Genpact
Annual Report 2016

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-K☒☒Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2016.☐☐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) Bermuda98-0533350(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 ☒ 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 ☒Indicate 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 shorter periodthat the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 405 ofRegulation 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 ☒ 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. ☒Indicate 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 ☒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 ☒As of June 30, 2016, the aggregate market value of the common stock of the registrant held by non-affiliates of the registrant was $4,049,244,809, based on the closing price of the registrant’s common shares,par value of $0.01 per share, reported on the New York Stock Exchange on such date of $26.84 per share. Directors, executive officers and significant shareholders of Genpact Limited are considered affiliates for purposesof this calculation, but should not necessarily be deemed affiliates for any other purpose.As of February 17, 2017, there were 198,970,955 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, 2016. Portions of the proxy statement are incorporatedherein 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 CONTENTS Page No.PART I Item No. 1. Business 1 1A. Risk Factors 15 1B. Unresolved Staff Comments 32 2. Properties 32 3. Legal Proceedings 32 4. Mine Safety Disclosures 32PART II 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33 6. Selected Financial Data 35 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 7A. Quantitative and Qualitative Disclosures About Market Risk 61 8. Financial Statements and Supplementary Data 62 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 62 9A. Controls and Procedures 62 9B. Other Information 63PART III 10. Directors, Executive Officers and Corporate Governance 63 11. Executive Compensation 63 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 64 13. Certain Relationships and Related Transactions, and Director Independence 64 14. Principal Accounting Fees and Services 64PART IV 15. Exhibits and Financial Statement Schedules 64 16. Form 10-K Summary 64 CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm F-2Consolidated Balance Sheets F-5Consolidated Statements of Income F-6Consolidated Statements of Comprehensive Income (loss) F-7Consolidated Statements of Equity F-8Consolidated Statements of Cash Flows F-11Notes to the Consolidated Financial Statements F-12 SIGNATURES EXHIBIT INDEX E-1 i  Special 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 thefinancial services 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; •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, Norwegian krone, 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, Israeli newshekel, Colombian peso, Guatemalan quetzal, Peruvian sol, Macau pataca, Malaysian ringgit, Moroccan dirham and Canadian dollar;ii  •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.In this Annual Report on Form 10-K, we use the terms “Genpact,” “Company,” “we” and “us” to refer to both our predecessor company and itssubsidiaries, and Genpact Limited and its subsidiaries. Our registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda. iii  PART IItem 1. BusinessOverviewGenpact stands for “generating business impact.” We are a global leader in digitally-powered business process management and services. Wearchitect the Lean DigitalSM enterprise through our patented Smart Enterprise Processes (SEPSM) framework that reimagines our clients’ operating models end-to-end, including the middle and back offices. This creates Intelligent OperationsSM that we help design, transform, and run. The impact on our clients is ahigh return on transformation investments through growth, efficiency, and business agility. For two decades, first as a division of the General ElectricCompany, or GE, and later as an independent company, we have been passionately serving our clients. Today, we generate impact for a few hundred strategicclients, including approximately one fifth of the Fortune Global 500, and have grown to over 75,000 people in 25 countries, with corporate offices in NewYork City. The resulting business process and industry domain expertise and experience running complex operations are a unique heritage and focus thathelp us drive the best choices across technology, analytics, and organizational design.Our business was initially conducted through various entities and divisions of GE. We began operating as an independent company in 2004, whenGE spun off our operations and sold indirect interests in us to our initial investors. In 2007, we completed our initial public offering. In 2012, affiliates ofBain Capital Investors, LLC, or Bain Capital, acquired the majority of the remaining interests held by our initial investors. As of December 31, 2016, BainCapital (through its affiliates) owned approximately 29% of our outstanding equity.In 2016, we had net revenues of $2.57 billion, of which $2.21 billion, or 86%, was from clients other than GE, which we refer to as Global Clients,with the remaining $358 million, or 14%, coming from GE.We provide digitally-driven solutions that draw on our deep domain expertise, our understanding of process operations, analytics and advancedtechnology, and the operational insight we have acquired from our experience in managing thousands of processes for our clients. We seek to build long-termclient relationships with companies that wish to improve the ways in which they do business and to whom we can offer a full range of services. Our businessis increasingly focused on digital and consulting solutions, and we made significant investments in these areas in 2016.Genpact DigitalGenpact’s digital practice helps architect the Lean DigitalSM enterprise, enabling clients to re-imagine their business operations by extending thepower of digital all the way through the middle and back offices in an effort to enhance growth, cost efficiency, and business agility. Building on ourfoundation of deep process expertise in industry and functional domains and our SEPSM framework, our digital approach harnesses advanced technologies todrive transformative solutions for our clients through the application of actionable analytics that can be incorporated into their operations. Through thisapproach, we strive to improve our clients’ returns on existing IT investments.In 2016, we opened the Genpact Lean DigitalSM Innovation Center, a lab designed to help our clients drive digital transformations across theirenterprises. The Innovation Center enables clients to learn about new digital solutions and how they apply to their specific business needs through acomprehensive program that includes three key components: customer-focused design thinking workshops to help identify and reframe problems anddevelop innovative ideas that can scale to accelerate business impact; a digital incubation program that leverages carefully selected cutting-edge digitaltechnology disruptors with proven success in developing real-life solutions that add value to the client experience; and a co-innovation lab that bringsenterprise executives together with technology and business process experts to turn ideas into actionable prototypes through rapid development. Smart Enterprise Processes (SEPSM)SEPSM is our patented and highly granular approach to dramatically improving the performance of business processes. In addition to efficiency, itfocuses on maximizing process effectiveness.SEPSM and its more recent evolution, Digital SEPSM, are based on work done in the Genpact Process Innovation Lab, where we leverage our exposureto thousands of business processes and hundreds of millions of client transactions to map and analyze end-to-end processes at a granular level. This enablesus to test the effectiveness of1 clients’ processes by identifying opportunities for improvement using best-in-class and granular benchmarks gleaned from within and across industries andthen applying our deep process knowledge, process-centric technology, and analytical skills to improve them. The result is a client-specific road map formaximizing process effectiveness.Digital SEPSM builds on our SEPSM framework, developing our digital and domain-specific assets and solutions in an effort to drive business impactfor clients in such areas as profitability and cash flows, user and customer experience, speed and strategic risk. Using Lean and design-thinking principles, wehave built proprietary digital assets to address the domain-specific needs of clients in our targeted industry verticals. Our Digital SEPSM solutions leverageour digital expertise in mobility, cloud, workflow, advanced visualization, robotics, and machine learning capabilities and incorporate proprietaryframeworks that we use to determine a client’s process, technology and performance maturity. 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 serviceprovider. These relationships often begin with the outsourcing of discrete processes or with shorter-cycle engagements in analytics and research or consultingand transformation services. Over time, these relationships often expand to encompass multiple business processes across a broader set of functions andgeographic areas.No matter how large or small the engagement, we strive to be a seamless extension of our client’s operations. To achieve this goal, we developed theGenpact Virtual CaptiveSM model for service delivery, and we may implement all or some of its features in any given client relationship, depending on theclient’s needs. This approach provides clients with dedicated employees and management as well as dedicated infrastructure at our delivery centers to createvirtual extensions of the client’s own teams and environments. We train our personnel in the client’s culture to be familiar not only with the process but alsowith the business environment in which it is being executed. Our 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 seek to enhance our industry and domain capabilitiesthrough acquisitions, strategic partnerships and by investing in experienced professionals in our targeted verticals and service areas to strengthen clientrelationships and help us deliver end-to-end services that drive business impact.Guide Global Enterprises to Best-in-ClassOur Smart Enterprise Processes (SEPSM) framework, built on the foundation of thousands of Lean Six Sigma-based improvement ideas andbenchmarks around granular process performance, builds deeper client relationships and delivers measurable business impact over time. We continue tointegrate new digital technologies and data analytics into these frameworks to develop Digital SEPs. Our differentiated framework is critical not only toextending 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 moreinformed decisions that address challenges around regulations and risk, while they continue to drive top-line growth and profitability. The insights we derivefrom our experience and expertise, combining smarter processes, analytics and technology, help us provide a differentiated solution to these challenges.2 Expand Geographically in Key MarketsWe deliver our services and solutions from service delivery centers in 17 countries, including nine locations in the United States. We continue toexpand and diversify our delivery capabilities globally in order to be closer to our clients.Our ServicesWe seek to deliver significant business impact for our clients by designing, transforming and running a combination of processes, as well asproviding solutions that combine elements of several of our service offerings. We recognize that our clients are focused on achieving business outcomes,rather than on transferring particular processes or using particular platforms. Accordingly, we focus on understanding their business needs and the businesscontext of their existing processes in order to design appropriate and comprehensive solutions. We help organizations examine and re-frame the challengesthat prevent them from reaching their business objectives by using design-thinking practices to help them reimagine end-to-end processes and rapidlyleveraging the power of effective digital solutions, including reusable tools, platforms, and analytics. Our business focuses on industry verticals in banking and financial services, capital markets, consumer product goods, healthcare, high tech,infrastructure, manufacturing and services, insurance, and life sciences. Our core domain expertise within these industry verticals includes the following: •Banking and Financial Services. Our banking and financial services core operations include application processing; mortgage loan origination;wealth management; risk management and compliance activities; omnichannel account servicing and setup; collections and customer services;commercial lending, business banking, auto finance, and finance and accounting activities. We use our analytics capabilities to help our clientsprice products, estimate capital and reserve requirements, analyze and monitor portfolios, and manage risk. We also handle reporting andmonitoring services for statutory and regulatory compliance, portfolio and performance review services and financial planning and tax services.Our services for financial services clients include investment banking support for deals, asset-backed finance surveillance, trade finance support,payment and fraud operations support, credit and market risk management, operational risk management and continuous transaction monitoring.Our wealth management services include brokerage and retirement offerings that provide end-to-end process services, including onboarding,reconciliations, plan administration, fund administration and trade support. •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; businessprocess outsourcing; domain knowledge-based consulting related to technology systems (domain consulting); and consulting not tied to atechnology system (business consulting). Areas of domain focus within our capital markets practice include asset and wealth management; riskand compliance; client onboarding; Know Your Customer (KYC); collateral management; post trade processing; and data services, such asreference data and data scrubbing and reconciliation. We have also set up centers of excellence focusing on several technology platforms used bythe financial services industry, 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, marketmix modeling, 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. •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 solutions help payers andproviders manage the end-to-end life cycle of a claim, from claims processing and adjudication to claims recovery and payment integrity,leveraging comprehensive solutions including consulting, enterprise application services, infrastructure management services and integratedbusiness-process-as-a-service (BPaaS) solutions. Our regulatory compliance solutions encompass planning, business alignment systems changemanagement, training and testing.3 •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. •Infrastructure, Manufacturing and Services. Our infrastructure, manufacturing and services offerings include enterprise processes such asfinance and accounting, indirect procurement and IT operations. Our industry specific solutions include industrial internet solutions, aftermarketservices support, industrial asset optimization, engineering services covering the complete product lifecycle from concept to release andsustaining engineering, supply chain management, direct procurement and logistics services. •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. We cover many phases of insurance business processes, including in the areas of product development, finance, risk management,actuarial modeling, sales and marketing, underwriting support, claims and policy administration, and brokerage operations. •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,and regulatory information management; multi-channel customer experience for medical information, sales and marketing, direct-to-consumersupport, patient assistance programs (access and reimbursement), and patient support programs; and enterprise services such as finance andaccounting (F&A), indirect procurement, IT operations, risk management and audit support. We also provide comprehensive analytics servicesincluding market research and competitive intelligence, patient level data analysis, physician and drug analysis, social media monitoring anddata management.Our professional services offerings in these core industry verticals are driven by our broad end-to-end process expertise in a number of service areas,including analytics and research, collections and customer services, consulting and transformation services, core industry operations services, enterpriseapplication services, finance and accounting (F&A) services, IT infrastructure management services, and supply chain and procurement services.Analytics and ResearchOur analytics and research capabilities are central to our ability to improve business operations and drive transformational value for clients. We offeranalytics services in areas where we have domain expertise, both on a standalone basis and as an integrated part of our other service offerings. We help ourclients reimagine their business operations in the context of analytics and technology through the delivery of Genpact Intelligent OperationsSM fueled byour Lean DigitalSM approach. Using Systems of EngagementTM, we have built what we refer to as the Genpact Intelligent Process Insights Engine, a process-aware platform that embeds technology and analytics to deliver purpose-built analytics applications.Through our Data-to-ActionSM Analytics approach, we deliver measurable business outcomes to clients across industries. Companies do not alwaysrecognize the inherent potential in data or have the capability to apply rigorous analytical models that can reveal opportunities. Our domain-specificanalytics prowess, along with a sophisticated innovation ecosystem, is embedded in our service offerings to help clients make timely, informed and fact-based decisions. By quantitatively and qualitatively scrutinizing data, we can deliver the insight necessary for clients to assess new business opportunities,mitigate market risks, and make better business decisions. Our innovation centers in Bangalore, India, and Palo Alto, California facilitate collaboration andinnovation with clients, partners and industry experts by bringing together process-centric digital technologies, design thinking, data and analytics, and deepdomain expertise.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-4 tracing, refunds and other specialized services. In our collections services, we act as an agent only; we do not acquire debts for our own account or handledebtor payments. Our customer services include account servicing and customer care services such as handling customer queries, general servicing anddispute resolution. We support omnichannel interactions and provide origination and order management support.Consulting and Transformation ServicesOur consulting teams apply Lean DigitalSM practices to help clients design the right strategy and target operating model for their functions. We helpclients develop transformation roadmaps that deliver all components of a target operating model vision and implement process-driven improvements. Ourbusiness and enterprise risk consulting teams support our clients through transformation delivery, including enhanced internal controls and regulatorycompliance. We partner with our clients to reimagine their controllership functions and improve their risk and control environments across operational andregulatory processes while preserving value and mitigating risk exposure.Our transformation services leverage digital, analytics and consulting solutions to help clients create competitive advantage and realize cost savingsor increase revenues by improving or re-engineering business processes that are underperforming or by designing new processes to meet growth objectives.Clients engage our transformation teams to provide an end-to-end view of their organization and help determine business-process needs at the strategic andexecution levels. Strategically, we help clients achieve a comprehensive assessment of how well their enterprise-level processes – such as source to pay, orderto cash, record to report, inquiry to order, new product introduction and salesforce effectiveness – perform against industry benchmarks and best practices. Atthe execution level, we institutionalize the recommendations by deploying resources to train the client team and drive sustainable best practices.Our consulting and transformation services build on our deep understanding of the complete enterprise operating model and draw on our expertise inprocess, state-of-the-art technology, organizational structures, compliance and risk-mitigation strategies. We combine a design-thinking approach with ourindustry and domain expertise to create client offerings that apply cutting-edge digital technologies and analytics with the goal of driving fundamental shiftsin clients’ business performance.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 SEPSM frameworks, we use Lean DigitalSM to leverage digital technologies and specialized analytics to power Intelligent OperationsSM. We supportour clients’ core operations in retail and commercial banking, capital markets, insurance, healthcare, life sciences, manufacturing, consumer goods and retail,and high tech. 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 DigitalSM approach, we aim to create Intelligent OperationsSM that execute efficiently and effectively, and continuouslylearn to adapt. Our focused approach is designed to maximize the impact that business processes have on business outcomes while limiting capitalexpenditures, risk, complexity, and time-to-benefit. Our solutions include business intelligence and big data, enterprise resource planning, quality assuranceand technology integration. We also have significant expertise in Hyperion, SAS and Cognos, and platform support for ERP systems such as Oracle, SAP andMicrosoft.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), Enterprise Performance Management (EPM), and Enterprise Risk and Compliance (ERC) services. Our AP services span the end-to-end APfunction and include document management, invoice processing, approval and resolution management, and T&E processing. Our OTC services covercustomer master data management, credit and contract management, fulfillment, billing, collections, and dispute management services. Our R2R servicesencompass accounting, closing and reporting, including SEC5 and regulatory reporting, treasury, tax services, and product cost accounting. Our EPM services include budgeting, forecasting, business performancereporting and analytics, including predictive analytics. Our ERC services specialize in operational risk and controls, Sarbanes-Oxley Act advisory, third-party risk management and regulatory compliance with services such as enterprise risk management, internal audits, Foreign Corrupt Practices Act and IT riskmanagement.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. As part of our Lean DigitalSM approach, Genpact Systems of EngagementTM for F&A creates an agile technology layerthat complements existing systems of record, providing continuity of information and operations across the enterprise. Our Systems of EngagementTMmodules for OTC, AP, R2R, and EPM support smart processes, detailed analytics, and a host of agile technologies, including proprietary cloud-basedtechnology platforms and bolt-on, best-of-breed solutions from our technology partners. Our F&A services also include Digital SEPSM frameworks andsolutions, which aim to reimagine client processes. 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 capabilities with their business priorities and at thesame time reduce technology costs. We use our proprietary SEPSM framework Service Disruption to Restore (D2R), along with our accelerators and IPframeworks, to continuously reduce defects. We also provide cloud infrastructure services, IT service integration and management and cyber security servicesapart from ITIL implementation services. 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. Using our Lean DigitalSMapproach, we integrate disparate technology systems and provide dynamic digital dashboard reporting while transforming business operations and improvingservice productivity. We leverage our technology expertise in delivering our services in this area, particularly in automating order management processes andoptimizing the supply chain. We have competency in many of the custom platforms used by our clients and are not tied to any single platform or vendor. 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 14% of our 2016 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 business units that cover in more detail thenature of the work we will perform and the amounts we will bill for the relevant services. As a general matter, each GE business unit makes its own decisionsas to 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, ourrevenues from GE are generally attributable to a number of different businesses each with its own leader responsible for decision-making regarding ourservices.6 We have over 700 clients spread across a variety of industries and geographies. Our net revenues from clients other than GE, or Global Clients, havegrown rapidly in the last five years, from $1.12 billion in 2011 to $2.21 billion in 2016, a compound annual growth rate of 14.7%. Our net revenues fromGlobal Clients as a percentage of total net revenues increased from approximately 70% in 2011 to approximately 86% in 2016. See Item 7—“Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Classification of Certain Net Revenues.” The majority of our Global Clients arebased 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, Kraft-Heinz, Merck, 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 beeninvolved in 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 reinforce, 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, 2016, we had approximately 75,000 employees. We monitor and manage our attrition rate very closely, and believe it is one ofthe lowest 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. In 2015, we launched a simplified transformation framework – ProDGSM, 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. With the growing prevalence of digital technologies incorporated in our solutions, we alsocertify digital black belts and digital master black belts.As of December 31, 2016, we had more than 17,000 employees with Six Sigma green belt training, over 500 employees with Six Sigma black belttraining, and more than 46,000 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 an7 internal 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 implemented 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 6,000 people at any one timewith approximately 250 trainers. In 2016, we had more than 16,500 employees enrolled in part-time professional degree, e-learning and other non-degreeprograms provided internally or by universities and other third parties. Our training programs are designed to transfer the industry-specific knowledge andexperience of our industry leaders to our employees to ensure we maintain our deep process and domain expertise across the industries and processes inwhich we work. Our training programs cover a large number of topics, including specific service offerings, key technical and IT skills, our different clients’workplace cultures and Lean and digital transformation methodologies. A large part of our continuous training is designed to impart the skills andknowledge required by our employees to move 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 26% in 2016. 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.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 levelof services required to the experience and qualification of the employee concerned and we avoid having over-qualified people in any particular job. Thisallows us to give our highly qualified and experienced people higher-value jobs and, coupled with the practice of up-skilling, ensures better career paths forall of our employees.Corporate Social ResponsibilityOur Corporate Social Responsibility (CSR) initiative aims to integrate our social and environmental priorities with our operational fabric. Genpact’sapproach to CSR focuses on three pillars that reflect our strengths and core expertise and include causes that our employees are passionate about: •Education and employability •Environment and sustainability •Diversity and inclusionWe have institutionalized a culture of giving and volunteering through a number of global platforms, programs, projects and social initiatives. Ourmore than 15,000 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.8 Our AlliancesWe have entered into and continue to pursue partnerships or alliances with companies whose capabilities complement ours in an effort to enhanceour existing solutions or create new solutions to address market needs. Such alliances may be transaction- or deal-specific, may be for the development ofjoint capabilities in a service line or may take the form of enterprise-wide transformational partnerships. Our alliances generally fall into one of fourcategories: joint ventures; strategic, go-to-market alliances; deal-specific partnerships to provide a joint solution to a client; or digital and other “white label”partnerships.Our digital partnerships aim to nurture relationships with established and emerging players and start-ups that specialize in leading-edge disruptivedigital technologies that we can embed into our solutions. Our Lean DigitalSM Innovation Center in Palo Alto supports these partnerships, combining ourpartners’ 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 and our global relationship managers.Members of this team are based around the globe, including in the United States, Europe, Australia and Asia, and dedicate their time to expanding theservices we provide to our existing clients as well as acquiring new clients.We have designated client partners and 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 Lean DigitalSM approach and SEPSM methodology, byfocusing on processes that are “upstream” or “downstream” from the processes we initially handle, or by applying our analytical, consulting and digitalcapabilities to transform processes.We also strive to foster relationships between our senior leadership team and our clients’ senior management. These “C-level” relationships ensurethat both parties are focused on establishing priorities, aligning objectives and driving client value from the top down. High-level executive relationshipshave been particularly constructive as a means of increasing business from our existing clients. It also provides us with a forum for addressing client concerns.Our governance methodology is designed to ensure that we are well connected at all levels of our clients’ organizations (executive, management andoperations).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 is our global network of 75 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 offers9 flexibility for both clients and employees. Our presence in locations around the world provides us with multilingual capabilities, access to a larger talentpool, “near-shoring” capabilities to take advantage of time zones, as well as the ability to provide services from the United States. With this network, wemanage complex processes in multiple geographic regions. We use different locations for different types of services depending on the specific client needsand the mix of skills and cost of employees available in each location. We choose the location of our delivery centers based on a number of factors, whichinclude 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; Bucharestin Romania; and Gurgaon, Hyderabad, Jaipur and Kolkata in India. We regularly 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, Israel, Japan, Malaysia, Mexico, the Netherlands, the Philippines, Poland, Romania, Slovakia, South Africa, the United Kingdomand the United States. As of December 31, 2016, 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 clientsnormally include a license to use the client’s proprietary systems to provide our services. Clients authorize us to access and use third party software licensesheld by the client so that we may provide our services.It 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 orengagement is 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 and accounting firms that provide consulting and other professional services; •companies that are primarily business process service providers operating from low-cost countries, most commonly India; •companies that are primarily information technology service providers with some business process service capabilities; •smaller, niche service providers that provide services in a specific geographic market, industry or service area, including digital; and10 •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, including digital 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. RegulationWe 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 of our service contracts,we are contractually required to comply even if such laws and regulations apply to our clients, but not to us, and sometimes our clients require us to takespecific 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, ourclients 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 addition, public figures in the United States, including the current U.S. Presidentand members of his administration, have suggested that changes to certain regulations applicable to us may potentially be adopted. See Item 1A—“RiskFactors—Risks Related to our Business—Future legislation or executive action in the United States and other jurisdictions could significantly affect theability or willingness of our clients and prospective clients to utilize 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 Bank Secrecy Act, the USA PATRIOT Act, the Bank Service Company Act, the Home Owners Loan Act, the ElectronicFunds Transfer Act, the Equal Credit Opportunity Act, and regulation by U.S. agencies such as the SEC, the Federal Reserve, the Federal Deposit InsuranceCorporation, the National Credit11 Union Administration, the Commodity Futures Trading Commission, the Federal Financial Institutions Examination Council, the Office of the Comptrollerof the Currency, and the Consumer Financial Protection Bureau. We are also subject to regulation under the Health Insurance Portability and AccountabilityAct, the Federal Trade Commission Act, the Family Educational Rights and Privacy Act, the Communications Act, the Electronic Communications PrivacyAct and applicable regulations in the area of health and 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 Fair Housing Act, the Real Estate Settlement Procedures Act, the Homeowners Protection Act, the Truth inLending Act, the Real Estate Settlement Procedures Act, and the Home Mortgage Disclosure Act and by regulatory bodies such as the U.S. Department ofHousing and Urban Development. We currently hold mortgage-related licenses, registrations or letters of exemption from licensing in all 50 U.S. states andthe District 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 thedepartment of insurance in each such state. In two other states, we qualify for regulatory exemption from licensing based on the insurance processingactivities we provide.We 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 or executive action in the United States and otherjurisdictions could significantly 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 export control, customs and sanctions regulations maintained by governmentbodies such as the Commerce Department’s Bureau of Industry and Security, the State Department’s Directorate of Defense Trade Controls and the TreasuryDepartment’s Office of Foreign Assets Control, and Homeland Security Department’s Bureau of Customs and Border Protection.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 CompaniesAct 1981 regulating the declaration and payment of dividends and the making of distributions from contributed surplus.12 We are classified as a non-resident of Bermuda for exchange control purposes by the Bermuda Monetary Authority. Pursuant to our non-residentstatus, we may engage in transactions in currencies other than Bermuda dollars. There are no restrictions on our ability to transfer funds in and out ofBermuda or to pay 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. As an exemptedcompany, we may not, without a license granted by the Minister of Economic Development, participate in certain business transactions, includingtransactions involving Bermuda landholding rights and the carrying on of business of any kind, for which we are not licensed 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.The 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, 2017: Name Age Position(s) N.V. Tyagarajan55President, Chief Executive Officer and DirectorEdward Fitzpatrick50Chief Financial OfficerPatrick Cogny50Senior Vice President, Infrastructure, Manufacturing & Services andHigh TechVictor Guaglianone61Senior Vice President, General Counsel and Corporate SecretaryPiyush Mehta48Senior Vice President, Chief Human Resources OfficerArvinder Singh52Senior Vice President, Capital Markets and IT ServicesMohit Thukral51Senior 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 and has also beenresponsible for our High Tech business since January 2017. From 2005 to August 2011, 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 Europe corporate headquarters, in France, the United States and Belgium.Victor Guaglianone has served as our Senior Vice President, General Counsel and Corporate Secretary since January 2007. From 2004 to 2007, hewas senior counsel at Holland & Knight LLP. From 2003 to 2004, he served as a commercial arbitrator for the American Arbitration Association. Prior to2003, he spent 16 years at GE Capital, most recently as Vice President and Associate General Counsel.13 Piyush Mehta has served as our Senior Vice President, Chief Human Resources Officer since March 2005. He has worked for us since 2001, initiallyas Vice President of Human 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 2014.14 Item 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 inour significant 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.Our business depends on generating and maintaining ongoing, profitable client demand for our services and solutions, including through theadaptation and expansion of our services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in suchdemand or an inability to respond to the evolving technological environment could materially affect our results of operations.Our revenue and profitability depend on the demand for our services and solutions with favorable margins, which could be negatively affected bynumerous factors, many of which are beyond our control and unrelated to our work product. Volatile, negative or uncertain global economic conditions andlower growth in the markets we serve have adversely affected and could in the future adversely affect client demand for our services and solutions. Oursuccess depends, in part, on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuingchanges in technology and offerings to serve the evolving needs of our clients. Examples of areas of significant change include digital- and cloud-relatedofferings, which are continually evolving as developments such as artificial intelligence, automation, Internet of Things and as-a-service solutions arecommercialized. Technological developments such as these may materially affect the cost and use of technology by our clients and, in the case of as-a-service solutions, could affect the nature of how we generate revenue. Some of these technologies, such as cloud-based services, artificial intelligence andautomation, and others that may emerge, have reduced and replaced some of our historical services and solutions and may continue to do so in the future.This has caused, and may in the future cause, clients to delay spending under existing contracts and engagements and to delay entering into new contractswhile they evaluate new technologies. Such delays can negatively impact our results of operations if the pace and level of spending on new technologies isnot sufficient to make up any shortfall.Developments in the industries we serve, which may be rapid, also could shift demand to new services and solutions. If, as a result of newtechnologies or changes in the industries we serve, our clients demand new services and solutions, we may be less competitive in these new areas or need tomake significant investment to meet that demand. Our growth strategy focuses on responding to these types of developments by driving innovation that willenable us to expand our business into new growth areas. If we do not sufficiently invest in new technology and adapt to industry developments, or evolveand expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfullydrive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute on ourgrowth strategy could be negatively affected.We operate in a rapidly evolving environment in which there currently are, and we expect will continue to be, new technology entrants. New servicesor technologies offered by competitors or new entrants may make our offerings less differentiated, less competitive or obsolete when compared to otheralternatives, which may adversely15 affect our results of operations. In addition, companies in the industries we serve sometimes seek to achieve economies of scale and other synergies bycombining with or acquiring other companies. If one of our current clients merges or consolidates with a company that relies on another provider for theservices and solutions we offer, we may lose work from that client or lose the opportunity to gain additional work if we are not successful in generating newopportunities from the merger or consolidation.Future legislation or executive action in the United States and other jurisdictions could significantly affect the ability or willingness of our clientsand prospective clients 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.Current or prospective clients may elect to perform such services themselves or may be discouraged from transferring these services from onshore to offshoreproviders to avoid negative perceptions that may be associated with using an offshore provider. Any slowdown or reversal of existing industry trends towardoffshore outsourcing 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 andenacted. The measures that have been enacted to date generally have restricted the ability of government entities to outsource work to offshore businessprocess service providers and have not materially adversely affected our business, primarily because we do not currently work for such governmental entitiesand they are not a focus of our sales strategy. Such measures 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. Measures 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, public figures in the United States, including the current U.S. President and members ofhis administration, have suggested that U.S. businesses be subjected to tax or other consequences for outsourcing, with incentives for returning outsourcedoperations to the U.S., although it is not known what specific measures might be proposed or how they would be implemented and enforced. There can be noassurance that pending or future legislation or executive action in the United States that would significantly adversely affect our business, results ofoperations, and financial condition will not be enacted.Legislation enacted in certain European jurisdictions and any future legislation in Europe, Japan or any other country in which we have clientsrestricting the performance of business process services from an offshore location could also have a material adverse effect on our business, results ofoperations and financial condition. For example, evolving European Union cloud computing standards and regulations and proposed taxes on outsourceddata center activities may limit or restrict our operations, or make them more costly. Moreover, legislation enacted in the United Kingdom and by many EUcountries, provides that if a company outsources all or part of its business to a service provider or changes its current service provider, the affected employeesof the company or of the previous service provider are entitled to become employees of the new service provider, generally on the same terms and conditionsas their original employment. In addition, dismissals of employees who were employed by the company or the previous service provider immediately prior tothat outsourcing, if the dismissals resulted solely or principally from the outsourcing, are automatically considered unfair dismissals that entitle suchemployees to compensation. As a result, in order to avoid unfair dismissal claims we may have to offer, and become liable for, voluntary redundancypayments to the employees of our clients in the United Kingdom and other EU countries who have adopted similar laws who transfer business to us. Webelieve that this legislation could materially affect our ability to obtain new business from companies in the EU and, after including the cost of the potentialcompensation paid for unfair dismissal claims or redundancies, to provide outsourced services to our current and future clients in the EU in a cost-effectivemanner.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-16 competition, data privacy and protection, wage-and-hour standards, and employment and labor relations. Our clients’ business operations are also subject tonumerous regulations, and our clients may require that we perform our services in compliance with regulations applicable to them or in a manner that willenable 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 regulations in the conduct of our business could result in significant fines, criminalsanctions against us and/or our employees, prohibitions on doing business, breach of contract damages and harm to our reputation. Due to the varyingdegrees of development of the legal systems of the countries in which we operate, local laws may not be well developed or provide sufficiently clearguidance 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, common practices in the local businesscommunity might not conform to international business standards and could violate anticorruption laws or regulations, including the U.S. Foreign CorruptPractices Act and the UK Bribery Act 2010. Our employees, subcontractors, agents, joint venture partners, the companies we acquire and their employees,subcontractors and agents, and other third parties with which we associate, could take actions that violate policies or procedures designed to promote legaland regulatory compliance or applicable anticorruption laws or regulations. Violations of these laws or regulations by us, our employees or any of these thirdparties could subject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations),including fines or penalties, disgorgement of profits and suspension or disqualification from work, any of which could materially adversely affect ourbusiness, including our results 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. Ourprovision for income taxes, actual tax expense and cash tax liability could be adversely affected by a variety of factors including, but not limited to, lowerincome before taxes generated in countries with lower tax rates; higher income generated in countries with higher tax rates; changes in tax laws andregulations or in applicable income tax treaties; changes in accounting principles or interpretations thereof or in the valuation of deferred tax assets andliabilities; the possible disappearance of certain tax concessions that we have enjoyed in prior years; and adverse outcomes of tax examinations and pendingtax-related litigation. Any of these factors could have a material adverse effect on our operations, effective tax rate and financial condition.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 there can be no assurance that negative outcomes from those examinations or any appeals therefrom will notadversely affect our provision for income taxes and cash tax liability, which in turn could have a material adverse effect on our operations, effective tax rateand financial condition. For example, the Government of India is appealing a 2011 ruling by the Delhi High Court that Genpact India Private Limited (one ofour subsidiaries) cannot be held to be a representative assessee of GE in connection with an assertion that GE has a “permanent establishment” in India byreason of a 2004 transfer of shares of our predecessor company. We believe that, if the Government of India is successful in its appeal, GE would be obligatedto 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, 2015 and 2016 seeking to assess tax on certain transactions thatoccurred in 2009, 2010 and 2013. We do not believe that the transactions should be subject to tax in India under applicable law, including due to the reliefprovided under the Mauritius-India treaty, and have accordingly filed appeals. Our appeal in respect of tax year 2010 has been resolved in our favor. Wehave received demands for potential tax claims resulting from assessments related to tax years 2009 and 2013 in an aggregate amount of $158 million,including interest. To date, we have paid a total of $20 million toward these demands to the Indian tax authority under protest, and may be required to paythe remainder of the demands pending resolution of the matter. There is no assurance that we will prevail in this matter or similar transactions, includingwhere we have relied on the Mauritius-India treaty, and a final determination of tax in the amounts claimed could have a material adverse effect on ouroperations, 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 existing17 significant shareholders, in which indirect transfers of Indian subsidiaries or assets are involved. Those authorities may seek to impose tax on us directly or asa withholding agent or representative assessee of the seller in these or other transactions.Furthermore, there is growing pressure in many jurisdictions, including the United States, and from multinational organizations such as theOrganization for Economic Cooperation and Development (OECD) and the European Union (EU) to amend existing international tax rules in order to renderthem more responsive to current global business practices. For example, in October 2015 the OECD published a package of measures for reform of theinternational tax rules as a product of its Base Erosion and Profit Shifting (BEPS) initiative, which was endorsed by the G20 finance ministers. Many of theinitiatives in the BEPS package will require amendments to the domestic tax legislation of various jurisdictions. Separately, the European Union is assertingthat a number of country-specific favorable tax regimes and rulings in certain member states may violate, or have violated, EU law, and may require rebates ofsome or all of the associated tax benefits to be paid by benefitted taxpayers in particular cases. In 2016, some members of the U.S. Congress began publiclyconsidering potential tax reform, including the possibility of replacing large parts of the existing federal income tax with a “destination-based cash flow tax”that could result in higher taxes being imposed on entities buying goods and services provided from outside the United States. The current U.S. President andhis administration have stated that they are considering this proposal as well as other potential tax reforms. While the details of any proposed changes in U.S.tax law being discussed are unknown at this point and there is no certainty that any changes will be implemented, any changes imposing higher taxes onentities buying goods and services from outside the United States could have a material adverse effect on our operations, effective tax rate and financialcondition and could materially reduce the willingness of clients and prospective clients to utilize our services. See Item 1A—“Risk Factors—Risks Relatedto our Business—Future legislation or executive action in the United States and other jurisdictions could significantly affect the ability or willingness of ourclients and prospective clients to utilize our services.”Although we monitor these developments, it is very difficult to assess to what extent these changes may be implemented in the United States andother jurisdictions in which we conduct our business or may impact the way in which we conduct our business or our effective tax rate due to theunpredictability and interdependency of these potential changes. As these and other tax laws and related regulations and practices change, those changescould 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, financing,marketing, sales and delivery functions. U.S. and Indian transfer pricing regulations, as well as regulations applicable in other countries in which we operate,require that any international transaction involving associated enterprises be on arm’s-length terms. We consider the transactions among our subsidiaries tobe substantially on arm’s-length terms. If, however, a tax authority in any jurisdiction reviews any of our tax returns and determines that the transfer pricesand terms we have applied are not appropriate, or that other income of our affiliates should be taxed in that jurisdiction, we may incur increased tax liability,including accrued interest and penalties, which would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cashflows, which in turn could have a material adverse effect on our operations, effective tax rate and financial condition.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 2014, 2015 and 2016, GE accounted for 20.4%, 18.7% and 13.9% ofour revenues, respectively. As a result of GE’s publicly announced plan to divest a significant portion of its GE Capital business, our services for GE havedeclined and we expect that our services for GE will continue to decline as GE concludes the planned divestitures. We intend to continue to make efforts toprocure 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 suchcontracts would be on favorable terms. In addition, we recently entered into a new master services agreement, or MSA, with GE, effective January 1, 2017,which replaced our prior MSA with GE that expired in December 2016 under which GE was committed to purchase minimum amounts of18 services annually. Under the new MSA, GE is not obligated to provide us with any exclusivity or opportunity to work on GE projects and GE is no longerrequired to purchase a minimum amount of services from us. In addition, GE has the right to terminate the MSA or any statement of work in whole or in partfor any reason by providing us 30 days’ notice. As a result of the foregoing, we expect that our revenues from GE will be more volatile in the future and maygo through periods of decline as well as increase. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Revenues” for further information regarding our new MSA with GE.We expect that any business with GE that we retain will continue to come from a variety of GE’s businesses and that, in general, GE’s decisions to useour services will continue to be made by a number of people within GE. Therefore, although some decisions may be made centrally at GE, we expect that thetotal level of business we receive will continue to depend on the decisions of the various operating managers of such businesses. Finally, there can be noassurance that GE will not establish its own business unit to provide English-language business process services from low-wage countries or otherwisecompete with us.Any of the above events could have a material adverse effect on our business, results of operations 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 2016, 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 2016, 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 adverseeffect on our business, results of operations and financial condition. Any deterioration in economic activity in the United States or Europe could adverselyaffect demand 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.We 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, including by incorporating digital solutions that use social, mobility, big data andcloud-based technologies. Our ability to effectively offer a wide breadth of end-to-end business solutions depends on our ability to attract existing or newclients to new service offerings, and the market for end-to-end solutions is highly competitive. We cannot be certain that our new service offerings,particularly our digital offerings, will effectively meet client needs or that we will be able to attract clients to these service offerings. The complexity of ournew service offerings, our inexperience in developing or implementing them, and significant competition in the markets for these services may affect ourability to market these services successfully. In addition, the breadth of our existing service offerings continues to result in larger and more complex projectswith our clients, which have risks associated with their scope and complexities. Our failure to deliver services that meet the requirements specified by ourclients could result in termination of client contracts, and we could be liable to our clients for significant penalties or damages. Larger projects may involvemultiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages or may cancel or delay additional plannedengagements. These terminations, cancellations or delays may result from factors that have little or nothing to do with the quality of our services, such as thebusiness or financial condition of our clients or the economy generally. Such cancellations or delays make it difficult to plan for project resourcerequirements 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.19 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 2016, our attrition ratefor all employees who were employed for a day or more was approximately 26%. We cannot assure you that we will be able to reduce our level of attrition oreven maintain our attrition rate at the 2016 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 our clients to be less willing to utilize ourservices. In addition, wage increases may reduce our margins. We will attempt to control such costs by our efforts to add capacity in locations where weconsider wage levels of skilled personnel to be satisfactory, but we may not be successful in doing so. We may need to increase our wage levels significantlyand 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 effecton our business, results of operations and financial condition. We have also increased, and expect to further increase, the number of employees we have in theUnited States from the levels than we have had historically, and this could have a negative effect on our profit 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, UK pounds sterling, the Australian dollar, theJapanese yen and the Indian rupee. Most of our expenses are incurred and paid in Indian rupees, with the remaining amounts largely in U.S. dollars, Chineserenminbi, Romanian lei, euros, UK pounds sterling, Philippine pesos, Japanese yen, Polish zloty, Mexican pesos, Guatemalan quetzals, the South Africanrand and Hungarian 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 andQualitative Disclosures 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, pound sterling-U.S. dollar, Australian dollar-U.S. dollar and our Chinese renminbi-Japanese yen foreign currencyexposures, there is no assurance that our hedging strategy will be successful or that the hedging markets will have sufficient liquidity or depth for us toimplement our strategy in a cost effective manner. In addition, in some countries such as India and China, we are subject to legal restrictions on20 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 general, immigration laws are subject tolegislative change and varying standards of application and enforcement due to political forces, economic conditions, terrorist attacks or other events. Inaddition, there is currently uncertainty with respect to immigration laws and standards in the United States due to potential policy changes suggested bypublic figures, including the current U.S. President and members of his administration, although it is not currently known what, if any, specific measuresmight be proposed or how they would be implemented or enforced.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.The credit 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, 2016, the total amount due under the credit facility, including the amount utilized under the revolving facility, was $900 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, pay dividends or repurchase shares and may not be able to obtain such additionalfinancing on competitive terms, which could restrict our ability to complete such transactions.21 We 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 frommanagement to our shareholders on our internal control over financial reporting that includes an assessment of the effectiveness of these controls. Internalcontrol over financial reporting has inherent limitations, including human error, sample-based testing, the possibility that controls could be circumvented orbecome inadequate because of changed conditions, and fraud. Because of these inherent limitations, internal control over financial reporting might notprevent or detect all misstatements or fraud. If we cannot maintain and execute adequate internal control over financial reporting or implement required newor improved 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 our22 financial statements, and our results of operations, the market price of our common shares and our ability to obtain new business could be materiallyadversely affected.We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to thoseestimates and 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 certaincases, we have committed to pricing over this period with only limited sharing of risk regarding inflation and currency exchange rates. In addition, we areobligated under some of our contracts to deliver productivity benefits to our clients. If we fail to estimate accurately future wage inflation rates, currencyexchange rates or our costs, or if we fail to accurately estimate the productivity benefits we can achieve under a contract, it could have a material adverseeffect on our business, 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.We 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 proprietary, personally identifying or other sensitive or confidential client data in the operation ofour business or in connection with the services we provide under our contracts, including names, address, social security numbers, personal healthinformation, credit card account numbers, payment history records, and checking and savings account numbers. In addition, we collect and store data23 regarding our employees. As a result, we are subject to numerous data protection and privacy laws and regulations designed to protect this information in thecountries in which we operate. If any person, including any of our current or former employees, negligently disregards or intentionally breaches ourestablished controls with respect to sensitive data or if we do not adapt to changes in data protection legislation, we could be subject to significant litigation,monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.In addition, the products, services and software that we provide to our clients may contain or introduce cybersecurity threats or vulnerabilities to ourclients’ information technology networks, intentionally or unintentionally. Our clients may maintain their own proprietary, sensitive, or confidentialinformation that could be compromised in a cybersecurity attack, or their systems may be disabled or disrupted as a result of such an attack. Our clients,regulators, or other third-parties may attempt to hold us liable, through contractual indemnification clauses or directly, for any such losses or damagesresulting from such an attack.The threat of incursion into our information systems and technology infrastructure has increased and evolved in recent years with the increasingnumber and sophistication of third parties who have hacked, attacked, disrupted or otherwise invaded information systems of other companies and havemisappropriated or disclosed data. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems changefrequently or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unableto anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our security occurs, whether through breachof our computer systems, systems failure or otherwise, the market perception of the effectiveness of our security measures and our reputation could be harmedand we could lose existing or potential customers. Our clients, suppliers, subcontractors, and other third parties with whom we do business generally facesimilar cybersecurity threats, and in some cases we must rely on the safeguards adopted by these parties. We may also be liable to our clients or others fordamages caused by disclosure of confidential information or system failures. Many of our contracts do not limit our potential liability for breaches ofconfidentiality. We may also be subject to civil actions and criminal prosecution by governments or government agencies for breaches relating to such data.Our insurance coverage or indemnification protections for breaches or mismanagement of such data may not be adequate to cover all costs related to dataloss, cybersecurity attacks, or disruptions resulting from such events, or they may not continue to be available on reasonable terms or in sufficient amounts tocover one or more large claims against us and our insurers may disclaim coverage as to any future claims. The impact of these cybersecurity attacks, datalosses, and other security breaches cannot be predicted, but any such attack, loss or breach could disrupt our operations, or the operations of our clients,suppliers, subcontractors, or other third parties. Incidents of this type could require significant management attention and resources, could result in the lossof business, regulatory enforcement and financial liability, and could harm our reputation among our clients and the public, any of which could have amaterial adverse impact on our financial condition, results of operation, or liquidity.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 our24 insurers may disclaim coverage as to any future claims. The successful assertion of one or more large claims against us that exceed available insurancecoverage, or changes in our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could havea material adverse effect on our business, results of operations and financial condition.If 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 contain provisions that would require us to pay penalties to our clients and/or provide our clients with the right to terminatethe contract if we do not meet pre-agreed service level requirements. Failure to meet these requirements could result in the payment of significant penalties byus to our clients which in turn could have a material adverse effect on our business, results of operations and financial condition.A few of our MSAs provide that during the term of the MSA and under specified circumstances, we may not provide similar services to thecompetitors of 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 12months, we may not provide similar services to certain or any of our client’s competitors using the same personnel. These restrictions may hamper our abilityto compete for and 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 marketsare breadth 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-shore business process service providers in low-cost locations like India, in-house captives of potential clients, software services companies25 that also provide business 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 againstus in the future. The costs of defending any such claims could be significant, and any successful claim may require us to modify, discontinue or rename anyof our 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 politicaluncertainties in 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 central or state governments, could trigger significant changes in India’s economicliberalization and deregulation policies and disrupt business and economic conditions in India generally 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 the26 last several 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. Recent economic reform efforts have been disruptive and may increase the level ofeconomic uncertainty in India. Our ability to recruit, train and retain qualified employees, develop and operate our delivery centers, and attract and retainclients 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 human-caused events such as protests, riots and labor unrest. Such events may lead tothe disruption of information systems and telecommunication services for sustained periods. They also may make it difficult or impossible for employees toreach our 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. Thismay involve expanding into countries other than those in which we currently operate. It may involve expanding into less developed countries, which mayhave less 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 economicrecession, which could adversely affect our business, results of operations, financial condition and cash flows. These events could adversely affect our clients’levels of business activity and precipitate sudden significant changes in regional and global economic conditions and cycles. These events also posesignificant risks to 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 andPakistan. In recent years, military confrontations between India and Pakistan 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 attacks on the Indian Parliament and in the city of Mumbai, troop mobilizations along theIndia/Pakistan border and an aggravated geopolitical situation in the region. Such military activity or terrorist attacks in the future could influence the Indianeconomy by disrupting communications and making travel more difficult. Resulting political tensions could create a greater perception that investments incompanies with Indian operations involve a high degree of risk, and that there is a risk of disruption of services provided by companies with Indianoperations, which could have a material adverse effect on our share price and/or the market for our services. Furthermore, if India were to become engaged inarmed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue ouroperations. We generally do not have insurance for losses and interruptions caused by terrorist attacks, military conflicts and wars.27 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 resolutionand employee removal and legislation that imposes financial obligations on employers upon retrenchment. Though we are exempt from some of these laborlaws at 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 usin the future. If these labor laws become applicable to our employees, it may become difficult for us to maintain flexible human resource policies and attractand employ the numbers of sufficiently qualified candidates that we need or discharge employees, and our compensation expenses may increasesignificantly.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, 2016, Bain Capital (through its affiliates) beneficially owned approximately 29% 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 shareholders party to the agreement have agreed to vote their shares for the election ofsuch persons. These shareholders can exercise significant influence over our business policies and affairs and all matters requiring a shareholders’ vote,including the composition of our board of directors, the adoption of amendments to our certificate of incorporation and bye-laws, the approval of mergers orsales of substantially all of our assets, our dividend policy and our capital structure and financing. This concentration of ownership also may delay, defer oreven prevent a change in control of our company and may make some transactions more difficult or impossible without the support of these shareholders,even if such transactions are beneficial to other shareholders. The interests of these shareholders may conflict with your interests. Bain Capital currently holdsinterests in companies that compete with us and it may, from to time, make significant investments in companies that could compete with us. In addition,pursuant to our shareholder agreement and to the extent permitted by applicable law, our directors who are affiliated with Bain Capital are not required topresent to us corporate opportunities (e.g., acquisitions or new potential clients) of which they become aware. So long as Bain Capital owns a significantamount of our equity it will be able to strongly influence our decisions.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.28 We have received a written assurance from the Bermuda Minister of Finance under The Exempted Undertaking Tax Protection Act 1966 of Bermudato the 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, 2016, we have $1,069.4 million of goodwill and $72.0 million of intangible assets. We periodically assess these assets todetermine if they are impaired and we monitor for impairment of goodwill relating to all acquisitions and our formation in 2004. Goodwill is not amortizedbut is tested for impairment 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 of goodwill may also beperformed between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of goodwill below itscarrying amount. We perform an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination thatit 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 qualitative assessment, theCompany performs the quantitative assessment of goodwill impairment if it determines that it is more likely than not that the fair value of a reporting unit isless than its carrying amount. If the book value of our goodwill and other intangible assets is impaired, any such impairment would be charged to earnings inthe period of impairment. We cannot assure you that future impairment of goodwill and other intangible assets will not have a material adverse effect on ourbusiness, financial condition or results of operations.29 Risks 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 theprice of our common shares and impede our ability to raise capital through the issuance of equity securities. As of December 31, 2016, Bain Capital (throughits affiliates) and its co-investors beneficially owned approximately 34% 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.There can be no assurance that we will continue to declare and pay dividends on our common shares, and future determinations to pay dividendswill be at the discretion of our board of directors.Historically we have not declared regular dividends. In February 2017, we announced the declaration of a quarterly cash dividend on our commonshares in the amount of $0.06 per share, representing a planned annual dividend of $0.24 per share. Any determination to pay dividends to holders of ourcommon shares in the future, including future payment of a regular quarterly cash dividend, will be at the discretion of our board of directors and will dependon many factors, including our financial condition, results of operations, general business conditions, statutory requirements under Bermuda law and anyother factors our board of directors deems relevant. Our ability to pay dividends will also continue to be subject to restrictive covenants contained in creditfacility agreements governing indebtedness we and our subsidiaries have incurred or may incur in the future. In addition, statutory requirements underBermuda law could require us to defer making a dividend payment on a declared dividend date until such time as we can meet statutory requirements underBermuda law. A reduction in, delay of, or elimination of our dividend payments could have a negative effect on our share price.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 protectionto shareholders.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 generallydo not 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 by the Bermudacourts 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 the conduct of thedirector and the extent of the causal relationship between his or her conduct and the loss suffered.30 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 anyof our 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 informationtechnology services; •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, including by the Company underexisting or future share repurchase programs; 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 theoperating performance 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 obtained against us or our directors or officers based on the civilliability or penal provisions of the federal or state securities laws of the United States or would hear actions against us or those persons based on those laws.We have been advised by Appleby (Bermuda) Limited, our Bermuda counsel, that the United States and Bermuda do not currently have a treaty providing forthe reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered byany federal or state court in the United States based on civil liability, whether or not based solely on United States federal or state securities laws, would notautomatically be enforceable in Bermuda. Similarly, those judgments may not be enforceable in countries, other than the United States, where we have assets.31 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 operationsand financial condition.Item 4. Mine Safety DisclosuresNot applicable.32 PART 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 followingtable sets forth the high and low closing sales price of the Company’s common shares for each quarter of 2015 and 2016. As of January 31, 2017, there were20 holders of record of our common shares. Sales Price High Low Year Ended December 31, 2016: First Quarter$27.19$23.30Second Quarter$28.39$25.41Third Quarter$27.16$22.70Fourth Quarter$24.51$22.76Year Ended December 31, 2015: First Quarter$23.76$18.87Second Quarter$23.31$21.33Third Quarter$23.64$21.22Fourth Quarter$25.85$23.42 The following graph and table compare the performance of an investment in our common shares (measured as the cumulative total shareholder return)with investments in the S&P 500 Index (capitalization weighted) and a peer group of companies for the period from January 1, 2012 to December 31, 2016.The selected peer group for the period presented is comprised of six companies that we believe are our closest reporting issuer competitors: Accenture plc,Cognizant Technology Solutions Corp., ExlService Holdings, Inc., Infosys Technologies Limited, Wipro Technologies Limited, and WNS (Holdings)Limited. The returns of the component entities of our peer group index are weighted according to the market capitalization of each company as of thebeginning of each period for which a return is presented. The returns assume that $100 was invested on December 31, 2011 and that all dividends werereinvested. The performance shown in the graph and table below is historical and should not be considered indicative of future price performance. 33 3/31/20126/30/20129/30/201212/31/20123/31/2013Genpact109.03111.24126.56117.60138.01Peer Group115.2998.28108.41104.21120.35S&P 500112.59109.49116.44116.00128.31 6/30/20139/30/201312/31/20133/31/20146/30/2014Genpact145.98143.25139.38132.17133.00Peer Group103.76121.38143.06142.20139.05S&P 500132.04138.97153.57156.35164.53 9/30/201412/31/20143/31/20156/30/20159/30/2015Genpact123.82143.63176.40161.84179.13Peer Group141.51151.42169.53164.78175.18S&P 500166.39174.60176.26176.75165.37 12/31/20153/31/20166/30/20169/30/201612/31/2016Genpact189.53206.30203.64181.71184.67Peer Group171.75188.35181.49169.94170.63S&P 500177.01179.40183.80190.88198.18 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.DividendsIn February 2017, we announced that our board of directors has approved a dividend program under which we intend to pay a regular quarterly cashdividend of $0.06 per share to holders of our common shares, representing a planned annual dividend of $0.24 per share. The initial dividend will be payableon or about March 28, 2017 to shareholders of record as of March 10, 2017. Future dividends will be subject to the discretion of the board of directors.Unregistered Sales of Equity SecuritiesNone.34 Purchase of Equity Securities by the Issuer and Affiliated PurchasersShare repurchase activity during the three months ended December 31, 2016 was as follows: Period Total Number of SharesPurchased Average Price Paid perShare ($) 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, 2016 2,101,262 23.75 2,101,262 230,633,562 November 1-November 30,2016 1,358,424 23.47 1,358,424 198,757,245 December 1-December 31,2016 865,773 24.11 865,773 177,883,222 Total 4,325,459 23.73 4,325,459 The table above does not reflect that in February 2017, our board of directors authorized a $500 million increase to our existing $750 million share repurchase program, first announced in February 2015, bringing the total authorization under our existing program to $1.25 billion. This repurchase programdoes not obligate us to acquire any specific number of shares and does not specify an expiration date. All shares repurchased under the plan have beencancelled.Item 6. Selected Financial DataThe table below presents selected historical financial data.We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Financial data as ofDecember 31, 2015 and 2016 and for the three-year period ended December 31, 2016 have been derived from our audited consolidated financial statementsincluded elsewhere in this Annual Report on Form 10-K. Financial data as of December 31, 2012, 2013 and 2014 and for the years ended December 31, 2012and 2013 have been derived from our audited consolidated financial statements not included in this Annual Report on Form 10-K.You should read the selected financial data below together with the financial statements included herein and Item 7—“Management’s Discussionand Analysis of Financial Condition and Results of Operations.” Year Ended December 31, 2012 2013 2014 2015 2016 (dollars and share count in millions, except per share data) Statement of income data: Total net revenues$ 1,902.0 $ 2,132.0 $ 2,279.4 $ 2,461.0 $ 2,570.8 Income from operations$ 264.3 $ 309.5 $ 294.0 $ 334.2 $ 340.8 Net income available to Genpact Limited commonshareholders$ 178.2 $ 229.7 $ 192.0 $ 239.8 $ 269.7 Earnings per common share Basic$ 0.80 $ 1.00 $ 0.87 $ 1.11 $ 1.30 Diluted$ 0.78 $ 0.97 $ 0.85 $ 1.09 $ 1.28 Weighted average number of common shares used incomputing earnings percommon share Basic223.7 229.3 220.8 216.6 206.9 Diluted229.5 235.8 225.2 219.1 210.1 35 As of December 31, 2012 2013 2014 2015 2016 (dollars in millions) Balance sheet data: Cash and cash equivalents$ 459.2 $ 571.3 $ 461.8 $ 450.9 $ 422.6 Total assets 2,605.9 2,689.4 2,742.5 2,793.5 2885.9 Long-term debt, including current portion 661.9 657.9 653.6 776.5 737.3 Genpact Limited shareholders’ equity$ 1,168.4 $ 1,323 $ 1,285.1 $ 1,304.4 $ 1286.6 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.OverviewOur business began as the India-based captive business process services operation for GE’s financial services business. We started actively pursuingbusiness from clients other than GE, or Global Clients, on January 1, 2005. Since that time, we have succeeded in increasing our business and diversifyingour revenue sources, including through acquisitions and other strategic opportunities. Our 2016 revenues were $2.571 billion, an increase of 4% year-over-year, or 6% on a constant currency basis. See Item 7—“Net Revenues” below for an explanation of how we calculate constant currency, which is a non-GAAPfinancial measure.RevenuesRevenue by top clients. The table below sets forth the percentage of our total net revenues derived from our largest clients, including GE, in theyears ended December 31, 2014, 2015 and 2016: Percentage of Total Net Revenues Year ended December 31, 2014 2015 2016 Top five clients 30.7% 28.5% 26.7%Top ten clients 39.2% 36.9% 35.6%Top fifteen clients 45.3% 43.0% 41.4%Top twenty clients 50.3% 48.0% 46.0% We earn revenues pursuant to contracts that 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 witha set 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 our36 MSAs also provide that, under transaction-based and fixed-price SOWs, we are entitled to retain a portion of certain productivity benefits we achieve.However, some of our MSAs and/or SOWs require certain minimum productivity benefits to be passed on to our clients. Once an MSA and related SOWs aresigned and production of services commences, our revenues and expenses increase as services are ramped up to the agreed upon level. In many cases, we mayhave opportunities to increase our margins over the life of an MSA or SOW, driven by a number of factors.We entered into a new MSA, effective January 1, 2017, with General Electric International, Inc. on December 22, 2016. The new MSA replaced ourprior MSA with GE, which expired on December 31, 2016. Under the new MSA, GE is not obligated to provide us with any exclusivity or opportunity towork on GE projects and GE is no longer required to purchase a minimum amount of services from us. In addition, GE has the right to terminate the MSA orany SOW in whole or in part for any reason by providing us 30 days’ notice. The term of the new MSA is four years, unless it is terminated earlier, and maybe extended upon mutual agreement by us and GE. The specific nature of the work we will perform under the new MSA and the amounts we will bill for ourservices will be covered in separate SOWs that we enter into with GE during the term of the new MSA. Under the new MSA, we are obligated to providecertain transition assistance services to GE upon GE’s request for a period of 180 days following the termination or expiration of the MSA or a statement ofwork upon GE’s request and we are obligated to continue providing services to any GE divested business for a period of 24 months following its divestiture.In addition, the new MSA contains customary indemnification provisions. The terms of the prior MSA will continue to govern any statements of work orother agreements with any GE business that was divested as of January 1, 2017 if such statement of work or agreement was in place prior to such date. Theforegoing description of the new MSA is qualified in its entirety by the full text of the MSA, which is attached hereto as Exhibit 10.36 and is incorporatedherein by reference.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.”Classification 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 reclassify the revenues from such business as Global Clientrevenues following the divestiture. Prior to 2016, we reclassified revenues from these divested GE businesses as Global Client revenues in each fiscal quarterbeginning on the date of divestiture. However, beginning with 2016, we reclassify such revenue as Global Client revenue only at the end of each fiscal year.We believe that this change allows us to provide a more consistent view of quarterly trends underlying our Global Client and GE businesses. Afterreclassifying $69.7 million of revenues from businesses that GE divested in 2016, our 2016 revenues from Global Clients and GE were $2,212.9 million and$357.9 million, respectively.In many cases, we have continued to perform services for GE-divested businesses following their divestiture by GE even though they were notobligated by the GE MSA to continue to use our services. In such cases, we have either entered into new MSAs with respect to such businesses following theirdivestiture 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 tocontinue efforts, to procure engagements with the businesses that GE is divesting as part of its planned divestiture of a portion of its GE Capital businesses.In 2016, we also reclassified revenue from our 2016 acquisitions of Endeavour Software Technologies Private Limited and PNMSoft Ltd. as revenuefrom BPO services rather than revenue from IT services to better align with the digital business process client solutions derived from these businesses. Afterreclassifying $12.4 million of revenues from these acquisitions, our 2016 revenues from BPO and IT services were $2,083.4 million and $487.3 million,respectively.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 compensation37 and 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 DigitalSM approach, tools and design thinking.Additionally in 2015, we first implemented various initiatives, which we continued to advance in 2016, to train our sales force, consulting teams and leadsolution architects in concepts relating to design thinking and digital technologies in support of our Lean DigitalSM 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, IT expenses, and consulting and certain otherexpenses. Consulting charges, consisting of the cost of consultants and contract employees with specialized skills who are directly responsible for theperformance of services for clients, are included in cost of revenue. Facilities maintenance expenses and certain other expenses are allocated between cost ofrevenue and selling, general and 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 clients, their supervisors and certain support personnel who may be dedicated to aparticular client or a set of processes. Travel and living expenses are included in cost of revenue if the personnel expense for the employee incurring suchexpense 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 contractor client relationship than in later periods. This is because the number of supervisory and direct support personnel relative to the number of employees whoare performing 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 ofearn-out consideration relating to business acquisitions and certain operating losses resulting from the impairment of property, plant and equipment,intangible assets and certain capital work-in-progress items.38 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 under 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 2016 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. See Note2 to our consolidated financial statements for additional information.Interest income (expense), net. Interest income (expense), net consists primarily of interest expense on indebtedness and capital lease obligations,interest adjustments relating to earn-out consideration in connection with certain acquisitions, certain items related to debt restructuring and interest incomeon certain deposits.Other income (expense), net. Other income (expense), net primarily includes the gain or loss on the divestiture of our cloud-hosted technologyplatform for the rural banking sector in India and certain government subsidies received by one of our subsidiaries.Net loss (income) attributable to non-controlling interest/redeemable non-controlling interest. Net loss (income) attributable to non-controllinginterest/redeemable non-controlling interest primarily refers to the loss associated with the non-controlling interest in the operations of SSE in 2016, whichwe discuss in Note 3—“Business acquisitions” to our consolidated financial statements.Gain (loss) on equity-method investment activity, net. Gain (loss) 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 2014.Income taxes. We are incorporated in Bermuda and have operations in many countries. Our effective tax rate has historically varied and willcontinue to 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 thosecountries, the tax relief and incentives available to us, the financing and tax planning strategies employed by us, changes in tax laws or the interpretationthereof, and movements 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 or39 reconstructing existing operations or transferring existing plant and equipment (beyond prescribed limits) to new locations. During the last nine years, weestablished new delivery centers that we believe are eligible for the SEZ benefits. However, we cannot forecast what percentage of our operations or incomein India will in the future be eligible for SEZ benefits, as this will depend on how much of our business can be conducted at the qualifying locations and howmuch of that business 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.Additionally, the governments of foreign jurisdictions from which we deliver services may assert that certain of our clients have a “permanentestablishment” in such jurisdictions by reason of the activities we perform on their behalf, particularly those clients that exercise control over or havesubstantial dependency on 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 Australia, Brazil, Canada, China, the Czech Republic, Germany,Guatemala, Israel, Japan, Kenya, Malaysia, Mexico, the Netherlands, the Philippines, Poland, Romania, Singapore, Slovakia, South Africa, the UnitedKingdom and the United States, as well as sales and marketing subsidiaries in certain jurisdictions, including the United States and the United Kingdom,which are subject to tax in such jurisdictions.In 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 corporate income tax rate of 15% for a three-year period that began in 2009 and was extendedthrough December 31, 2017, subject to the fulfillment of certain conditions. Our delivery centers also enjoy corporate tax holidays or concessional tax ratesin certain other jurisdictions, including the Philippines and Guatemala. These tax concessions will expire over the next few years, possibly increasing ouroverall tax rate.Our ability to repatriate surplus earnings from our foreign subsidiaries in a tax-efficient manner is dependent upon interpretations of local laws,possible changes in such laws and the renegotiation of existing double tax avoidance treaties. Changes to any of these may adversely affect our overall taxrate.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.Certain 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 4, 2016, we acquired 100% of the outstanding equity interest in PNMSoft Limited (“PNM”), a Company incorporated under laws of Israel,for cash consideration of $28.1 million, net of cash acquired of $2.9 million and an adjustment for working capital, transaction expenses and net debt. Theacquisition enhances our40 digital capabilities by adding dynamic workflow solution and implementation services. The purchase agreement between us and the sellers of PNM alsoprovides for contingent earn-out consideration of up to $9.0 million payable by us to the sellers. Goodwill arising from the acquisition amounted to $25.1million, which has been allocated to the Company’s India reporting unit and is not deductible for tax purposes. The goodwill represents primarily thecapabilities, operating synergies and other benefits expected to result from combining the acquired operations with the Company’s existing operations.On April 13, 2016, we acquired 100% of the outstanding equity interest in Endeavour Software Technologies Private Limited (“Endeavour”), aprivate limited company incorporated under the laws of India, for cash consideration of $10.0 million, net of cash acquired of $2.3 million, subject toadjustment for closing date working capital and net debt. The purchase agreement between us and the sellers of Endeavour also provides for contingent earn-out consideration of up to $3.5 million payable by us to the sellers. This acquisition enhances our digital capabilities by adding end-to-end mobilityservices. Goodwill arising from the acquisition amounted to $8.9 million, which has been allocated to the Company’s India reporting unit and is notdeductible for tax purposes. The goodwill represents primarily the capabilities in end-to-end mobility services, operating synergies and other benefitsexpected to result from combining the acquired operations with the Company’s existing operations.On January 8, 2016, we acquired 51% of the outstanding equity interest in Strategic Sourcing Excellence LLC (“SSE”), a Delaware limited liabilitycompany, for initial cash consideration of $2.6 million, subject to adjustment for working capital, transaction expenses and indebtedness. This acquisitionstrengthens our procurement consulting, transformation and strategic sourcing capabilities. The equity purchase agreement between us and the sellingequityholders provides for contingent earn-out consideration of up to $20.0 million, payable by us to the selling equityholders based on the futureperformance of SSE relative to the thresholds specified in the earn-out calculation. Up to $9.8 million of the total potential earn-out consideration,representing the selling equityholders’ 49% interest in SSE, is payable by us to the selling equityholders only if either the put or call option, each asdescribed below, is exercised. Goodwill arising from the acquisition amounted to $14.4 million, which has been allocated to our India reporting unit and isdeductible for tax purposes. The equity purchase agreement grants us a call option to purchase the remaining 49% equity interest in SSE, which option wehave the right to exercise between January 1, 2018 and January 31, 2018. If we do not exercise our call option during such period, the selling equityholdershave the right to exercise a put option between March 1, 2018 and April 30, 2018 to require us to purchase their 49% interest in SSE at a price ranging from$2.5 million to $3.0 million. The goodwill represents future economic benefits we expect to derive from the Company’s expanded presence in the sourcingand procurement consulting domains, operating synergies and other anticipated benefits of combining the acquired operations with the Company’s existingoperations.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.In May 2014, we acquired 100% of the outstanding equity interest in each of Pharmalink Consulting Limited, a company incorporated under thelaws of England and Wales, and Pharmalink Consulting Inc., a California corporation (collectively referred to as “Pharmalink”). The contingent earn-outconsideration for this acquisition was 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.DivestitureIn September 2016, we completed the sale of our cloud-hosted technology platform for the rural banking sector in India, which we acquired in 2012.Net sale proceeds were $17.2 million, net of selling expenses of $0.4 million and cash divested of $0.9 million. As a result of the divestiture, we recorded again of $5.2 million under “other income (expense)” in our consolidated statement of income.41 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 2016 were approximately $2.65 billion, up 3% from approximately $2.59 billion in 2015. The increase in new bookings isattributable to our investments in our front-end sales teams and our continued focus on deepening existing client relationships, including by addingtransformation services comprised of our consulting, digital, and analytics offerings.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 ofservices clients are demanding, the duration of the contract and the pace and level of their spending may impact the conversion of new bookings to revenues.For example, 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 ofnew bookings involves estimates and judgments. There are no third-party standards or requirements governing the calculation of bookings. We do not updateour new 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 consolidatedfinancial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters thatare highly uncertain at the time the estimate is made and if changes in the estimate that are reasonably possible could materially impact the financialstatements or require a higher degree of judgment than others in their application. We base our estimates on historical experience, contractual commitmentsand on various other assumptions that we believe to be reasonable under the circumstances and at the time they are made. We believe the following criticalaccounting policies require a higher level of management judgment and estimates than others in preparing the consolidated financial statements.Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. Although these estimates are basedupon management’s best knowledge of current events and actions, actual results could differ from these estimates.Revenue 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 we incur prior to signing a contract with a client are expensed as incurred, except for any costs incurred for acquiring contracts, such ascontract acquisition fees or other upfront fees paid to a client or any other third party, which are amortized over the period of a contract. Once a contract issigned, we defer revenues from the transition of services to our delivery centers, as well as the related cost of revenue. We recognize such deferred revenuesand related costs of revenue over the period in which the related service delivery is expected to be performed. Deferred costs are limited to the amount ofdeferred revenues. 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 rates42 are determined on a periodic basis, vary by category of service delivery personnel and are set at levels to reflect all of our costs, including the cost ofsupervisory personnel, the allocable portion of other costs, and a margin. In some cases, time-and-materials contracts are based on hourly rates of thepersonnel providing the services. We recognize revenues when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, serviceshave been rendered, and collectability is reasonably assured. Revenues derived from time-and-materials and transaction-based contracts are recognized as therelated 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 termsof the contracts. Revenues with respect to fixed-price contracts for the development, modification or customization of software are recognized on apercentage-of-completion method. Guidance has been drawn from FASB guidelines on Software—Revenue Recognition, to account for revenue from fixed-price arrangements 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.We typically 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 doubtful accounts for estimated losses inherent in our accounts receivable portfolio. In establishing the required allowance, weconsider current market conditions and our clients’ financial condition, the amount of receivables in dispute, and the current receivables’ aging and currentpayment patterns of the client. 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 a43 quantitative assessment of goodwill impairment if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carryingamount. Based on the results of our assessments of qualitative factors, we determined that the fair values of all of our reporting units are likely to be higherthan their respective carrying values as of December 31, 2016, except our IT services reporting unit, primarily due to decline in planned revenues. Weconducted a quantitative assessment of our IT services reporting unit to determine if its fair value is less than the carrying amount. Based on such quantitativeassessment, we concluded that no impairment is warranted for the year ended December 31, 2016 and that the fair value of our IT services reporting unitsubstantially exceeded its carrying value as of December 31, 2016. Further details are included in the “Goodwill Impairment Testing” section below. As ofDecember 31, 2015, based on the results of our assessments of qualitative factors, we determined that the fair values of all of our reporting units are likely tobe higher than their respective carrying values. We review for impairment our identified intangible assets with defined useful lives whenever events or changes in circumstances indicate that therelated carrying amounts may not be recoverable. Determining whether we have incurred an impairment loss requires comparing the carrying amount to thesum 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, and we enter into interest rate swaps to mitigate interest rate fluctuation risk on itsindebtedness. Most of these transactions meet the criteria for hedge accounting as cash flow hedges 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,as well 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 prospectivelydiscontinue 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 recorded as a component of other comprehensive income (losses), net of tax, until thehedged transactions occur and are recognized in the Consolidated Statements of Income along with the underlying hedged item and disclosed as a part of“Total net revenues,” “Cost of revenue”, “Selling, general and administrative expenses,” and “Interest expense” 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 of the fair value hierarchy primarily represent foreign currency forward contracts. The quotes are taken from independent sources anddatabases.Income taxes. We account for income taxes using the asset and liability method. Under this method, income tax expense is recognized for theamount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their tax bases and operating losses arecarried forward, if any. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which thetemporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or tax status isrecognized in the statement of income in the period that includes the enactment date or the filing or approval date of the tax status change. Deferred tax assetsare recognized in full, subject to a valuation allowance that reduces the amount recognized to that which is more likely than not to be realized. In assessingthe likelihood of realization, we consider estimates of future taxable income. In44 the 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 over 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.45 Results of OperationsThe following table sets forth certain data from our income statement for the years ended December 31, 2014, 2015 and 2016. Percentage Change Year ended December 31, Increase/(Decrease) 2014 2015 2016 2015 vs.2014 2016 vs.2015 (dollars in millions) Net revenues—GE* $ 466.1 $ 459.9 $ 357.9 (1.3)% (22.2)%Net revenues—Global Clients* 1,813.4 2,001.1 2,212.9 10.4 % 10.6 %Total net revenues2,279.4 2,461.0 2,570.8 8.0 % 4.5 %Cost of revenue1,378.1 1,493.5 1,554.7 8.4 % 4.1 %Gross profit901.4 967.5 1,016.0 7.3 % 5.0 %Gross profit margin 39.5% 39.3% 39.5% Operating expenses Selling, general and administrative expenses585.6 608.1 653.0 3.8 % 7.4 %Amortization of acquired intangible assets28.5 28.5 27.2 (0.1)% (4.7)%Other operating (income) expense, net(6.9) (3.3) (4.9) (51.6)% 48.7 %Income from operations294.0 334.2 340.8 13.7 % 2.0 %Income from operations as a percentage of total netrevenues 12.9% 13.6% 13.3% Foreign exchange gains (losses), net(12.4) 5.3 2.6 (142.6)% (50.1)%Interest income (expense), net (29.4) (31.3) (16.2) 6.4 % (48.2)%Other income (expense), net2.1 4.4 10.1 106.4 % 132.1 %Income before equity-method investment activity, netand income tax expense254.4 312.6 337.3 22.9 % 7.9 %Gain (loss) on equity-method investment activity, net(4.8) (10.8) (7.7) 125.2 % (28.7)%Income before income tax expense249.6 301.8 329.6 20.9 % 9.2 %Income tax expense 57.4 61.9 62.1 7.9 % 0.3 %Net income192.2 239.8 267.5 24.8 % 11.6 %Net loss (income) attributable to non-controllinginterest/redeemable non-controlling interest (0.2) — 2.1 (100.0)% 100.0 %Net income attributable to Genpact Limited commonshareholders$ 192.0 $ 239.8 $ 269.7 24.9 % 12.5 %Net income attributable to Genpact Limited commonshareholders as a percentage of total net revenues 8.4% 9.7% 10.5% *As described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Classification of CertainNet Revenues,” net revenues from certain businesses in which GE ceased to be a 20% shareholder are reclassified from GE net revenues to GlobalClient net revenues only at the end of each fiscal year. There was no impact on net revenues from GE in the year ended December 31, 2015 as a resultof excluding net revenues from such divested GE businesses. Net revenues from GE in the year ended December 31, 2016, after excluding netrevenues from such divested GE businesses, decreased by 8.1% compared to the year ended December 31, 2015.46 Fiscal Year Ended December 31, 2016 Compared to Fiscal Year Ended December 31, 2015Net revenues. Our net revenues were $2,570.8 million in 2016, up $109.7 million, or 4.5%, from $2,461.0 million in 2015. The growth in netrevenues was primarily driven by an increase in business process outsourcing, or BPO, services delivered to our Global Clients. Adjusted for foreignexchange, primarily the depreciation of the U.K. pound sterling, euro and Australian dollar against the U.S. dollar, our net revenues grew 6% compared to2015. We provide information about our revenue growth on a constant currency basis so that our revenue may be viewed without the impact of foreigncurrency exchange rate fluctuations, thereby facilitating period-to-period comparisons of our business performance. Total net revenues on a constantcurrency basis are calculated by restating current-period activity using the prior fiscal period’s foreign currency exchange rates and hedging gains/losses. Ouraverage headcount increased by 10.7% in 2016 to approximately 74,600 from approximately 67,400 in 2015. PercentageChange Year ended December 31, Increase/(Decrease) 2015 2016 2016 vs.2015 (dollars in millions) Global Clients: BPO services $ 1,578.1 $ 1,825.4 15.7 %IT services 423.0 387.4 (8.4) Total net revenues from Global Clients $ 2,001.1 $ 2,212.9 10.6 %GE : BPO services 355.0 258.0 (27.3)%IT services 104.9 99.9 (4.8) Total net revenues from GE $ 459.9 $ 357.9 (22.2)%Total net revenues from BPO services 1,933.1 2,083.4 7.8 Total net revenues from IT services 527.9 487.3 (7.7) Total net revenues $ 2,461.0 $ 2,570.8 4.5 % Net revenues from Global Clients in 2016 were $2,212.9 million, up $211.7 million, or 10.6%, from $2,001.1 million in 2015. 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 81.3% in 2015 to 86.1% in 2016.Net revenues from GE in 2016 were $357.9 million, down $102.0 million, or 22.2%, from 2015. The decline in net revenues from GE was largely dueto phase-outs of work we do for GE Capital due to continued dispositions by GE of GE Capital businesses. Net revenues from GE declined as a percentage ofour total net revenues from 18.7% in 2015 to 13.9% in 2016.Prior to 2016, we reclassified revenues from these divested GE businesses as Global Client revenues in each fiscal quarter beginning on the date ofdivestiture. However, beginning with 2016, we reclassify such revenue as Global Client revenue only at the end of each fiscal year. We believe that thischange allows us to provide a more consistent view of quarterly trends underlying our Global Client and GE businesses. After reclassifying $69.7 million ofrevenues from businesses that GE divested in 2016, our 2016 revenues from Global Clients and GE were $2,212.9 million and $357.9 million, respectively.Due to delays in GE’s planned divestitures, we expect that our revenues from GE will continue to be volatile in 2017. See Item 1A—“Risk Factors—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 or GE’sbusinesses could have a material adverse effect on our business, results of operations and financial condition.”In 2016, we also reclassified revenue from our 2016 acquisitions of Endeavour Software Technologies Private Limited and PNMSoft Ltd. as revenuefrom BPO services rather than revenue from IT services to better align with the digital business process client solutions derived from these businesses. Afterreclassifying $12.4 million of revenues from these acquisitions, our 2016 revenues from BPO and IT services were $2,083.4 million and $487.3 million,respectively.47 Net revenues from BPO services in 2016 were $2,083.4 million, up $150.4 million, or 7.8%, from $1,933.1 million in 2015. This increase is primarilyattributable to an increase in services delivered to our Global Clients, particularly finance and accounting services, core industry vertical operations servicesand transformation services. Net revenues from IT services were $487.3 million in 2016, down $40.6 million, or 7.7%, from $527.9 million in 2015 due to adecline in IT services engagements from Global Clients in the investment banking and healthcare industries.Net revenues from BPO services as a percentage of total net revenues increased to 81.0% in 2016 from 78.5% in 2015 with a corresponding decline inthe percentage of total net revenues attributable to IT services.Cost of revenue and gross margin. The following table sets forth the components of our cost of revenue and the resulting gross margin: Year Ended December 31, As a Percentage of Total Net Revenues 2015 2016 2015 2016 (dollars in millions) Personnel expenses$ 1,013.2 $ 1,061.5 41.2 % 41.3 %Operational expenses432.5 446.9 17.6 17.4 Depreciation and amortization47.8 46.3 1.9 1.8 Cost of revenue$ 1,493.5 $ 1,554.7 60.7 % 60.5 %Gross margin 39.3 % 39.5 % Cost of revenue was $1,554.7 million, up $61.2 million, or 4.1%, from 2015. Wage inflation, an increase in our operational headcount, and increasesin infrastructure expenses and the use of contract employees contributed to the higher cost of revenue in 2016 compared to 2015. These increases werepartially offset by improved operational efficiencies, a decrease in IT and travel expenses, and favorable foreign exchange, primarily the depreciation of theIndian rupee and U.K. pound sterling against the U.S. dollar. Foreign exchange fluctuations cause gains and losses on our foreign currency hedges and have atranslation impact when we convert our non-U.S. dollar income statement items to the U.S. dollar, our reporting currency.Our gross margin increased marginally from 39.3% in 2015 to 39.5% in 2016 due to the factors described above, partially offset by lower headcountutilization on billable projects due to a decline in IT services engagements.Personnel expenses. Personnel expenses as a percentage of total net revenues increased marginally from 41.2% in 2015 to 41.3% in 2016.Personnel expenses were $1,061.5 million, up $48.3 million, or 4.8%, from $1,013.2 million in 2015. The impact of wage inflation and an approximately5,900-person, or 10.0%, increase in our operational headcount resulted in higher personnel expenses in 2016 compared to 2015. These increases werepartially offset by favorable foreign exchange and improved operational efficiencies.Operational expenses. Operational expenses as a percentage of total net revenues decreased from 17.6% in 2015 to 17.4% in 2016. Operationalexpenses were $446.9 million, up $14.4 million, or 3.3%, from 2015. An increase in the use of contract employees and an increase in infrastructure expensesin 2016 contributed to the increase in operational expenses compared to 2015. These increases were partially offset by lower IT and travel expenses andfavorable foreign exchange.Depreciation and amortization expenses. Depreciation and amortization expenses as a percentage of total net revenues were 1.8%, compared to1.9% in 2015. Depreciation and amortization expenses as a component of cost of revenue were $46.3 million, down $1.5 million, or 3.2%, from 2015. Thismarginal decrease was primarily due to an increase in fully depreciated assets since 2015 and favorable foreign exchange, partially offset by the expansion ofcertain existing facilities in India.48 Selling, general and administrative expenses. The following table sets forth the components of our selling, general and administrative, or SG&A,expenses: Year Ended December 31, As a Percentage of Total Net Revenues 2015 2016 2015 2016 (dollars in millions) Personnel expenses$ 430.1 $ 470.0 17.5 % 18.3 %Operational expenses169.0 174.1 6.9 6.8 Depreciation and amortization9.0 9.0 0.4 0.4 Selling, general and administrative expenses$ 608.1 $ 653.0 24.7 % 25.4 % SG&A expenses as a percentage of total net revenues increased from 24.7% in 2015 to 25.4% in 2016. SG&A expenses were $653.0 million, up $44.9million, or 7.4%, from 2015. Our sales and marketing expenses as a percentage of total net revenues were approximately 7.0% in 2016, marginally up fromapproximately 6.9% in 2015. Higher personnel expenses, investments in domain expertise and digital and analytics capabilities, a reserve for doubtfulreceivables and certain non-recurring travel and related costs all contributed to higher SG&Aexpenses in 2016 compared to 2015. These increases were partially offset by lower fees for professional services, lower travel expenses and by favorableforeign exchange, primarily the depreciation of the Indian rupee and U.K. pound sterling against the U.S. dollar.Personnel expenses. Personnel expenses as a percentage of total net revenues increased from 17.5% in 2015 to 18.3% in 2016. Personnel expensesas a component of SG&A expenses were $470.0 million, up $39.9 million, or 9.3%, from 2015. Wage inflation and investments in domain expertise anddigital and analytics capabilities resulted in higher personnel costs as a component of SG&A expenses in 2016 compared to 2015. These increases werepartially offset by favorable foreign exchange. Operational expenses. Operational expenses as a percentage of total net revenues decreased marginally from 6.9% in 2015 to 6.8% in 2016.Operational expenses as a component of SG&A expenses were $174.1 million, up $5.0 million, or 3.0%, compared to 2015. Operational expenses increasedprimarily due to a reserve for doubtful receivables and the timing of certain non-recurring travel and related costs in 2016. These increases were partiallyoffset by lower fees for professional services, lower travel expenses and favorable foreign exchange.Depreciation and amortization. Depreciation and amortization expenses as a percentage of total net revenues were 0.4%, unchanged from 2015.Depreciation and amortization expenses as a component of SG&A expenses were $9.0 million, unchanged from 2015.Amortization of acquired intangibles. Non-cash charges on account of the amortization of acquired intangibles were $27.2 million, down $1.3million, or 4.7%, from 2015. This decrease is primarily due to a decline in the amortization expense relating to a 2014 acquisition.Other operating (income) expense, net. The following table sets forth the components of other operating (income) expense, net: Year Ended December 31, Percentage ChangeIncrease/(Decrease) 2015 2016 2016 vs. 2015 (dollars in millions) Other operating (income) expense$ (2.5)$ (1.3) (49.7)%Impairment of intangible assets10.7 11.2 4.5 Change in the fair value of earn-out consideration, deferredconsideration (relating to business acquisitions)(11.5) (14.9) 29.1 Other operating (income) expense, net$ (3.3)$ (4.9) 48.7 %Other operating (income) expense, net as a percentageof total net revenues (0.1)% (0.2)% Other operating income, net of expenses, was $4.9 million, up $1.6 million from $3.3 million in 2015. This increase was primarily due to $14.9million gain in 2016 compared to $11.5 million gain in 2015 due to changes in49 the fair value of earn-out consideration payable in connection with certain acquisitions. This income was partially offset by a $1.2 million decrease in otheroperating income in 2016 compared to 2015 primarily due to decrease in income from subleases and an $11.2 million charge in 2016 compared to a $10.7million charge in 2015 relating to a software intangible asset, which charges are discussed in Note 10—“Goodwill and intangible assets” to our consolidatedfinancial statements.Income from operations. As a result of the foregoing factors, income from operations as a percentage of total net revenues decreased from 13.6% in2015 to 13.3% in 2016. Income from operations was $340.8 million, up $6.6 million from $334.2 million in 2015.Foreign exchange gains (losses), net. We recorded a net foreign exchange gain of $2.6 million in 2016, compared to a $5.3 million gain in 2015,primarily due to the re-measurement of non-functional currency assets and liabilities and related foreign exchange contracts. The gain in 2016 resultedprimarily from the depreciation of the Indian rupee and U.K. pound sterling against the U.S. dollar, and the gain in 2015 was primarily attributable to thedepreciation of the Indian rupee against the U.S. dollar.Interest income (expense), net. The following table sets forth the components of interest income (expense), net: Year ended December 31, Percentage ChangeIncrease/(Decrease) 2015 2016 2016 vs. 2015 (dollars in millions) Interest income$ 8.7 $ 7.2 (16.5)%Interest expense (29.8) (23.4) (21.4) Loss on extinguishment of debt (10.1) — (100.0) Interest income (expense), net$ (31.3) $ (16.2) (48.2)%Interest income (expense), net as a percentage of total net revenues (1.3)% (0.6)% Our net interest expense was $16.2 million in 2016, down $15.1 million from $31.3 million in 2015, primarily due to the accelerated amortization of$10.1 million in debt issuance costs in 2015 and a $6.4 million decrease in interest expense in 2016 compared to 2015. The 2015 accelerated amortizationwas in connection with the refinancing of our credit facility in June 2015, which we discuss in Note 14—“Long-term debt” to our consolidated financialstatements. The $6.4 million decrease in interest expense is primarily due to (i) a lower interest rate on our term loan in 2016 compared to 2015, whichaccounted for $4.1 million of the decrease, (ii) a reduction in the unwinding of interest in 2016 on earn-out consideration payable by the Company inconnection with certain acquisitions compared to 2015, which accounted for $2.1 million of the decrease, and (iii) $1.3 million in debt issuance costs andinterest expense on the two short-term loans we obtained and repaid in 2015 in the amounts of $672.5 million and $737.5 million, respectively, inconnection with certain internal reorganization transactions. The decrease in interest expense was partially offset by $1.5 million in interest on interest rateswaps that we entered into in 2016. Our interest income decreased by $1.4 million in 2016 compared to 2015 primarily due to lower account balances inIndia, where we earn higher interest rates on our deposits, in 2016 compared to 2015, and to the non-recurring receipt of interest income on income taxrefunds in 2015. The weighted average rate of interest on our debt decreased from 2.5% in 2015 to 2.2%, including interest on interest rate swaps, in 2016.Other income (expense), net. Our net other income was $10.1 million in 2016, up $5.8 million from $4.4 million in 2015. This increase is primarilydue to a $5.2 million gain on the divestiture of our cloud-hosted technology platform for the rural banking sector in India in the third quarter of 2016.Equity-method investment activity, net. Equity-method investment activity, net in 2016 primarily represents our $7.7 million share of loss,compared to our $10.8 million share of loss in 2015, from our non-consolidated affiliate, Markit Genpact KYC Services Limited, a U.K.-based joint venturewith Markit Group Limited formed in 2014.Income tax expense. Our income tax expense increased marginally from $61.9 million in 2015 to $62.1 million in 2016 due to higher pre-taxincome. Our effective tax rate, or ETR, was 18.7% in 2016, down from 20.5% in 2015. Our ETR reflects the jurisdictional mix of our income. The decrease inour ETR is primarily due to certain50 discrete items, including the reversal of tax reserves for uncertain tax positions and our early adoption of ASU 2016-09.Net income attributable to redeemable non-controlling interest. Redeemable non-controlling interest primarily refers to the loss associated withthe non-controlling interest in the operations of SSE, in which we acquired a controlling interest in in 2016 and which is discussed in Note 3—“Businessacquisitions” to our consolidated financial statements.Net income attributable to Genpact Limited common shareholders. As a result of the foregoing factors, net income attributable to our commonshareholders as a percentage of net revenues increased from 9.7% in 2015 to 10.5% in 2016. Net income attributable to our common shareholders increasedby $29.9 million from $239.8 million in 2015 to $269.7 million in 2016.Fiscal 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 BPO services delivered to our Global Clients, including the impact of revenues derived from large,transformational deals. Adjusted for foreign exchange, primarily the depreciation of the euro, Japanese yen and Australian dollar against the U.S. dollar, ournet revenues grew 10.2% compared to 2014. We provide information about our revenue growth on a constant currency basis so that our revenue may beviewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of our business performance.Total net revenues on a constant currency basis are calculated by restating current-period activity using the prior fiscal period’s foreign currency exchangerates and hedging gains/losses. Our average headcount increased by 4.7% to approximately 67,400 in 2015 from approximately 64,400 in 2014. Percentage Change Year ended December 31, Increase/(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 vertical operationsservices, analytics services and consulting services. Net revenues from IT services were $527.9 million in 2015, down $14.8 million, or 2.7%, from $542.7million in 2014 due to an overall decrease in IT services delivered to our clients. This decrease was primarily the result of a decline in revenues from ourhealthcare and capital markets verticals.51 Net revenues from BPO services as a percentage of total net revenues increased to 78.5% in 2015 from 76.2% in 2014 with a corresponding decline inthe percentage of total net revenues attributable to IT services.Cost of revenue and gross margin. The following table sets forth the components of our cost of revenue and the resulting gross profit: Year Ended December 31, As a Percentage of Total Net Revenues 2014 2015 2014 2015 (dollars in millions) Personnel expenses$ 943.1 $ 1,013.2 41.4 % 41.2 %Operational expenses390.4 432.5 17.1 17.6 Depreciation and amortization44.5 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 supportthe growth in our business, and related increases in the use of contract employees and infrastructure, IT and travel expenses contributed to the higher cost ofrevenue in 2015 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 operationalefficiencies and favorable foreign exchange.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 contract employees and increases in infrastructure, IT andtravel expenses in 2015 contributed to the increase in operational expenses compared to 2014. These increases were partially offset by favorable foreignexchange.Depreciation and amortization expenses. Depreciation and amortization expenses as a percentage of total net revenues were 1.9%, compared to2.0% in 2014. Depreciation and amortization expenses as a component of cost of revenue were $47.8 million, up $3.3 million, or 7.3%, from 2014. Thisincrease was primarily due to the expansion of certain existing facilities in India and was partially offset by favorable foreign exchange.Selling, general and administrative expenses. The following table sets forth the components of our selling, general and administrative, or SG&A,expenses: Year Ended December 31, As a Percentage of Total Net Revenues 2014 2015 20142015 (dollars in millions) Personnel expenses$ 419.3 $ 430.1 18.4 % 17.5% Operational expenses157.8 169.0 6.9 6.9 Depreciation and amortization8.6 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 $22.5million, or 3.8%, from 2014. Investments in front-end sales and relationship management teams and subject matter experts through the hiring of seasonedpersonnel in targeted markets and52 verticals along with the impact of wage inflation contributed to higher SG&A expenses. As a result, our sales and marketing expenses as a percentage of netrevenues were approximately 6.9% in 2015, up from approximately 6.6% in 2014. Additionally, fees for professional services contributed to higher SG&Aexpenses in 2015 compared to 2014. These increases were partially offset by productivity savings, including the more effective use of support staff, areduction in stock-based compensation 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, unchangedfrom 2014. A $1.6 million increase in amortization expenses in 2015 is primarily due to a 2014 acquisition. This increase was more than offset by a $1.9million decline in the amortization expense of intangibles arising out of the Company’s 2004 reorganization when we began operating as an independentcompany. The 2004 reorganization intangibles were fully amortized in 2014.Other operating (income) expense, net. The following table sets forth the components of other operating (income) expense, net: Year Ended December 31, Percentage ChangeIncrease/(Decrease) 2014 2015 2015 vs. 2014 (dollars in millions) Other operating (income) expense$ (3.2) $ (2.5) (20.5)%Impairment of intangible assets — 10.7 100.0 Change in the fair value of earn-out consideration, deferredconsideration (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 oftotal net revenues (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 financial 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 valueof earn-out consideration 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 2014.53 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$12.4 million in 2014, primarily due to the re-measurement of non-functional currency assets and liabilities and related foreign exchange contracts. The gainin 2015 resulted primarily from the depreciation of the Indian rupee against the U.S. dollar, and the loss in 2014 is primarily attributable to the depreciationof the euro against the U.S. dollar.Interest income (expense), net. The following table sets forth the components of Interest income (expense), net: Year ended December 31, Percentage ChangeIncrease/(Decrease) 2014 2015 2015 vs. 2014 (dollars in millions) Interest income$ 4.4 $ 8.7 97.0 %Interest expense (33.8) (29.8) (11.8) Loss on extinguishment of debt — (10.1) 100.0 Interest income (expense), net$ (29.4) $ (31.3) 6.4 %Interest income (expense), net as a percentage of total net revenues (1.3)% (1.3)% Our net interest expense increased by $1.9 million in the year ended 2015 compared to the year ended 2014, primarily due to the acceleratedamortization in 2015 of $10.1 million in debt issuance costs in connection with the refinancing of our credit facility, which is discussed in Note 14 to ourconsolidated financial statements. This was partially offset by lower interest expense and higher interest income in the year ended 2015 compared to the yearended 2014. The decrease in our interest expense is primarily due to a lower interest rate on our term loan and a lower amount drawn down under ourrevolving facility 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 interestincome increased by $4.3 million in 2015 compared to 2014, primarily due to higher account balances in India, where we earn higher interest rates on ourdeposits, in 2015 compared to 2014, and to the non-recurring receipt of interest income on income tax refunds in 2015.Other income (expense), net. Our net other income was $4.4 million in the year ended 2015 compared to $2.1 million in the year ended 2014. Thisincrease is primarily due to a non-recurring loss on the sale of a capital asset in 2014.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.Net income attributable to Genpact Limited common shareholders. As a result of the foregoing factors, net income attributable to our commonshareholders as a percentage of net revenues increased from 8.4% in 2014 to 9.7% in 2015. Net income attributable to our common shareholders increased by$47.8 million from $192.0 million in 2014 to $239.8 million in 2015.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 aresult of several factors. We generally find that demand for short-term IT projects, transformation services and analytics services increases in the fourth quarteras our clients utilize the54 balance of their budgets for the year. In addition, contracts for long-term IT Services and BPO engagements are often signed in the first and second quarters asclients begin new budget cycles. Volumes under such contracts then increase in the latter part of the year as engagements ramp up. Additionally, demand forcertain services, such as collections and transaction processing, is often greater in the second half of the year as our clients’ volumes in 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 2016 with the fourth quarter of 2015 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.Statement of financial positionKey changes in our financial position during 2016Following are the significant changes in our financial position as of December 31, 2016 compared to December 31, 2015: •Short-term borrowings increased by $138.5 millionOur short-term borrowings increased, primarily as a result of the drawdown of $138.5 million (net of repayments) on our revolving creditfacility to meet short-term internal funding requirements. Refer to Note 15 to our consolidated financial statements for additionalinformation. •Other assets and prepaid expenses increased by $97.4 millionThe increase in other assets and prepaid expenses is primarily due to a net increase in advance tax payments, customer acquisition costs,mark-to-market gains on derivative financial instruments, advance supplier payments and deferred transition costs. •Accounts receivable increased by $25.1 millionThe increase in our accounts receivable is primarily due to increased sales in 2016, partially offset by a marginal decrease in our days salesoutstanding. •Goodwill and intangible assets increased by $4.5 millionGoodwill increased by $31.1 million, primarily due to goodwill arising out of our 2016 acquisitions, partially offset by foreign exchangefluctuations in 2016. Our intangible assets decreased by $26.6 million, primarily due to amortization expenses and a charge relating to asoftware intangible asset in 2016, partially offset by intangible assets acquired in 2016. Refer to Notes 3 and 10 to our consolidated financialstatements for additional information. •Accrued expenses, other current liabilities and other liabilities increased by $6.2 millionThe increase in accrued expenses, other current liabilities and other liabilities is primarily due to higher net employee-related accruals in2016 and an increase in earn-out consideration payable in connection with certain acquisitions. These increases were partially offset by themark-to-market impact of our derivative financial instruments, including interest rate swaps that we entered into in 2016. •Long-term debt decreased by $39.2 millionOur long-term debt decreased primarily as a result of repayments we made in 2016. Refer to Note 14 to our consolidated financial statementsfor additional information. •Net deferred tax assets decreased by $29.6 millionOur net deferred tax assets decreased by $29.6 million. Refer to Note 25 to our consolidated financial statements for additional information.55 Liquidity and Capital ResourcesOverviewInformation about our financial position as of December 31, 2015 and 2016 is presented below: As of December31, As of December31, Percentage ChangeIncrease/(Decrease) 2015 2016 2016 vs. 2015 (dollars in millions) Cash and cash equivalents$ 450.9 $ 422.6 (6.3)%Short-term borrowings 21.5 160.0 644.2 Long-term debt due within one year39.1 39.2 0.1 Long-term debt other than the current portion737.3 698.2 (5.3)Genpact Limited total shareholders’ equity$ 1,304.4 $ 1,286.6 (1.4)% Financial ConditionWe have historically financed our operations and our expansion, including acquisitions, with cash from operations and borrowing facilities.As of December 31, 2016, $412.5 million of our $422.6 million in cash and cash equivalents was held by our foreign (non-Bermuda) subsidiaries.$148.2 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 $35.9 million of retained earnings. $92.3 million of the cash and cash equivalents is held by foreign subsidiaries in jurisdictions where no tax is expectedto be imposed upon repatriation. The remaining $172.1 million in cash and cash equivalents held by certain foreign subsidiaries is being permanentlyreinvested.In February 2015, our board of directors authorized a program to repurchase up to $250 million in value of our common shares. Under the sameprogram, our board of directors subsequently approved up to an additional $250 million in share repurchases on February 4, 2016, up to an additional $250million in share repurchases on September 19, 2016, and up to an additional $500 million share repurchases on February 10, 2017, bringing the totalauthorization under our existing program to $1.25 billion. Our share repurchase program does not obligate us to acquire any specific number of shares. Underthe program, we may purchase shares in privately negotiated or open market transactions.During the year ended December 31, 2016, we purchased 13,940,782 of our common shares under this program. The shares were purchased at aweighted average price of $24.76 per share for an aggregate cash amount of $345.2 million.Pursuant to our share repurchase program, we purchased an aggregate of 808,293 of our common shares between January 1, 2017 and March 1, 2017at a weighted average price of $24.48 per share for an aggregate cash amount of $19.8 million.We expect that in the future our cash from operations, cash reserves and debt capacity will be sufficient to finance our operations, our growth andexpansion plans, dividend payments and additional share repurchases we may make under our share repurchase program. In addition, we may raise additionalfunds through public or private debt or equity financings. Our working capital needs are primarily to finance our payroll and other administrative andinformation technology expenses in advance of the receipt of accounts receivable. Our primary capital requirements include opening new delivery centers,expanding related operations to support our growth, and financing acquisitions.56 Cash flows from operating, investing and financing activities, as reflected in our consolidated statements of cash flows, are summarized in thefollowing table: Year Ended, December 31, Percentage ChangeIncrease/(Decrease) 2015 2016 2016 vs. 2015 (dollars in millions) Net cash provided by (used for)Operating activities$ 327.4 $ 345.8 5.6 %Investing activities(100.5) (125.8) 25.2 Financing activities(218.9) (232.8) 6.4 Net increase (decrease) in cash and cash equivalents$ 8.1 $ (12.8) (258.2)% Cash flows from operating activities. We generated net cash from operating activities of $345.8 million in 2016, up $18.3 million from 2015. Theincrease in cash inflows is primarily attributable to a $74.4 million increase in net income adjusted for amortization, depreciation and other non-cash items.This increase was partially offset by a $56.1 million net change in our operating assets and liabilities in 2016 compared to 2015 primarily due to(i) higher upfront investments in connection with certain client contracts in 2016, (ii) a $15.7 million net decrease in income taxes, which was primarily dueto tax refunds received in 2016 and certain excess payments made in 2015 relating to tax demands received from Indian taxing authorities for prior yearassessments as well as to the timing of certain other payments, and (iii) a decrease in trade receivables in 2016 primarily due to the favorable impact of adecrease in our days sales outstanding partially offset by an increase in revenue volume in 2016 compared to 2015.Cash flows from investing activities. Our net cash used for investing activities was $125.8 million in 2016, up $25.3 million from $100.5 million in2015. This increase was primarily due to higher payments for purchases of property, plant and equipment (net of sales proceeds) of $27.5 million in 2016compared to 2015. Additionally, payments for acquisitions consummated in 2016 were $23.8 million higher than for acquisitions consummated in 2015.This increase was partially offset by an $8.8 million reduction in investments in our nonconsolidated affiliate, Markit Genpact KYC Services Limited, in2016 compared to 2015, and proceeds of $17.2 million in 2016 from the divestiture of our cloud-hosted technology platform for the rural banking sector inIndia.Cash flows from financing activities. Our net cash used for financing activities was $232.8 million in 2016, up $13.9 million from $218.9 millionin 2015. In June 2015, we refinanced our 2012 credit facility through a new credit facility comprised of an $800.0 million term loan and a $350.0 millionrevolving facility. As a result, we extinguished the outstanding term loan, amounting to $663.2 million, under the previous facility and obtained $800.0million in new funding, resulting in a net inflow of $136.8 million. In connection with the entry into the new facility in 2015, we paid $5.5 million inexpenses and repaid $135.0 million, representing the amount we had drawn down under the 2012 revolving credit facility as of the date of the June 2015refinancing. Also in 2015, we obtained and repaid two short-term loans in the amounts of $672.5 million and $737.5 million, in connection with which wepaid debt issuance costs of $1.0 million. In 2016, we repaid $40.0 million of the term loan under our new credit facility, compared to repayments of $20.0million in 2015. Additionally, we had higher proceeds from short-term borrowings (net of repayments) of $138.5 million in 2016 compared to $21.5 millionin 2015 to meet short-term internal funding requirements. For details refer to Notes 14 and 15 to our consolidated financial statements. Additionally, noexcess tax benefit related to stock-based compensation was recognized in 2016 due to our early adoption of ASU 2016-09, compared to $6.6 million in suchexcess tax benefits in 2015. Proceeds from the issuance of common shares under stock-based compensation plans (net of payments) were $8.6 million higherin 2016 than in 2015 and payments related to earn-out or deferred consideration were $1.3 million higher in 2016 than in 2015. Share repurchase paymentswere $345.2 million in 2016 compared to $226.9 million in 2015.Financing Arrangements (Credit Facility)In June 2015, we refinanced the 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, 2015 and December 31, 2016, our outstanding term loan debt, net of debt amortization expense of $3.5 million and $2.7million, respectively, was $776.5 million and $737.3 million, respectively. As of December 31, 2015 and December 31, 2016, a total of $22.9 million and$161.0 million, respectively, of our revolving credit facility was utilized, of which $21.5 million and $160.0 million, respectively, constituted fundeddrawdown and $1.4 million and $1.0 million, respectively, constituted non-funded drawdown. We also have fund-based and non-fund based credit facilitieswith banks, which57 are available for operational requirements in the form of overdrafts, letters of credit, guarantees and short-term loans. As of December 31, 2015 and December31, 2016, the limits available under such facilities were $15.8 million and $15.4 million, respectively, of which $10.3 million and $11.0 million was utilized,constituting non-funded drawdown. For details on our financing arrangements, 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 as of December 31, 2016, the fair values of all of our reporting units are likelyto be higher than their respective carrying values other than our IT services reporting unit primarily due to decline in planned revenues. We conducted aquantitative assessment of our IT services reporting unit as of December 31, 2016 to determine if its fair value is less than the carrying amount. Determining,through a quantitative approach, whether an impairment has occurred requires valuation of the reporting unit, which we estimate using a discounted cashflow model. The fair valuation of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. While we believethat our estimates and assumptions are reasonable at the time they are made, they are unpredictable and inherently uncertain, and, accordingly, actual resultsmay differ from such estimates. Our estimates and assumptions included revenue growth rates and operating margins to calculate projected future cash flows,risk-adjusted discount rates, and terminal growth rates. We derived our discount rate using the capital asset pricing model to estimate the weighted averagecost of capital relevant to our reporting units. We used a discount rate that is commensurate with the risks and uncertainties in the business and our internallydeveloped forecasts. Based on the results of our quantitative assessment we determined that the fair value of the IT services reporting unit substantiallyexceeded its carrying value as of December 31, 2016. In the year ended December 31, 2015, in accordance with ASU 2011-08, the Company performed an assessment of qualitative factors to determinewhether 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 less than itscarrying amount. Based on this assessment, the Company concluded that it is not more likely than not that the fair value of any of the Company’s reportingunits is less than its carrying amount.Off-Balance Sheet ArrangementsOur off-balance sheet arrangements consist of foreign exchange contracts and certain operating leases. For additional information, see Item 1A—“Risk Factors—Currency exchange rate fluctuations in various currencies in which we do business, especially the Indian rupee, the euro and the U.S.dollar, could have a material adverse effect on our business, results of operations and financial condition,” the section titled “Contractual Obligations”below, and Note 7 to our consolidated financial statements.58 Contractual ObligationsThe following table sets forth our total future contractual obligations as of December 31, 2016: Total Less than1 year 1-3 years 3-5 years After 5 years (dollars in millions) Long-term debt $791.7 $55.9 $109.1 $626.7 — — Principal payments 737.3 39.2 78.5 619.6 — — Interest payments* 54.4 16.7 30.6 7.1 — Short-term borrowings 161.8 161.8 — — — — Principal payments 160.0 160.0 — — — — Interest payments** 1.8 1.8 — — — Capital leases 4.7 1.7 2.3 0.7 — — Principal payments 3.8 1.3 1.9 0.6 — — Interest payments 0.9 0.4 0.4 0.1 — Operating leases 136.5 29.9 48.1 31.5 27.0 Purchase obligations 26.7 19.4 6.9 0.4 — Capital commitments net of advances 5.2 5.2 — — — Earn-out consideration 26.5 8.0 9.9 8.6 — — Reporting date fair value 22.5 6.9 8.8 6.8 — — Interest 4.0 1.1 1.1 1.8 — Other liabilities 33.7 20.2 11.9 1.6 — Total contractual obligations $1,186.8 $302.1 $188.2 $669.5 $27.0 *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 election and currentcredit rating as of December 31, 2016. Amounts shown exclude the impact of interest rate swaps.**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 ourelection and current credit rating as of December 31, 2016 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 ASU No. 2014-09, Revenue from Contracts with Customers, which will replace most existing revenue recognitionguidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount thatit expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty ofrevenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. Subsequently, the FASB issued ASU No.2016-08, “Principal versus Agent Considerations (Reporting Gross versus Net),” in March 2016, ASU No. 2016-10, “Identifying performance obligations andlicensing,” in April 2016, and ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” in December2016, which amend and clarify ASU 2014-09. These ASUs will be effective for us beginning January 1, 2018, including interim periods in our fiscal year2018, and allow for both retrospective and prospective adoption. We expect to complete our assessment of the cumulative effect of adopting ASU No. 2014-09 as well as the selection of a transition approach during the first half of 2017. However, we do not believe there will be a material impact to our revenuesupon adoption while there may be an impact on the recognition of timing of contract costs. We are continuing to evaluate the impact on our consolidatedresults of operations, cash flows,59 financial position and disclosures of our pending adoption of ASU 2014-09 and our preliminary assessments are subject to change.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 will 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 of determining the method of adoption and assessing theimpact of this ASU on our consolidated results of operations, cash flows, financial position and disclosures.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 andliabilities that arise from its leases other than those that meet the definition of a short-term lease. The ASU requires extensive qualitative and quantitativedisclosures, including with respect to significant judgments made by management. The ASU will be effective for us beginning January 1, 2019, includinginterim periods in our fiscal year 2019. Early adoption is permitted. We are in the process of determining the method of adoption and assessing the impact ofthis ASU on our consolidated results of operations, cash flows, financial position and disclosures.In June 2016, the FASB issued ASU No. 2016-13, “Measurement of credit losses on financial instruments,” The ASU requires measurement andrecognition of expected credit losses for financial assets held. The ASU will be effective for us beginning January 1, 2020, including interim periods in ourfiscal year 2020. We are in the process of assessing the impact of this ASU on our consolidated results of operations, cash flows, financial position anddisclosures.In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments." The newguidance is intended to reduce diversity in how certain transactions are classified in the statement of cash flows. The ASU is effective for us beginningJanuary 1, 2018, including interim periods in our fiscal year 2018. Early adoption is permitted. We are in the process of assessing the impact of this ASU onour consolidated results of operations, cash flows, financial position and disclosures.In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory.” The new guidance eliminates the exceptionfor deferment of tax recognition until the transferred asset is sold to a third party or otherwise recovered through use for all intra-entity sales of assets otherthan inventory. The ASU is effective for us beginning January 1, 2018, including interim periods in our fiscal year 2018. Early adoption is permitted. We arein the process of assessing the impact of this ASU on our consolidated results of operations, cash flows, financial position and disclosures.In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The new guidancerevises the definition of a business. The definition of a business affects many areas of accounting (e.g., acquisitions, disposals, goodwill impairment,consolidation). The ASU is effective for us beginning January 1, 2018, including interim periods in our fiscal year 2018. Early adoption is permitted. We arein the process of assessing the impact of this ASU on our consolidated results of operations, cash flows, financial position and disclosures.In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” which removes step two from the goodwillimpairment test. As a result, under the ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of areporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’sfair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Also, an entity should considerincome tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, ifapplicable. The ASU is effective for us beginning January 1, 2020, including interim periods in our fiscal year 2020. Early adoption is permitted. We are inthe process of assessing the impact of this ASU on our consolidated results of operations, cash flows, financial position and disclosures.60 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 2016) 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 2016, 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 2016 by approximately $6 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 2016 by approximately $35 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 2016 by approximately $39 million.We have sought to reduce the effect of any Indian rupee-U.S. dollar, Philippine Peso-U.S. dollar, Chinese renminbi-Japanese yen, euro-Romanian leu,Mexican peso-U.S. dollar and certain other local currency exchange rate fluctuations on our results of operations by purchasing forward foreign exchangecontracts to cover a portion of our expected cash flows and accounts receivable. These instruments typically have maturities of zero to sixty months. We usethese instruments as economic hedges and not for speculative purposes, and most of them qualify for hedge accounting under the FASB guidance onderivatives and hedging. Our ability to enter into derivatives that meet our planning objectives is subject to the depth and liquidity of the market for suchderivatives. In addition, the laws of China and India limit the duration and amount of such arrangements. We may not be able to purchase contracts adequateto insulate us from Indian rupee-U.S. dollar and Chinese renminbi-Japanese yen foreign exchange currency risks. In addition, any such contracts may notperform adequately as hedging mechanisms. 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, 2016, we had $897.3 million ofindebtedness under our credit facility, comprised of a long-term loan of $737.3 million, net of $2.7 million in debt amortization expenses, and a revolvingloan of $160 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, 2016, a 1% change in interest rates, including the impact on the cost of our interest rate swaps, wouldhave had an approximately $4.1 million impact on our net interest expense in fiscal 2016.We are exposed to interest rate risk arising from changes in interest rates on the floating rate indebtedness under our term loan. Borrowings under ourterm loan bear interest at floating rates based on LIBOR, but in no event less than the floor rate of 0.0% plus an applicable margin. Accordingly, fluctuationsin market interest rates may increase or decrease our interest expense which will, in turn, increase or decrease our net income and cash flow.We manage a portion of our interest rate risk related to floating rate indebtedness by entering into interest rate swaps under which we receive floatingrate payments based on the greater of LIBOR and the floor rate under our term loan and make payments based on a fixed rate. As of December 31, 2016, wewere party to interest rate swaps covering a total notional amount of $456.8 million. Under our swap agreements, the rate that we pay to banks in exchangefor LIBOR ranges between 0.88% and 1.20%.Credit riskAs of December 31, 2016, we had accounts receivable, including long-term accounts receivable, net of provisions for doubtful receivables, of $618.5million. Of this, $92.1 million was owed by GE, and the balance, or $526.4 million, was owed by Global Clients. No single Global Client owed more than 5%of our accounts receivable balance as of December 31, 2016.61 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 Securities Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized andreported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated andcommunicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regardingrequired 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 Exchange Act Rule 13a-15(b). Based upon that evaluation, theCompany’s Chief Executive Officer along with the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures areeffective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in theCompany’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 accordancewith generally 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 ourassets that could have a material effect on our financial statements.Due 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, weconducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of SponsoringOrganizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on its evaluation, our management concludedthat our internal control over financial reporting was effective as of December 31, 2016.62 During 2016, we acquired all of the outstanding equity interest in PNMSoft Ltd., all of the outstanding equity interest in Endeavour SoftwareTechnologies Private Limited and a controlling equity interest in Strategic Source Excellence Limited. We have excluded from our assessment of theeffectiveness of the Company’s internal control over financial reporting as of December 31, 2016 the operations of such acquisitions and the internal controlover financial reporting associated with total assets of $74.1 million (of which $56.1 million represents goodwill and intangible assets included within thescope of the assessment) and total revenues of $17.5 million included in the consolidated financial statements of the Company as of and for the year endedDecember 31, 2016.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 2016, we implemented the second phase of our new enterprise resource planning, or ERP, system the first phase of which we implementedin 2015. This ERP system was designed to enhance our overall system of internal control over financial reporting through further automation and integrationof business processes and was not implemented in response to any identified deficiency or material weakness in the Company’s internal control overfinancial reporting. This implementation was significant in scale and complexity and significantly affected certain accounting functions. Both during andafter the implementation, the Company maintained its internal control design by changing detailed key controls to achieve all key financial reportingassertions. Other than the ERP implementation, 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 the Exchange Act) during the quarterly period ended December 31, 2016 that have materially affected, or are reasonably likely tomaterially affect, the Company’s internal control over financial reporting.Item 9B. Other InformationWe entered into a new MSA, effective January 1, 2017, with General Electric International, Inc. on December 22, 2016. The new MSA replacedour prior MSA with GE, which expired on December 31, 2016. The description of the MSA set forth in Item 7—“Management’s Discussion and Analysis ofFinancial Condition and Results of Operations—Overview” and the full text of the MSA, which is attached hereto as Exhibit 10.36, are incorporated byreference herein.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. Theother information required by this Item will be included in our Proxy Statement for the 2017 Annual General Meeting of Shareholders under the captions“Director Nominees,” “Corporate Governance,” and “Section 16(a) Beneficial Ownership Reporting Compliance,” which will be filed with the SEC no laterthan 120 days after the close of the fiscal year ended December 31, 2016 and is incorporated by reference in this report.Item 11. Executive CompensationThe information required by this Item will be included in our Proxy Statement for the 2017 Annual General Meeting of Shareholders under thecaption “Information about Executive and Director Compensation,” which will be filed with the SEC no later than 120 days after the close of the fiscal yearended December 31, 2016 and is incorporated by reference in this report.63 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 2017 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, 2016 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 2017 Annual General Meeting of Shareholders under thecaption “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, 2016 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 2017 Annual General Meeting of Shareholders under thecaption “Independent Registered Public Accounting Firm Fees and Other Matters,” which will be filed with the SEC no later than 120 days after the close ofthe fiscal year ended December 31, 2016 and is incorporated by reference in this report.PART 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. Therequired financial statements appear on pages F-4 through F-58 hereof. 2.Financial Statement SchedulesSeparate financial statement schedules have been omitted either because they are not applicable or because the required informationis included 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 referenceinto this Annual Report on Form 10-K.Item 16. Form 10-K SummaryNone. 64 GENPACT LIMITED AND ITS SUBSIDIARIESIndex to Consolidated Financial Statements Page No.Reports of Independent Registered Public Accounting FirmF-2Consolidated Balance Sheets as of December 31, 2015 and 2016F-5Consolidated Statements of Income for the years ended December 31, 2014, 2015 and 2016F-6Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2014, 2015 and 2016F-7Consolidated Statements of Equity for the years ended December 31, 2014, 2015 and Consolidated Statements of Equity and Redeemable Non-controlling Interest for the year ended December 31, 2016F-8Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2015 and 2016F-11Notes to the Consolidated Financial StatementsF-12 F-1 Report of Independent Registered Public Accounting Firm The 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, 2015 and 2016, 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, 2016. 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 standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide 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 as ofDecember 31, 2015 and 2016, and the results of their operations and their cash flows for each of the years in the three‑year period ended December 31, 2016,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 internal controlover financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committeeof Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 1, 2017 expressed an unqualified opinion on theeffectiveness of the Company’s internal control over financial reporting. /s/ KPMGGurgaon, IndiaMarch 1, 2017 F-2 Report of Independent Registered Public Accounting Firm The Board of Directors and ShareholdersGenpact Limited:We have audited Genpact Limited and subsidiaries (“Genpact Limited” or the “Company”) internal control over financial reporting as of December 31, 2016,based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment ofthe effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over FinancialReporting. 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 require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such otherprocedures 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 financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith 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, 2016, based on criteriaestablished in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).The Company acquired PNMSoft Limited, Endeavour Software Technologies Private Limited and Strategic Sourcing Excellence Limited, and managementexcluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, PNMSoft Limited’s,Endeavour Software Technologies Private Limited’s and Strategic Sourcing Excellence Limited’s internal control over financial reporting associated withtotal assets of $74,133 thousands (of which $56,139 thousands represent goodwill and intangible assets included within the scope of the assessment) andtotal revenues of $17,459 thousands included in the consolidated financial statements of the Company as of and for the year ended December 31, 2016. Ouraudit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of PNMSoftLimited, Endeavour Software Technologies Private Limited and Strategic Sourcing Excellence Limited.F-3 We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsof the Company as of December 31, 2015 and 2016, and the related consolidated statements of income, comprehensive income (loss), equity, and cash flowsfor each of the years in the three-year period ended December 31, 2016, and our report dated March 1, 2017 expressed an unqualified opinion on thoseconsolidated financial statements. /s/ KPMGGurgaon, IndiaMarch 1, 2017 F-4 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Balance Sheets(In thousands, except per share data and share count) Notes As of December 31,2015 As of December 31,2016 Assets Current assets Cash and cash equivalents 4 $450,907 $422,623 Accounts receivable, net 5 590,137 615,265 Prepaid expenses and other current assets 8 154,025 189,149 Total current assets $1,195,069 $1,227,037 Property, plant and equipment, net 9 175,396 200,115 Deferred tax assets 25 99,395 70,143 Investment in equity affiliates 6,677 4,800 Intangible assets, net 10 98,601 72,049 Goodwill 10 1,038,346 1,069,408 Other assets 11 180,005 242,328 Total assets $2,793,489 $2,885,880 Liabilities and equity Current liabilities Short-term borrowings 15 $21,500 $160,000 Current portion of long-term debt 14 39,134 39,181 Accounts payable 10,086 9,768 Income taxes payable 25 24,122 24,159 Accrued expenses and other current liabilities 13 499,638 498,247 Total current liabilities $594,480 $731,355 Long-term debt, less current portion 14 737,332 698,152 Deferred tax liabilities 25 2,093 2,415 Other liabilities 16 155,228 162,790 Total liabilities $1,489,133 $1,594,712 Redeemable non-controlling interest — 4,520 Shareholders' equity Preferred shares, $0.01 par value, 250,000,000 authorized, none issued — — Common shares, $0.01 par value, 500,000,000 authorized, 211,472,312 and 198,794,052 issued and outstanding as of December 31, 2015 and December 31, 2016, respectively 2,111 1,984 Additional paid-in capital 1,342,022 1,384,468 Retained earnings 411,508 358,121 Accumulated other comprehensive income (loss) (451,285) (457,925)Total equity $1,304,356 $1,286,648 Commitments and contingencies 28 Total liabilities, redeemable non-controlling interest and equity $2,793,489 $2,885,880 See accompanying notes to the Consolidated Financial Statements. F-5 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Income(In thousands, except per share data and share count) Year ended December 31, Notes 2014 2015 2016 Net revenues $2,279,438 $2,461,044 $2,570,756 Cost of revenue 21,27 1,378,088 1,493,547 1,554,707 Gross profit $901,350 $967,497 $1,016,049 Operating expenses: Selling, general and administrative expenses 22,27 585,646 608,114 653,029 Amortization of acquired intangible assets 10 28,543 28,513 27,183 Other operating (income) expense, net 23 (6,870) (3,322) (4,940)Income from operations $294,031 $334,192 $340,777 Foreign exchange gains (losses), net (12,363) 5,269 2,630 Interest income (expense), net 24 (29,395) (31,267) (16,184)Other income (expense), net 2,112 4,360 10,120 Income before equity-method investment activity, net and income tax expense $254,385 $312,554 $337,343 Gain (loss) on equity-method investment activity, net (4,795) (10,800) (7,698)Income before income tax expense $249,590 $301,754 $329,645 Income tax expense 25 57,419 61,937 62,098 Net income $192,171 $239,817 $267,547 Net loss (income) attributable to non-controlling interest/ redeemable non-controllinginterest (169) — 2,137 Net income attributable to Genpact Limited shareholders $192,002 $239,817 $269,684 Net income available to Genpact Limited common shareholders 20 $192,002 $239,817 $269,684 Earnings per common share attributable to Genpact Limited common shareholders 20 Basic $0.87 $1.11 $1.30 Diluted $0.85 $1.09 $1.28 Weighted average number of common shares used in computing earnings per common share attributable to Genpact Limited common shareholders Basic 220,847,098 216,606,542 206,861,536 Diluted 225,168,665 219,145,044 210,126,023 See accompanying notes to the Consolidated Financial Statements.F-6 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Comprehensive Income (Loss)(In thousands) Year ended December 31, 2014 2015 2016 GenpactLimitedShareholders Non-controllinginterest GenpactLimitedShareholders Non-controllinginterest GenpactLimitedShareholders RedeemableNon-controllinginterest Net income (loss) $192,002 $169 $239,817 $— $269,684 $(2,137)Other comprehensive income: Currency translation adjustments (41,964) (11) (64,504) — (46,340) 104 Net gain (loss) on cash flow hedging derivatives, net of taxes (Note 7) 90,200 — 22,880 — 43,742 — Retirement benefits, net of taxes (1,106) — 2,823 — (4,042) — Other comprehensive income (loss) $47,130 $(11) $(38,801) $— $(6,640) $104 Comprehensive income (loss) $239,132 $158 $201,016 $— $263,044 $(2,033) See accompanying notes to the Consolidated Financial Statements.F-7 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Equity(In thousands, except share count) Genpact Limited Shareholders Common shares Accumulated No. ofShares Amount AdditionalPaid-in Capital RetainedEarnings OtherComprehensiveIncome (Loss) Non-controllinginterest TotalEquity 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 on exercise of options (Note 18) 3,319,760 33 16,018 — — — 16,051 Issuance of common shares under the employee stock 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) $— $1,285,136See accompanying notes to the Consolidated Financial Statements.F-8 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Equity(In thousands, except share count) Genpact Limited Shareholders Common shares Accumulated No. ofShares Amount AdditionalPaid-in Capital RetainedEarnings OtherComprehensiveIncome (Loss) TotalEquity 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 on exercise of options (Note 18) 1,428,605 14 13,550 — — 13,564 Issuance of common shares under the employee stock purchase plan (Note 18) 121,485 1 2,523 — — 2,524 Net settlement on vesting of restricted share units (Note 18) 259,776 3 (2,309) — — (2,306)Net settlement on vesting of performance units (Note 18) 846,114 8 (8) — — — Stock repurchased and retired (Note19) (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-9 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Equity and Redeemable Non-controlling Interest(In thousands, except share count) Genpact Limited Shareholders Common shares Accumulated No. ofShares Amount AdditionalPaid-in Capital RetainedEarnings OtherComprehensiveIncome (Loss) TotalEquity Redeemablenon-controllinginterest Balance as of January 1, 2016 $211,472,312 $2,111 $1,342,022 $411,508 $(451,285) $1,304,356 $— Issuance of common shares on exercise of options (Note 18) 994,155 10 14,886 — — 14,896 — Issuance of common shares under the employee stock purchase plan (Note 18) 146,685 1 3,331 — — 3,332 — Net settlement on vesting of restricted share units (Note 18) 121,682 1 (884) — — (883) — Net settlement on vesting of performance units (Note 18) — — — — — — — Stock repurchased and retired (Note19) (13,940,782) (139) — (345,061) — (345,200) — Excess tax benefit on stock-based compensation (Note 25) — — — — — — — Expenses related to stock purchase (Note 19) — — — (279) — (279) — Stock-based compensation expense (Note 18) — — 25,113 — — 25,113 — Redeemable non-controlling interest — — — — — — 3,910 Deferred Tax Assets recognized on early adoption of ASU2016-09 (Note 25) — — — 24,912 — 24,912 — Change in fair value of redeemable non-controlling interest — — — (2,643) — (2,643) 2,643 Comprehensive income: Net income (loss) — — — 269,684 — 269,684 (2,137)Other comprehensive income — — — — (6,640) (6,640) 104 Balance as of December 31, 2016 198,794,052 $1,984 $1,384,468 $358,121 $(457,925) $1,286,648 $4,520See accompanying notes to the Consolidated Financial Statements. F-10 GENPACT LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Cash Flows(In thousands) Year ended December 31, 2014 2015 2016 Operating activities Net income attributable to Genpact Limited shareholders $192,002 $239,817 $269,684 Net income (loss) attributable to non-controlling interest/redeemable non-controlling interest 169 — (2,137)Net income $192,171 $239,817 $267,547 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 51,064 54,286 54,553 Amortization of debt issuance costs (including loss on extinguishment of debt) 3,240 13,546 1,531 Amortization of acquired intangible assets 28,543 28,513 27,183 Intangible assets write-down — 10,714 11,195 Reserve for doubtful receivables 3,107 2,449 7,282 Unrealized (gain) loss on revaluation of foreign currency asset/liability 9,419 (4,999) 1,717 Equity-method investment activity, net 4,795 10,800 7,698 Excess tax benefit on stock-based compensation — (6,560) — Stock-based compensation expense 28,065 24,976 25,113 Deferred income taxes (12,252) (18,713) 30,454 Gain on divestiture — — (5,214)Others, net 1,291 (238) (41)Change in operating assets and liabilities: Increase in accounts receivable (24,088) (78,923) (48,612)Increase in prepaid expenses, other current assets and other assets (31,657) (32,602) (62,852)Increase (decrease) in accounts payable (7,268) (3,988) (463)Increase (decrease) in accrued expenses, other current liabilities and other liabilities 27,500 69,606 27,977 Increase (decrease) in income taxes payable (2,092) 18,757 704 Net cash provided by operating activities $271,838 $327,441 $345,772 Investing activities Purchase of property, plant and equipment (62,577) (62,173) (88,772)Proceeds from sale of property, plant and equipment 564 1,486 547 Investment in equity affiliates — (18,423) (9,620)Short-term deposits placed (25,000) — — Redemption of short-term deposits 25,000 — — Payment for business acquisitions, net of cash acquired (130,809) (21,363) (45,162)Proceeds from divestiture of business, net of cash divested — — 17,242 Net cash used for investing activities $(192,822) $(100,473) $(125,765)Financing activities Repayment of capital lease obligations (2,095) (2,035) (1,793)Payment of debt issuance and refinancing costs — (6,584) — Proceeds from long-term debt — 800,000 — Repayment of long-term debt (6,750) (684,875) (40,000)Proceeds from short-term borrowings 195,000 1,451,500 200,000 Repayment of short-term borrowings (60,000) (1,565,000) (61,500)Proceeds from issuance of common shares under stock-based compensation plans 30,144 16,088 18,228 Payment for net settlement of stock-based awards (25,975) (7,194) (769)Payment of earn-out/deferred consideration (1,088) (230) (1,485)Distribution to non-controlling interest (1,487) — — Payment for stock purchased and retired (302,625) (226,917) (345,200)Payment for expenses related to stock purchase (2,543) (197) (279)Excess tax benefit on stock-based compensation — 6,560 — Net cash used for financing activities $(177,419) $(218,884) $(232,798)Effect of exchange rate changes (11,085) (18,965) (15,493)Net increase (decrease) in cash and cash equivalents (98,403) 8,084 (12,791)Cash and cash equivalents at the beginning of the period 571,276 461,788 450,907 Cash and cash equivalents at the end of the period $461,788 $450,907 $422,623 Supplementary information Cash paid during the period for interest 27,175 20,950 17,860 Cash paid during the period for income taxes 83,803 72,102 46,731 Property, plant and equipment acquired under capital lease obligations 2,176 1,656 2,206 See accompanying notes to the Consolidated Financial StatementsF-11 GENPACT 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 management and services. The architect of the Lean DigitalSM enterprise, theCompany uses its patented Smart Enterprise Processes (SEPSM) framework to reimagine its clients’ operating models end-to-end, including their middle andback offices. This creates Intelligent OperationsSM that the Company helps to design, transform, and run. The Company generates impact for a few hundredstrategic clients, including approximately one fifth of the Fortune Global 500, and has over 75,000 employees 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 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 consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the resultsof operations for these periods.The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of Genpact Limited, aBermuda company, and all of its subsidiaries that are more than 50% owned and controlled. When the Company does not have a controlling interest in anentity but exerts significant influence over the entity, the Company applies the equity method of accounting. All intercompany transactions and balances areeliminated in consolidation.Non-controlling interest in subsidiaries that is redeemable outside of the Company’s control for cash or other assets is reflected in the mezzaninesection between liabilities and equity in the consolidated balance sheets at the redeemable value, which approximates fair value. Redeemable non-controlling interest is adjusted to its fair value at each balance sheet date. Any resulting increases or decreases in the estimated redemption amount areaffected by corresponding charges to additional paid-in capital. The share of non-controlling interest in subsidiary earnings is reflected in net loss (income)attributable to redeemable non-controlling interest in the consolidated statements of income.(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-12GENPACT 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,revenue recognition, reserves for doubtful receivables, valuation allowances for deferred tax assets, the valuation of derivative financial instruments,measurements of stock-based compensation, assets and obligations related to employee benefits, and income tax uncertainties and other contingencies.Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable. Although these estimates are basedupon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any changes in estimates are adjustedprospectively in the Company’s consolidated financial statements.(c) Revenue recognitionThe Company derives its revenue primarily from business process outsourcing and information technology services, which are provided on a time-and-material, transaction or fixed-price basis. The Company recognizes revenue when persuasive evidence of an arrangement exists, the sales price is fixed ordeterminable, 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 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.(d) Accounts receivableAccounts receivable are recorded at the invoiced or to be invoiced amount and do not bear interest. Amounts collected on trade accounts receivableare included 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 clients’ financial condition, the amount of receivablesF-13GENPACT 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)in dispute, and the current receivables’ aging and current payment patterns. Account balances are charged off against the allowance after all means ofcollection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposurerelated 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 monthsor less.(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 improvementsare capitalized, whereas the costs of maintenance and repairs are charged to earnings as incurred. The Company depreciates and amortizes all property, plantand equipment 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 4Software 4-7Leasehold improvements Lesser of lease periodor 10 yearsVehicles 3-4 The 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 (i) external direct costs of materials and services utilized in developing or obtaining computer software, (ii) compensation andrelated benefits for employees who are directly associated with the software project, and (iii) interest costs incurred while developing internal-use computersoftware. Capitalized software costs are included in property, plant and equipment on the Company’s balance sheet and amortized on a straight-line basiswhen placed into service over the estimated useful lives of the software. 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.F-14GENPACT 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)Thereafter, all software production costs will be capitalized and amortized over their useful lives and reported at the lower of unamortized cost andnet 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. Goodwillis not 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.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 years Intangible assets are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economicbenefits of 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 United Kingdom, the Czech Republic and one subsidiary in Poland, is the euro, and thefunctional currencies of theF-15GENPACT 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)Company’s subsidiaries organized in Brazil, China, Colombia, Guatemala, India, Israel, Japan, Morocco, South Africa, the Philippines, the UnitedKingdom, Poland, the Czech Republic, Hong Kong, Singapore, Australia, Canada and United Arab Emirates are their respective local currencies. Thefunctional currency of all other Company subsidiaries is the U.S. dollar. The translation of the functional currencies of the Company’s subsidiaries into U.S.dollars is performed for balance sheet accounts using the exchange rates in effect as of the balance sheet date and for revenues and expense accounts using amonthly average exchange rate prevailing during the respective period. The gains or losses resulting from such translation are reported as currencytranslation adjustments under other comprehensive income (loss), net, under accumulated other comprehensive income (loss) as a separate component ofequity.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.(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 and interest rate swaps to mitigate interest rate fluctuation risk on its indebtedness.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,”“Selling, general and administrative expenses,” and “Interest expense,” as applicable. Changes in the fair value of derivatives not designated as hedginginstruments, and the ineffective portion of derivatives designated as cash flow hedges are recognized in the consolidated statements of income and areincluded in foreign exchange 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 currentF-16GENPACT 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)year. In addition, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financialstatement carrying amounts of existing assets and liabilities and their tax bases and all operating loss and tax credit carry forwards, if any. Deferred tax assetsand liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to berecovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the statement of income in the periodthat includes the enactment date or the filing or approval date of the tax status change. Deferred tax assets are reduced by a valuation allowance if, based onthe weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.The Company applies a two-step approach for recognizing and measuring the benefit of 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 percent likely of being realized upon settlement. The Companyincludes interest and penalties related to unrecognized tax benefits within income tax expense.(n) Employee benefit plansContributions 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, 2014, 2015 and 2016 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 accountedF-17GENPACT 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)for 18% and 15% of the Company’s receivables as of December 31, 2015 and 2016, respectively. GE accounted for 20%, 19% and 16% of theCompany’s revenues in the years ended December 31, 2014, 2015 and 2016, 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 probablethat a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Legal costs incurred in connection withsuch liabilities are expensed as incurred.(s) Recently adopted accounting pronouncementsThe authoritative bodies release standards and guidance which are assessed by management for impact on the company’s consolidated financialstatements.The following recently released accounting standard has been adopted by the Company:In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based PaymentAccounting. The new standard contains several amendments that will simplify the accounting for employee share-based payment transactions, including theaccounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification onthe statement of cash flows. The changes in the new standard eliminate the requirement for excess tax benefits to be recognized in additional paid-in capitaland tax deficiencies recognized either in income tax expense or in additional paid-in capital. The Company elected to early adopt ASU 2016-09 on January1, 2016 which will be applied using a modified retrospective approach. The treatment of forfeitures has not changed as we are electing to continue our currentprocess of estimating the number of forfeitures. With the early adoption of ASU 2016-09, we have elected to present the cash flow statement on a prospectivetransition method and no prior periods have been adjusted.The following recently released accounting standards have 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 January 1, 2016, the Company has adopted FASB ASU 2015-01 (Topic 225): Simplifying Income Statement Presentation by Eliminatingthe Concept of Extraordinary Items (“ASU 2015-01”). Such items are defined as transactions or events that are both unusual in nature and infrequent inoccurrence, and, currently, are required to be presented separately in the income statement, net of income tax, after income from continuing operations. Thechanges eliminate the concept of an extraordinary item and, therefore, the presentation of such items will no longer be required. Notwithstanding this change,the Company will still be required to present and disclose a transaction or event that is both unusual in nature and infrequent in occurrence in the notes to thefinancial statements.Effective January 1, 2016, the Company has adopted FASB ASU 2015-05 (Topic 350), Customer’s Accounting for Fees Paid in a Cloud ComputingArrangement (“ASU 2015-05”), which provides explicit guidance to evaluate the accounting for fees paid by a customer in a cloud computing arrangement.The new guidance clarifies that if a cloud computing arrangement includes a software license, the customer should account for the license consistent with itsaccounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a servicecontract.F-18GENPACT 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)Effective January 1, 2016, the Company has adopted FASB ASU 2015-16 (Topic 805), Business Combinations (“ASU 2015-16”), which eliminatesthe requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. The guidance requires that theacquirer shall recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which theadjustment amounts are determined.Effective January 1, 2016, the Company has adopted FASB ASU 2015-02. In February 2015, the FASB issued ASU No. 2015-02, Amendment to theConsolidation Analysis, which specifies changes to the analysis that an entity must perform to determine whether it should consolidate certain types of legalentities. These changes (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interestentities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reportingentities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and (iv) provide a scopeexception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance withrequirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. 3. Business acquisitions A. Certain acquisitions(a) PNMSoft Ltd.On August 4, 2016, the Company acquired 100% of the outstanding equity interest in PNMSoft Limited (“PNM”), a company incorporated under thelaws of Israel. The total purchase consideration paid by the Company to acquire PNM is $35,341. This amount includes the estimated fair value of contingentearn-out consideration, cash consideration of $28,128, net of cash acquired of $2,853, and an adjustment for working capital, transaction expenses and netdebt. During the quarter ended December 31, 2016, the Company recorded a measurement period adjustment that resulted in a $155 decrease in the purchaseconsideration upon the recognition of an additional reserve for doubtful receivables with a value of $136 and a non-current liability with a value of $19. Thisadjustment also resulted in the creation of a deferred tax asset amounting to $25 with a corresponding impact on goodwill. These measurement periodadjustments did not have a significant impact on the Company’s consolidated statements of income, balance sheets or cash flows. The purchase agreementbetween the Company and the sellers of PNM provides for contingent earn-out consideration ranging from $0 to $9,000, payable by the Company to thesellers of PNM based on future performance relative to the thresholds specified in the earn-out calculation. This acquisition enhances the Company’s digitalcapabilities by adding dynamic workflow solutions and implementation services.In connection with this acquisition, the Company recorded $1,700 in customer-related intangibles, $1,630 in marketing-related intangibles and$5,110 in other intangible assets, which have a weighted average amortization period of two years. Goodwill arising from the acquisition amounted to$25,101, which has been allocated to the Company’s India reporting unit and is not deductible for tax purposes. The goodwill represents primarily thecapabilities, operating synergies and other benefits expected to result from combining the acquired operations with those of the Company.Acquisition-related costs of $1,273 have been included in selling, general and administrative expenses as incurred. In connection with thetransaction, the Company acquired assets with a value of $7,110, assumed liabilities amounting to $4,366 and recognized a net deferred tax liability of $944.The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’s consolidatedfinancial statements with effect from the date of the acquisition.F-19GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 3. Business acquisitions (Continued)(b) Endeavour Software Technologies Private LimitedOn April 13, 2016, the Company acquired 100% of the outstanding equity interest in Endeavour Software Technologies Private Limited(“Endeavour”), a private limited company incorporated under the laws of India. The preliminary estimated total consideration paid by the Company for theacquisition of Endeavour is $14,443, subject to adjustment for closing date working capital and net debt. This amount includes the estimated fair value ofcontingent earn-out consideration, cash consideration of $10,028, net of cash acquired of $2,345, and a preliminary adjustment for working capital and netdebt. Of this amount, $95 is payable by the Company to one of the sellers. The purchase agreement between the Company and the sellers of Endeavour alsoprovides for contingent earn-out consideration ranging from $0 to $3,500, payable by the Company to the sellers based on future performance relative to thethresholds specified in the earn-out calculation. This acquisition enhances the Company’s digital capabilities by adding end-to-end mobility services.In connection with the transaction, the Company recorded $800 in customer-related intangibles, $900 in marketing-related intangibles and $950 inother intangible assets, which have a weighted average amortization period of three years. Goodwill arising from the acquisition amounted to $8,870, whichhas been allocated to the Company’s India reporting unit and is not deductible for tax purposes. The goodwill represents primarily the capabilities in end-to-end mobility services, operating synergies and other benefits expected to result from combining the acquired operations with those of the Company.Acquisition-related costs of $338 have been included in selling, general and administrative expenses as incurred. In connection with the transaction,the Company acquired certain assets with a value of $5,691, assumed certain liabilities amounting to $1,853 and recognized a new deferred tax liability of$915. The results of operations of the acquired business and the fair value of the acquired assets and assumed liabilities are included in the Company’sconsolidated financial statements with effect from the date of the acquisition.(c) Strategic Sourcing Excellence LimitedOn January 8, 2016, the Company acquired 51% of the outstanding equity interest in Strategic Sourcing Excellence LLC (“SSE”), a Delaware limitedliability company. The total consideration paid by the Company to the selling equityholders for the acquired interest in SSE is $14,541. This amountincludes the fair value of earn-out consideration, cash consideration of $2,550, and an adjustment for working capital, transaction expenses and indebtedness.During the quarter ended December 31, 2016, the Company recorded a measurement period adjustment that resulted in a $51 increase in the purchaseconsideration and the recognition of $69 in current assets and $16 in non-current assets, with a corresponding impact on goodwill of $34. These measurementperiod adjustments did not have a significant impact on the Company’s consolidated statements of income, balance sheets or cash flows in any period. Theequity purchase agreement between the Company and the selling equityholders of SSE also provides for contingent earn-out consideration of up to $20,000,payable by the Company to the selling equityholders based on future performance relative to the thresholds specified in the earn-out calculation. Up to$9,800 of the total potential earn-out consideration, representing the selling equityholders’ 49% interest in SSE, is payable only if either the put or calloption, each as described below, is exercised.The equity purchase agreement grants the Company a call option to purchase the remaining 49% equity interest in SSE, which option the Companyhas the right to exercise between January 1, 2018 and January 31, 2018. If the Company does not exercise its call option during such period, the sellingequityholders have the right to exercise a put option between March 1, 2018 and April 30, 2018 to require the Company to purchase their 49% interest inSSE at a price ranging from $2,450 to $2,950. This acquisition strengthens the Company’s sourcing and procurement consulting domain expertise.Acquisition-related costs of $164 have been included in selling, general and administrative expenses as incurred. Through this transaction, theCompany acquired assets with a value of $412 and assumed liabilities amounting to $617. The results of operations of the acquired business, the fair value ofthe acquired assets and assumed liabilities, and redeemable non-controlling interest are included in the Company’s Consolidated Financial Statements witheffect from the date of the acquisition. F-20GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 3. Business acquisitions (Continued)In connection with the transaction, the Company recorded $300 in customer-related intangible assets with an amortization period of five years.Goodwill arising from the acquisition amounted to $14,445, which has been allocated to the Company’s India reporting unit and is deductible for taxpurposes. The goodwill represents future economic benefits the Company expects to derive from its expanded presence in the sourcing and procurementconsulting domains, operating synergies and other anticipated benefits of combining the acquired operations with those of the Company.(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 pensionassets and the recognition of a current asset with a value of $147 with a corresponding impact on goodwill. The measurement period adjustments did nothave a significant impact on the Company’s consolidated statements of income, balance sheets or cash flows in any period and were accordingly recordedduring the 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 Company’s China reporting unit and is non-deductible for tax purposes as the Companyhas not recorded any tax benefit for amortization. The goodwill primarily represents the cost savings, operating synergies and other benefits expected toresult from combining the acquired operations with those of the Company. In connection with the transaction, the Company also assumed net liabilitiesamounting to $80, including measurement period adjustments. The results of operations of the delivery center and the fair value of its assets and liabilitiesare included in the Company’s consolidated 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.F-21GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 3. Business acquisitions (Continued) (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 companyincorporated under the laws of England and Wales, and Pharmalink Consulting Inc., a California corporation (collectively referred to as “Pharmalink”). Thepurchase consideration 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 The contingent earn-out consideration was 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. The goodwill represents future economic benefits the Company expects toderive from its expanded presence in the regulatory affairs services industry, cost savings, operating synergies and other anticipated benefits of combiningthe acquired operations with those of the Company.During the quarter ended December 31, 2014, the Company recorded a measurement period adjustment that resulted in a non-current liability of$585 and 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 liabilitiesassumed as 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 Company’s India reporting unit and is not deductible for tax purposes. The intangible assets consist of customer-related and marketing-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. F-22GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 3. Business acquisitions (Continued) B. Divestiture(a) Atyati Technologies Private Limited In September 2016, the Company completed the sale of its cloud-hosted technology platform for the Indian rural banking sector (the “Business”),which the Company acquired in 2012. Net sale proceeds from the sale of the Business were $17,155, net of selling expenses of $427 and cash divested of$854. During the year ended December 31, 2016, the Business recorded net revenues of $14,958 and a net profit of $64.The Company recorded a gain of $5,214 in its consolidated statement of income in connection with the sale of the Business, calculated as follows: Net sale proceeds $17,155Net assets of the business, including intangible assets, allocated goodwill and the translation impact thereof 11,941Gain on divestiture included in other income (expense), net $ 5,214 4. Cash and cash equivalents As of December 31, 2015 2016 Cash and other bank balances $450,907 $422,623 Total $450,907 $422,623 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, 2014 2015 2016 Opening Balance as of January 1 $16,560 $15,192 $11,530 Additions due to acquisitions 178 — — Additions charged to cost and expense 3107 2,449 7,282 Deductions/effect of exchange rate fluctuations (4,653) (6,111) (3,293)Closing Balance $15,192 $11,530 $15,519 Accounts receivable were $601,667 and $630,784, and reserves for doubtful receivables were $11,530 and $15,519, resulting in net accountsreceivable balances of $590,137 and $615,265 as of December 31, 2015 and 2016, respectively. In addition, accounts receivable due after one year of $8,348and $3,272 as of December 31, 2015 and 2016, respectively, are included under other assets in the consolidated balance sheets.Accounts receivable from related parties were $1,980and $2,490 as of December 31, 2015 and 2016, respectively. There are no reserves for doubtfulreceivables for amounts due from related parties. F-23GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 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, 2015 and 2016: 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 (Notes a,c) $30,380 $— $30,380 $— Total $30,380 $— $30,380 $— Liabilities Earn-out consideration (Notes b,d) $22,820 $— $— $22,820 Derivative instruments (Notes b,c) $59,620 $— $59,620 $— Total $82,440 $— $59,620 $22,820 As of December 31, 2016 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 (Notes a,c) $55,386 $— $55,386 $— Total $55,386 $— $55,386 $— Liabilities Earn-out consideration (Notes b,d) $22,435 $— $— $22,435 Derivative instruments (Notes b,c) 17,353 — 17,353 — Total $39,788 $— $17,353 $22,435 Redeemable non-controlling interest (Note e) $4,520 $— $— $4,520 (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.(c)The Company values its derivative instruments based on market observable inputs, including both forward and spot prices for the relevant currenciesand interest rate indices for relevant interest rates. The quotes are taken from an independent market database.(d)The fair value of earn-out consideration, calculated as the present value of expected future payments to be made to the sellers of acquired businesses,was derived by estimating the future financial performance of the acquired businesses using the earn-out formula and performance targets specified ineach purchase agreement and adjusting the result to reflect the Company’s estimate of the likelihood of achievement of such targets. Given thesignificance of the unobservable inputs, the valuations are classified in level 3 of the fair value hierarchy.(e)The Company’s estimate of the fair value of redeemable non-controlling interest as of December 31, 2016 is based on unobservable inputsconsidering the assumptions that market participants would make in pricing the obligation. Given the significance of the unobservable inputs, thevaluation was classified in level 3 of the fair value hierarchy. Refer to Note 3—Business Acquisitions.F-24GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 6. Fair Value Measurements (Continued)The following table provides a roll-forward of the fair value of earn-out consideration categorized as level 3 in the fair value hierarchy for the yearsended December 31, 2015 and 2016: As of December 31 2015 2016 Opening Balance $33,990 $22,820 Earn-out consideration payable in connection with acquisitions — 14,550 Payments made on earn-out consideration (126) (1,611)Change in fair value and others (11,046) (13,324)Ending balance $22,820 $22,435 7. Derivative financial instrumentsThe Company is exposed to the risk of rate fluctuations on foreign currency assets and liabilities and on foreign currency denominated forecastedcash flows. The Company has established risk management policies, including the use of derivative financial instruments to hedge foreign currency assetsand liabilities and foreign currency denominated forecasted cash flows and interest rate risks. These derivative financial instruments are largely deliverableand non-deliverable forward foreign exchange contracts and interest rate swaps. The Company enters into these contracts with counterparties that are banksor other financial institutions, and the Company considers the risk of non-performance by such counterparties not to be material. The forward foreignexchange contracts and interest rate swaps mature over periods of up to 60 months and the forecasted transactions are expected to occur during the sameperiods.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 31,2015 As ofDecember 31,2016 As ofDecember 31,2015 As ofDecember 31,2016 Foreign exchange forward contracts denominated in: United States dollars (sell) Indian rupees (buy) $1,139,400 $1,108,400 $(48,197) $6,669 United States dollars (sell) Mexican peso (buy) 8,520 9,120 (1,163) (187)United States dollars (sell) Philippines peso (buy) 58,500 70,050 (1,387) (1,036)Euro (sell) United States dollars (buy) 146,719 138,613 9,109 9,180 Euro (sell) Romanian leu (buy) 39,027 29,805 567 (152)Japanese yen (sell) Chinese renminbi (buy) 62,740 77,267 (1,379) (742)Pound sterling (sell) United States dollars (buy) 118,438 104,142 7,496 14,228 Australian dollars (sell) United States dollars (buy) 106,544 114,412 5,714 2,328 Interest rate swaps (floating to fixed) — 456,810 — 7,746 (29,240) 38,034 (a)Notional amounts are key elements of derivative financial instrument agreements but do not represent the amount exchanged by counterparties anddo not 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 and interestrate swaps as cash flowF-25GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 7. Derivative financial instruments (Continued)hedges. Foreign exchange forward contracts are entered into to cover the effects of future exchange rate variability on forecasted revenue andpurchases of services, and interest rate swaps are entered into to cover interest rate fluctuation risk. In addition to this program, the Company uses derivativeinstruments that are not accounted for as hedges under the FASB guidance in order to hedge foreign exchange risks related to balance sheet items, such asreceivables and intercompany borrowings, that are denominated 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 31,2015 As ofDecember 31,2016 As ofDecember 31,2015 As ofDecember 31,2016 Assets Prepaid expenses and other current assets $17,400 $33,921 $884 $809 Other assets $12,096 $20,657 $— $— Liabilities Accrued expenses and other current liabilities $34,576 $4,540 $34 $237 Other liabilities $25,010 $12,576 $— $— 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, 2014 2015 2016 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 $(205,952) $72,612 $(133,340) $(66,786) $23,646 $(43,140) $(30,090) $9,830 $(20,260)Net gains (losses) reclassified into statement of income on completion of hedged transactions (49,161) 17,498 (31,663) (42,106) 15,346 (26,760) (6,799) 409 (6,390)Changes in fair value of effective portion of outstandingderivatives, net 90,005 (31,468) 58,537 (5,410) 1,530 (3,880) 60,752 (23,400) 37,352 Gain (loss) on cash flow hedging derivatives, net 139,166 (48,966) 90,200 36,696 (13,816) 22,880 67,551 (23,809) 43,742 Closing balance as of December 31 $(66,786) $23,646 $(43,140) $(30,090) $9,830 $(20,260) $37,461 $(13,979) $23,482 F-26GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 7. Derivative financial instruments (Continued) The gains or losses recognized in other comprehensive income (loss) and their effects on financial performance are summarized below: Derivatives in Cash FlowHedging RelationshipsAmount of Gain (Loss)recognized in OCI onDerivatives (EffectivePortion) Location of Gain(Loss)reclassified fromOCI intoStatement ofIncome(EffectivePortion) Amount of Gain (Loss)reclassified from OCI intoStatement of Income(Effective Portion) Year ended December 31, Year ended December 31, 2014 2015 2016 2014 2015 2016 Forward foreign exchange contracts$90,005 $(5,410) $54,664 Revenue $(4,301) $13,667 $12,859 Interest rate swaps — — 6,088 Cost of revenue (35,539) (44,634) (14,223) Selling, general andadministrativeexpenses (9,321) (11,139) (3,765) Interest Expense — — (1,670) $90,005 $(5,410) $60,752 $(49,161) $(42,106) $(6,799) Gain (loss) recognized in income on the ineffective portion of derivatives and the amount excluded from effectiveness testing is $0 as of December31, 2014, 2015 and 2016.Non-designated Hedges Derivatives not designated as hedginginstruments Location of Gain (Loss) recognized in Statement ofIncome on Derivatives Amount of Gain (Loss)recognized in Statement ofIncome on Derivatives Year ended December 31, 2014 2015 2016 Forward foreign exchange contracts (Note a) Foreign exchange gains (losses), net $287 $6,566 $2,921 $287 $6,566 $2,921 (a)These forward foreign exchange contracts were entered into to hedge fluctuations in foreign exchange rates for recognized balance sheet items, suchas receivables 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 consolidatedstatements of income. F-27GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 8. Prepaid expenses and other current assetsPrepaid expenses and other current assets consist of the following: As of December 31, 2015 2016 Advance income and non-income taxes $52,953 $50,676 Deferred transition costs 36,620 45,252 Derivative instruments 18,284 34,730 Prepaid expenses 12,565 22,222 Customer acquisition cost 6,687 11,126 Employee advances 3,878 6,880 Deposits 1,820 2,688 Advances to suppliers 8,028 10,059 Others 13,190 5,516 $154,025 $189,149 9. Property, plant and equipment, netProperty, plant and equipment, net consist of the following: As of December 31, 2015 2016 Land $9,873 $9,635 Buildings 47,718 44,487 Furniture and fixtures 33,356 37,421 Computer equipment and servers 172,086 187,119 Plant, machinery and equipment 79,599 84,677 Computer software 110,153 119,648 Leasehold improvements 86,997 92,313 Vehicles 6,009 6,753 Capital work in progress 10,727 25,398 Property, plant and equipment, gross $556,518 $607,451 Less: Accumulated depreciation and amortization (381,122) (407,336)Property, plant and equipment, net $175,396 $200,115 Depreciation expense on property, plant and equipment for the years ended December 31, 2014, 2015 and 2016 was $44,029, $47,673 and $45,826,respectively. Software amortization for the years ended December 31, 2014, 2015 and 2016 amounted to $9,105, $9,114 and $9,471, 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 $2,070, $2,501 and $744 for the years ended December 31, 2014, 2015 and 2016,respectively.Property, plant and equipment, net include assets held under capital lease arrangements amounting to $2,797 and $3,183 as of December 31, 2015and December 31, 2016, respectively. Depreciation expense in respect of these assets was $1,786, $1,594 and $1,564 for the years ended December 31, 2014,2015 and 2016, respectively. F-28GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 10. Goodwill and intangible assetsThe following table presents the changes in goodwill for the years ended December 31, 2015 and 2016: As of December 31, 2015 2016 Opening balance $1,057,214 $1,038,346 Goodwill relating to acquisitions consummated during the period 7,674 51,535 Goodwill relating to divestitures during the period — (2,226)Impact of measurement period adjustments (135) (59)Effect of exchange rate fluctuations (26,407) (18,188)Closing balance $1,038,346 $1,069,408 Goodwill has been allocated to the following reporting units, which represent different business units of the Company, as follows: As of December 31, 2015 2016 India $461,383 $493,084 China 59,250 58,139 Europe 38,242 36,584 Americas 46,583 48,713 IT services 432,888 432,888 $1,038,346 $1,069,408 In the year ended December 31, 2016, in accordance with ASU 2011-08, the Company performed an assessment of qualitative factors to determinewhether 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 less than itscarrying amount. Based on such assessment, as at December 31, 2016, the Company concluded that it is not more likely than not that the fair values of all ofthe Company’s reporting units are less than their carrying amounts other than its IT services reporting unit primarily due to decline in planned revenues.Accordingly, the Company performed quantitative assessment of goodwill impairment for its IT services reporting unit. Based on such quantitativeassessment, the Company concluded that no impairment is warranted for the year ended December 31, 2016 and that the fair value of its IT services reportingunit substantially exceeded its carrying value as of December 31, 2016.In the year ended December 31, 2015, in accordance with ASU 2011-08, the Company performed an assessment of qualitative factors to determinewhether 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 less than itscarrying 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’s reportingunits is less than its carrying amount.The total amount of the Company’s goodwill deductible for tax purposes is $36,390 and $39,032 as of December 31, 2015 and 2016, 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, 2015 As of December 31, 2016 Gross carryingamount Accumulatedamortization &Impairment Net Gross carryingamount Accumulatedamortization &Impairment Net Customer-related intangible assets $319,035 $247,463 $71,572 $310,277 $259,460 $50,817 Marketing-related intangible assets 42,749 27,021 15,728 42,587 29,277 13,310 Other intangible assets 29,729 18,427 11,301 33,266 25,344 7,922 $391,513 $292,911 $98,601 $386,130 $314,081 $72,04910. Goodwill and intangible assets (Continued)F-29GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) Amortization expenses for intangible assets disclosed in the consolidated statements of income under amortization of acquired intangible assets forthe years ended December 31, 2014, 2015 and 2016 were $28,543, $28,513 and $27,183, respectively.During the year ended 2016, the Company tested for recoverability an intangible software asset as a result of a downward revision to the forecastedcash flows with respect to the use of the asset and a customer-related intangible asset as a result of the termination of a client contract.Based on the results of such testing, the Company determined that the carrying values of the intangible assets exceed their estimated undiscountedcash flows by $11,195 and recorded a charge to reduce the carrying values by this amount. The Company used a combination of the income and costapproaches to determine the fair values of these intangible assets for the purpose of calculating the resulting charge. This charge has been recorded in otheroperating (income) expenses, net in the consolidated statement of income.During the year ended December 31, 2015, the Company tested an intangible software asset for recoverability as a result of a downward revision tothe forecasted cash flows to be generated by the intangible asset. Based on the results of such testing, the Company determined that the carrying value of theintangible asset exceeded its fair value by $10,714 and recorded a charge to reduce the carrying value by this amount. The Company used the discountedcash flow, or income, approach to determine the fair value of the intangible asset for the purpose of calculating the resulting charge. This charge had beenrecorded in other operating (income) expenses, net in the consolidated statement of income.The estimated amortization schedule for the Company’s intangible assets for future periods is set out below: For the year ending December 31: 2017 $24,397 2018 18,194 2019 13,084 2020 9,289 2021 and beyond 7,085 $72,049 11. Other assetsOther assets consist of the following: As of December 31, 2015 2016 Customer acquisition cost $13,458 $30,996 Advance income and non-income taxes 50,123 60,203 Deferred transition costs 56,759 74,462 Deposits 24,107 29,853 Derivative instruments 12,096 20,657 Prepaid expenses 4,435 3,179 Accounts receivable due after one year 8,348 3,272 Others 10,679 19,706 $180,005 $242,328 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.F-30GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 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: As of December 31: 2017 $52,612 2018 48,897 2019 43,886 2020 39,305 2021 35,354 2022 and beyond 115,921 Total minimum lease payments $335,975 Rental expenses in agreements with rent holidays and scheduled rent increases are recorded on a straight-line basis over the applicable lease term.Rent expenses under cancellable and non-cancellable operating leases were $57,178, $50,342 and $50,827 for the years ended December 31, 2014, 2015 and2016, respectively.The rental expenses set out above include the effect of the reclassification of foreign exchange (gains) losses related to the effective portion offoreign currency derivative contracts amounting to $1,823, $2,037 and $598 for the years ended December 31, 2014, 2015 and 2016, respectively. 13. Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities consist of the following: As of December 31, 2015 2016 Accrued expenses $161,672 $163,400 Accrued employee cost 158,054 179,360 Deferred transition revenue 44,974 50,552 Statutory liabilities 32,149 36,878 Retirement benefits 17,930 17,616 Derivative instruments 34,610 4,777 Advance from customers 19,815 21,969 Earn-out consideration 16,896 6,885 Other liabilities 12,210 15,461 Capital lease obligations 1,328 1,349 $499,638 $498,247 14. Long-term debtIn 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 a margin of 1.50% perannum or a base rate plus a margin of 0.50% per annum, in each case subject to adjustment based on the Company’s debt ratings provided by Standard &Poor’s Rating Services and Moody’s Investors Service, Inc. Based on the Company’s election and current credit rating, the applicable interest rate is equal toLIBOR plus 1.50% per annum. As a result of the June 2015 refinancing, the gross outstanding term loan under the previous facility, which amounted to$663,188 as of June 30, 2015, was extinguished, and the Company expensed $10,050, representing accelerated amortization of the existing unamortizeddebt issuance costs related to the prior facility. Additionally, the refinancing of the revolving facility resulted in the accelerated amortization of $65 relatingto the existing unamortized debt issuance cost. The remaining unamortized costs for the revolving facility, together with the fees paid to the Company’slenders 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 onJune 30, 2020. For the year ended 2016, the Company was in compliance with the financial covenants.F-31GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) As of December 31, 2015 and December 31, 2016, the amount outstanding under the Company’s term loan, net of debt amortization expense of$3,534 and $2,667, was $776,466 and $737,333, respectively. As of December 31, 2015, the term loan bore interest at a rate equal to LIBOR (subject to afloor of 0.75%) plus a margin of 1.50% per annum. As of December 31, 2016, the term loan bore interest at a rate equal to LIBOR plus a margin of 1.50% perannum. Indebtedness under the refinanced facility is unsecured. The amount outstanding on the term loan as of December 31, 2016 will be repaid throughquarterly 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 2017 $39,181 2018 39,226 2019 39,272 2020 619,654 Total $737,333 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, lettersof credit, guarantees and short-term loans. As of December 31, 2015 and December 31, 2016, the limits available were $15,781 and $15,382,respectively, of which $10,301 and $10,980 was utilized, constituting non-funded drawdown.F-32GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 15. Short-term borrowings (Continued) (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.This facility replaces the Company’s $250,000 facility initially entered into in August 2012 and subsequently amended in June 2013. As ofDecember 31, 2015 and December 31, 2016, a total of $22,947 and $160,978 respectively, was utilized, of which $21,500 and $160,000,respectively, constituted funded drawdown and $1,447 and $978, 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 1.50% as of December 31, 2015.As of December 31, 2016, the revolving facility bore interest at a rate equal to LIBOR plus a margin of 1.50% per annum. The unutilizedamount on the revolving facility bore a commitment fee of 0.25% and 0.25% as of December 31, 2015 and December 31, 2016, respectively.The credit agreement contains certain customary covenants, including a maximum leverage covenant and a minimum interest coverage ratio.During the year ended December 31, 2016, 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,from Morgan Stanley Senior Funding, Inc. in connection with certain internal reorganization transactions. These loans bore interest at a rateof 2.00% per annum and were fully repaid on January 30, 2015 and March 26, 2015, respectively. The Company recorded $1,045 in debtissuance expenses 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, 2015 2016 Accrued employee cost $6,901 $3,976 Deferred transition revenue 66,737 72,560 Retirement benefits 29,689 39,020 Derivative instruments 25,010 12,576 Amount received from GE under indemnification arrangement, pending adjustment 3,549 3,159 Advance from customers 4,485 2,371 Earn-out consideration 5,924 15,550 Others 10,729 11,078 Capital lease obligations 2,204 2,500 $155,228 $162,790 F-33GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 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 Gratuity Plan. Trustees administer contributions made to the trust, andcontributions are invested in specific designated instruments as permitted by Indian law. The Company’s overall investment strategy is to investpredominantly 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, 2014, 2015 and 2016, 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 all of its Mexicanemployees based on the age, duration of service and salary of each eligible employee. The full-year benefit cost of the Mexican Plan is calculated on anactuarial basis.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 full-year benefit costs of the Japan Plan and the Philippines Plan are calculated onan 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.In addition, in accordance with Israeli law, the Company provides certain termination benefits (the “Israeli Plan”) to all of its Israeli employees basedon the age, duration of service and salary of each eligible employee. The full-year benefit cost of the Israeli Plan is calculated on an actuarial basis.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 priorservice costs, if any, resulting from amendments to the plans are recognized and amortized over the remaining period of service of the employees or over theaverage remaining life expectancies for inactive employees if most of the plan obligations are payable to inactive employees.F-34GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 17. Employee benefit plans (Continued)The following table sets forth the funded status of the Company’s defined benefit plans and the amounts recognized in the Company’s financialstatements based on actuarial valuations carried out as of December 31, 2015 and 2016. As of December 31, 2015 2016 Change in benefit obligation Projected benefit obligation at the beginning of the year $36,445 $35,617 Service cost 5,578 5,661 Actuarial loss (gain) (3,459) 6,749 Interest cost 2,629 2,585 Liabilities assumed on acquisition — 693 Benefits paid (3,846) (4,967)Effect of exchange rate changes (1,730) (1,055)Projected benefit obligation at the end of the year $35,617 $45,283 Change in fair value of plan assets Fair value of plan assets at the beginning of the year $29,721 $28,549 Employer contributions 1,283 5,776 Actual gain on plan assets 2,465 1,777 Assets assumed on acquisition — 170 Acturial gain/(loss) — — Benefits paid (3,763) (4,897)Effect of exchange rate changes (1,157) (504)Fair value of plan assets at the end of the year $28,549 $30,871 Amounts included in other comprehensive income (loss) as of December 31, 2015 and 2016 were as follows: As of December 31, 2015 2016 Net actuarial loss (3,051) (8,979)Deferred tax assets 874 2,759 Other comprehensive income (loss), net (2,177) (6,220) Changes in other comprehensive income (loss) during the year ended December 31, 2016 were as follows: 2016 Net actuarial loss $(7,141)Amortization of net actuarial loss (75)Deferred income taxes 1,885 Effect of exchange rate changes 1,289 Other comprehensive income (loss), net $(4,042) F-35GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 17. Employee benefit plans (Continued) Net defined benefit plan costs for the years ended December 31, 2014, 2015 and 2016 include the following components: Year ended December 31, 2014 2015 2016 Service costs $4,721 $5,578 $5,661 Interest costs 2,410 2,629 2,585 Amortization of actuarial loss 419 330 (113)Expected return on plan assets (1,719) (2,154) (2,043)Net defined benefit plan costs $5,831 $6,383 $6,090 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$758.The weighted average assumptions used to determine the benefit obligations of the Gratuity Plan as of December 31, 2015 and 2016 are presentedbelow: As of December 31, 2015 2016Discount rate 8.30% - 8.45% 7.10% - 7.5%Rate of increase in compensation per annum 5.20%-11.00% 5.20%-11.00% The weighted average assumptions used to determine the Gratuity Plan costs for the years ended December 31, 2014, 2015 and 2016 are presentedbelow: Year ended December 31, 2014 2015 2016 Discount rate 9.50% - 9.55% 8.50% - 8.55% 8.30% - 8.45% 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% 7.50% The weighted average assumptions used to determine the benefit obligations of the Mexican Plan as of December 31, 2015 and 2016 are presentedbelow: Year ended December 31, 2015 2016 Discount rate 6.50% 6.80%Rate of increase in compensation per annum 5.50% 5.50% The weighted average assumptions used to determine the costs of the Mexican Plan for the years ended December 31, 2014, 2015 and 2016 arepresented below: Year ended December 31, 2014 2015 2016 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% F-36GENPACT 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 benefit obligation of the Japan Plan as of December 31, 2015 and 2016 are presentedbelow: Year ended December 31, 2015 2016Discount rate 0.24% - 1.30% 0.08% - 1.30%Rate of increase in compensation per annum 0.00% - 3.55% 0.00% - 3.55% The weighted average assumptions used to determine the costs of the Japan Plan for the years ended December 31, 2014, 2015 and 2016 arepresented below: Year ended December 31, 2014 2015 2016Discount rate 0.50% - 1.44% 0.20% - 1.30% 0.24% - 1.30%Rate of increase in compensation per annum 0.00% 0.00% - 3.55% 0.00% - 3.55%Expected long-term rate of return on plan assets per annum 2.69% 2.69% - 3.44% 0.00% - 3.77% The expected returns on plan assets set forth above are based on the Company’s expectation of the average long-term rate of return expected toprevail over the next 15 to 20 years on the types of investments prescribed by applicable statute.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 values of the Company’s plan assets as of December 31, 2015 and 2016 by asset category are as follows: As of December 31, 2016 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 $4,809 $4,809 $- $- Fixed income securities (Note a) 23,659 3,001 20,658 - Other securities (Note b) 2,403 2,191 212 - Total $30,871 $10,001 $20,870 $- F-37GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 17. Employee benefit plans (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) 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 $— (a)Includes investments in funds that invest 100% of their assets in fixed income securities such as money market instruments, government securitiesand public and private bonds.(b)Includes 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, 2017 $6,577 2018 $6,654 2019 $7,013 2020 $7,819 2021 $8,268 2022 - 2026 $38,886 $75,217 The Company’s expected benefit plan payments are based on the same assumptions that were used to measure the Company’s benefit obligations asof December 31, 2016.Defined contribution plansDuring the years ended December 31, 2014, 2015 and 2016, the Company contributed the following amounts to defined contribution plans invarious jurisdictions: Year ended December 31, 2014 2015 2016 India $15,272 $15,915 $19,074 U.S. 5,565 8,148 10,379 U.K. 3,361 4,453 6,593 China 14,518 14,511 15,512 Other regions 4,355 4,690 4,684 Total $43,071 $47,717 $56,242 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“2006 Plan”), the Genpact Global Holdings 2007 Plan (the “2007 Plan”) and the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company.F-38GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 18. Stock-based compensation (Continued)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 grantedunder any such plan is forfeited or otherwise expires, terminates, or is cancelledwithout the delivery of shares, then the shares covered by the forfeited, expired, terminated, or cancelled award will be added to the number of sharesotherwise 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 Planwas increased by 8,858,823 and 495,915 shares, respectively, as the result of a one-time adjustment to outstanding unvested share awards in connection witha special dividend payment.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.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, 2014, 2015 and 2016, were $27,773, $24,684and $24,686, 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, excluding excess benefits, during the years ended December 31, 2014,2015 and 2016 were $6,366, $6,125 and $ 6,446, 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 periodof ten years and vest over four to five years unless specified otherwise in the applicable award agreement. The Company recognizes compensation cost overthe vesting period of the option. Compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholesoption-pricing model.F-39GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 18. Stock-based compensation (Continued)The following table shows the significant assumptions used in connection with the determination of the fair value of options granted in 2014, 2015and 2016: 2014 2015 2016 Dividend yield — — — Expected life (in months) 84 84 84 Risk-free rate of interest for expected life 2.18% - 2.29% 1.99% 1.42%-1.56% Volatility 37.27% - 38.34% 34.97% 25.60%-27.22% 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.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, 2014, 2015 and 2016 is set out below: 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 options granted during theperiod $7.54 F-40GENPACT 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 options granted during theperiod $9.15 Year ended December 31, 2016 Shares arisingout of options Weightedaverageexercise price Weighted averageremainingcontractual life(years) Aggregateintrinsicvalue Outstanding as of January 1, 2016 5,986,845 $16.99 5.8 $— Granted 860,000 26.80 — — Forfeited (145,000) 17.77 — — Expired — — — — Exercised (994,155) 14.98 — 9,301 Outstanding as of December 31, 2016 5,707,690 $18.65 5.8 $34,641 Vested as of December 31, 2016 and expected to vest thereafter (Note a) 5,457,701 $18.42 5.8 $34,150 Vested and exercisable as of December 31, 2016 2,746,191 $15.62 4.0 $23,960 Weighted average grant-date fair value of options granted during theperiod $8.50 (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 by the Company upon the exercise of stock options amounted to $16,051, $13,564 and $14,896. Cash tax benefits realized by theCompany upon the exercise of stock options during the years ended December 31, 2014 and 2015 and cash tax benefits received by the Company upon theexercise of stock options during the year ended December 31, 2016 were $761, $6,982 and $1,548 (including excess tax benefits of $0, $6,560, $1,004),respectively.As of December 31, 2016, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $12,683, whichwill be recognized over the weighted average remaining requisite vesting period of 2.5 years.F-41GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 18. Stock-based compensation (Continued)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, 2014, 2015 and 2016 is set out below: 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 b) (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 c) (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 Year ended December 31, 2016 Number of RestrictedShare Units Weighted AverageGrant Date Fair Value Outstanding as of January 1, 2016 157,390 $17.67 Granted 95,553 25.49 Vested (Note d) (133,903) 20.66 Forfeited (1,135) 14.18 Outstanding as of December 31, 2016 117,905 $20.65 Expected to vest (Note a) 107,366 (a) RSUs expected to vest reflect an estimated forfeiture rate.(b)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, 91,963 shares in respect of which were issued in 2016 after withholding shares to the extent of minimum statutorywithholding taxes.(c)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 in 2017 after withholding shares to the extent of minimum statutory withholdingtaxes.(d) Vested RSUs were net settled by issuing 29,719 shares (net of minimum statutory tax withholding). 86,517 RSUs vested in the year ended December 31,2016, shares in respect of which will be issued in 2017 after withholding shares to the extent of minimum statutory withholding taxes.F-42GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 18. Stock-based compensation (Continued)61,057 RSUs vested in the year ended December 31, 2013, in respect of which 59,827 shares were issued in January 2015 after withholding shares tothe extent of minimum statutory withholding 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, 2016, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $1,520, which will berecognized over the weighted average remaining requisite vesting period of 2.6 years.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, 2014, 2015 and 2016 is set out below: 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 b) (1,469,200) 14.50 (1,469,183)Forfeited (Note d) (2,629,463) 17.30 (2,664,980)Adjustment due to achievement of higher-than-target performance (Note c) 139,930 12.04 Adjustment due to achievement of lower-than-maximum performance (Note e) (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GENPACT 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 f) (855) 16.78 (855)Forfeited (136,216) 17.82 (156,194)Adjustment due to achievement of lower-than-target performance (Note g) (32,007) 20.45 Adjustment due to achievement of lower-than-maximum performance (Note h) (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 Year ended December 31, 2016 Number ofPerformance Units Weighted AverageGrant Date Fair Value Maximum SharesEligible to Receive Outstanding as of January 1, 2016 2,499,322 $19.95 2,499,322 Granted 1,518,374 27.93 3,343,335 Vested — — — Forfeited (252,842) 21.88 (325,817)Adjustment upon final determination of level ofperformance goal achievement (Note i) 7,274 22.72 Adjustment upon final determination of level ofperformance goal achievement (Note i) 7,274 Outstanding as of December 31, 2016 3,772,128 $23.04 5,524,114 Expected to vest (Note a) 2,226,489 (a)PUs expected to vest are based on the probable achievement of the performance targets after considering an estimated forfeiture rate.(b)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).(c)Represents 139,930 additional shares issued in 2014 (included in note (b) above) for PUs granted in 2011.(d)Includes 251,427 shares underlying PUs granted in May 2011, 1,244,507 shares underlying PUs granted in March 2013 and 630,000 sharesunderlying PUs granted in May 2013, all of which were forfeited due to non-fulfillment of the performance conditions as certified by thecompensation committee based on the Company’s audited financial statements.F-44GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 18. Stock-based compensation (Continued)(e)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 madein May 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)Vested PUs were net settled upon vesting by issuing 590 shares (net of minimum statutory tax withholding).(g)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 achievementof lower-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.(h)Represents the difference between the maximum number of shares achievable and the number of shares expected to vest under the PU awards grantedin 2015 based on the level of achievement of the performance goals. Also includes the difference between the maximum number of shares achievableand the number of shares eligible to vest under the PU awards granted in 2014 based on the certified level of achievement of the performance goals.(i)Represents an adjustment made in March 2016 to the number of shares underlying the PUs granted in 2015 upon certification of the level ofachievement of the performance targets for such awards.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.Outstanding PUs as of December 31, 2016 include 1,452,424 awards granted in 2016, the performance conditions of which are not expected to befulfilled. The non-fulfillment of the performance conditions of these awards will be certified by the compensation committee following the finaldetermination of the performance goals achieved for the performance period.As of December 31, 2016, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $8,947 which will berecognized over the weighted average remaining requisite vesting period of 1.0 year.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, 2014, 2015 and 2016, 151,461, 121,485 and 146,685 common shares, respectively, were issued under theESPP.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, 2014, 2015 and 2016 was $292, $292 and $428, respectively,and has been allocated to cost of revenue and selling, general, and administrative expenses. F-45GENPACT 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, 2015 and 2016 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 211,472,312 and 198,794,052 common shares, and no preferred shares,issued and outstanding as of December 31, 2015 and 2016, 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, dividendrates, 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 (the “Board”) authorized a program to repurchase up to $250,000 in value of the Company’scommon shares. On February 4, 2016, the Board approved up to an additional $250,000 in share repurchases under the program, on September 19, 2016 theBoard approved up to an additional $250,000 in share repurchases, and on February 10, 2017 the Board approved up to an additional $500,000 in sharerepurchases, bringing the total authorization under the Company’s existing program to $1,250,000. The Company’s share repurchase program does notobligate it to acquire any specific number of shares. Under the program, shares may be purchased in privately negotiated and/or open market transactions,including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. During the years ended December 31, 2015 andDecember 31, 2016, the Company purchased 9,867,873 and 13,940,782 of its common shares, respectively, at a weighted average price of $23.00 and $24.76per share, respectively, for an aggregate cash amount of $226,917 and $345,200, respectively. The purchased shares have been retired.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, 2015 and December 31, 2016. Shares purchased and retired are deducted to the extent of their par value from common stock and from retainedearnings for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares. For the year ended December 31,2015 and December 31, 2016, $197 and $279, respectively, was deducted from retained earnings in direct costs related to share purchases. F-46GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 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 outstanding. The calculation of basic earnings per common share was determined by dividing netincome available to common shareholders by the weighted average number of common shares outstanding. The potentially dilutive shares, consisting ofoutstanding options on common shares, restricted share units, common shares to be issued under the ESPP and performance units, have been included in thecomputation of diluted net earnings per share and number of weighted average shares outstanding, except where the result would be anti-dilutive.The number of stock awards outstanding but not included in the computation of diluted earnings per common share because their effect was anti-dilutive is 3,758,000, 2,821,000 and 781,215 for the years ended December 31, 2014, 2015 and 2016, respectively. Year ended December 31, 2014 2015 2016 Net income available to Genpact Limited common shareholders $192,002 $239,817 $269,684 Weighted average number of common shares used in computing basic earnings per common share 220,847,098 216,606,542 206,861,536 Dilutive effect of stock-based awards 4,321,567 2,538,502 3,264,487 Weighted average number of common shares used in computing dilutive earnings per common share 225,168,665 219,145,044 210,126,023 Earnings per common share attributable to Genpact Limited common shareholders Basic $0.87 $1.11 $1.30 Diluted $0.85 $1.09 $1.28 21. Cost of revenueCost of revenue consists of the following: Year ended December 31, 2014 2015 2016 Personnel expenses $943,105 $1,013,209 $1,061,501 Operational expenses 390,441 432,535 446,922 Depreciation and amortization 44,542 47,803 46,284 $1,378,088 $1,493,547 $1,554,707 22. Selling, general and administrative expensesSelling, general and administrative expenses consist of the following: Year ended December 31, 2014 2015 2016 Personnel expenses $419,299 $430,088 $469,956 Operational expenses 157,755 169,042 174,060 Depreciation and amortization 8,592 8,984 9,013 $585,646 $608,114 $653,029 F-47GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 23. Other operating (income) expense, net Year ended December 31, 2014 2015 2016 Other operating (income) expense $(3,163) $(2,515) $(1,266)Impairment of intangible assets — 10,714 11,195 Change in fair value of earn-out consideration, deferred consideration (relating to business acquisitions) (3,707) (11,521) (14,869)Other operating (income) expense, net $(6,870) $(3,322) $(4,940) 24. Interest income (expense), netInterest income (expense), net consists of the following: Year ended December 31, 2014 2015 2016 Interest income $4,405 $8,676 $7,247 Interest expense (33,800) (29,828) (23,431)Loss on extinguishment of debt — (10,115) — Interest income (expense), net $(29,395) $(31,267) $(16,184) 25. Income taxesIncome tax expense (benefit) for the years ended December 31, 2014, 2015 and 2016 is allocated as follows: Year ended December 31, 2014 2015 2016 Income from continuing operations $57,419 $61,937 $62,098 Other Comprehensive Income: Unrealized gains (losses) on cash flow hedges 48,966 13,816 23,809 Retirement benefits (413) 1,304 (1,885)Additional paid-in capital: Excess tax benefit on stock-based compensation — $(6,560) — Retained earnings: Deferred tax assets recognized on early adoption ofASU 2016-09 — — (24,912) The components of income before income tax expense from continuing operations are as follows: Year ended December 31, 2014 2015 2016 Domestic (U.S.) $19,614 $23,122 $44,110 Foreign (Non-U.S.) 229,976 278,632 285,535 Income before income taxes $249,590 $301,754 $329,645 F-48GENPACT 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 consists of: Year ended December 31, 2014 2015 2016 Current taxes : Domestic (U.S. federal taxes) $3,768 $12,142 $78 Domestic (U.S. state taxes) 666 301 1,069 Foreign (Non-U.S.) 65,237 68,207 30,497 $69,671 $80,650 $31,644 Deferred taxes : Domestic (U.S. federal taxes) $2,761 $(5,396) $11,379 Domestic (U.S. state taxes) (193) 344 (459)Foreign (Non-U.S.) (14,820) (13,661) 19,534 $(12,252) $(18,713) $30,454 Total income tax expense (benefit) $57,419 $61,937 $62,098 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, 2014 2015 2016 Income before income tax expense $249,590 $301,754 $329,645 Statutory tax rates 35% 35% 35%Computed expected income tax expense 87,356 105,614 115,376 Increase (decrease) in income taxes resulting from: Foreign tax rate differential (4,703) (16,550) (18,574)Tax benefit from tax holiday (35,868) (38,039) (32,893)Non-deductible expenses 3,789 1,884 2,295 Effect of change in tax rates 176 1,436 353 Change in valuation allowance (2,880) (33) (4,830)Unrecognized tax benefits 1,423 6,272 (627)Others 8,126 1,353 998 Reported income tax expense (benefit) $57,419 $61,937 $62,098 A portion of the profits of the Company’s operations is exempt from income tax in India. One of the Company’s Indian subsidiaries has fourteenunits eligible for a tax holiday as a special economic zone unit in respect of 100% of the export profits it generates for a period of 5 years fromcommencement, 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 investment requirements. The tax holidays for the Company’s existingspecial economic zone units will begin to expire on March 31, 2022 and will have fully expired on March 31, 2029, assuming the Company satisfies thecapital investment requirements.The effect of the Indian tax holiday on basic earnings per share was $0.16, $0.18 and $0.19, respectively, for the years ended December 31, 2014,2015 and 2016. The effect of the tax holiday on diluted earnings per share was $0.16, $0.17 and $0.18, respectively, for the years ended December 31, 2014,2015 and 2016.F-49GENPACT 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, 2015 and 2016 are as follows: As of December 31, 2015 2016 Deferred tax assets Net operating loss carryforwards $48,626 $52,997 Accrued liabilities and other expenses 16,680 19,840 Provision for doubtful receivables 5,655 6,419 Property, plant and equipment 4,538 3,445 Unrealized losses on cash flow hedges, net 10,296 558 Share-based compensation 14,253 19,054 Retirement benefits 2,772 5,067 Deferred revenue 39,547 44,892 Tax credit carryforwards 52,993 34,509 Others 9,173 8,876 Gross deferred tax assets $204,533 $195,657 Less: Valuation allowance (20,091) (14,746)Total deferred tax assets $184,442 $180,911 Deferred tax liabilities Intangible assets $20,987 $13,519 Property, plant and equipment 3,406 2,745 Deferred cost 31,953 41,950 Investments in foreign subsidiaries notindefinitely reinvested 23,097 29,546 Unrealized gains on cash flow hedges, net — 14,350 Others 7,697 11,073 Total deferred tax liabilities $87,140 $113,183 Net deferred tax asset $97,302 $67,728 As of December 31, Classified as 2015 2016 Deferred tax assets Non-current $99,395 $70,143 Deferred tax liabilities Non-current $2,093 $2,415 $97,302 $67,728 The change in the total valuation allowance for deferred tax assets as of December 31, 2014, 2015 and 2016 is as follows: Year ended December 31, 2014 2015 2016 Opening valuation allowance $24,654 $21,094 $20,091 Reduction during the year (8,662) (3,499) (7,299)Addition during the year 5,102 2,496 1,954 Closing valuation allowance $21,094 $20,091 $14,746 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.F-50GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 25. Income taxes (Continued) Management considers the scheduled reversal of deferred tax liabilities and projected taxable income in making this assessment. In order to fullyrealize a deferred tax asset, the Company must generate future taxable income prior to the expiration of the deferred tax asset under applicable law. Based onthe level of historical taxable income and projections for future taxable income over the periods during which the Company’s deferred tax assets aredeductible, management believes that it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existingvaluation allowances at December 31, 2016. The amount of the Company’s deferred tax assets considered realizable, however, could be reduced in the nearterm 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 had 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-51GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 25. Income taxes (Continued)In 2016, one of the Company’s subsidiaries filed amended tax returns with respect to prior years,resulting in revised assessments, higher taxable income and the utilization of operating loss carryforwards. The use of operating loss carryforwards resulted inthe complete reversal of the subsidiary’s remaining valuation allowance of $3,377. On January 1, 2016, the Company elected the early adoption of ASU 2016-09, which was applied using a modified retrospective approach.Accordingly, excess tax benefits relating to the exercise of stock options prior to December 31, 2015 amounting to $24,912 were recorded through retainedearnings. For the year ended December 31, 2016, the Company has recognized net excess tax benefits of $1,004 in income tax expense attributable tocontinuing operations.The Company recorded excess tax benefits of $0, $6,560, and $0 through additional paid-in capital during the years ended December 31, 2014, 2015and 2016, respectively.As of December 31, 2016, the Company’s deferred tax assets related to net operating loss carryforwards amounted to $52,997. Net operating losses ofsubsidiaries in the United Kingdom, Hungary, Singapore, Malaysia, China, Australia, Brazil, Spain, Israel and Luxembourg amounted to $143,029 and can becarried forward for an indefinite period. The Company’s remaining tax loss carryforwards expire as set forth in the table below: US - Federal Europe Others Year ending December 31, 2017 $— $3 $— 2018 — 5 19 2019 — 5 67 2020 — 234 697 2021 — 2,335 2,790 2022 — 1,829 57 2023 — 4,576 1,133 2024 — 5,820 8,577 2025 — 3,485 2,379 2026 — 348 2,329 2027 — — — 2028 — 31 — 2029 — - — 2030 — 196 — 2031 14,607 188 — 2032 21 65 — 2033 4,538 83 — 2034 37 — — 2035 30 — — 2036 — — — 2037 — — 1,097 $19,233 $19,203 $19,145 As of December 31, 2016, the Company had additional deferred tax assets on U.S. state and local tax loss carryforwards amounting to $6,295 withvarying expiration periods between 2017 and 2035. As of December 31, 2016, the company had a total foreign tax credit of $31,490, which will expire as set forth in the table below: F-52GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 25. Income taxes (Continued) Year ending December 31, Amount 2022 $893 2023 1,202 2024 15,552 2025 8,481 2026 5,362 $31,490 Undistributed earnings of the Company’s foreign (non-Bermuda) subsidiaries amounted to $795,398 as of December 31, 2016. The Company plansto indefinitely reinvest such undistributed earnings, except for those earnings for which a deferred tax liability has already been accrued or which can berepatriated in a tax-free manner. Accordingly, with limited exceptions, the Company does not accrue any income, distribution or withholding taxes thatwould arise if such earnings were repatriated. Due to the Company’s changing corporate structure, the various methods that are available to repatriateearnings, and uncertainty relative to the applicable taxes at the time of repatriation, it is not practicable to determine the amount of tax that would beimposed 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, 2016, $412,533 of the Company’s $422,623 in cash and cash equivalents was held by the Company’s foreign (non-Bermuda)subsidiaries. $148,158 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 $35,902 of retained earnings. $92,254 of the Company’s cash and cash equivalents is held by foreign subsidiaries in jurisdictions where no taxis expected to be imposed upon repatriation. The remaining $172,121 in cash and cash equivalents held by certain foreign subsidiaries of the Company isbeing permanently reinvested.The following table summarizes activities related to our unrecognized tax benefits from January 1 to December 31 for each of 2014, 2015 and 2016: Year Ended December 31, 2014 2015 2016 Opening Balance at January 1 $21,832 $22,718 $26,357 Increase related to prior year tax positions,including recorded in acquisition accounting 2,472 2,000 370 Decrease related to prior year tax positions (1,002) — (1,506)Decrease related to divestiture of business — — (345)Decrease related to prior year tax position due tolapse of applicable statute of limitation (753) (820) (2,122)Increase related to current year tax positions,including recorded in acquisition accounting 442 3,544 3,225 Decrease related to settlements with tax authorities — — (2,000)Effect of exchange rate changes (273) (1,085) (512)Closing Balance at December 31 $22,718 $26,357 $23,467 As of December 31, 2014, 2015 and 2016, the Company had unrecognized tax benefits amounting to $21,268, $24,935 and $22,469, respectively,which, if recognized, would impact the effective tax rate.As of December 31, 2014, 2015 and 2016, the Company had accrued $3,417, $4,223 and $3,856, respectively, in interest relating to unrecognizedtax benefits. During the years ended December 31, 2014, 2015 and 2016, the Company recognized $44, $1,152 and $(206), respectively, excluding exchangerate differences, in interest on unrecognized tax benefits. As of December 31, 2014, 2015 and 2016 the company had accrued $561, $958 and $977,respectively, for penalties.F-53GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 25. Income taxes (Continued)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 priorto 2013. The Company’s subsidiaries in India and China are open to examination by relevant taxing authorities for tax years beginning on or after April 1,2009, and January 1, 2007, 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 variousindustries and geographic locations. The Company’s Chief Executive Officer, who has been identified as the Chief Operation Decision Maker (CODM),reviews financial 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, 2014 2015 2016 Business process outsourcing $1,736,716 $1,933,095 $2,083,450 Information technology services 542,722 527,949 487,306 Total net revenues $2,279,438 $2,461,044 $2,570,756 Revenues from clients based on the industry serviced are as follows: Year ended December 31, 2014 2015 2016 Banking, financial services and insurance $940,345 $1,030,584 $1,055,704 Manufacturing, including pharmaceuticals and medical equipment manufacturing 796,872 878,570 958,779 Technology, healthcare and other services 542,221 551,890 556,273 Total net revenues $2,279,438 $2,461,044 $2,570,756 F-54GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 26. Segment reporting (Continued) Net revenues from geographic areas based on the location of the Company’s service delivery centers are as follows. A portion of net revenuesattributable to India consists of net revenues for services performed by delivery centers in India or at clients’ premises outside of India by business units orpersonnel normally based in India. Year ended December 31, 2014 2015 2016 India $1,505,960 $1,687,699 $1,804,113 Asia, other than India 232,349 238,529 249,839 North and Latin America 302,515 304,879 282,434 Europe 238,614 229,937 234,370 Total net revenues $2,279,438 $2,461,044 $2,570,756 Revenues from GE comprised 20%, 19% and 16% of the Company’s consolidated total net revenues in 2014, 2015 and 2016, respectively. No othercustomer accounted 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, 2015 2016 India $112,911 $116,417 Asia, other than India 11,700 13,549 North and Latin America 41,561 51,400 Europe 9,224 18,749 Total $175,396 $200,115 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 years ended December 31, 2014, 2015, and 2016, the Company recognized net revenues of $285, $326 and $335, respectively, from a clientthat is also a significant shareholder of the Company.In the years ended December 31, 2014, 2015 and 2016, the Company recognized net revenues of $5,580, $7,826 and $8,077, respectively, from aclient that is a non-consolidating affiliate of the Company. $1,955 and $2,411 of such revenue is receivable as of December 31, 2015 and 2016, respectively.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, 2014, 2015 and 2016, cost of revenue includes an amount of $2,126, $2,173 and $2,067,respectively, attributable to the cost of such services provided by the Company’s non-consolidating affiliates.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, 2014, 2015 and 2016, selling, general and administrativeexpenses include an amount of $613, $384F-55GENPACT LIMITED AND ITS SUBSIDIARIESNotes to the Consolidated Financial Statements(In thousands, except per share data and share count) 27. Related party transactions (Continued) and $291, respectively, attributable to the cost of such services provided by the Company’s non-consolidating affiliates.During the years ended December 31, 2015 and 2016, the Company engaged a significant shareholder of the Company to provide services to theCompany at a cost of $421 and $58, respectively. Investment in equity affiliatesDuring the years ended December 31, 2015 and 2016, the Company made investments of $17,013 and $5,884, respectively, in its non-consolidatingaffiliates. As of December 31, 2015 and 2016, $3,736 and $ 0, respectively, of such amounts were outstanding and have been included in accrued expensesand other current liabilities in the Company’s consolidated balance sheet.As of December 31, 2015 and 2016, the Company’s investments in its non-consolidating affiliates amounted to $6,677 and $4,800, respectively.OthersDuring the years ended December 31, 2015 and 2016, the Company also entered into transactions with one of its non-consolidating affiliates forcertain cost reimbursements amounting to $2,077 and $1,162, respectively, of which $488 is receivable as of December 31, 2016.During the year ended December 31, 2016, the company claimed a portion of an equity affiliate’s net operating losses under consortium relief in theUnited Kingdom amounting to $3,291, which was outstanding and has been included in other liabilities in the company’s consolidated balance sheet as ofDecember 31, 2016. 28. Commitments and contingenciesCapital commitmentsAs of December 31, 2015 and 2016, the Company has committed to spend $8,237 and $5,185, 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 $11,748 and $11,958 as of December 31, 2015 and 2016, respectively. Bankguarantees are generally provided to government agencies and excise and customs authorities for the purposes of maintaining a bonded warehouse. Theseguarantees may be revoked by the government agencies if they suffer any losses or damages through the breach of any of the covenants contained in theagreements governing 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-56GENPACT 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 ended March 31, 2016 June 30, 2016 September 30,2016 December 31,2016 December 31,2016 Total net revenues $609,703 $630,523 $648,783 $681,747 $2,570,756 Gross profit $236,855 $246,768 $256,351 $276,075 $1,016,049 Income from operations $75,622 $79,940 $87,124 $98,092 $340,777 Income before equity method investment activity,net andincome tax expense $72,664 $81,818 $87,360 $95,502 $337,343 Net income $58,276 $64,349 $68,045 $76,878 $267,547 Net income attributable to non-controllinginterest/redeemableNon-controlling interest $289 $882 $734 $232 $2,137 Net income attributable to Genpact Limitedcommon shareholders $58,565 $65,231 $68,779 $77,110 $269,684 Earnings per common share attributable toGenpact Limited common shareholders Basic $0.28 $0.31 $0.33 $0.38 $1.30 Diluted $0.27 $0.31 $0.33 $0.38 $1.28 Weighted average number of common sharesused in computing earnings per common shareattributable to Genpact Limited commonshareholders Basic 210,780,165 210,178,050 206,146,007 200,341,922 206,861,536 Diluted 213,892,964 213,803,134 209,376,683 203,431,310 210,126,023 F-57GENPACT 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 ended March 31, 2015 June 30, 2015 September 30,2015 December 31,2015 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 equity method investmentactivity, net andincome tax expense $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 common sharesused in computing earnings per common shareattributable to Genpact Limited commonshareholders 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 30. Subsequent EventsShare RepurchaseOn February 10, 2017, the Company announced that its Board of Directors has approved a $500,000 increase to its existing $750,000 sharerepurchase program, bringing the total authorization under the Company’s existing program to $1,250,000.Pursuant to its share repurchase program, the Company repurchased 808,293 of its common shares between January 1, 2017 and March 1, 2017, at aweighted average price of $24.48 per share for an aggregate cash amount of $19,783. DividendOn February 10, 2017, the Company announced that its Board of Directors has approved a dividend program under which the Company intends topay a regular quarterly cash dividend of $0.06 per share to holders of its common shares, representing a planned annual dividend of $0.24 per share. Theinitial dividend will be paid on or about March 28, 2017 to shareholders of record as of the close of business on March 10, 2017. The declaration of anyfuture dividends is subject to the discretion of the Board of Directors.AcquisitionOn February 5, 2017, the Company entered into a definitive agreement to acquire the item processing business of Fiserv Solutions of Australia PtyLimited for estimated cash consideration of $32,150, subject to adjustment for working capital, value transfer and net debt. This acquisition will expand theCompany’s digital transformation and end-to-end capabilities for its clients in the financial services industry. The acquisition will also strengthen theCompany’s rapidly growing financial services portfolio and expand its Australia footprint. F-58 SIGNATURESPursuant 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 LIMITED By:/s/ N.V. Tyagarajan N.V. Tyagarajan President and Chief Executive Officer Date: March 1, 2017POWER 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. tyagarajan President, Chief Executive Officer and Director (PrincipalExecutive Officer) March 1, 2017N.V. Tyagarajan /s/ Edward J. Fitzpatrick Chief Financial Officer (Principal Financial andAccounting Officer) March 1, 2017Edward J. Fitzpatrick /s/ Robert G. Scott Director March 1, 2017Robert G. Scott /s/ Amit Chandra Director March 1, 2017Amit Chandra /s/ Laura Conigliaro Director March 1, 2017Laura Conigliaro /s/ David Humphrey Director March 1, 2017David Humphrey /s/ Carol Lindstrom Director March 1, 2017Carol Lindstrom /s/ James C. Madden Director March 1, 2017James C. Madden /s/ Alex Mandl Director March 1, 2017Alex Mandl /s/ CeCelia Morken Director March 1, 2017CeCelia Morken /s/ Mark Nunnelly Director March 1, 2017Mark Nunnelly /s/ Hanspeter Spek Director March 1, 2017Hanspeter Spek  /s/ Mark Verdi Director March 1, 2017Mark Verdi  EXHIBIT 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’sRegistration Statement 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 onForm S-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 Statementon Form 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 Statementon Form 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 (FileNo. 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(File No. 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(File No. 001-33626) filed with the SEC on March 21, 2011).E-1 ExhibitNumber 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(File No. 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 tothe Registrant’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 Exhibit10.1 to 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 Exhibit10.1 to 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(incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC onAugust 3, 2012). 10.21 Shareholder Agreement dated August 1, 2012 by and among the Registrant and South Asia Private Investments (incorporated by referenceto Exhibit 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 asof August 1, 2012 (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 001-33626) filedwith the SEC 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 tothe Registrant’s Current Report on Form 8-K (File No. 001-33626) filed with the SEC on August 3, 2012).E-2 ExhibitNumber 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(File No. 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 (FileNo. 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 (FileNo. 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., GenpactGlobal Holdings (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(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 onMarch 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, theRegistrant, the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing bank,and the other parties thereto, dated as of June 30, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report onForm 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) filedwith the SEC on December 18, 2015). 10.36*+ Master Services Agreement, dated as of December 22, 2016, by and between Genpact International, Inc. and General Electric International,Inc. 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 ExhibitNumber 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-OxleyAct of 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.+Confidential treatment has been requested for portions of this exhibit. Confidential materials have been omitted and filed separately with theSecurities and Exchange Commission.†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) Consolidated Balance Sheets as of December 31, 2015 and December 31, 2016, (ii) Consolidated Statements of Income for the years ended December 31,2014, December 31, 2015 and December 31, 2016, (iii) Consolidated Statement of Comprehensive Income (Loss) for the years ended December 31,2014, December 31, 2015 and December 31, 2016, (iv) Consolidated Statement of Equity for the years ended December 31, 2014, December 31, 2015 andConsolidated Statements of Equity and Redeemable Non-controlling Interest for the year ended December 31, 2016, (v) Consolidated Statements of CashFlows for the years ended December 31, 2014, December 31, 2015 and December 31, 2016, and (vi) Notes to Consolidated Financial Statements. E-4 Confidential Materials omitted and filed separately with theSecurities and Exchange Commission. Double asterisks denote omissions. Exhibit 10.36 MASTER SERVICES AGREEMENT (MSA)(BPO, Professional IT and Engineering Services) THIS MSA is made by and between the following parties (each individually referred to as a “Party” and jointly as “the Parties”) and is effective as of: January 1,2017 (the “Effective Date”). GENERAL ELECTRIC INTERNATIONAL, INC. (“GE”)a Delaware corporationwith the following principal business address:41 Farnsworth St.Boston, MA 02210GENPACT INTERNATIONAL, INC (“SP”)A Delaware Corporationwith the following principal business address:42 Old Ridgebury RoadFirst FloorFairfield, CT 06431 GE Notice Information:SP Notice Information:GE Notice Contact: [**]GE Notice Contact Phone: [**]GE Notice Contact Email: [**]Also send a written copy of any notices to:GE LEGAL – Contact/Address/Email:[**]SP Notice Contact: [**]SP Contact Phone: [**]SP Contact Email:[**]Also send a written copy of any notices to:SP LEGAL – Contact/Address/Email: [**] The Parties agree that the information above shall be used for the purpose of making any required notices. Capitalized terms are as defined in SCHEDULE MS1and in applicable Schedules. All Schedules, SOWs, COs, and policies set forth herein are incorporated by reference into the MSA and are collectively known as the “MSA”.Any references to Supplier shall mean SP. Any references to Supplier Personnel shall mean SP Personnel. MANDATORY SCHEDULES (MS) ☒ SCHEDULE MS1 - General Terms and Conditions (GTC)☒ SCHEDULE MS2 - GE Privacy and Data Protection Appendix (PDPP)☒ SCHEDULE MS3 - Required SP and SP Personnel Insurance Coverage (INS)☒ SCHEDULE MS4 – Personnel Background Check Requirements (BC)☒ SCHEDULE MS5 – Batched Payments and Accelerated Payment Terms☒ SCHEDULE MS6 – Local Implementation Template (LI)☒ SCHEDULE MS7 - Business Continuity Requirements (BCR)☒ SCHEDULE MS8 – Statement of Work Template (SOW)☒ SCHEDULE MS9 – Step-In Rights☒ SCHEDULE MS10 – Change Order Template (CO) (Prior to the commencement of any BPO, Professional IT or Engineering services, the Parties shall negotiate in good faith with respect to the applicable function specificschedules and execute the same. Upon execution, the applicable function specific schedule shall be governed by and incorporated into this MSA).ADDITIONAL FUNCTION SPECIFIC SCHEDULES (FS) SCHEDULE FS1 –BPO Services SCHEDULE FS2 –Professional IT Services SCHEDULE FS3 –Engineering Services IN WITNESS WHEREOF, the Parties have caused the MSA to be executed by their duly authorized representatives as of the Effective Date. GENERAL ELECTRIC INTERNATIONAL, INC.GENPACT INTERNATIONAL, INCBy:By: /s/ Victor GuaglianonePrinted Name: James P. OtisPrinted Name: Victor GuaglianoneTitle: GO-S IT Professional Services LeaderTitle: SVPDate: December 21, 2016Date: 12/22/16  GENERAL TERMS AND CONDITIONS OF SERVICESchedule MS11.DEFINITIONS a.“Agreement” means these General Terms and Conditions of Service. b.“Affiliate” means any entity which directly or indirectly Controls, is Controlled by, or is under common Controlof a Party to this agreement. c.“Circumvent” means to directly or indirectly, including assisting any related or third party to (i) solicit, induce orinfluence or attempt to solicit, induce or influence any Contacts to terminate, reduce the extent of, discourage the developmentof or otherwise harm its, his or her relationship or contract with GE or any GE Affiliate, or (ii) in any fashion directing businessor opportunities with a Contact away from GE or any GE Affiliate. d.“Confidential Information” means any and all information, data and materials disclosed or provided by oneParty to the other, in any medium, that the disclosing Party designates as confidential, whether by marking, orally, or by othermeans, at the time of or promptly after disclosure, or, if not so designated, that the receiving Party would reasonably beexpected to assume is confidential due to its nature. Confidential Information shall include, without limitation, all information,data and materials disclosed to SP and SP Personnel in any SOW and in any other writing whether electronically, orally,visually and/or observed while on the premises of GE or any GE Affiliate, its customers and/or that which is developed as aresult of performance of the Services. Confidential Information shall also include, without limitation, GE Data, GE Materials,and each Party’s ideas, inventions, methods, designs, formulas, systems, improvements, prices, discounts, business affairs,products, product specifications, manufacturing processes, data and know-how, technical information of any kind whatsoever,trade secrets and other confidential, secret or proprietary matters, as well as Controlled Data, GE Restricted Data, PersonalData and Sensitive Personal Data as defined in the GE Privacy and Data Protection Appendix referenced in Section 11.g. e.“Contacts” mean customers, contractors, vendors, consultants, programmers, manufacturers and inventors of aParty. f.“Control” means the possession of the power (by voting, under a charter, by agreement or otherwise) to conductthe affairs of another entity or to direct or cause the direction of the management and the policies of another entity. g.“Deliverables” means all data, reports, communications, materials, Work Product, deliverables, information,project status reports, innovations, inventions, software, code, documentation, artwork, images, videos, presentations, ordiscoveries (whether or not patentable, trademarkable or copyrightable), in any medium, conceived, reduced to practice, madeor developed by SP solely or jointly with others or otherwise provided by SP, SP Personnel or on their behalf, by or to GE inconnection with the Services. h.“Disabling Device” means any software, hardware, device, technology or other means, the purpose or effect ofwhich is to: (A) permit unauthorized access to, or to destroy, disrupt, disable, distort, or otherwise harm or impede in anymanner, any (i) computer, software, firmware, hardware, system or network, or (ii) any application or function of any of theforegoing or the integrity, use or operation of any data processed thereby; or (B) prevent GE or any authorized user fromaccessing or using the Services  as intended by this MSA, and includes any virus, timer, clock, counter, time lock, time bomb, Trojan horse, worm, file infector,boot sector infector or other limiting design, instruction or routine that could, if triggered, erase data or programming or causethe resources to become inoperable or otherwise incapable of being used in substantially the same manner for which suchresources were intended to be used. The term “Disabling Device” shall not include any tool of SP or its third-party licensors thatis disclosed to GE and that disables the access at the end of the subscription term as set forth in the agreed upon specificationsof the applicable software. i.“Fees” means the rates and prices payable to SP in consideration of the performance of the Services as specified inthe applicable SOW or PO and subject to payment terms, including MS5 – Accelerated Payment Terms, discounts,pre-negotiated rates, rebates and set-off rights. j."GE Data" means any and all information, data, materials, works, expressions or other content of GE or a GEAffiliate that is provided to SP or produced or developed in connection with the Services, including any that (a) are uploaded,submitted, posted, transferred, transmitted or otherwise provided or made available by or on behalf of GE or any authorizeduser for processing by or through systems of SP or SP Personnel, (b) are collected, downloaded or otherwise received by SP orSP Personnel for GE or any authorized user pursuant to this MSA or at the written request or instruction of GE or suchauthorized user, or (c) meets the definition of GE Data, Controlled Data, GE Restricted Data, Personal Data and SensitivePersonal Data as set forth in the GE Privacy and Data Protection Appendix referenced in Section 11.g. All output, copies,reproductions, improvements, modifications, adaptations, translations and other derivative works of, based on, derived from orotherwise using any GE Data are themselves also GE Data. k.“GE Materials” means all Materials related to GE, its Affiliates, customers and other suppliers and personalproperty that is furnished, disclosed or otherwise made available to SP, directly or indirectly, by or on behalf of GE pursuant tothe Agreement and all Intellectual Property Rights therein. l.“Indemnitees” means a Party and its Affiliates and each of their employees, shareholders, directors, officers,agents, representatives, successors and assigns. m.“Intellectual Property Rights” means the entire right, title and interest under (i) all applicable worldwideintellectual property laws, including without limitation, patent, copyright and trademark laws, (ii) all other rights, privilegesand priorities, including Related Rights; (iii) all rights to contest, protest, sue at law or in equity for any infringement, imitation,impairment, distortion, dilution or other unauthorized use or conduct in derogation of the Deliverables and Related Rightsoccurring at any time, including the right to receive all proceeds and damages therefrom; and (iv) any and all rights to obtainregistrations, renewal of registrations or other legal protections pertaining to the Deliverables and Related Rights. n.“Losses” means all actual and alleged damages, costs, expenses, fines, penalties, interest and legal/attorney fees,of whatever kind and nature claimed or incurred by a Party or a third-party, including, without limitation, those related towarranties, investigation, reworking, remediation, cover costs, royalty payments, litigation, alternative dispute resolution,appeals and/or settlement. o.“Materials” means any materials, information, systems; software, code, tools and tooling, mechanisms; maskworks; compositions of matter, processes, ideas, inventions, know-how, trade secrets, developments, discoveries andimprovements, data, textual matter, forms, lists, photographs,  illustrations, audio and/or video, compilations of data and other content, designs, specifications, schematics, work and processflows, plans, models, prototypes, methodologies, interfaces, “look and feel,” packaging, research, analyses, reports, procedures,techniques, and identifiers such as domain, business and/or product names, marks, logos, URL’s, user and account names,social media presences and the like. p.“MSA” means this Agreement, Schedules, SOW(s), PO(s), CO(s), online materials and all documents and policiesincorporated by reference. q.“Open Source Materials” or “OSM” means Open Source Software (or Materials that meet the definition) asdefined in the Product Cybersecurity Appendix (as amended) referenced in Section 11.g. of this Agreement. r.“Related Rights” means common law rights, trade secret rights, design rights, industrial design rights, databaserights, performer’s rights, rights of approval, moral rights, trade dress rights, rights of publicity, rights of privacy, rights againstdefamation and libel and right under the laws of unfair competition. s.“Services” means all services, Work Product and Deliverables provided by SP and SP Personnel to GE under theMSA. t.“SP Personnel” means all individuals and entities providing any Services under this Agreement, including,without limitation, SP’s subsidiaries, Affiliates, employees, agents, contractors, subcontractors and suppliers, as well anyonedirectly or indirectly employed by, retained by or acting on behalf of any of the foregoing. u.“SP Pre-Existing Intellectual Property” means data, materials and information, as evidenced by SP’s writtenrecords, that is: (i) developed or otherwise owned by SP prior to the Effective Date or commencement of Services under thisMSA, whichever is earlier; or (ii) developed independently by SP outside the scope of this MSA and not based on GEConfidential Information, GE Data, GE Materials, Work Product or other data, materials and information in which GE ownsIntellectual Property Rights. v.“Third Party Materials” or “3PM” means Materials the rights to which are owned in whole or in part by one ormore third-party individuals or entities (and not by either Party or its Affiliates). w.Underlying License” means any and all terms which are legally applicable to the use, disclosure, modification,incorporation, distribution (or other exercise of Intellectual Property Rights) in OSM or 3PM. x.“Work Product” means any Deliverables that are not Third Party Materials, Open Source Materials, or SPPre-Existing Intellectual Property and that are created by SP or SP Personnel for GE under the MSA. 2.PROVISION OF SERVICES. a.Scope. This Agreement sets forth the terms under which SP and SP Affiliates (each as applicable, “SP” and“Party”) agree to provide GE and its Affiliates with agreed upon Services and  Deliverables. The scope of Services shall be agreed upon by the GE or its Affiliates (each as applicable, “GE” and “Party”) in anapplicable SOW using the template in Schedule MS8 – Statement of Work, or PO and any attachments thereto, stating, at aminimum: (i) project objectives and specifications; (ii) Services; (iii) Deliverables (including Work Product); (iv) acceptancecriteria; (v) responsibilities of each Party; (vi) timelines and deadlines; (vii) SP Pre-Existing Intellectual Property to beincorporated into the Deliverables or otherwise provided to GE; and (viii) Fees. Each SOW and PO shall be a separateagreement governed by and subject to this MSA. GE is not obligated in any way to provide or to guarantee SP with anyexclusivity or a specific amount of services or an opportunity to work on GE projects. b.Change Orders. Neither Party shall materially deviate from the terms of an SOW except under the terms ofa Change Order (CO) (Schedule MS10) mutually agreed to in writing by both Parties (“Change Request”). If the Parties fail toagree (despite diligent and good faith negotiations) on the outcome of a Change Request, SP shall (at GE’s option) continueperforming under the SOW without any changes, or cease performing under the SOW immediately upon receiving writtennotice of termination. Both Parties agree that all SOWs shall be governed by this MSA even if the applicable SOW has no clearreference to this MSA. 3.TERM. The term of the MSA shall commence on the Effective Date and shall continue until the effective date of earliertermination or December 31, 2020, whichever is earlier. The term of the MSA may be extended in a written document signed byauthorized representatives of both Parties. The initial term, together with any extension terms, shall be collectively referred to asthe “Term.” The terms of this MSA shall continue to apply to any outstanding SOW until the SOW is completed, or terminatedas set forth herein. 4.ACCEPTANCE OF SERVICES AND DELIVERABLES. If upon review of the Services, GE, in its commercially reasonable discretion, determines that any part of the Services doesnot conform to mutually agreed upon acceptance criteria set forth in the applicable SOW, then SP, at its cost and expense, shallcure the nonconformity within [**] days or other duration agreed upon by GE. Acceptance by GE shall not constitute a waiverof any rights and remedies that may be available to GE under the MSA, law or equity, including for a breach of applicablewarranties. 5.FEES AND EXPENSES. a.General. The Services shall be provided at the agreed upon Fees without increase during the term of the applicableSOW or PO. All agreed upon expenses and costs will be billed at actual net cost to GE without markup. GE shall not be billed orliable for any costs or expenses other than those stated, described and expressly authorized by GE in the applicable SOW. SPshall be solely responsible for the its costs of doing business, including, procuring any permits, licenses, equipment, softwareand other tools needed by SP in the ordinary course of business for the performance of the Services. b.Invoicing and Payment Terms. GE has a strict “NO PO - NO PAY Policy.” SP shall not commence performanceof any Services under this MSA or applicable SOW until SP has received a PO from GE referencing this MSA and the applicableSOW. No GE financial obligation shall arise absent a PO. Any invoice without a valid PO will be rejected. Except as otherwiseset forth in the applicable SOW or PO, SP shall invoice GE within [**] days of completion and delivery of the applicable Servicesand Deliverables. Invoices shall clearly indicate the Services, expenses and costs for which GE is being  charged, and will provide adequate detail and itemization to allow GE to reconcile invoices with Services received. Allauthorized T&L expenses shall be separately itemized and supported by receipts. Any invoice that is received more than [**]days after the due date shall be deemed invalid and not payable by GE. Unless prohibited by applicable law, undisputed Fees,costs and expenses shall be payable by GE, as applicable: (i) within [**] days from the date a correct invoice is received andapproved by GE; or (ii) per the Batched Payments and Accelerated Payment Terms in Schedule MS5, if SP is participating inone or both programs. GE shall have the right to set off amounts owed by SP to GE or a GE Affiliate against any amountspayable to SP under this MSA. c.Billing Dispute. If GE disputes any fee, expense, or other charge, GE will provide SP with notice of such disputewithin [**] days of receipt of the applicable invoice. Any properly submitted and correct invoice not disputed in accordancewith this section shall be considered approved. GE and SP will use good faith efforts to resolve in an expedient manner. EachParty agrees to continue performing its obligations under this Agreement while any dispute is being resolved unless and untilsuch obligations are terminated by the termination or expiration of this MSA. SP will provide GE with copies of all supportingdocumentation relating to the dispute within [**] days after GE has provided written notification to SP. Such amount (or suchamount as may be ultimately determined to be correct) shall not be due until [**] days after the dispute is resolved but in noevent earlier than the original invoice due date. Notwithstanding anything contained herein, GE shall have no obligation to paya disputed amount until resolution of the dispute. 6. CONFIDENTIALITY OBLIGATIONS. a.Obligations. Each Party agrees to not disclose or use the other Party’s Confidential Information except aspermitted in this MSA and applicable SOW. Any other disclosure or use shall require the prior written approval of anauthorized representative of the other Party. Each Party will ensure that its personnel that need to access the ConfidentialInformation under a SOW will abide by the confidentiality obligations herein and such access will be limited to ConfidentialInformation necessary for such Personnel to provide Services. Each Party shall protect the other Party’s ConfidentialInformation against unauthorized use or disclosure using at least those measures that it takes to protect its own ConfidentialInformation of a similar nature, but no less than a high degree of reasonable care. For certain engagement that are identified byGE in the applicable SOW as strategic, if GE requires that specifically identified SP Personnel who are subcontractors orsuppliers of SP to execute additional documents to protect GE’s Confidential Information, SP shall promptly execute and shallcause said SP Personnel to execute the same. Should SP already render or wish to render services to a third-party that directlyor indirectly competes with GE, then SP shall establish appropriate firewalls and security measures to protect GE ConfidentialInformation, GE Data and GE Materials. Upon GE’s request, SP shall provide GE with a written description of its practices toprotect, secure and isolate GE Confidential Information, GE Data and GE Materials and shall work in good faith to implementany additional measures as may be requested by GE. Neither Party will disclose the existence or terms of any part of the MSAwithout the other Party’s prior written consent, provided however, GE may disclose the same in connection with divestituresand acquisitions as set forth in Section 30. b.Exceptions. Confidential Information shall not include information that, using documentary evidence can beshown: (a) to have been rightfully in the receiving Party’s possession from a source other than disclosing Party prior to the timeof disclosure of said information by the disclosing Party (the “Time of Receipt”); (b) to have been in the public domain prior tothe Time of Receipt; (c) to have become part of the public domain after the Time of Receipt by any means other than anunauthorized act or  omission on the part of the receiving Party; (d) to be independently developed by the receiving Party prior to the Time ofReceipt. c.Procedure in case of Disclosure. In the event of any unauthorized use, disclosure or loss of any ConfidentialInformation, the receiving Party shall promptly, at its own expense: (i) notify the disclosing Party in writing; (ii) take suchactions as may be necessary or reasonably requested by the disclosing Party to minimize the violation or the damage resultingthere from; and (iii) cooperate in all reasonable respects with the disclosing Party to minimize the violation and any damageresulting there from. d.Compelled Disclosures. If, in the reasonable opinion of receiving Party’s counsel, any of the ConfidentialInformation is required to be disclosed pursuant to law, regulation, or court order, to the extent legally permissible, receivingParty will give disclosing Party prompt, written notice, in order to allow disclosing Party to take whatever action it deemsnecessary to protect its Confidential Information. In the event that no protective order or other remedy is obtained, or thedisclosing Party waives compliance with the terms of this section, receiving Party will furnish only that portion of theConfidential Information which receiving Party is advised by counsel as being legally required and will notify disclosing Partyin writing of the Confidential Information disclosed. e.Post-MSA Obligations. Upon expiration or any termination of this Agreement, completion of SP’s obligationsunder the MSA or each SOW or upon request of disclosing Party at any time, receiving Party shall return or destroy, asdisclosing Party may direct, all documentation in any medium that contains or refers to the Confidential Information, andretain no copies; provided however, each Party may retain a single copy for the duration as reasonably required to meet itslegal and compliance obligations. Upon GE’s request, an authorized officer of SP shall provide written certification of SP’scompliance with the foregoing obligations. Further, as applicable, for any hardware or equipment on which GE's ConfidentialInformation was stored or processed, SP shall dispose of the hardware and equipment through a methodology consistent withbest practices as defined by the National Institute of Standards Technology (NIST), including, without limitation, NISTGuidelines for Media Sanitization. The obligations of confidentiality and non-use with respect to any Confidential Informationof GE shall survive in perpetuity. f.Third-Party Confidential Information. SP will not disclose to GE or use in the performance of the Services, anyinformation which is confidential or proprietary to a third party or the trade secret of a third party without first obtaining thewritten consent of such third party and GE. 7.NON-CIRCUMVENTION. SP acknowledges that, during the performance of Services related to certain limited and strategic projects that arespecifically identified as strategic to SP by GE, SP may be introduced to GE Contacts and may have an opportunity to develop arelationship with GE Contacts. SP agrees that during the Term and for a period of [**] years thereafter, whether terminated bySP or GE, SP will not enter into an arrangement that Circumvents GE with respect to any Contacts on a project that is identicalor similar to the strategic project without the prior written consent of an authorized officer of GE . 8.NON-HIRE. Except as otherwise set forth in the applicable Function Specific Schedule (FS), and subject to applicable laws,during the Term of this MSA and any SOW and for [**] months after its expiration or  termination for any reason, the Parties shall not, without a written waiver by the other Party of its rights under this Section,hire for employment any employee of the other Party who: (a) is classified by the other Party as exempt from overtime eligibilityunder applicable wage and hour laws; and (b) has been directly involved in the Services under this MSA within the previous[**] months. It shall not be a breach of this MSA for a Party to solicit the employment of the other Party’s employee if it does notresult in a hire, or if hired prior to permission being obtained, the other Party does not object in writing within [**] days, or if anoffer of employment is withdrawn and the other Party fully reinstates the employee. 9.PRE-EXISTING INTELLECTUAL PROPERTY OF SP. GE will not acquire ownership of any SP Pre-existing Intellectual Property. SP shall not incorporate any SPPre-existing Intellectual Property into the Deliverables without the prior written consent of GE and without specificallydisclosing it in the applicable SOW. SP hereby grants to GE, a non-exclusive, irrevocable, transferable, royalty-free, worldwidelicense to use, modify and prepare derivative works of any SP Pre-existing Intellectual Property (including the right tosublicense or assign) to the extent that such license is required to enable GE to make use of the Services under the relevant SOWand so long as such SP Pre-existing Intellectual Property remains embedded in the Deliverables and is not exploitedcommercially independent of the Deliverables. To the extent any portion of the SP Pre-existing Intellectual Property is not SP’soriginal work, SP hereby represents and warrants that SP has obtained permission from the original owner of such third partycontent to use all or a portion of such third party content, and that SP has the right to grant to GE such non-exclusive license inand to such third party content. 10.OWNERSHIP. a. GE Ownership. GE shall be the sole and exclusive owner of all right, title and interest in the GE Data, GEConfidential Information and GE Materials and all Intellectual Property Rights therein. SP acknowledges that all trademarks,logos, service marks or trade names of GE and its Affiliates, whether or not registered, are valuable and have attained a highdegree of goodwill throughout the world. SP agrees that it shall not, without prior written consent of GE (or the applicable GEAffiliate) in each instance; (a) use in advertising, publicity or otherwise, the name or logo of GE or any GE Affiliate, or of anyofficer or employee of GE or GE Affiliates, nor any trade name, trademark, logo or simulation thereof owned by GE or any GEAffiliate; or (b) represent directly or indirectly that any product or service provided by SP has been approved or endorsed by GEor any GE Affiliate. Nothing contained in this MSA grants SP any express or implied rights or licenses with respect to GE Data,GE Confidential Information or GE Materials other than for performance of SP’s obligations under the applicable SOW. b.Third Party Materials, Open Source Materials. Without first disclosing to GE in the SOW and receiving GE’sprior written approval, SP shall not provide any Deliverable to GE which uses or incorporates Open Source Materials or ThirdParty Materials (or depends in any way upon OSM or 3PM) unless: (a) SP cooperates and complies with GE’s security andproprietary rights assessments concerning OSM and 3PM; (b) SP validly holds and is in compliance with all UnderlyingLicenses necessary to use or incorporate the OSM or 3PM as specified in the SOW; and (c) SP agrees, upon GE’s request, toallow GE (or an approved third party inspector paid for by SP) to examine any Deliverable for OSM or 3PM, and provides GEwith any related necessary assistance. If any 3PM incorporated into a Deliverable is not commercially available as a separateproduct offering, SP agrees to obtain for GE an Underlying License conveying a non-exclusive, royalty-free, perpetual,irrevocable, worldwide, fully paid-up, sublicenseable (through all tiers) right which allows GE and its authorized designees touse the 3PM as incorporated, at no additional charge to GE. SP shall be responsible at its sole expense for remediating anytechnical or  legal issues experienced by GE in connection with the use or incorporation of OSM or 3PM (including, but not limited toremoving any OSM or 3PM incorporated without GE approval; re-performing Services or Deliverables; reimbursing GE forlosses, costs and other direct damages related to the OSM or 3PM; and/or undertaking the fulfillment of obligations that mightbe imposed on GE by any applicable OSM or 3PM Underlying Licenses, or resolving conflicts among them). SP further agreesthat the GE may perform a code scan of any software contained in any Work Product prior to acceptance to ensure that noOpen Source Materials have been included in such Deliverable without the prior approval from GE in writing. c.GE Rights. Subject to Third Party Materials, Open Source Materials and SP Pre-existing Intellectual Propertylicense rights disclosed by SP and approved by GE in writing, all Work Product and all Intellectual Property Rights therein shallbe the sole and exclusive property of GE. GE shall have the sole and exclusive right to use or not use the Services andDeliverables, and to use, reproduce, reuse, modify, crop, alter, edit or change the Work Product, as it sees fit and for anypurpose. GE shall have the right to transfer or assign any and all rights hereunder to any third-party, in its sole discretion. d.Work Made for Hire. At GE’s written request, SP will execute, or cause to have executed, by SP Personnel, suchdocuments and take such other actions, as GE deems necessary or appropriate, to obtain, record or enforce Intellectual PropertyRights or assignments thereof in GE’s name, as applicable, covering the Work Product. To the extent the Work Product iscopyrightable (including, without limitation, computer programs, source code, object code and supporting documentation), itwill be deemed a Work Made for Hire or alternatively a Specially Commissioned Work under the Copyright Act of 1976 andwill become and remain the sole and exclusive property of GE and assignable by GE. If any Work Product may not be a WorkMade for Hire, SP agrees to assign and does hereby assign or will cause to have assigned all right, title and interest, including,Intellectual Property Rights in such Work Product to GE. SP shall cause the SP Personnel to irrevocably waive, to the extentpermitted by applicable law, any and all claims such SP Personnel may now or hereafter have in any jurisdiction to so-called"moral rights" or rights of droit moral with respect to the Services. If for any reason, SP is unable to or does not sign and/ordeliver such documentation with respect to the Work Product within [**] days of GE’s escalation to SP’s General Counsel orother senior officer of SP, any officer of GE is hereby irrevocably appointed and authorized as attorney-in-fact for SP to signand deliver such documentation, it being agreed that this authorization and appointment is a right coupled with an interest. e.Residual Knowledge. Except to the extent where an SP is specifically retained to develop ideas, concepts,know-how or techniques as Work Product under the terms of the applicable SOW, each Party is free to use any generalizedideas, concepts, know-how, or techniques that are developed or provided by the other or jointly by both Parties during theTerm, so long as it does not use the Confidential Information of the other Party. Subject to the restrictions set forth in the MSA,SP and GE are free to enter into similar agreements with third parties, and to develop and provide to such third partiesmaterials or services that are the same as or similar to those provided under this MSA. 11.REPRESENTATIONS, WARRANTIES AND COVENANTS OF SP. SP represents, warrants and covenants that each of SP and SP Personnel: a. General Warranty. (i) Is duly organized, validly existing and in good standing as a corporation or otherentity as represented herein under the laws and regulations of its jurisdiction of incorporation, organization or chartering; (ii) ithas, and throughout the Term and any additional periods during which it does or is required to perform the Services willretain, the full right, power and authority to  enter into this MSA and perform its obligations hereunder; (iii) the execution of this MSA by its representative whose signatureis set forth at the end hereof has been duly authorized by all necessary corporate or organizational action and when executedand delivered to GE, this MSA will constitute the legal, valid and binding obligation of SP and SP Personnel, enforceable againstthem in accordance with its terms; and (iv) is not a Party to any contract or arrangement with any third party or subject to anythreatened or actual administrative or legal claim or proceeding which prohibits, inhibits or adversely affects the performanceof the Services or obligations under the MSA; b.Performance Warranty. Shall perform and provide the Services: (i) in material compliance with the MSA; provided, however, for business process outsourcing services, thewarranty shall be as set forth in the applicable service levels, and with respect to all other services, such warranty shall be for aperiod of [**] days (or other agreed upon duration in the applicable SOW) from acceptance by GE as set forth in Section 4. Thewarranty in this subsection shall run to GE, its successors, assigns, and the users of Deliverables and Services covered by theSOW. If any Deliverables or Services are found to be defective during that warranty period then, in addition to other rights andremedies that GE may have by law, contract or at equity, GE at its option and sole discretion and at SP’s expense may: (x.)reject and return such Deliverables or Services; (y.) require SP to remove, ship and reinstall/reperform nonconformingDeliverables and Services with Deliverables and/or Services that conform to all the requirements of the MSA and the applicableSOW (and SP shall do so in a timely manner); and/or (z.) take such actions as may be required to cure all defects and/or bringthe Deliverables and Services into conformity with all the requirements of the MSA and the applicable SOW, in which event allcosts and expenses including material, labor and handling costs and charges (inclusive of any required re-performance),incurred by GE shall be for SP’s account. Any repaired or replaced part, or re-performed Services shall carry warranties on thesame terms as set forth above, with the warranty period being the later of the original unexpired warranty or [**] months afterrepair or replacement. To the extent SP is not the manufacturer of any goods or components or Deliverables sold or transferredhereunder SP agrees to transfer to GE, or otherwise give the benefit to GE, of any warranties or indemnities that may beprovided by the manufacturer of such goods and/or components and/or Deliverables and shall enforce the same for GE at SP’ssole cost and expense; (ii) (a) without violating, infringing or misappropriating any rights of third-parties, including withoutlimitation, Intellectual Property Rights, proprietary, contractual or Related Rights; (b) with a guarantee that GE’s use of theServices or Deliverables or the exercise of any rights and licenses provided hereunder shall not violate, infringe ormisappropriate any rights of third-parties, including without limitation, Intellectual Property Rights, proprietary, contractual orRelated Rights; (iii) free from any security interest, lien or other encumbrance; and (iv) free of any defects (latent or patent) in material, design or workmanship; c. Operational Warranty. Shall devote the resources necessary to meet their obligations under the MSA, shallprovide periodic status reports if requested by GE or per the applicable SOW, and all Services shall be performed in a timely,professional and workmanlike manner in conformity with the best industry standards applicable to the Services usingpersonnel with the requisite skill, experience and qualifications. d. Recommendations. Is a recognized expert in the field of Services who shall be responsible for itsrecommendations, including those related to the use of Third Party Materials and Open Source  Materials, products or services that are provided by SP as a requirement (without any other options) for the use of theDeliverables and Services; e. Originality. Subject to Third Party Materials and SP Pre-existing Intellectual Property license rightsapproved by GE in writing, all Work Product shall be new and original; f. Compliance with Law. Shall perform, deliver and maintain the Services, regardless of the location: (i) inaccordance with all applicable laws, rules and regulations of any governmental authority, agency, securities exchange or otherself-regulatory organization of which it is a member or by which its activities are governed or regulated; (ii) in accordance withany other applicable legal or other limitation or restriction; and (iii) in compliance with its charter and by-laws or otherconstituent documents, and not in contravention or breach of its obligations to or agreements with any third-party. g. Compliance with GE Policies. Shall comply with, and shall replace any SP Personnel who fail to complywith, all applicable GE policies, procedures, licenses and governance matters including, without limitation, (i) GE’s safety,security, drug use and drug testing policies; (ii) applicable licenses, policies, procedures, governance matters if SP or SPPersonnel are provided access to GE or GE- contracted facilities, premises, systems, content, software or equipment; and (iii)The policies located at www.gesupplier.com/html/GEPolicies.htm, including, the GE Integrity Guide and as applicable,Supplier Travel and Expense Policy, GE Privacy and Data Protection Appendix (PDP), European Union Standard Data PrivacyClauses, Protected Health Information Agreement, Product Cybersecurity Appendix, GE Background Checking Guidelines andUS Government Flowdown Provisions (if identified in the applicable SOW)/GE Power & Water Government Acquisition ofCommercial Items Appendix (if identified in the applicable SOW). (To the extent SP is unable to comply with any materialamendments thereto due to a substantial increase in SP's costs or obligations under the MSA, within fifteen (15) days of noticeof said amendments, SP shall provide GE with written notification of its inability to do so and said notification shall specificallyidentify the amendments to which such inability applies. Without limitation, the Parties mutually acknowledge that failure tocomply with this Section shall be deemed a material breach incapable of cure.); h. Background Checks. Shall, to the extent permissible by applicable law, perform background checks usingan authorized background checking agency as set out in Schedule MS4 -Personnel Background Check Requirements (BC) priorto (a) stationing any SP Personnel to perform Services at any GE location, facility or work site (for purpose of clarity,“stationing” shall not include periodic attendance or visits to such locations, facilities or work sites); (b) granting access to GEnetworks (such as having a GE issued single sign-on account) to SP Personnel to provide the Services; (c) assigning SP Personnelto duties that are directly related to the safe operation or security of a GE facility or piece of equipment and which, if notperformed properly, could cause a serious environmental, health or safety hazard to employees or the general public; or (iv)assigning SP Personnel to a GE worksite that is designated in its entirety as “security sensitive,” even though the workresponsibilities, if performed in another context, would not be security sensitive; and after securing appropriate writtenauthorization from its SP Personnel. i. Taxes. Shall be responsible for all taxes applicable to its income from the Services, and for including any sales,use, value-added or similar taxes applicable to the Services as a line item on the pertinent invoice (identifying the type andamount thereof) as well as for tracking and paying the taxes collected from GE to the appropriate governmental authority;  j. Licenses and Assets for Performance. Shall, at no additional cost to GE, obtain and keep in full force and effectany assets, licenses, visas, certifications, permits, clearances or registrations necessary to provide the Services in the ordinarycourse of business; k. Third Party and Open Source Materials. Shall not incorporate any Third Party Materials and Open SourceMaterials into the Services until all required clearances within GE have been obtained; l. Litigation Support. Shall ensure that the Services are capable of audit trails and record hold requests and it canimplement such trails and hold requests promptly and in a manner that will meet GE’s litigation and regulatory obligations asthey arise;m.Migration. Have the knowledge, experience, technology and plans to sufficiently locate, isolate and extractGE Confidential Information and GE Materials, should GE desire bring the same back in-house or migrate to a different vendor; n. Disabling Devices. Shall deliver and maintain the Services free from all Disabling Devices. 12.INFRINGEMENT OF INTELLECTUAL PROPERTY If the Services become or in GE’s opinion are likely to become the subject of an infringement or misappropriationclaim, SP shall, at SP’s sole cost and expense, in addition to its indemnification obligations, at GE’s discretion, either (i) procurefor GE the right to continue using the Services or SP Pre- existing Intellectual Property, (ii) replace or modify the Services or SPPre-existing Intellectual Property in a manner acceptable to GE to make them non-infringing or without misappropriation,provided that any such replacement or modification shall not materially degrade the performance or quality of the affectedServices or Pre-existing Intellectual Property, or disrupt GE’s business operations; or (iii) refund all or part of the Fees and costsfor the applicable Services. 13.INDEMNIFICATION a.SP Duty. To the fullest extent permitted by law, SP shall, at its own expense, defend, indemnify, release, and holdthe GE Indemnitees harmless against all Losses related to third-party claims, to the extent directly or indirectly, arising from,related to, or out of: (i.) any act or omission of SP or SP Personnel, constituting negligence, recklessness, or intentional or willfulmisconduct, (ii) breach of any term, representations, warranties or covenants of the MSA or any part thereof by SP or SPPersonnel; (iii.) any assertion or allegation that the Services or use thereof by GE as intended or agreed upon by the Parties inthe applicable SOW constitute violations, misappropriation or infringement of any Intellectual Property Rights; (iv.) injury toperson (including death) or damage to property caused by SP or SP Personnel; and (v.) taxes or other liability related to theemployment or engagement or the termination of employment or engagement of SP Personnel. SP shall extend the benefit to GEof all applicable third- party indemnities that are provided to SP in connection with the Services. b.GE Duty. To the fullest extent permitted by law, GE shall, at its own expense, defend, indemnify, release, and holdSP Indemnitees harmless against all Losses related to third party claims to the extent arising from or related to (i.) any assertionor allegation that SP’s use of any GE Confidential Information violates the Intellectual Property Rights of said third-party; (ii)injury to person (including death) or damage to property caused by a GE employee; and (iii) breach by GE of applicable laws.  c.Exceptions to Intellectual Property Infringement. The indemnifying Party shall not be responsible for a violationor infringement of Intellectual Property Rights of a third-party to the extent caused directly by: (i) an unauthorizedmodification or enhancement or misuse of the subject intellectual property by the indemnified party and such violation orinfringement would not have arisen but for such modification, enhancement or misuse; (ii) failure by the indemnified party touse new or corrected versions of the subject intellectual property (provided and implemented at no additional cost to theindemnified party) after written notification to do so and the violation or infringement would not have occurred but for suchfailure; or (iii) the combination or integration of the subject intellectual property with products or information not furnished orotherwise authorized by the indemnifying property and the violation or infringement would not have occurred but for suchcombination or integration. d.Procedure. The indemnified party shall have the right, but not the obligation, at its expense, to participate in thedefense of any such claim through counsel of its own choosing. If the indemnifying Party and/or its retained counsel fail topromptly provide such defense, or, having commenced such defense, fail to diligently proceed with such defense, in theindemnified Party’s discretion, the indemnified party shall have the right to assume the defense of any such matter throughlegal counsel of its own choosing. In such case, the indemnifying Party shall remain liable for all of the indemnified party’sLosses incurred in conjunction therewith, including all legal fees and expenses the indemnified party incurs to enforce itsindemnity rights. The indemnifying Party shall not enter into any settlement agreement or otherwise agree to the entry of anyorder or judgment that requires the indemnified Party to take any specific action, admit liability or pay any sum of money outof its own resources without the prior written approval of an authorized representative of the indemnified party. 14.DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY a. Disclaimer of Warranties. NEITHER PARTY PROVIDES ANY WARRANTIES, EXPRESS OR IMPLIED,OTHER THAN THOSE SET FORTH IN THIS AGREEMENT. b. Disclaimer of Special Damages. NEITHER PARTY SHALL BE LIABLE UNDER THE MSA TO THEOTHER PARTY OR ANY THIRD PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIALOR PUNITIVE DAMAGES, WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE)OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE c. Limitation of Liability. EACH PARTY’S LIABILITY TO THE OTHER PARTY RELATING TO THESERVICES PROVIDED UNDER A SOW SHALL NOT EXCEED TWO (2) TIMES THE AMOUNT PAYABLE BY GE WITHRESPECT TO THAT APPLICABLE SOW. d. Exclusions. The Disclaimer of Special Damages in Section 14(b) and Limitation of Liability in Section 14 (c)shall not apply to any Losses arising from or related to: (i) either Party’ gross negligence, intentional misconduct, includingfraud, or willful misconduct; (ii) either Party’s obligation to indemnify the other Party per Section 13 or a breach of eitherParty’s indemnification obligations or any infringement or misappropriation by SP or SP Personnel of any Intellectual PropertyRights of GE or GE Affiliate; (iii) any intentional or willful breach of the MSA by SP or SP Personnel; (iv) any personal injury,bodily injury, death or property damage caused by SP or SP Personnel; (v) breach of confidentiality obligations by SP or SPPersonnel; (vi) any taxes, filing fees, fines, penalties and related charges imposed on or alleged against GE due SP’s or SPPersonnel’s acts or omissions in violation of this MSA; (vii) any warranties pertaining to product, equipment, Deliverables,Work Product or Services provided under the MSA; or (viii) any matters that cannot be limited due to applicable laws orregulations.  15.Insurance. SP shall, and shall cause SP Personnel, to secure and maintain, in full force and effect throughout the Term and for aperiod of [**] years from the termination or expiration of the applicable SOW (whichever is longer), insurance coverage intypes and amounts (at a minimum Commercial General Liability, Worker’s Compensation, Commercial Automobile Liability,Errors and Omissions/Professional Liability) appropriate to the conduct of SP's business and sufficient to support SP'sindemnification obligations hereunder, but no less than as required in SCHEDULE MS3 - Required SP and SP PersonnelInsurance Coverage. In no event shall the coverage or limits of any insurance maintained by SP under this section or the lackor unavailability of any other insurance, limit or diminish in any way SP’s obligations or liability to GE under this Agreement,law or equity. Any acceptance of insurance certificates by GE shall not limit or relieve SP of the duties and responsibilitiesassumed by SP under the MSA.16.Business Audit. a. GE Right to Audit. GE through its authorized employees, representatives, agents, and partners, upon givingnotice to SP (as reasonable under the circumstances), will have the right to inspect and/or audit, at GE’s discretion, all facilities,equipment, procedures, and practices employed by SP in conducting the Services and to examine and audit all records, files,notebooks, relevant operating procedures and processes, and data relating to the Services performed or provided, in order toassure and confirm SP's compliance with the MSA, including all applicable GE policies and applicable law. Any significantnon-compliance issues identified during such inspection and/or audit will be communicated to SP. SP will provide a correctiveaction plan in writing to GE within [**] days (or mutually agreed upon longer period) of such communication, unless GEdetermines that a shorter period is necessary due to the nature of non-compliance. If, in the sole discretion of GE, thenon-compliance is not remediable or resolution cannot be reached within a reasonable period of time following such request,GE, in its sole discretion, may terminate the MSA and/or any or all SOWs as a material breach of this Agreement. Theforegoing rights shall be effective during the Term and for a period of [**] years following the expiration or termination of theMSA or an applicable SOW (whichever is later). Except where SP is alleged to be in breach of the MSA, including, withoutlimitation, breach of security and confidentiality requirements or applicable law, the audit rights shall not be exercised morethan [**] month period. Except to the extent reasonably necessary for GE to enforce its rights and remedies under the MSA, theaudit shall be conducted in compliance with SP’s reasonable security and confidentiality requirements. b. SP Responsibilities. SP shall continuously monitor its facilities, equipment, SP Personnel and procedures andpractices employed by SP in performing the Services, including, without limitation, the effectiveness of SP and SP Personnel’ssecurity (physical and IT). Additionally, SP shall be responsible for ensuring consistency of its operations, including proactivemonitoring and mitigation of all vulnerabilities across all of its sites. Using an independent third-party reasonably acceptable toGE and at SP’s sole cost and expense, SP shall conduct audits and risk and vulnerability assessments against the requirementsof policies and procedures referenced in this MSA or made known to SP, no less frequently than every [**] months. The reportsof such audits and assessments shall include, at a minimum, the scope of the audit and/or assessment and anyvulnerabilities/issues/findings/concerns/recommendations in so far as they impact GE. SP shall provide to GE all reports ofsuch periodic audits and assessments. Such reports will be treated as SP Confidential Information. SP shall remediate within[**] days any items rated as high, critical or severe (or similar rating indicating similar risk) in such reports and shall remediateall other issues within a commercially reasonable time. If, in the sole discretion of GE, the non-compliance is  not remediable or resolution cannot be reached within a reasonable period of time, GE, in its sole discretion, may terminate theMSA and/or any or all SOWs as a material breach of this Agreement. 17.Financial Audit Rights During the Term and for [**] years after (or the length of time as may be required by applicable law, ordinance orregulation, whichever period is longer), SP shall maintain complete and accurate books and records, in accordance withgenerally accepted accounting and document retention principles, regarding its business operations relevant to the calculationof Fees and SP and SP Personnel’s compliance with this MSA. Upon GE’s request, SP shall make such books and records, andappropriate SP Personnel, available during normal business hours for inspection and audit by GE or an independentaccounting firm, provided that GE shall: (a) give SP prior notice (reasonable under the circumstances) of any audit; (b)undertake an audit no more than once per calendar year except for good cause shown; and (c) conduct or cause to beconducted such audit in a manner designed to minimize disruption of SP’s normal business operations. GE may take copies andabstracts of materials audited [provided that such material is deemed Confidential Information of SP]. In case of anydiscrepancy, SP shall immediately, pay GE the amount of any overpayment revealed by the audit. Additionally, if an auditreveals an overbilling or over-reporting of [**] percent ([**]%) or more, then SP shall reimburse GE for the cost of the audit. 18.Business Continuity Planning If GE, in its sole discretion, identifies SP as a critical supplier in an applicable SOW, SP shall, at no additional cost toGE, comply with the requirements of Schedule MS7- Business Continuity Planning. 19.Export Controls. The Parties acknowledge that certain materials to be provided hereunder and certain transactions hereunder maybe subject to export controls under the laws and regulations of the United States, EU member states, EU and other countries.Neither Party will export or re-export any such items, information, or any direct product thereof or undertake any transactionin violation of any such laws or regulations. SP agrees that all persons performing Services, or otherwise working withcontrolled United States technology, will be in compliance with the Export Administration Regulations (15 C.F.R. 730 et seq.)and that SP will obtain any required export license for SP Personnel prior to assigning such personnel to the Services. 20.Local Implementation Agreement a. LIA. Where it appears necessary to accommodate specific regional or national circumstances, in particularto differences in local mandatory laws and regulations or to local business requirements of GE, a GE Affiliate or SP, the Partiesmay enter into a local implementation agreement ("LIA") for the purchase of Services in a particular country using the templateform set out in Schedule MS6 -Local Implementation Agreement Template. Each such LIA shall: (i) form a separate agreementbetween the relevant parties to it governing the provision of Services to the GE Affiliate in or in respect of the relevant countryor market; (ii) incorporate as if set out in full therein the then current version of this Agreement; (iii) set out any exceptionsand/or additional terms and conditions in a LIA deemed appropriate by the relevant parties to such LIA in consideration oftheir respective organizational or operational needs and/or processes or to apply local mandatory laws; and (iv) be read suchthat references in this Agreement to “GE” shall be deemed to be references to the GE Affiliate contracting entity of such LIA.  b. Requirements. A LIA shall not take effect under this MSA unless each of the following requirements is met:(i) the LIA references this MSA as being a LIA placed under it; (ii) the LIA is signed by an authorized GE (or GE Affiliate, asapplicable) signatory and by an authorized SP signatory; and (iii) at the date the LIA is signed by both applicable parties to theLIA, this MSA has not expired or been terminated. For governance reasons, each LIA shall have to be countersigned by a GEGlobal Commodity Leader. c. Exceptions. Any exceptions expressly agreed upon in writing by a GE Affiliate and SP, pursuant to aparticular LIA shall apply only for purposes of that LIA and only between the parties thereto, and shall not be deemed to inany way amend, modify, cancel, or waive the provisions of this MSA or any other LIA or SOW. To the extent the parties desireto amend or modify a particular term in a SOW, the parties shall specifically reference the applicable section of the SOW. Anysuch modification or amendment shall be limited to that particular SOW and only to such matter and section. In no event shallthe applicable GE Affiliate and SP use the LIA to override substantive terms of this MSA unless required by local mandatorylaws and regulations to be changed. 21.Independent Contractor The relationship of the Parties under this MSA is that of independent contractors. Nothing contained in the MSA isintended or is to be construed so as to constitute the Parties as partners, joint venturers, or one Party as an agent or employee ofthe other Party. Neither Party has any express or implied right under this Agreement or any SOW to assume or create anyobligation on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertakingwith any third party, and no conduct of a Party will be deemed to infer such right. To the extent SP engages the services of anyindividual or entity to support the Services under any SOW, SP is responsible for compliance with all applicable employment ortax laws. 22.Assignment and Subcontracting SP shall not assign the MSA or any part thereof to any third party without GE’s prior written consent (which is inits sole discretion to grant or withhold). Any permitted assignment will not relieve SP of responsibility for the performance ofany obligation. Additionally, SP shall not subcontract, delegate or outsource any right, duty or obligations under the MSA toany third party without GE’s prior written consent (which is in GE’s sole discretion to grant or withhold). If any suchsubcontracting, delegation or outsourcing is permitted, such consent by GE shall be limited to the specific project, time period,or other parameters, for or on which such consent was provided and GE shall have no direct responsibility for payment of anykind to such SP Personnel and no liability for amounts owing by SP to such SP Personnel. SP will remain jointly and severallyresponsible and liable for the acts or omissions of SP Personnel as if such acts or omission had been performed directly by SP.GE may freely assign this MSA to any GE Affiliate without the consent of SP. 23.Notices. Any notices required or permitted under this Agreement will be in writing, will refer specifically to this Agreement,and will be sent by recognized national or international overnight courier, confirmed facsimile transmission (provided thatduplicative copy is provided via confirmed electronic mail, registered mail or certified mail), confirmed electronic mail, orregistered or certified mail, postage prepaid, return receipt requested, or delivered by hand to the address as set forth herein. AParty may  change its contact information immediately upon written notice to the other Party in the manner provided in this Section. 24. Termination a. Termination for Convenience. GE may terminate this MSA and/or any SOW (or any part thereof) forconvenience by giving to SP thirty (30) days’ written notice of its intention to terminate. b. Termination for Cause. Either Party may terminate the MSA and/or any SOW (or any part thereof) for causeimmediately by written notice to the other Party (the “Defaulting Party”), if the Defaulting Party: (a) materially breaches thisAgreement, and such breach is incapable of cure, or with respect to a material breach capable of cure, the Defaulting Partydoes not cure such breach within [**] days or other agreed upon period after receipt of written notice of such breach providedthe Defaulting Party has commenced cure in good faith; (b) becomes insolvent or has an encumbrancer take possession or areceiver or examiner appointed over any of its property or assets; (c) makes any voluntary arrangement with its creditors orbecomes subject to an administration order; (d) goes into liquidation (except for the purposes of restructuring or otherreorganization and in such manner that the company resulting from the reorganization effectively agrees to be bound by or toassume the obligations imposed on that other Party under this Agreement); (e) suffers any distress, execution or other process tobe levied or enforced on any of its property and is not paid out withdrawn or discharged within 21 days; (f) ceases or threatensto cease to carry on business; or (g) suffers any material adverse change that impacts its ability to perform under the MSA.Additionally, GE may terminate the MSA and/or SOW immediately for cause if: (u) there is a change in Control of SP,including, without limitation, a change in Control involving any entity that directly or indirectly competes with GE and/or itsAffiliates; provided however, SP shall provide written notice to GE in accordance with Section 23 of any change in Controlwithin [**] days of effective date thereof and GE shall have one hundred and eighty (180) days from the receipt of the properlydelivered notice to terminate the MSA and/or SOW as permitted under this Section; or (v) if SP or SP Personnel violate anyapplicable anti-corruption laws, rules, regulations and conventions. c. Survival. Expiration or termination of the MSA and/or any SOW shall not relieve SP from the provisions whichby their express terms of nature extend beyond expiration or termination, including but not limited to Sections 1, 4-19, 22, and24-31 hereof, which shall remain binding upon the Parties until expressly released by the GE in writing. Upon termination, GEshall be entitled to receive all completed and uncompleted Deliverables which SP and SP Personnel have made or developedhereunder up to the termination date. d.Post-Termination Obligations. The provisions of the MSA shall continue to govern all outstanding, butnon-terminated SOWs and during the Transition Period in Section 25. Except in case of Termination for Cause by GE involvingbreaches by SP or SP Personnel of Sections 6, 11.b., 11.f., 11.g., 11.j., and 11.m., upon expiration or termination of the MSAand/or SOW (or any part thereof), GE shall pay SP those undisputed and unpaid Fees due under the applicable SOW forServices provided to and accepted by GE prior to the effective date of termination. The foregoing shall be the sole and exclusiveremedy of SP in connection with any termination or expiration. Unless otherwise set forth in the applicable termination notice,any termination of this MSA or applicable SOW by a GE Affiliate shall be effective only with respect to the terminating GEAffiliate and shall not affect any other GE Affiliate. Any advance payments made by GE or a GE Affiliate to SP which are inexcess of amounts due to SP as of the effective date of termination or expiration shall be refunded to GE within thirty (30) daysof said effective date of termination or expiration, together with all GE Materials in the possession or control of SP or SPPersonnel.  25.Transition Assistance. On GE’s request at any time, or the termination or expiration of the MSA or an applicable SOW, SP shall, and shallcause SP Personnel to: (a) return GE Data in a platform-agnostic format; and (b) destroy or return, as instructed by GE, allremaining GE Confidential Information and GE Materials on the systems of SP and SP Personnel. In connection with anytermination or expiration of the MSA and/or any SOW, for a period of [**] days (or mutually agreed upon longer period) fromthe effective date of termination or expiration, SP shall provide to GE, such information and transition assistance or that GEreasonably requests to allow the applicable Services to continue without interruption or adverse effect on GE and to facilitatethe smooth and orderly transfer of those Services to GE or its designee, as applicable. In case of Termination for Cause by GEinvolving breaches by SP or SP Personnel of Sections 6, 11.b., 11.f., 11.g., 11.j., and 11.m., all such assistance shall be providedat SP’s sole cost and expense. In all other cases, the Parties shall enter into an SOW with respect to such transition services,provided however, SP shall provide all transition services at the same rates, terms and conditions in effect at the time oftermination or expiration. SP shall fully cooperate with GE and any replacement provider by promptly providing requestedinformation and committing necessary resources to ensure that the quality of Services is maintained at levels set forth in theapplicable SOW and to ensure a seamless transition of Services. 26.Severability. If any provision, right or remedy provided for herein is held to be unenforceable or inoperative by a court ofcompetent jurisdiction, the validity and enforceability of the remaining provisions will not be affected thereby. 27.Waiver. No waiver will be implied from conduct or failure to enforce rights. No provisions of this Agreement or anyStatement of Work will be deemed waived by either Party unless such waiver is in writing and signed by the authorizedrepresentative of the other Party. Waiver by a Party of any default by the other Party of any provision of this Agreement orSOW will not be deemed a waiver of any subsequent or other default. 28.Order of Precedence To the extent any business terms and conditions of this MSA conflict with those of any SOW, this MSA will controlunless the SOW expressly and specifically states an intent to supersede the MSA on a specific matter by specific reference to theapplicable section in the MSA (but then only with respect to a particular SOW and with respect only to such matter andsection). Notwithstanding the foregoing, the Parties agree that this Agreement shall supersede any conflicting, different oradditional legal terms in a SOW, including, without limitation, indemnification, limitation of liability, confidentiality, andrepresentations, warranties and covenants. To the extent, SP desires to modify any legal terms in this Agreement, SP shallrequest a written amendment to the MSA, which shall be agreed or withheld by GE, in its sole discretion. The pre-printed termsappearing on either Party’s PO’s and invoices shall be deemed without effect and superseded by this MSA. If any of eitherParty’s systems require any user to “click through”online terms when accessing or using the Services, such terms shall bedeemed without effect and superseded by this MSA.  29.Additional Parties. SP agrees that the Services and Deliverables provided under this MSA (including any SOWs issued hereunder) maybe used by GE for itself, and at no additional expense to GE, for the benefit of any GE Affiliate. Any GE Affiliate, worldwide,which uses the Services and/or Deliverables, whether the right to use passes directly to that entity or not, shall be entitled to allof the rights and interests of GE under this Agreement and may enforce this MSA in its own name. Each GE Affiliate shall beprovided the benefit of this MSA and to any discounts, rebates or other advantageous financial arrangements provided to theother GE Affiliates and may enter into SOWs directly with SP. If a GE Affiliate enters into an SOW with SP under this MSA,then all references to GE and Party in this Agreement will be deemed to be reference to that GE Affiliate in its individualcapacity. Each individual GE Affiliate will be solely responsible for its own obligations and performance under this MSA and SPwill look solely to such GE Affiliate with respect to rights and remedies under this MSA. All obligations of each GE Affiliateunder the MSA will be several and not joint; in no event will any GE Affiliate be liable for the obligations or performance of anyother GE Affiliate. In the event an SOW is terminated at the request of GE, the Parties will mutually resolve any issues fromsuch termination pursuant to Section 31.e. of the MSA. 30.Divestitures and Acquisitions. Any GE Affiliate divested by GE as an ongoing concern or otherwise, for a period of [**] months following theeffective date of divestiture, may continue to: (a) benefit under the terms of this MSA and/or applicable SOW, as well as, (b)issue SOWs under the MSA. Any entity or business acquired by GE or a GE Affiliate may utilize the terms of this MSA for anyof their SOWs with SP. The Parties understand and agree that any entity that was divested by GE as of the Effective Date ofthis MSA shall have the right to continue to rely on and exercise all rights and remedies in the manner and for the duration setforth in the agreements between GE and SP that were in place prior to the Effective Date of this MSA, which shall continue infull force and effect for purposes thereof. 31.Miscellaneous. a. Additional Duties. As GE may request, and/or as may be set forth in a SOW, SP will submit written reportson the progress of the Services. SP will not present or publish, or submit for publication, any work resulting from the Serviceswithout GE’s prior written approval. b. Effect of SP or SP Personnel Bankruptcy. All rights and licenses granted by SP under this MSA shall bedeemed to be rights and licenses to "intellectual property," and the subject matter of this agreement, including the Services, isand shall be deemed to be "embodiment[s]" of "intellectual property" for purposes of and as such terms are used in andinterpreted under section 365(n) of the United States Bankruptcy Code (the "Code") (11 U.S.C. § 365(n) (2010)). GE shall havethe right to exercise all rights and elections under the Code and all other applicable bankruptcy, insolvency and similar lawswith respect to this Agreement (including all executory SSAs and SLAs). Without limiting the generality of the foregoing, if SPor its estate becomes subject to any bankruptcy or similar proceeding: (a) subject to GE’s rights of election, all rights and licensesgranted to GE under this Agreement will continue subject to the respective terms and conditions hereof and thereof, and willnot be affected, even by SP’s rejection of this Agreement; (b) GE shall be entitled to a complete duplicate of (or complete accessto, as appropriate) all such intellectual property and embodiments of intellectual property, and the same, if not already in GE’spossession, shall be promptly delivered to GE, unless SP elects to and does in fact continue to perform all of its obligations underthis Agreement; and (c) if there is an escrow agreement between the Parties, the automatic stay under Section 362 of the Code(11 U.S.C. § 362 (2011)) shall not apply to any  instructions from GE to the escrow agent relating to the escrow deposit materials; provided however, GE shall be responsible forfees charged by the escrow agent related to the maintenance of such escrow deposits. c. Integration. This Agreement includes all attached exhibits and SOWs, all of which are herein incorporatedby reference. This MSA contains the entire understanding of the Parties with respect to the subject matter hereof andsupersedes all previous agreements and undertakings with respect thereto. This MSA may be modified only by writtenagreement signed by the Parties. Notwithstanding the foregoing, the Parties understand and agree that any existing EuropeanUnion Standard Data Privacy Clauses executed by SP prior to the Effective Date shall continue in full force and effect duringthe Term until and unless SP executes a new set of said Clauses. d. Governing Law. This MSA and each SOW will be construed, governed, and interpreted in accordance withthe laws of the state of New York, excluding its conflicts of law provisions. The United Nations Convention on the InternationalSale of Goods shall not apply to this MSA.e. Dispute Resolution. i. Mediation and Arbitration. Except with respect to any request for preliminary injunctive relief or otherinterim or conservatory measures of protection or those circumstances described in subparagraph (ii) below, in the event of anydispute, controversy or claim arising out of or relating to this MSA, including any question regarding its existence, validity,interpretation, breach, violation or termination (a “Dispute”), the Parties shall first refer the Dispute to proceedings under TheMediation Rules of the International Chamber of Commerce. If the dispute has not been settled pursuant to said Rules ofMediation within [**] days following the filing of a Request for Mediation or within such other period that the Parties mayagree in writing or which may be shortened due to the appointment of an emergency arbitrator, such dispute shall thereafter befinally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce. The seat of arbitrationshall be New York, New York. Where the claim amount is less than US $[**], the tribunal shall consist of a sole arbitrator.Where the claim amount is $[**] or greater, the tribunal shall consist of three arbitrators, with the claimant and the respondenteach nominating a single arbitrator respectively, and the two party- nominated arbitrators within [**] days of the last of theirappointments, appointing the third arbitrator, who shall be the chairman of the tribunal. The language of the arbitration shallbe English. The prevailing Party shall be entitled to recover, in addition to its damages, its reasonable attorneys’ fees andexpenses, expert witness fees and expenses and its internal legal, administrative and management costs incurred in connectiontherewith. The Parties hereby waive any right to refer any question of law and any right of appeal on the law and/or merits toany court. ii. Litigation. Notwithstanding the foregoing, GE is authorized to institute proceedings in the federal andstate courts of the County of New York, State of New York, at any time, if commencement of litigation is deemed appropriateby GE (a) to avoid the expiration of a statute of limitations period, (b) to preserve a superior position with respect to othercreditors; (c) because GE makes a good faith determination that a breach of the MSA (or actual or threatened violation of itsrights) by SP or SP Personnel is imminent (or has already occurred), such that a temporary restraining order or otherpreliminary injunctive relief is necessary; or (d) with regard to the determination of intellectual property rights in connectionwith any of the Services or Deliverables. Litigation authorized under this section shall include the right to seek, in addition todamages, court costs and fees of attorneys and other professionals.  iii. Continuing Obligation. SP agrees to continue performing its obligations under this Agreement while anydispute is being resolved unless and until such obligations are terminated by the termination or expiration of this MSA or theapplicable SOW. f. Injunctive Relief. Each Party acknowledges that a breach of Sections 6-8, 10-19, 22 and 25 hereof maycause the other Party irreparable damages, for which an award of damages would not be adequate compensation and agreesthat, in the event of such breach or threatened breach, the non- breaching Party will be entitled to seek equitable relief,including a restraining order, injunctive relief, specific performance and any other relief that may be available from any court.Such remedies shall not be deemed to be exclusive but shall be in addition to all other remedies available at law or in equity. g. Force Majeure. The Parties hereto shall be excused from non-performance to the extent arising from anyevent beyond that Party’s control which the affected Party could not have been prevented or avoided by the exercise of all duediligence including but not limited to, labor disturbance, war, terrorist action, fire, adverse weather, and national emergencies.The time for any performance required hereunder shall be extended by the delay incurred as a result of such act of forcemajeure, and each Party shall act with diligence to correct such force majeure. Except as otherwise set forth above, no ForceMajeure event shall relieve SP of its other contractual obligations, including those related to disaster recovery, ownership,confidentiality, security, and indemnification. Notwithstanding anything to the contrary contained herein, such force majeureeventsdo not include any event that are within SP’s reasonable control and that the SP could have prevented or avoided by theexercise of all due diligence, including, but not limited to (i) shutdowns, disruptions, malfunctions, labor disturbances, fire,accidents, breakdown of or damage to equipment or facilities other than as a result of or on a general and widespread basesthat are not limited to SP; and (ii) the delay or failure of any SP Personnel to perform any obligation unless such delay or failureto perform is itself by reason of a force majeure event. h. Jurisdiction and Venue. Any legal suit, action or proceeding for injunctive relief or to enforce an arbitrationaward shall be instituted exclusively in the federal courts of the United States or the courts of the State of New York in eachcase located in County of New York. Each Party irrevocably submits to the exclusive jurisdiction of and venue in such courts.Service of process, summons, notice or other document by mail to such Party's address set forth herein shall be effective serviceof process for any suit, action or other proceeding brought in any such court. i.Counterparts. This MSA and all SOWs issued thereunder may be executed in any number of counterparts bythe Parties hereto and delivered in-person or by facsimile or email, each of which, when so executed and delivered, shall bedeemed an original, but such counterparts shall constitute but one and the same Agreement or SOW, as the case may be.Facsimiles and scanned images of original signatures are considered valid as original signatures. This MSA and any applicableSOW may be executed using electronic signatures. In addition, images of the original of this Agreement and/or any SOW withoriginal or electronic signatures may be stored electronically. The Parties intend that electronic copies or images reproducedfrom the electronically stored original of this MSA and/or any SOW shall be valid as an original.[END OF DOCUMENT]  SCHEDULE MS2GE Privacy and Data Protection Appendix By executing the MSA, SP and SP Personnel agree to the GE Privacy and Data Protection Appendix located athttp://www.gesupplier.com/html/GEPolicies.htm. This Appendix may change from time to time. Please check the Appendix periodically for updates.  SCHEDULE MS3 REQUIRED SP AND SP PERSONNEL INSURANCE COVERAGE (INS) 1.0.Insurance Policy.1.1 Carriers. SP, and each subcontractor of SP performing under this MSA, shall obtain and keep in force for thebenefit of SP the following insurance to be issued by insurance carriers with a minimum A.M. Best’s rating of A-: VII,or S&P A, or better, or the equivalent in those jurisdictions that do not recognize such rating classification, andlicensed to provide insurance in the jurisdiction in which work is to be performed, with minimum limits as set forthbelow: 1.1.1Worker’s Compensation; Employer’s Liability. Statutory Workers’ Compensation and or Employer’sLiability as required by state or country law. 1.1.2. Commercial General Liability. Commercial General Liability (also referred to as civil or public liability insuranceoutside of the US) including, Product and Completed Operations Liability (maintained in effect for a period of at least [**]years after the date of final payment); including contractual liability and deletion of the Care, Custody, Control and Insuredvs. Insured exclusions. The following minimum limits for Bodily/Personal Injury and Property Damage and be written on anoccurrence basis: $[**] per occurrence, $[**] general aggregate, $[**] product completed operations. 1.1.3. Business Automobile Liability. Business Automobile Liability covering all vehicles (owned, non-owned, hired, etc.)used in connection with the Services, covering Bodily Injury and Property Damage with a minimum limit of $[**] combinedsingle limit per accident. 1.1.4. Professional Errors and Omissions. Professional Errors and Omissions (also known as Professional Indemnity outsidethe USA) covering the activities of SP, with coverage limits of not less than [**] Dollars per claim or per occurrence/[**]Dollars aggregate ($[**]). Policy may be placed either on an “occurrence” basis or on a “claims made” basis, with full prioracts coverage for claims arising out of services rendered from the initial commencement of Services through the end of theMSA. Continuity of coverage must be maintained for, [**] years after the completion of the Services. If SP will have access toGE’s IT systems or GE Data, coverage must also include loss of, mishandling of data containing private or confidentialinformation of GE or others for which GE is responsible; and failure to prevent unauthorized access to, or use of, GE’ssystems or data. 1.1.5. Crime Insurance. If SP will have access to GE’s funds or accounts, Crime Insurance (also known as EmployeeDishonesty insurance/ Fidelity Bond) in an amount of not less than $[**] covering all SP Personnel and Subcontractors andincluding a Client’s interest endorsement or Insuring Agreement specifying that coverage extends to GE’s property in theevent of any theft of GE money or property, or money or property of others for which GE is responsible. Verification that GEhas been included as a Joint Loss payee under the policy must be provided upon request by GE. 1.1.6. Property. If the SP either has GE property in its care, custody or control or is reliant upon its property in connectionwith the provision of Services and/or Deliverables, Property insurance on an All- Risk, Replacement Cost basis. If propertyincludes that of the GE, policy must name GE as Loss Payee, as its interests may appear.1.1.7. Environmental. If the scope of Services involves the potential for an environmental release, Environmental Impairment(also known as Pollution) Liability with a limit of not less than $[**] per  occurrence covering on-site and off-site bodily injury and property damage, including clean-up cost as a result of pollutionconditions arising from the SP’s operations, including completed operations. If coverage is provided on a claims-made form,the retroactive date must precede the effective date of this agreement and provide for continuity in cover for [**] after thecompletion of the Services. 1.1.8. The amount of coverage specified herein may be satisfied with combined limits together with umbrella/excess liabilitypolicies which follow form and drop down to apply as primary insurance in the event an underlying policy is exhausted. 2.0Additional Insureds.GE, GE Affiliates, and their respective directors, officers, agents and employees shall be named as additional insureds underthe Commercial General Liability and Automobile Liability policies of insurance set forth in subsections 1.1.2 and 1.1.3, forany and all purposes arising out of or connected to the MSA. SP shall secure endorsements to this effect from all insurers ofsuch policies. 3.0.Insurance to be Primary.It is the intent of the Parties that all insurance purchased by SP in compliance with this MSA that provides AdditionalInsured status, will be primary to any other insurance owned, secured, or in place by GE, which insurance shall not be calledupon by SP’s insurer to contribute in any way. SP shall secure endorsements to this effect from all insurers of such policies. 4.0.Verification of Coverage.5.Upon execution of this MSA, SP shall furnish GE with certificates of insurance reflecting the coverage required by this clause.For the duration of the MSA and any mutually agreed upon extended period of time, SP shall provide GE with Certificates ofInsurance prior to each subsequent renewal of the evidenced insurance outlined above. 5.0.Policy Change or Termination.6.SP shall ensure that the policies shall not be canceled, terminated or altered so that coverage is reduced below that which isrequired in this MSA without [**] days prior written notice to GE. 6.0.Waiver of Right of Subrogation.7.SP hereby waives any right of recovery against GE and its insurers for any loss or damage that is covered by any insurancepolicy maintained or required to be maintained with respect to the Services. SP shall inform all its insurers of policies requiredby this MSA about this waiver of subrogation, and shall secure from the insurers amendments to the policies recognizing andproviding for the waiver. 7.0.Subcontractor’s Insurance.8.SP shall be responsible to ensure that any and all subcontractors hired on behalf of SP or have procured Workers’Compensation Insurance, Commercial General Liability Insurance and Commercial Automobile Liability Insurance for lossesarising out of the performance of their work in amounts as stated above. SP shall obtain a certificate of insurance from eachsubcontractor’s insurance company, agent or broker authorized by that insurer to bind coverage on its behalf showing thatthe above insurance is in force. The certificate of Insurance shall include insurer, policy numbers, dates of expiration andlimits of liability, and further providing that the insurance will not be canceled or changed until the expiration of at least [**]days after written notice of the cancellation or change has been mailed to and received by SP and GE.  8.0.Separate Duty.9.In no event shall the coverage or limits of any insurance maintained by SP or SP Personnel under this section or the lack orunavailability of any other insurance, limit or diminish in any way SP’s obligations or liability to GE under this Agreement,law or equity. Any acceptance of insurance certificates by GE shall not limit or relieve SP or SP Personnel of the duties andresponsibilities assumed by SP under the MSA.  SCHEDULE MS4 Personnel Background Check Requirements (BC) By executing the MSA, SP and SP Personnel agree to the GE Background Checking Guidelines located athttp://www.gesupplier.com/html/GEPolicies.htm. These requirements may change from time to time. Please check periodically for updates.  Schedule MS5 Batched Payments and Accelerated Payment Terms (a)Batched Payments. Unless prohibited by law, GE or the applicable GE Affiliate may choose to group all invoices that have not beendiscounted and that have Net Dates ranging from the sixteenth day of one month to the fifteenth day of the next month, and initiatepayment for all such invoices on the third day of the second month or if that day is not a business day, then on the next business day(the “Monthly Batch Payment Date”), with the result that some invoices will be paid earlier than their Net Dates and some invoices willbe paid later than their Net Dates. Alternatively, unless prohibited by law, GE or the applicable GE Affiliate may choose to group and payon a quarterly basis all invoices that have not been discounted as follows: (i) invoices with Net Dates ranging from the sixteenth day ofFebruary to the fifteenth day of May will be grouped and GE or the applicable GE Affiliate will initiate payment on the third day of Aprilor if that day is not a business day, then on the next business day; (ii) invoices with Net Dates ranging from the sixteenth day of May tothe fifteenth day of August will be grouped and Buyer will initiate payment on the third day of July or if that day is not a business day,then on the next business day; (iii) invoices with Net Dates ranging from the sixteenth day of August to the fifteenth day of Novemberwill be grouped and GE or the applicable GE Affiliate will initiate payment on the third day of October or if that day is not a business day,then on the next business day; and (iv) invoices with Net Dates ranging from the sixteenth day of November to the fifteenth day ofFebruary will be grouped and GE or the applicable GE Affiliate will initiate payment on the third day of January or if that day is not abusiness day, then on the next business day (each such payment date being referred to as the “Quarterly Batch Payment Date”), withthe result that some invoices will be paid earlier than their Net Dates and some invoices will be paid later than their Net Dates. (b)Accelerated Payment Program. The Accelerated Payment Program is administered by GE Capital US Holdings, Inc. (“GECC”). If SP isenrolled in the Accelerated Payment Program, the agreed upon early payment discount of the gross invoice price per the TPSAgreement (the “Daily Discount Rate”) will be taken for each day payment is initiated before the Net Date. If the Net Date falls on aweekend or holiday, the Net Date will be moved to the next business day and an early payment discount will be taken for each daypayment is initiated before that date. Alternatively, a flat early payment discount (the “Flat Discount”) may be taken for initiatingpayment on a date certain prior to the Net Date (the “Flat Discount Date”). The Flat Discount will be calculated by applying the DailyDiscount Rate to the number of days between the Flat Discount Date and the Net Date. If the Flat Discount Date falls on a weekend or aholiday, payment will be initiated on the next business day net of the Flat Discount. Each early payment discount will be rounded to thenearest one hundredth of a percent. (c)Indexing. The Daily Discount Rate is based in part on the 3 Month Libor Rate (defined below) in effect on the last business day of themonth preceding the day when the first early payment discount is taken to settle an invoice (the “Base Libor Rate”). If the 3 MonthLibor Rate in effect on the last business day of any month (the “Current Libor Rate”) differs from the Base Libor Rate, the Daily DiscountRate may be adjusted on the last business day of such month to reflect the difference between the Base Libor Rate and the CurrentLibor Rate. If the Daily Discount Rate is adjusted, the adjusted Daily Discount Rate will be applied to all invoices posted for paymentafter that date. The “3 Month Libor Rate” will be the three month Libor rate published in the “Money Rates” section of The Wall StreetJournal as the “London interbank offered rate, or Libor three month” (or, if not so published, as published in another nationallyrecognized publication) on the last business day of each month.  (d)Title Transfer. If GE or the applicable GE Affiliate takes an early payment discount to settle an invoice, SP confirms that: (1) GE or the GEAffiliate has assigned its right, title and interest in the related Services to GECC and an interest in such Services will pass directly to GECCin accordance with the terms of this Agreement; (2) once an interest in such Services has passed to GECC, GECC will immediately anddirectly transfer such interest to GE or the GE Affiliate; and (3) all of SP’s obligations under this Agreement, including SP'srepresentations and warranties, will extend to and benefit GE or the GE Affiliate as if such interest passed directly to GE or the GEAffiliate.  SCHEDULE MS6LOCAL IMPLEMENTATION AGREEMENT (LIA) This Local Implementation Agreement (“LIA”) for [INSERT COUNTRY] ("Country") is executed as of [INSERT EFFECTIVEDATE] by and between [INSERT SP], a legally registered company incorporated under the laws of [INSERT COUNTRY] andmaintaining an office at [INSERT ADDRESS] (“SP”), and [INSERT NAME OF APPLICABLE GE AFFILIATE], a legallyregistered company incorporated under the laws of [INSERT COUNTRY] and maintaining an office at [INSERT ADDRESS](“GE”). For purposes of this LIA, SP and GE may be referred collectively as “Local Parties” or individually as a “Local Party.”In consideration of the mutual covenants and terms and conditions set out below, the Local Parties agree as follows: 1. GENERAL TERMS. This LIA incorporates the terms of the Purchase Agreement, with an effective date of [INSERTDATE], by and between [INSERT SP] and [INSERT GENERAL ELECTRIC COMPANY OR THE NAME OF THE APPLICABLEGE CONTRACTING ENTITY] (the “Agreement”), and all other attachments and documents incorporated by reference to thisLIA (including all applicable Order Forms and SOWs). Capitalized terms used but not defined in this LIA shall have themeaning ascribed to them in the Agreement. 2. TERM. The initial term of this LIA shall commence on the Effective Date and shall continue until such date as this LIAmay be terminated or expires in accordance with the terms of the Agreement. 3.ADDITIONAL OR MODIFIED TERMS. To override any terms or conditions of the Agreement, the Local Parties mustexpressly override the terms or conditions of the Agreement with reference to the specific section number(s) of the Agreementto be overridden by the LIA, in which case the conflicting provisions of the LIA shall prevail but only with respect to the LIA.The Local Parties agree to supplement and/or modify the Agreement as follows solely for purposes of this LIA (andcorresponding Order Forms and SOWs to this LIA) to the extent necessary to comply with local law or with local custom,practices or commercial climate: <> 4. APPLICABLE LAW. This LIA (and any non-contractual obligations arising out of or in connection with it) shall beconstrued and enforced in accordance with, and governed by, the substantive laws of [INSERT APPLICABLE COUNTRYLAW] (including but not limited to application of any real property or landlord and tenant law, and data protectionregulations) (“Mandatory Law”), which Mandatory Law shall apply and prevail over the choice of the laws of the State ofNew York to the fullest extent required by Mandatory Law, without regard to the conflict of laws principles thereof, and allactions arising out of or relating to this LIA (whether arising out of or in connection with contractual or non-contractualobligations) must be brought in the courts of [INSERT APPLICABLE COUNTRY]. English language shall be the applicablelanguage and translation of this LIA unless otherwise mutually agreed to by the Local Parties or required by Mandatory Law. IN WITNESS WHEREOF, the Local Parties hereto have caused this LIA to be executed as of the EffectiveDate of this LIA.  [GE] [SP]By: By: Print Name: Print Name: Title: Title: Date: Date: Address for notices: Address for notices: Phone: Phone: Fax: Fax: Email: Email:  SCHEDULE MS7BUSINESS CONTINUITY PLANNING REQUIREMENTS 1. If GE, in its sole discretion, identifies SP as a critical supplier, SP will prepare, maintain and provide, at noadditional cost to GE, a Business Continuity Plan (“BCP”) satisfactory to GE and designed to ensure that SP cancontinue to provide the Services in accordance with this Agreement and each SOW therein in the event of a disaster orother BCP-triggering event (as such events are defined in the applicable BCP). SP’s BCP will, at a minimum, providefor (a) the retention, rotation, and retrieval of data and files; (b) obtaining resources necessary for recovery, (c)appropriate continuity plans to maintain adequate levels of staffing required to provide the Services during adisruptive event; (d) procedures to activate an immediate, orderly response to emergency situations; (e) procedures toaddress potential disruptions to SP’s supply chain; (f) a defined escalation process for notification of GE in the event ofa BCP-triggering event; and (g) training for key SP Personnel who are responsible for monitoring and maintaining SP’scontinuity plans and records. 2. SP will maintain the BCP, update it no less than [**] per year and test it at least [**]. Upon GE request, SPwill provide GE an executive summary of the plan updates, a summary of test results, and a report of corrective actionsto be taken to remedy deficiencies identified as a result of the test, including timetables for new corrective actions andthe status of corrective actions previously identified. 3. Upon request, with reasonable advance notice and conducted in such a manner not to unduly interferewith SP’s operations, SP will give GE and its designated agents access to designated representative(s) with detailedfunctional knowledge of SP’s BCP and relevant subject matter. Subject to confidentiality obligations under thisAgreement, information requested by GE arising from such meetings will be provided to GE within [**] days or asotherwise mutually agreed. 4. SP shall maintain a written Security Plan consistent with the Customs-Trade Partnership Against Terrorism(“C-TPAT”) program of U.S. Customs and Border Protection, the Authorized Economic Operator for Security programof the European Union (“EU AEO”) and similar World Customs Organization SAFE Framework of Standards(collectively, “SAFE Framework programs”) and implement appropriate procedures pursuant to such plan. Uponadvance notice by GE to SP and during SP’s normal business hours, SP shall make its facility available for inspectionby GE’s representative for the purpose of reviewing SP’s compliance with applicable SAFE Framework programs andwith SP’s Security Plan. Each Party shall bear its own costs in relation to such inspection and review.  SCHEDULE MS8 STATEMENT OF WORK (SOW TEMPLATE) FOR EVERY SECTION: (1) DELETE ALL OPTIONS WHICH ARE NOT APPLICABLE, AND THE GREEN OPTION TAGS. (2)FILL IN ALL YELLOW HIGHLIGHTED AREAS IN SECTION BODY TEXT AND CHOSEN OPTIONS. (3) DELETE ALL GRAYHELP BOXES (INCLUDING THIS ONE). (4) REMOVE ALL YELLOW HIGHLIGHTER FROM WHAT YOU ENTERED ORREPLACED. THERE SHOULD BE NO COLOR LEFT (EXCEPT TABLE HEADERS). This Statement of Work (“SOW”) dated , 20__ (“SOW Effective Date”), is made by and between [GENERAL ELECTRICAFFILIATE] [Insert correct legal name of GE Affiliate] (“GE”) and [SP ENTITY] (“SP”), pursuant to the Master ServicesAgreement (“MSA”) by and between General Electric International, Inc. and SP with an Effective Date of _________, 201_ ,the terms of which are incorporated herein by reference. This SOW sets forth the details of the Services and/or Deliverablesdescribed herein. Capitalized terms not defined within this SOW shall have their defined meanings in the MSA. This SOWshall not become binding on GE until GE issues a PO for the total fees payable hereunder. GE shall promptly notify SPupon issuance of the PO. ☐ Check here if SP is a critical supplier for GE (If yes, Schedule MS7 is applicable).☐ Check here if GE has consented to be a testing site (alpha, beta or otherwise)☐ Check here if this is a strategic engagement for GE that requires SP subcontractors and suppliers to enter intoagreements directly with GE to protect GE’s Confidential Information per Section 6 of the MSA and/or requires anon-circumvention requirement per Section 7 of the MSA. The Parties agree that the MSA shall supersede any conflicting, different or additional legal terms in this SOW,including, without limitation, indemnification, limitation of liability, confidentiality, and representations, warranties andcovenants. To the extent, SP desires to modify any legal terms in the MSA, SP shall request a written amendment to theMSA, which shall be agreed or withheld by GE, in its sole discretion. A. EXECUTIVE SUMMARY. (Required)1. Project purpose. Enter a summary of the business objective of the project.2. CTQ business requirements. Identify any and all critical-to-quality (“CTQ”) business requirements.B. SERVICES. (Required) SP shall perform the following Services under this SOW: NOTE: Services are tasks (maintaining, providing, supporting, producing, monitoring, designing, developing,installing, training, etc.) and should not be mistaken for the end products of Services, which are Deliverables. List all Services separately.Make sure that all in-scope, material aspects of the Services are separately identified in the list below in clear and descriptiveterms. Avoid shorthand and undefined acronyms. ItemServices Task – Name and Description (detail each Services task in a single box) B1 Task 1 – name and description B2 Task 2 – name and description B3 Task 3 – name and description  C. DELIVERABLES THAT ARE WORK PRODUCT i.e. GE owned Deliverables. (Required) CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. NOTE: Deliverables are end products (whethercompleted work product or deliverables, or interim work product or deliverables such as project plans and status reports). The MSAstates that GE owns Deliverables that are Work Product. Deliverables may entirely consist of new Work Product. Deliverables mayalso include SP Preexisting Intellectual Property (Deliverables owned by Supplier), Open Source Materials, Third PartyMaterials). You must specifically identify any of these that apply, for each Deliverable, i.e. Work Product, SP PreexistingIntellectual Property, Open Source Materials and Third Party Materials .There will be no Deliverables (includingWork Product) under this SOW.SP shall provide the following Work Product (Deliverables owned by GE)under this SOW:ItemWork Product – Name and Description (detail each Work Product in a single box)C1 Work Product 1 – name and description C2 Work Product 2 – name and description C3 Work Product 3 – name and description C4 Work Product 4 – name and description D. SP PREEXISTING INTELLECTUAL PROPERTY INCORPORATED INTO DELIVERABLES.(Required) CHOOSE Option 1, Option 2 or Option 3. DELETE the other option text and all option tags. For each item of incorporated SPPreexisting Intellectual Property in the list, IDENTIFY all Deliverables(s) the item affects.Not applicable; there will be no Deliverables under this SOW.None of the Deliverables will contain incorporated SPPreexisting Intellectual Property.This is a comprehensive list of SP SP Preexisting Intellectual Property incorporated into the Deliverables and duly licensed to GE under Section 9 of theAgreement and this SOW, ownership of which is being retained by SP. (The Parties shall update this list over the life of theSOW as Deliverables are added or changed.) Name and Description of Incorporated SP To Which Deliverable? (Section CItemPreexisting Intellectual Property Item #)D1SP Preexisting Intellectual Property 1 – name anddescription AppliestoDeliverable(s)#: D2SP Preexisting Intellectual Property – name anddescription AppliestoDeliverable(s)#: D3SP Preexisting Intellectual Property – name anddescription AppliestoDeliverable(s)#:  E. OPEN SOURCE MATERIALS (OSM) / THIRD PARTY MATERIALS (3PM) INCORPORATED INTODELIVERABLES. (Required) CHOOSE Option 1, Option 2 or Option 3. DELETE the other option text and all option tags. For each item listed as incorporated OSMor 3PM: IDENTIFY type (OSM or 3PM), IDENTIFY ALL Deliverable(s) it affects, and IDENTIFY the applicable OSS or Third PartyMaterials license name. (For 3PM items, ATTACH license terms and IDENTIFY third party licensor company name.)Not applicable; there will be no Deliverables under this SOW.None of the Deliverables will contain incorporated OSM or 3PM.This is a comprehensive list of OSM and/or 3PM incorporated into theDeliverables as referenced in Section 10.b. of the Agreement and duly licensed to GE under this SOW, together withidentification of the underlying license terms applicable to each item. (The Parties shall update this list over the life of the SOWas Deliverables are added or changed.) ItemOSM /3PM?Item ShortNameIncorporated To WhichDeliverable? (Section CItem #)Name of Underlying License / Third Party(if 3PM, attach terms, and provide 3rd Partyname)E1(enter)Item 1NameIn Deliverable(s) #:________Underlying License Name / 3 Party NameE2(enter)Item 2NameIn Deliverable(s) #:________Underlying License Name / 3 Party NameE3(enter)Item 3NameIn Deliverable(s) #:________Underlying License Name / 3 Party Name F. PERFORMANCE SCHEDULE / TERM OF SOW. (Required) CHOOSE Option 1, Option 2 or Option 3. DELETE the other option text and all option tags. The options are listed in descending orderof GE preference. ItemServices Milestone / Deliverable # (use Section C Item #)Completion / Delivery DateF1Milestone: Milestone F1 Name & Description / Deliverable # _____Enter DateF2Milestone: Milestone F2 Name & Description / Deliverable # _____Enter DateF3Milestone: Milestone F3 Name & Description / Deliverable # _____Enter DateAll Services must be completed and accepted by GE by; __________ subject to GE’srights and remedies under the MSA.This SOW shall commence on the SOW Effective Date and, unless sooner terminated under theAgreement terms, shall remain in effect until.__________  G. FEES. (Required) CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. The options are listed in descending order of GEpreference.SP shall provide the Services and deliver the Deliverables on a FIXED FEE basis. GE shallhave no obligation under this SOW for payment of fees in excess of $__________, unless a higher amount is authorized by GEin writing.SP shall provide the Services and Deliverables on a TIME & MATERIALS basis at the ratesincluded in this Section. GE shall have no obligation under this SOW for payment of fees in excess of a total of $__________,unless a higher amount is authorized by GE in writing. In the event GE does not authorize a higher amount, SP is only requiredto provide Services equal to the number of hours that when multiplied by the applicable hourly rate would equal the totalpayment specified in this Section. [INCLUDE RATE SCHEDULE HERE]Include Rebates and Pre-negotiated Rates H. EXPENSES. (Required)No Expenses Are Payable on Fixed Fee projects. CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. The options are listed in descending order of GEpreference.All expenses associated with SP’s performance of the Services and/or delivery ofthe Deliverables under this SOW are included in the SOW price.GE shall reimburse SP for the expenses identified below associated with performing theServices and/or delivering the Deliverables under this SOW. All expenses approved for reimbursement must comply with theGE T&L Policy found at http://www.gesupplier.com/html/GEPolicies.htm. Expenses over the amount of $__________ mustbe pre-approved by GE to be reimbursable. Identify the expenses expected under this SOW to be reimbursed by GE (do notinclude any expenses associated with the project which will not be reimbursed by GE) If there are set amounts for reimbursableexpenses describe those here. I.INVOICES. (Required) CHOOSE Option 1A, Option 1B, Option 1C, or Option 2. DELETE the other option text and all option tags. The options are listed indescending order of GE preference.SP shall invoice GE monthly in arrears for this SOW, according to thefollowing schedule: [INCLUDE SCHEDULE]SP shall invoice GE for this SOW upon GE’s acceptance of each milestonesubject to GE’s rights and remedies under the MSA, according to the schedule in Section F of this SOW and the followingpayment table: [INCLUDE TABLE OF MILESTONE PAYMENTS - MUST SYNC WITH SECTION F TABLE]SP shall invoice GE for this SOW upon the completion of all Services and deliveryof all Deliverables, and GE shall pay all undisputed amounts in accordance with the MSA.SP shall invoice GE for this SOW monthly in arrears; provided however, no invoicesshall be submitted to GE, until GE’s Project Manager has approved the time spent.  J.PROJECT MANAGERS / KEY PERSONNEL OPTION. (Required) J1. Project Managers. The following are the designated Project Managers (“PMs”) for the Parties:GE Project ManagerSP Project ManagerGEPM:[GE_CONTACT_TITLE] SP PM:[SUPP_CONTACT_TITLE] GE PMPhone:[GE_CONTACT_PHONE] SP PMPhone:[SUPP_CONTACT_PHONE] GE PMEmail: [GE_CONTACT_EMAIL] SP PM Email:[SUPP_CONTACT_EMAIL] J1-1. PM Duties. The PMs shall: (a) engage in all communications regarding the Services and/orDeliverables; (b) arrange and attend any necessary meetings; (c) supervise and manage SP’s performance of Services and/ortransfer of Deliverables; (d) ensure that each Party’s responsibilities have been met on a timely basis; and (e) jointly approve anychanges to the Services and/or Deliverables to be made in response to Change Orders. Either Party may change its designatedPM at any time upon written notice to the other Party’s PM.J1-2. Project Reporting. At any time during the term of the SOW, GE may request status reports from SP’s PM, and SP’s PMshall promptly provide: (a) a list of outstanding SOWs; (b) the status of any uncompleted Services and/or Deliverables; (c)amounts or hours billed (and/or accrued but unbilled) for any period, for any SOW or in total; and/or (d) information aboutSP’s performance under the SOW. J2. Key Personnel Option.CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags.Not applicable; there are no SP Personnel whose services are specifically required for thisSOW.The Parties have agreed that the services of the following SP Personnel arespecifically required in the performance of this SOW (“Key Personnel”), and that any changes to Key Personnel must bemutually agreed between the Parties and documented on a Change Request Form and incorporated as a modification to thisSOW. Enter the names of all individuals who are Key Personnel and identify their role. NOTE: SP shall not reassign or transfer the Project Manager or other Key Personnel without GE's prior written approval,and in any event a reassignment or transfer shall be made upon written notice to GE of not less than thirty (30) days. If SPmust replace any Project Manager or Key Personnel for reasons beyond its control (resignation or serious illness ordisability), SP shall furnish GE as much advance notice as possible under the circumstances. In the event of a need forreplacement of any Project Manager or Key Personnel, SP shall furnish GE with the credentials of any proposedreplacement, as reasonably required by GE. No replacement shall be made without GE's prior consent. K.PREREQUISITES, ASSUMPTIONS AND RISKS. (Required) The following project prerequisites, assumptions, dependencies and/or risks may impact SP’s performance of Services ordelivery of Deliverables under this SOW: Identify and explain any and all prerequisites, assumptions, dependencies and/orrisks applicable to this SOW (particularly those which impact SP’s ability to perform any Services or provide any Deliverables). L. ACCEPTANCE CRITERIA. (Required) CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. (If the Parties are includingSection P, Option 1 or 2 may be necessary, as applicable.) Notwithstanding anything in the MSA to the contrary, GE shallhave__________ days from the date of each delivery by SP under this SOW (i.e., initial  delivery, or any re-delivery after rejection and re-performance) to inspect and test each Deliverable and accept or reject it. GE’sfailure to reject a Deliverable within this timeframe shall be deemed an acceptance of the Deliverable. All other terms of theMSA regarding inspection, testing and acceptance of Deliverables remain unchanged. The Specified Acceptance Criteria for the Services and/or Deliverables underthis SOW are as follows: Enter the Specified Acceptance Criteria and acceptance terms agreed to by the Parties here. M.SERVICE LEVELS. (Required)CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. (If the Parties are including Section P, Option 2 or 3may be necessary.)Not applicable; there are no specified performance service levels for the Servicesand/or Deliverables under this SOW.The service levels set forth in the applicable performance service level schedules that shall apply to the Servicesand/or Deliverables under this SOW. N. LOCATION. (Required) SP shall perform the Services at the following location or locations: Enter a single location, or the listof locations. If multiple locations will be involved list each and the Services performed at each.  O. ADDITIONAL OBLIGATIONS. None, unless listed here: List any additional obligations of the Parties not alreadycaptured in the SOW; if none delete this yellow section. DELETE the following Section P completely UNLESS the Parties specifically negotiate to apply liquidated damages to SP’s Servicesand/or Deliverables under this SOW. (Examples: GE receives a reduction in payments (or a refund or credit of amounts already paid),which could apply in cases such as SP’s late delivery, failure to meet specified acceptance criteria or a certification (e.g. ISO 9000), failureto provide continuous uninterrupted Services for a length of time or meet certain peak demands, etc.).P.LIQUIDATED DAMAGES. (Required) CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. Not applicable; 1. Liquidated Damages for Late Delivery. SP acknowledges that the above Performance Schedule above is critical andmaterial to performance of this SOW and for the avoidance of substantial loss to GE, and that SP’s unexcused failure to meetthe Performance Schedule without GE’s written consent may lead to the application of liquidated damages as specified in thisSection. In the event that any performance is delayed beyond the Performance Schedule due to any causes not expresslyexcused by the terms of the MSA, SP shall pay to GE the following, as liquidated damages, and not as a penalty, a sum equalto Insert formula here – e.g. the following portion of the SOW total price for each full of delay indelivery (up to a maximum of _______ % of the SOW total price): < _______% / $_______ > for the first_______ , <_______ % / $_______ > for the following_______, and <_______ % / $_______ > forall remaining .2.Liquidated Damages for Failure to Perform. SP guarantees that the Services and/or Deliverables shall achieve the servicelevels in Section M (if any) and shall meet the Specified Acceptance Criteria in Section L (if any) and the MSA. If the Servicesand/or Deliverables fail to achieve the service levels and/or meet the acceptance criteria specified herein, SP shall be affordeda period by GE during which it can correct and adjust the Services and/or Deliverables (the “Correction Period”). If, whenre-tested at the end of the Correction Period, the Services and/or Deliverables again fail to achieve the performanceguarantees, SP shall pay to GE the following, as liquidated damages, and not as a penalty:a sum equal to $_________.3. No Waiver. The above liquidated damages are a genuine pre-estimate by the Parties of the losses which GE will suffer inthe event of SP’s delay or failure to perform and are not a penalty. The payment of liquidated damages under this Sectionshall not relieve SP from its obligations to diligently complete the Services and/or Deliverables or from any other obligationsand liabilities under the MSA or this SOW, and shall not constitute a waiver of any term of the MSA or SOW, or of any rightof GE at law or in equity. Q. TRADE PAYABLE SERVICES. (Required) CHOOSE Option 1 or Option 2. DELETE the other option text and all option tags. Not applicable;The Parties have agreed that Trade Payable Services shall be applicable.  IN WITNESS WHEREOF, the Parties hereto have caused this SOW to be executed by their respective authorizedrepresentatives on the dates ascribed below to be effective as of the Effective Date of this SOW. [GENERAL ELECTRIC ENTITY] [SP ENTITY] By: By:Printed Name:Printed Name:Title:Title:Date:Date: SCHEDULE MS9 STEP-IN RIGHTS(Outsourcing/BPO) Without prejudice to GE’s rights under the MSA and in law and equity, any GE or GE Affiliate Party to a SOW can firstelect, by written notice to SP, to appoint a management team or a third party (subject to such third party entering into aconfidentiality agreement with the SP on terms no less onerous than set out in this Agreement) to take over the Services or anypart of the Services if: a.SP or SP Personnel is in material breach of a SOW applicable to outsourcing/BPO related Services including anySchedules or appendices thereto), or of the MSA, or any other event occurs which is likely to have a material adverseeffect on GE or a GE Affiliate; b.a governmental body advises GE or GE Affiliate in writing to take a course of action, or otherwise confirms to SP thatit requires that GE or GE Affiliate takes a course of action, with the effect that the exercise of GE or GE Affiliate’s stepin right under this Schedule is necessary to achieve that course of action; c.a Force Majeure event or a disaster event occurs that affects SP’s ability to perform any of its material obligationsunder the MSA, including where SP has been unable or unwilling to implement its business continuity plan; or d.either Party has served a notice of termination in accordance with the terms and conditions of the SOW for anyreason, “Hereinafter the “Step In Right”). Subject to the rights and remedies set forth in the MSA and any that GE or GE Affiliate may have in law and equity, GEand GE Affiliate shall be liable to pay its own costs incurred as a result of the exercise of the Step In Right while GE or GEAffiliate or any third party is providing any element of the Services, but the GE or GE Affiliate shall not be obliged to pay the SPfor that element of the Services in relation to which it has exercised the Step In Right. The GE and GE Affiliate rights under this Schedule shall cease on the earlier of the cessation or resolution of the eventgiving rise to the Step In Right. SCHEDULE MS10 CHANGE ORDER TEMPLATE The Parties agree that the MSA supersedes any conflicting, different or additional legal terms in this CO, including, without limitation,indemnification, limitation of liability, confidentiality, and representations, warranties and covenants. To the extent, SP desires to modify any legal terms inthe MSA, SP shall request a written amendment to the MSA, which shall be agreed or withheld by GE, in its sole discretion. This template is for a changeorder to an SOW only. CHANGE REQUEST / CHANGE ORDERThis Change Request is subject to the terms of the Agreement and SOW between the Parties referenced below. Any term used but not defined in this Form shall have the meaninggiven to it in the Agreement (or SOW, if applicable). The Party receiving the Change Request shall provide a written response to the Change Request on this Form (“ChangeResponse”). Each Change Request and its Change Response, if accepted by both Parties, shall be deemed a “Change Order” modifying the SOW. Change Orders are for changes tothe Specifications. A Change Order may not be used to modify the terms of the Agreement between the Parties.MSA Effective Date:For SOW #:SOW Effective Date:This is Change Request #:Requesting Party and Date.Requesting Party: [ ] GE [ ] SP Project Manager:Receiving Party: [__] GE [__] SP Project Manager:Date Submitted:Description of Change Request. (attach additional pages as required)Change to: (choose one)Description of Requested Change☐ Development Material☐ Deliverable☐ Services Task☐ Key Personnel Impact Analysis. SP must fill out this section (whether making a Change Request to GE, or making a Change Response to a GE Change Request) (attach additional pages asrequiredResource Impact: Cost Impact: Timing Impact: Date Response Delivered: Change Response. The Party receiving the Request hereby accepts or rejects the Change Request.Receiving Party (check here and initial below) [ ] GE [__] SP:_____Accepts the Change Request and desires to proceed with the change requested._____Rejects the Change Request and does not desire to proceed with the change requested and hereby terminates the request.Reason (optional):Change Order. Upon signing the Change Request shall be deemed a Change Order, and: (a) shall become a part of the SOW to which it relates, as if initially entered intoas part of the SOW, and (b) shall be incorporated into and governed by the terms of the MSA and SOWChange Order Effective Date: . If no date specified, effective as of the date last signed below.GENERAL ELECTRIC INTERNATIONAL, INC.[SP_LEGAL_NAME] By: By:Printed Name:Printed Name:Title:Title:Date:Date:  PROFESSIONAL IT SERVICESSchedule FS2 This Schedule FS2 is entered into as of January 1, 2017 (“Schedule Effective Date”) by and between Genpact International, Inc (“SP”) with aprincipal place of business located at 42 Old Ridgebury Road, First Floor, Fairfield, CT 06431 and General Electric International, Inc., a Delawarecorporation (“GE”) with a principal place of business located at 41 Farnsworth St., Boston, MA 02210. GE and SP are each referred to as “Party” andcollectively as “Parties.” WHEREAS, GE and SP are Parties to a certain Master Services Agreement dated January 1, 2017 (“MSA”); WHEREAS, the Parties desire to append this Schedule FS2 to the MSA; NOW, THEREFORE, in consideration of the good and valuable promises and premises set forth in the MSA and this Schedule FS2, the Parties agree asfollows: 1. Interpretation. This Schedule FS2 complements and supplements the MSA. As of the Schedule Effective Date, the MSA shall be construed to include this Schedule FS2. Allprovisions in the MSA not conflicting with this Schedule FS2 are hereby specifically affirmed. Capitalized terms not defined in this Schedule FS2 shall havethe meanings ascribed to them in the MSA. 2. Interpretation. The expectations and requirements in this Section shall apply generally to all Services and/or Deliverables provided by SP to GE during the Term unless GEand SP expressly agree otherwise in writing in an SOW (and then for purposes of that SOW only). (a) Non-Third Party Application Development. It is GE’s strategy to utilize GE Predix Platform/Operating System for all Non-Third Party ApplicationDevelopment. As such SP will be required to adhere to this by presenting all proposals (RFP’s), Designs and Implementations for Non-Third PartyApplication Development with Predix based solutions. (b) Predix Certification. Any Predix Solutions designed, developed or worked on by SP, must be done by Predix Certified personnel only. If SP is unable tocomply with this Schedule, prior to the commencement of applicable Services, SP shall provide written notice to GE of such non-compliance. GE shall havethe right, but not the obligation, to make exceptions on a case-by-case basis; provided any granted exception shall be limited to the SOW for which saidexception was granted. GE shall have no obligation to pay for any non-compliant Services performed by SP for which an exception was not granted. IN WITNESS WHEREOF, the Parties have caused the Schedule FS2 to be executed by their duly authorized representatives as of the Schedule EffectiveDate. GENERAL ELECTRIC INTERNATIONAL, INC.GENPACT INTERNATIONAL, INCBy: /s/ James P. OtisBy: /s/ Victor GuaglianonePrinted Name: James P OtisPrinted Name: Victor GuaglianoneTitle: GO-S IT Professional Services LeaderTitle: SVPDate: December 14, 2016Date: 12/22/16  Exhibit 21.1Subsidiaries of the Registrant: Name:Jurisdiction ofIncorporation: Genpact Australia Pty Ltd……………………………………………………..AustraliaHeadstrong (Australia) Pty Ltd.AustraliaGenpact Global (Bermuda) LimitedBermudaGenpact Global Holdings (Bermuda) LimitedBermudaGenpact Brasil Gestão de Processos Operacionais Ltda.BrazilHeadstrong Canada Ltd.CanadaGenpact (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 Czech s.r.o.Czech RepublicGenpact Administraciones-Guatemala, S.A.GuatemalaServicios Internacionales de Atencion Al Cliente, S.A.GuatemalaHeadstrong GmbHGermanyHeadstrong (Hong Kong) Ltd.Hong KongGenpact Hungary KftHungaryGenpact Hungary Process Szolgaltató Kft.HungaryAxis Risk Consulting Services Pvt. Ltd.IndiaEndeavour Software Technologies Private LimitedIndiaGenpact India Private LimitedIndiaGenpact Mobility Services (I) Pvt. Ltd.IndiaHeadstrong Services India Pvt. Ltd.IndiaGenpact Ireland Private Limited……………………………………………………….IrelandPNMSoft Ltd… IsraelGenpact Consulting KKJapanGenpact Japan Business Services KKJapanGenpact Japan KKJapanGenpact Japan Services Co., Ltd.JapanGenpact Kenya LimitedKenyaGenpact Luxembourg S.à r.l.LuxembourgGenpact Investment Luxembourg S.à r.l.Luxembourg  Name:Jurisdiction ofIncorporation: Genpact Malaysia Sdn BhdMalaysiaGenpact China InvestmentsMauritiusGenpact India HoldingsMauritiusGenpact MauritiusMauritiusEDM 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.VNetherlandsGenpact 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 Services Poland sp. z o.o.PolandPNMSoft Portugal SOC Unipessoal, Lda.PortugalGenpact Romania SRLRomaniaGenpact Singapore Pte. Ltd.SingaporeGenpact Consulting (Singapore) Pte. Ltd.SingaporeGenpact Slovakia s.r.o.SlovakiaGenpact South Africa (Proprietary) LimitedSouth AfricaGenpact Strategy Consultants S.L.SpainHeadstrong Thailand Ltd.ThailandGenpact (UK) Ltd.United KingdomGenpact Regulatory Affairs UK LimitedUnited KingdomGenpact WM UK LimitedUnited KingdomHeadstrong (UK) Ltd.United KingdomHeadstrong Worldwide Ltd.United KingdomPharmalink Consulting LimitedUnited KingdomPharmalink Consulting Operations Ltd.United KingdomPNMSoft UK LimitedUnited KingdomStrategic Sourcing Excellence LimitedUnited KingdomAkritiv Technologies, Inc.United StatesEndeavour Software Technologies Inc.United StatesGenpact (Mexico) I LLCUnited StatesGenpact (Mexico) II LLCUnited StatesGenpact CL, Inc.United States  Name:Jurisdiction ofIncorporation: Genpact Insurance Administration Services Inc.United StatesGenpact International, Inc.United StatesGenpact LH LLCUnited StatesGenpact LLCUnited StatesGenpact Mortgage Services, Inc.United StatesGenpact Onsite Services, Inc.United StatesGenpact Registered Agent, Inc.United StatesGenpact Services LLCUnited StatesGenpact Solutions, Inc.United StatesGenpact US LLCUnited StatesGenpact WB LLCUnited StatesHeadstrong Business Services, Inc.United StatesHeadstrong CorporationUnited StatesHeadstrong Inc.United StatesHeadstrong Public Sector, Inc.United StatesHeadstrong Services LLCUnited StatesHigh Performance Partners, LLCUnited StatesJawood Business Process Solutions, LLC…………………………United StatesLeaseDimensions, Inc………………………………………………………..United StatesOpenWealth Services, LLCUnited StatesPharmalink Consulting Inc.United StatesPNMSoft USA Inc.Inc...United StatesStrategic Sourcing Excellence LLCUnited StatesTechspan Holdings, Inc.United StatesTS Mergerco, Inc.United States  Exhibit 23.1Consent of Independent Registered Public Accounting Firm The Board of DirectorsGenpact Limited:We consent to the incorporation by reference in the registration statements (No. 333‑210729) 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 March 1, 2017, with respect to the consolidated balance sheets ofGenpact Limited as of December 31, 2015 and 2016, and the related consolidated statements of income, comprehensive income (loss), equity and cash flowsfor each of the years in the three-year period ended December 31, 2016, and the effectiveness of internal control over financial reporting as of December 31,2016, which reports appear in the December 31, 2016 annual report on Form 10‑K of Genpact Limited.Our report dated March 1, 2017, on the effectiveness of internal control over financial reporting as of December 31, 2016, contains an explanatory paragraphthat states that Genpact Limited acquired PNMSoft Limited, Endeavour Software Technologies Private Limited and Strategic Sourcing Excellence Limited,and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016,PNMSoft Limited’s, Endeavour Software Technologies Private Limited’s and Strategic Sourcing Excellence Limited’s internal control over financialreporting associated with total assets of $74,133 thousands (of which $56,139 thousands represent goodwill and intangible assets included within the scopeof the assessment) and total revenues of $17,459 thousands included in the consolidated financial statements of the Company as of and for the year endedDecember 31, 2016. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financialreporting of PNMSoft Limited, Endeavour Software Technologies Private Limited and Strategic Sourcing Excellence Limited. /s/ KPMGGurgaon, IndiaMarch 1, 2017  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, 2016, as filed with the Securitiesand Exchange 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 makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the 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 definedin Exchange 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 tous by others 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for 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 aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely 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 financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalentfunctions): 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’sinternal control over financial reporting.Date: March 1, 2017 /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, 2016, as filed with the Securitiesand Exchange 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 makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period coveredby this report; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the 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 definedin Exchange 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 tous by others 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for 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 aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely 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 financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalentfunctions): 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’sinternal control over financial reporting.Date: March 1, 2017 /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, 2016 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 theCompany.Date: March 1, 2017 /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, 2016 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: March 1, 2017 /s/ EDWARD J. FITZPATRICK Edward J. FitzpatrickChief Financial OfficerGenpact Limited 

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