of $8,000 of retained earnings. $71,573 of the cash and cash equivalents held by our foreign subsidiaries is held in jurisdictions where no tax isexpected to be imposed upon repatriation.The following table summarizes activities related to our unrecognized tax benefits for uncertain tax positions from January 1 to December 31 for eachof 2013, 2014 and 2015: Year Ended December 31, 2013 2014 2015 Opening balance at January 1 $21,024 $21,832 $22,718 Increase related to prior year tax positions, including recorded in acquisition accounting 1,685 2,472 2,000 Decrease related to prior year tax positions (1,952) (1,002) — Decrease related to prior year due to lapse of applicable statute of limitation — (753) (820) Increase related to current year tax positions, including recorded in acquisition accounting 2,905 442 3,544 Decrease related to settlements with tax authorities — — — Effect of exchange rate changes (1,830) (273) (1,085) Closing balance at December 31 $21,832 $22,718 $26,357 As of December 31, 2013, 2014 and 2015, the Company had unrecognized tax benefits amounting to $20,901, $21,268 and $24,935, respectively,which, if recognized, would impact the effective tax rate. F-54Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)25. Income taxes (Continued) As of December 31, 2013, 2014 and 2015, the Company has accrued approximately $3,373, $3,417 and $4,223, respectively, for interest relating tounrecognized tax benefits. During the years ended December 31, 2013, 2014 and 2015, the Company recognized approximately $(50), $44 and $1,152,respectively, excluding exchange rate differences, in interest expense. As of December 31, 2013, 2014 and 2015 the company has accrued $350, $561 and$958, respectively, for penalties.In the next twelve months and for all tax years that remain open to examinations by U.S. federal and various state, local, and non-U.S. tax authorities,the Company estimates that it is reasonably possible that the total amount of its unrecognized tax benefits will vary. However, the Company does not expectsignificant changes within the next twelve months other than depending on the progress of tax matters or examinations with various tax authorities, whichare difficult to predict.With exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax audits by taxing authorities for years prior to2010. The Company’s subsidiaries in India and China are open to examination by the relevant taxing authorities for tax years beginning on or after April 1,2009, and January 1, 2000, respectively. The Company regularly reviews the likelihood of additional tax assessments and adjusts its reserves as additionalinformation or events require.26. Segment reportingThe Company manages various types of business process and information technology services in an integrated manner for clients in various industriesand geographic locations. The Company’s Chief Executive Officer, who has been identified as the Chief Operation Decision Maker (CODM), reviewsfinancial information prepared on a consolidated basis, accompanied by disaggregated information about revenue and adjusted operating income byidentified business units. The identified business units are organized for operational reasons and represent either services-based, customer-based, industry-based or geography-based units. There is significant overlap between the manner in which the business units are organized. Additionally, the compositionand organization of the business units is fluid and the structure changes regularly in response to growth of the overall business, acquisitions and changes inthe reporting structure, clients, services, industries served, and delivery centers.Based on an overall evaluation of all facts and circumstances, and after combining operating segments with similar economic characteristics thatcomply with other aggregation criteria specified in the FASB guidance on Segment Reporting, the Company has determined that it operates as a singlereportable segment.Net revenues by service type are as follows: Year ended December 31, 2013 2014 2015 Business process outsourcing $1,608,224 $1,736,716 $1,933,095 Information technology services 523,773 542,722 527,949 Total net revenues $2,131,997 $2,279,438 $2,461,044 F-55Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)26. Segment reporting (Continued) Revenues from clients based on the industry serviced are as follows: Year ended December 31, 2013 2014 2015 Banking, financial services and insurance $888,916 $940,345 $1,030,584 Manufacturing, including pharmaceuticals and medical equipmentmanufacturing 711,184 796,872 878,570 Technology, healthcare and other services 531,897 542,221 551,890 Total net revenues $2,131,997 $2,279,438 $2,461,044 Net revenues from geographic areas based on the location of service delivery centers are as follows. A portion of net revenues attributable to Indiaconsists of net revenues for services performed by delivery centers in India or at clients’ premises outside of India by business units or personnel normallybased in India. Year ended December 31, 2013 2014 2015 India $1,328,201 $1,505,960 $1,687,699 Asia, other than India 224,657 232,349 238,529 Americas 359,774 302,515 304,879 Europe 219,365 238,614 229,937 Total net revenues $2,131,997 $2,279,438 $2,461,044 Revenues from GE comprised 23%, 20% and 19% of the consolidated total net revenues in 2013, 2014 and 2015, respectively. No other customeraccounted for 10% or more of the Company’s consolidated total net revenues during these periods.Property, plant and equipment, net by geographic region are as follows: As of December 31, 2014 2015 India $116,734 $112,911 Asia, other than India 13,461 11,700 Americas 36,617 41,561 Europe 9,124 9,224 Total $175,936 $175,396 F-56Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 27. Related party transactionsThe Company has entered into related party transactions with its non-consolidating affiliates. The Company has also entered into related partytransactions with a significant shareholder and its affiliates.The Company’s related party transactions can be categorized as follows:Revenue from servicesIn the year ended December 31, 2013, the Company recognized net revenues of $938 from clients that are affiliates of a significant shareholder of theCompany.In the years ended December 31, 2014, and 2015, the Company recognized net revenues of $285 and $326, respectively, from a client that is also asignificant shareholder of the Company.In the years ended December 31, 2014 and 2015, the Company recognized net revenues of $5,580 and $7,826, respectively, from a client that is a non-consolidating affiliate of the Company. $1,955 of such revenue is receivable as of December 31, 2015.Cost of revenue from servicesThe Company purchases certain services from its non-consolidating affiliates, mainly relating to training and recruitment, the costs of which areincluded in cost of revenue. For the years ended December 31, 2013, 2014 and 2015, cost of revenue includes an amount of $2,140, $2,126 and $2,173,respectively.Selling, general and administrative expensesThe Company purchases certain services from its non-consolidating affiliates, mainly relating to training and recruitment, the costs of which areincluded in selling, general and administrative expenses. For the years ended December 31, 2013, 2014 and 2015, selling, general and administrativeexpenses includes an amount of $505, $613 and $384, respectively, attributable to the cost of services provided by the Company’s non-consolidatingaffiliates.During the years ended December 31, 2014 and 2015, the Company engaged a significant shareholder of the Company to provide services to theCompany at a cost of $900 and $421, respectively, of which $40 is payable as of December 31, 2015.Investment in equity affiliatesDuring the years ended December 31, 2014 and 2015, the Company made investments of $5,146 and $17,013, respectively, in its non-consolidatingaffiliates. As of December 31, 2014 and 2015, $5,146 and $3,736, respectively, of such amounts were outstanding and have been included in accruedexpenses and other current liabilities in the Company’s consolidated balance sheet. In the first quarter of 2013, the Company acquired the balance of theoutstanding interest in its non-consolidating affiliate, NGEN Media Services Private limited, for contingent consideration amounting to $158, which resultedin such affiliate becoming a wholly-owned subsidiary. The results of operations and the fair value of the assets and liabilities of such wholly-ownedsubsidiary are included in the Company’s Consolidated Financial Statements as of the date of the acquisition.As of December 31, 2014 and 2015, the Company’s investments in its non-consolidating affiliates amounted to $494 and $6,677, respectively. F-57Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)27. Related party transactions (Continued) OthersDuring the years ended December 31, 2014 and 2015, the Company also entered into transactions with one of its non-consolidating affiliates forcertain cost reimbursements amounting to $1,530 and $2,077, respectively, of which $853 is receivable as of December 31, 2015.28. Commitments and contingenciesCapital commitmentsAs of December 31, 2014 and 2015, the Company has committed to spend $6,073 and $8,237, respectively, under agreements to purchase property,plant and equipment. This amount is net of capital advances paid in respect of such purchases.Bank guaranteesThe Company has outstanding bank guarantees amounting to $10,362 and $11,748 as of December 31, 2014 and 2015, respectively. Bank guaranteesare generally provided to government agencies and excise and customs authorities for the purposes of maintaining a bonded warehouse. These guaranteesmay be revoked by the government agencies if they suffer any losses or damage through the breach of any of the covenants contained in the agreementsgoverning such guarantees.Other commitmentsThe Company’s business process delivery centers in India are 100% export oriented units or Software Technology Parks of India (“STPI”) units underthe STPI guidelines issued by the Government of India. These units are exempt from customs, central excise duties, and levies on imported and indigenouscapital goods, stores, and spares. The Company has undertaken to pay custom duties, service taxes, levies, and liquidated damages payable, if any, in respectof imported and indigenous capital goods, stores, and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. F-58Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 29. Quarterly financial data (unaudited) Three months ended Year endedDecember 31,2015 March 31, 2015 June 30, 2015 September 30,2015 December 31,2015 Total net revenues $587,153 $609,532 $617,831 $646,528 $2,461,044 Gross profit $229,677 $243,228 $242,001 $252,591 $967,497 Income from operations $74,050 $89,353 $87,343 $83,446 $334,192 Income before loss(gain) on equity-methodinvestment activity, net and income taxexpense $57,938 $80,245 $89,685 $84,686 $312,554 Net income $44,653 $62,701 $68,050 $64,413 $239,817 Net income attributable to non-controllinginterest — — — — — Net income attributable to Genpact Limitedcommon shareholders $44,653 $62,701 $68,050 $64,413 $239,817 Earnings per common share attributable toGenpact Limited common shareholders Basic $0.20 $0.29 $0.32 $0.30 $1.11 Diluted $0.20 $0.28 $0.31 $0.30 $1.09 Weighted average number of commonshares used in computing earnings percommon share attributable to GenpactLimited common shareholders Basic 219,892,695 218,525,149 215,311,322 212,697,001 216,606,542 Diluted 222,347,101 220,962,306 217,595,704 215,675,065 219,145,044 F-59Table of ContentsGENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count)29. Quarterly financial data (unaudited) (Continued) Three months ended Year endedDecember 31,2014 March 31, 2014 June 30, 2014 September 30,2014 December 31,2014 Total net revenues $528,190 $561,611 $588,107 $601,530 $2,279,438 Gross profit $203,901 $221,486 $233,632 $242,331 $901,350 Income from operations $77,247 $73,051 $72,867 $70,866 $294,031 Income before loss (gain) on equity-methodinvestment activity, net and income taxexpense $67,121 $62,717 $61,757 $62,790 $254,385 Net income $50,853 $48,900 $46,666 $45,752 $192,171 Net income attributable to non-controllinginterest $240 ($84) $13 $0 $169 Net income attributable to Genpact Limitedcommon shareholders $50,613 $48,984 $46,653 $45,752 $192,002 Earnings per common share attributable toGenpact Limited common shareholders Basic $0.22 $0.23 $0.22 $0.20 $0.87 Diluted $0.21 $0.22 $0.21 $0.21 $0.85 Weighted average number of commonshares used in computing earnings percommon share attributable to GenpactLimited common shareholders Basic 232,093,917 217,541,960 216,472,908 217,279,606 220,847,098 Diluted 237,275,651 221,509,867 220,535,530 221,353,612 225,168,665 30. Subsequent EventsSince January 1, 2016, the Company has purchased 964,817 of its common shares under the share repurchase program first announced in February2015, completing $250 million in share purchases under this program. Such shares were purchased at a weighted average price of $23.93 per share for anaggregate cash amount of $23,083.On February 4, 2016, the Company announced that its Board of Directors has approved a $250 million share repurchase program, bringing the totalauthorization under the Company’s existing program to $500 million. Pursuant to its expanded share repurchase program, the Company has purchased343,013 of its common shares as of February 26, 2016, at a weighted average price of $25.30 per share for an aggregate cash amount of $8,677. F-60Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. GENPACT LIMITEDBy: /s/ N.V. TYAGARAJAN N.V. Tyagarajan President and Chief Executive OfficerDate: February 26, 2016POWER OF ATTORNEYEach person whose signature appears below hereby constitutes and appoints each of Victor Guaglianone and Heather White, as his or her true andlawful attorney-in-fact and agent, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and allcapacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents inconnection therewith, with the Securities and Exchange Commission granting to said attorneys-in-fact and agents, and each of them, full power and authorityto perform any other act on behalf of the undersigned required to be done in connection therewith.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. Signature Title Date/s/ N.V. TYAGARAJANN.V. Tyagarajan President, Chief Executive Officer and Director(Principal Executive Officer) February 26, 2016/s/ EDWARD J. FITZPATRICKEdward J. Fitzpatrick Chief Financial Officer (Principal Financial andAccounting Officer) February 26, 2016/s/ ROBERT G. SCOTTRobert G. Scott Director February 26, 2016/s/ AMIT CHANDRAAmit Chandra Director February 26, 2016/s/ LAURA CONIGLIAROLaura Conigliaro Director February 26, 2016/s/ DAVID HUMPHREYDavid Humphrey Director February 26, 2016/s/ JAMES C. MADDENJames C. Madden Director February 26, 2016/s/ ALEX MANDLAlex Mandl Director February 26, 2016Table of ContentsSignature Title Date/s/ MARK NUNNELLYMark Nunnelly Director February 26, 2016/s/ HANSPETER SPEKHanspeter Spek Director February 26, 2016/s/ MARK VERDIMark Verdi Director February 26, 2016Table of ContentsEXHIBIT INDEX ExhibitNumber Description 3.1 Memorandum of Association of the Registrant (incorporated by reference to Exhibit 3.1 to Amendment No. 2 of the Registrant’s RegistrationStatement on Form S-1 (File No. 333-142875) filed with the SEC on July 16, 2007). 3.3 Bye-laws of the Registrant (incorporated by reference to Exhibit 3.3 to Amendment No. 4 of the Registrant’s Registration Statement on FormS-1 (File No. 333-142875) filed with the SEC on August 1, 2007). 4.1 Form of specimen certificate for the Registrant’s common shares (incorporated by reference to Exhibit 4.1 to Amendment No. 4 of theRegistrant’s Registration Statement on Form S-1 (File No. 333-142875) filed with the SEC on August 1, 2007). 10.1 Gecis Global Holdings 2005 Stock Option Plan (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement onForm S-1 (File No. 333-142875) filed with the SEC on May 11, 2007).† 10.2 Genpact Global Holdings 2006 Stock Option Plan (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement onForm S-1 (File No. 333-142875) filed with the SEC on May 11, 2007).† 10.3 Genpact Global Holdings 2007 Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement onForm S-1 (File No. 333-142875) filed with the SEC on May 11, 2007).† 10.4 Form of Stock Option Agreement (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 (File No.333-142875) filed with the SEC on May 11, 2007).† 10.5 Reorganization Agreement dated as of July 13, 2007, by and among the Registrant, Genpact Global (Lux) S.à.r.l., Genpact Global HoldingsSICAR S.à.r.l. and the shareholders listed on the signature pages thereto (incorporated by reference to Exhibit 10.17 to Amendment No. 2 ofthe Registrant’s Registration Statement on Form S-1 (File No. 333-142875) filed with the SEC on July 16, 2007). 10.6 Assignment and Assumption Agreement dated as of July 13, 2007, among the Registrant, Genpact Global Holdings SICAR S.à.r.l. andGenpact International, LLC (incorporated by reference to Exhibit 10.19 to Amendment No. 2 of the Registrant’s Registration Statement onForm S-1 (File No. 333-142875) filed with the SEC on July 16, 2007). 10.7 Form of Director Indemnity Agreement (incorporated by reference to Exhibit 10.21 to Amendment No. 4 of the Registrant’s RegistrationStatement on Form S-1(File No. 333-142875) filed with the SEC on August 1, 2007).† 10.8 U.S. Employee Stock Purchase Plan and International Employee Stock Purchase Plan (incorporated by reference to Exhibit A to theRegistrant’s Proxy Statement filed on Schedule 14A with the SEC on April 3, 2008).† 10.9 Form of RSU Award Agreement (incorporated by reference to Exhibit 10.32 to the Registrant’s Annual Report on Form 10-K (File No. 001-33626) filed with the SEC on February 23, 2010).† 10.10 Form of Performance Share Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (FileNo. 001-33626) filed with the SEC on March 15, 2010).† 10.11 Form of Performance Share Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (FileNo. 001-33626) filed with the SEC on March 21, 2011).† E-1Table of ContentsExhibitNumber Description 10.12 Form of RSU Award Agreement, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (FileNo. 001-33626) filed with the SEC on March 31, 2011).† 10.13 Form of Amended and Restated Genpact Limited 2007 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 1 to theRegistrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-33626) filed with the SEC on April 15, 2011).† 10.14 Agreement and Plan of Merger dated April 5, 2011 among Genpact International, Inc., Hawk International Corporation, HeadstrongCorporation, WCAS Hawk Corp. and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form10-Q (File No. 001-33626) filed with the SEC on May 10, 2011). 10.15 Employment Agreement by and between the Registrant and N.V. Tyagarajan, dated June 15, 2011 (incorporated by reference to Exhibit 10.1to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on June 17, 2011).† 10.16 Employment Agreement by and between Genpact LLC and Patrick Cogny, dated August 5, 2011 (incorporated by reference to Exhibit 10.1to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on August 10, 2011).† 10.17 Form of Performance Share Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q(File No. 001-33626) filed with the SEC on May 10, 2012).† 10.18 Performance Share Award Agreement with N.V. Tyagarajan, dated March 6, 2012 (incorporated by reference to the Registrant’s QuarterlyReport on Form 10-Q (File No. 001-33626) filed with the SEC on May 10, 2012).† 10.19 Letter Agreement dated August 1, 2012 between the Registrant and South Asia Private Investments (incorporated by reference to Exhibit 10.1to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on August 3, 2012). 10.20 Letter Agreement dated August 1, 2012 by and among the Registrant and the shareholders listed on the signature pages thereto (incorporatedby reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on August 3, 2012). 10.21 Shareholder Agreement dated August 1, 2012 by and among the Registrant and South Asia Private Investments (incorporated by reference toExhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on August 3, 2012). 10.22 First Amendment to the Genpact Limited 2007 Omnibus Incentive Compensation Plan (as Amended and Restated April 11, 2012), effectiveas of August 1, 2012 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filedwith the SEC on August 3, 2012). 10.23 First Amendment to the Genpact Limited International Employee Stock Purchase Plan and U.S. Employee Stock Purchase Plan, effective as ofAugust 1, 2012 (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with theSEC on August 3, 2012). 10.24 Letter Agreement by and between the Registrant and N.V. Tyagarajan, dated August 2, 2012 (incorporated by reference to Exhibit 10.6 to theRegistrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on August 3, 2012).† E-2Table of ContentsExhibitNumber Description 10.25 Amended and Restated Shareholder Agreement, dated as of October 25, 2012, by and among the Registrant, Glory Investments A Limited,Glory Investments B Limited, Glory Investments IV Limited, Glory Investments IV-B Limited, RGIP, LLC, Twickenham Investment PrivateLimited and Glory Investments TA IV Limited (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (FileNo. 001-33626) filed with the SEC on October 25, 2012). 10.26 Form of Director Indemnity Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No.001-33626) filed with the SEC on August 9, 2013).† 10.27 Employment Agreement by and between the Registrant and Edward Fitzpatrick, dated June 26, 2014 (incorporated by reference to Exhibit10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on July 2, 2014). † 10.28 Form of Share Option Agreement with Edward Fitzpatrick (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report onForm 8-K (File No. 001-33626) filed with the SEC on July 2, 2014). † 10.29 Form of RSU Award Agreement with Edward Fitzpatrick (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report onForm 8-K (File No. 001-33626) filed with the SEC on July 2, 2014). † 10.30 Form of Director Indemnity Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No.001-33626) filed with the SEC on August 8, 2014). † 10.31 Credit Agreement, dated as of January 27, 2015, by and among the Registrant, Headstrong Consulting (Singapore) Pte. Ltd., Genpact GlobalHoldings (Bermuda) Limited and Morgan Stanley Senior Funding, Inc., as lender (incorporated by reference to Exhibit 10.1 to theRegistrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on January 30, 2015). 10.32 Expense Reimbursement Agreement, dated as of March 3, 2015, by and between the Registrant and Bain Capital Partners, LLC (incorporatedby reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on March 6, 2015). 10.33 Credit Agreement, dated as of March 23, 2015, by and among the Registrant, Headstrong Consulting (Singapore) Pte. Ltd., Genpact GlobalHoldings (Bermuda) Limited and Morgan Stanley Senior Funding, Inc., as lender (incorporated by reference to Exhibit 10.1 to theRegistrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on March 27, 2015). 10.34 Credit Agreement among Genpact International, Inc., Headstrong Corporation, Genpact Global Holdings (Bermuda) Limited, the Registrant,the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing bank, and the otherparties thereto, dated as of June 30, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.001-33626) filed with the SEC on July 2, 2015). 10.35 Amendment No. 1 to Employment Agreement by and among Genpact International, Inc., Genpact LLC and Patrick Cogny, dated as ofDecember 15, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed withthe SEC on December 18, 2015). † 21.1 Subsidiaries of the Registrant.* 23.1 Consent of KPMG.* 24.1 Powers of Attorney (included on the signature pages of this report).* 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* E-3Table of ContentsExhibitNumber Description 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- OxleyAct of 2002.* 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Actof 2002.*101.INS XBRL Instance Document (1)101.SCH XBRL Taxonomy Extension Schema Document (1)101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1) *Filed with this Annual Report on Form 10-K. †Indicates a management contract or compensatory plan, contract or arrangement in which any director or executive officer participates. (1)Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) ConsolidatedBalance Sheets as of December 31, 2014 and December 31, 2015, (ii) Consolidated Statements of Income for the years ended December 31,2013, December 31, 2014 and December 31, 2015, (iii) Consolidated Statement of Comprehensive Income (Loss) for the years ended December 31,2013, December 31, 2014 and December 31, 2015, (iv) Consolidated Statement of Equity for the years ended December 31, 2013, December 31, 2014and December 31, 2015, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2013, December 31, 2014 and December 31,2015, and (vi) Notes to Consolidated Financial Statements. E-4Exhibit 21.1Subsidiaries of the Registrant: Name: Jurisdiction ofIncorporation:Headstrong (Australia) Pty Ltd. AustraliaGenpact Global (Bermuda) Limited BermudaGenpact Global Holdings (Bermuda) Limited BermudaGenpact Brasil Gestão de Processos Operacionais Ltda. BrazilHeadstrong Canada Ltd. CanadaGenpact (Changchun) Co. Ltd. ChinaGenpact (Dalian) Co. Ltd. ChinaGenpact (Dalian) Information & Technology Service Co., Ltd. ChinaGenpact (Foshan) Information & Technology Service Co., Ltd. ChinaGenpact (Qingdao) Information & Technology Service Co., Ltd. ChinaGenpact (Suzhou) Information & Technology Service Co., Ltd. ChinaGenpact Colombia S.A.S. ColombiaGenpact Services Czech s.r.o. Czech RepublicGenpact Czech s.r.o. Czech RepublicGenpact Administraciones-Guatemala, S.A. GuatemalaServicios Internacionales de Atencion Al Cliente, S.A. GuatemalaHeadstrong GmbH GermanyHeadstrong (Hong Kong) Ltd. Hong KongGenpact Hungary Kft HungaryGenpact Hungary Process Szolgaltató Kft. HungaryAtyati Technologies Private Limited IndiaAxis Risk Consulting Services Pvt. Ltd. IndiaEmPower Research Knowledge Services Private Limited IndiaFelix Software Solutions Private Limited IndiaGenpact India IndiaGenpact India Business Processing Pvt. Ltd. IndiaGenpact Infrastructure (Bhubaneswar) Pvt. Ltd. IndiaGenpact Infrastructure (Jaipur) Pvt. Ltd. IndiaGenpact Mobility Services (I) Pvt. Ltd. IndiaHeadstrong Services India Pvt. Ltd. IndiaNGEN Media Services Pvt. Ltd. IndiaPharmalink Consulting Operations Pvt. Ltd. IndiaGenpact Ireland Private Limited IrelandGenpact Consulting KK JapanGenpact Japan Business Services KK JapanGenpact Japan KK JapanGenpact Japan Services Co., Ltd. JapanGenpact Kenya Limited KenyaGenpact Luxembourg S.à r.l. LuxembourgGenpact Investment Luxembourg S.à r.l. LuxembourgName: Jurisdiction ofIncorporation:Headstrong Malaysia Sdn Bhd MalaysiaGenpact China Investments MauritiusGenpact India Holdings MauritiusGenpact Mauritius MauritiusEDM S. de R.L. de C.V. MexicoGenpact Morocco S.à r.l. MoroccoGenpact Morocco Training S.à r.l. MoroccoGenpact A B.V. NetherlandsGenpact B B.V. NetherlandsGenpact C B.V. NetherlandsGenpact Consulting Services B.V. NetherlandsGenpact D B.V. NetherlandsGenpact E B.V. NetherlandsGenpact Netherlands B.V. NetherlandsGenpact NL B.V NetherlandsGenpact Resourcing Services B.V. NetherlandsGenpact V.O.F. NetherlandsGenpact Peru S.A. PeruHeadstrong Philippines, Inc. PhilippinesGenpact PL sp. z o.o. PolandGenpact Poland sp. z o.o. PolandGenpact Poland Services sp. z o.o. PolandGenpact Romania SRL RomaniaGenpact Singapore Pte. Ltd. SingaporeHeadstrong Consulting (Singapore) Pte. Ltd. SingaporePharmalink Consulting Pte. Ltd. SingaporeGenpact Slovakia s.r.o. SlovakiaGenpact South Africa (Proprietary) Limited South AfricaGenpact Strategy Consultants S.L. SpainHeadstrong Thailand Ltd. ThailandGenpact (UK) Ltd. United KingdomGenpact Regulatory Affairs UK Limited United KingdomGenpact WM UK Limited United KingdomHeadstrong (UK) Ltd. United KingdomHeadstrong Worldwide Ltd. United KingdomInformation Engineering Products (UK) Ltd United KingdomJames Martin Employee Share Scheme United KingdomPharmalink Consulting Limited United KingdomPharmalink Consulting Operations Ltd. United KingdomStrategic Sourcing Excellence Limited United KingdomAkritiv Technologies, Inc. United StatesEmpower Research, LLC United StatesGenpact (Mexico) I LLC United StatesGenpact (Mexico) II LLC United StatesGenpact CL, Inc. United StatesName: Jurisdiction ofIncorporation:Genpact Holdings LLC United StatesGenpact Insurance Administration Services Inc. United StatesGenpact International, Inc. United StatesGenpact LH LLC United StatesGenpact LLC United StatesGenpact Mortgage Services, Inc. United StatesGenpact Onsite Services, Inc. United StatesGenpact Registered Agent, Inc. United StatesGenpact Services LLC United StatesGenpact Solutions, Inc. United StatesGenpact US LLC United StatesGenpact WB LLC United StatesHeadstrong Business Services, Inc. United StatesHeadstrong Corporation United StatesHeadstrong Inc. United StatesHeadstrong Public Sector, Inc. United StatesHeadstrong Services LLC United StatesHigh Performance Partners, LLC United StatesJawood Business Process Solutions, LLC United StatesPharmalink Consulting Inc. United StatesStrategic Sourcing Excellence LLC United StatesTechspan Holdings, Inc. United StatesTriumph On-Demand, Inc. United StatesTS Mergerco, Inc. United StatesExhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsGenpact Limited:We consent to the incorporation by reference in the registration statements (No. 333-187707) on Form S-3, (No. 333-184296) on Form S-8, (No. 333-153113)on Form S-8 and (No. 333-145152) on Form S-8/A of Genpact Limited of our reports dated February 26, 2016, with respect to the consolidated balance sheetsof Genpact Limited as of December 31, 2014 and 2015, and the related consolidated statements of income, comprehensive income (loss), equity and cashflows for each of the years in the three-year period ended December 31, 2015, and the effectiveness of internal control over financial reporting as ofDecember 31, 2015, which reports appear in the December 31, 2015 annual report on Form 10-K of Genpact Limited.Our report dated February 26, 2016, on the effectiveness of internal control over financial reporting as of December 31, 2015, contains an explanatoryparagraph that states that Genpact Limited acquired certain wealth management operations from Citibank, N.A. in the United Kingdom and managementexcluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015, certain wealthmanagement operations acquired from Citibank, N.A. in the United Kingdom’s internal control over financial reporting associated with total assets of$13,318 thousands (of which $3,242 thousands represent goodwill and intangible assets included within the scope of the assessment) and total revenues of$8,818 thousands included in the consolidated financial statements of the Company as of and for the year ended December 31, 2015. Our audit of internalcontrol over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of certain wealth managementoperations acquired from Citibank, N.A. in United Kingdom./s/ KPMGGurgaon, IndiaFebruary 26, 2016Exhibit 31.1CHIEF EXECUTIVE OFFICER CERTIFICATIONI, N.V. Tyagarajan, certify that: 1.I have reviewed this Annual Report on Form 10-K of Genpact Limited for the period ended December 31, 2015, as filed with the Securities andExchange Commission on the date hereof; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: February 26, 2016 /s/ N.V. TYAGARAJANN.V. TyagarajanChief Executive OfficerExhibit 31.2CHIEF FINANCIAL OFFICER CERTIFICATIONI, Edward J. Fitzpatrick, certify that: 1.I have reviewed this Annual Report on Form 10-K of Genpact Limited for the period ended December 31, 2015, as filed with the Securities andExchange Commission on the date hereof; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared; b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles; c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: February 26, 2016 /s/ EDWARD J. FITZPATRICKEdward J. FitzpatrickChief Financial OfficerExhibit 32.1Certification of the Chief Executive OfficerPursuant to 18 U.S.C. Section 1350,As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Genpact Limited (the “Company”) on Form 10-K for the period ended December 31, 2015 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, N.V. Tyagarajan, Chief Executive Officer of the Company, certify, pursuant to 18U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: February 26, 2016 /s/ N.V. TYAGARAJANN.V. TyagarajanChief Executive OfficerGenpact LimitedExhibit 32.2Certification of the Chief Financial OfficerPursuant to 18 U.S.C. Section 1350,As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Genpact Limited (the “Company”) on Form 10-K for the period ended December 31, 2015 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Edward J. Fitzpatrick, Chief Financial Officer of the Company, certify, pursuant to18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: February 26, 2016 /s/ EDWARD J. FITZPATRICKEdward J. FitzpatrickChief Financial OfficerGenpact Limited

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